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Amazon (NASDAQ: AMZN) is one of the great companies of our generation, and today it is a leader in both e-commerce and cloud computing. While the stock has lagged the market over the past five years, it has laid the foundation for strong growth over the next decade, setting it up for significant gains. With just over $10,000, you could buy 40 shares.
Amazon's biggest source of growth will come from its cloud computing unit, Amazon Web Services (AWS). Amazon created the infrastructure-as-a-service concept and continues to have the largest market share in the cloud computing space today. The unit is its most profitable and also its fastest-growing. Last quarter, AWS revenue climbed 37% to $42.2 billion, while segment operating income soared 63% to $16.6 billion.
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Amazon CEO Andy Jassy sees AWS becoming a $1-trillion-revenue business, and the company is investing aggressively in AI infrastructure to keep up with growing demand. Amazon plans to spend a whopping $220 billion on capex this year, with that number expected to rise in 2027. It has a massive $496 billion backlog, with most of its capacity for next year already sold out. The company is getting a strong return on its investments. It says it will get a payback in two to three years, while signing five-year or more contracts, and its chip investments tend to have six-year useful lives.
Amazon also has a strong custom chip business, and I'd expect that its return profile could improve as it starts using more of its own chips. Back in April, Jassy said this was a $20 billion run rate business, or about $50 billion when including internal use. Amazon has partnerships with both Anthropic and OpenAI and looks well-positioned for continued strong AWS growth. Notably, it also holds a roughly 20% stake in Anthropic, which could be worth over $2 trillion in an IPO.
In addition to the strong growth Amazon is seeing with AWS, the company's e-commerce business continues to hum along. The business continues to post solid sales and has been seeing robust revenue growth from its high-margin sponsored ad business. The most impressive thing about its e-commerce operation, though, is the operating leverage it has realized from its investments in artificial intelligence (AI) and robotics. This is leading to profit growth nicely outpacing revenue growth.
Amazon also has some future growth opportunities that could become nice contributors by 2035. This includes its satellite internet service Amazon Leo, its autonomous vehicle subsidiary Zoox, and its new less-than-truckload freight venture.
Amazon is willing to invest big to win big, and that should translate into strong future growth. The last multi-analyst earnings per share (EPS) consensus for the company is for 2031, with analysts projecting EPS of $24.49, with a low estimate of $15.02 and a high estimate of $29.88.
Assuming Amazon grows its adjusted EPS by around 20% through 2034 and then 15% through 2036, the company would generate adjusted EPS of around $56.20 in 2036. The company has historically commanded a premium multiple, generally trading at a forward P/E of between 25 and 40, over the past couple of years. Apply a 25x multiple to the stock's projected 2026 EPS, and it could trade at $1,405. That's more than a 4.5-fold increase over the stock's current price.
At that multiple, an investment of just over $10,000 would be worth over $56,000 in 2035. Of course, Amazon may not achieve that type of adjusted EPS growth and/or its multiple could compress, but this is one of the best-run companies in the world, and its long-term upside looks substantial. I'd be a buyer of the stock.
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Geoffrey Seiler has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
Here's What a $10,000 Investment in Amazon Stock Could Be Worth in 2035 was originally published by The Motley Fool
