Amazon Stock Costs More Than the Market. I’d Still Buy It for the Next 5 Years.
Shares of Amazon (NASDAQ:AMZN) leaped about 5% on Monday. Still, the stock trades near $262 as I write, about 8% off its record close of $284.02 on Aug. 3.
For those buying today, though, the more helpful yardstick is an S&P 500 (SNPINDEX:^GSPC) index fund. From 1928 through 2025, the index compounded at about 10% a year with dividends reinvested, according to historical data gathered by New York University professor Aswath Damodaran. Any one stock needs to beat that to be worth the added risk.
I think Amazon will beat it over the next five years, mostly because its profits are growing far faster than its sales.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.