This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
Key Points
- Amazon stock’s trailing-five-year performance might come as a surprise to most investors.
- Many factors support Amazon’s bull case, including revenue growth and artificial intelligence.
Amazon (NASDAQ: AMZN) started out as an online bookseller. But these days, it has evolved into a thriving tech titan with a presence in many industries. The business is massive, sporting a market cap of $2.4 trillion.
The stock's long-term returns are magnificent. But they're not as impressive on a shorter time frame. If you bought $100 worth of Amazon shares five years ago, here's how much you'd have today.
Amazon lags the S&P 500
In the past five years, this stock has generated a return of only 43% (as of Nov. 19). This means that a $100 investment would be worth $143 today.
This gain pales in comparison to the 100% total return of the S&P 500 index. It's worth pointing out, though, that Amazon shares skyrocketed 77% in the 12 months before (from mid-November 2019 to mid-November 2020), as it benefited from a quick recovery following the COVID-19 dip.
Nonetheless, it might be surprising to see the stock underperforming the broader index on a trailing-five-year basis.
Should you buy Amazon stock?
Amazon looks to continue its winning ways. Its revenue keeps growing, with net income rising at a much faster clip in the third quarter (ended Sept. 30). It's a leader when it comes to artificial intelligence. And the business possesses numerous durable competitive advantages that support its dominant position.
Investors should consider buying the stock right now.
This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.
