Amazon has a lot to recommend it, such as a dominant cloud computing platform and a big investment in Anthropic.
Its shares seem undervalued at recent levels, too.
Are you invested in Amazon (NASDAQ: AMZN), like me? Do you wonder how much your investment is going to grow over time, like me? No one can really know for sure how any investment will grow, but we can entertain ourselves with some educated guesses. Here's mine: I predict that $5,000 invested in Amazon today will be worth $20,230 in 10 years.
My prediction could turn out wrong, of course, but it's based on some reasonable assumptions. Let me explain.
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Let's start with how Amazon stock has performed in recent years:
|
Time Period |
Amazon Average Annual Return |
|---|---|
|
Past 5 years |
7.12% |
|
Past 10 years |
20.24% |
|
Past 15 years |
22.33% |
Source: Data from Morningstar.com as of Sept. 16, 2026.
Interesting, right? The stock has been a powerful performer over the past 10 and 15 years, but it has lagged over the past five years. For example, over the past five years, the S&P 500 index has averaged annual gains of roughly 12%.
Before we get to our estimate, note that the stock seems somewhat undervalued these days, with a recent forward-looking price-to-earnings (P/E) ratio of 23, well below its five-year average of 39. That can serve as a tailwind for the stock if the company's business grows over time and its P/E returns to a more typical level.
So what average annual growth rate should we use as we estimate Amazon's growth over the coming decade? It could well be phenomenal, but I like to be at least a bit conservative, so let's go with 15%. If you buy $5,000 worth of stock today and it grows by 15% annually, it will end up worth around $20,230.
I think that's a reasonable guess, as the company appears to be doing well, recently posting its best quarter in years, and its Amazon Web Services cloud computing platform is growing briskly. It also has billions invested in artificial intelligence (AI) specialist Anthropic, which is going public soon, probably at a rich valuation.
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Selena Maranjian has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.