Trevor Jennewine, The Motley Fool

Sat, Jun 14, 2025, 1:12 AM5 min read

• A recent survey conducted by Charles Schwab found that Amazon was the third most-purchased stock among retail investors in May.

• Amazon's strong position in online retail, digital advertising, and cloud computing services could drive double-digit revenue growth through 2030.

• Amazon has developed about 1,000 generative artificial intelligence applications to improve the efficiency of its retail operations, which should lead to higher profit margins.

• 10 stocks we like better than Amazon ›

Amazon (NASDAQ: AMZN) stock has fallen 3% year to date while the S&P 500 (SNPINDEX: ^GSPC) has advanced 3%. But Wall Street anticipates a stronger performance from the retail giant over the next year. The median target price among 71 analysts is $240 per share, which implies 13% upside from its current share price of $212.

Tariffs are a big reason the stock has struggled in 2025, but sentiment appears to be on the upswing since the Trump administration de-escalated trade tensions with China. A recent survey from Charles Schwab shows Amazon was the third most-popular stock among retail investors in May.

Can Amazon turn $5,000 invested today into $100,000 over the next decade? Here are my thoughts.

Amazon has a strong position in three growing industries. The company operates the most popular online marketplace worldwide as measured by traffic, and it is the largest online retailer as measured by revenue. Amazon is also the third-largest ad tech company, and Amazon Web Services (AWS) is the largest public cloud.

The investment thesis is simple: Amazon's strong position in those industries should drive double-digit sales growth annually through the end of the decade. I say that because those industries are expanding at a double-digit pace. The estimates below come from Grand View Research:

• Retail e-commerce sales are projected to grow at 11.6% annually through 2030.

• Ad tech spending is forecast to increase at 14.4% annually through 2030.

• Cloud computing sales are projected to grow at 20.4% annually through 2030.

Additionally, Amazon should become more profitable over time as two tailwinds drive its margins higher. First, the company is building 1,000+ generative artificial intelligence (AI) applications to automate and optimize tasks like coding, customer service, inventory management, and logistics. It's also infusing warehouse robots with generative AI so human workers can instruct them in natural language.

Second, digital advertising and cloud computing services earn higher margins than retail. Amazon in the first quarter reported double-digit sales growth in its advertising and cloud segments versus single-digit sales growth in its retail segments. That means the high-margin revenue streams are increasing more quickly, which will lift its total profit margin over time.