Amazon shares rose about 5% on Monday but trade near $262, roughly 8% below their August 3 record close of $284.02. The author argues the right benchmark for today's buyers is an S&P 500 index fund, which compounded about 10% a year with dividends reinvested from 1928 through 2025, and expects Amazon to beat it over five years because profits are growing faster than sales. Operating income rose from $22.9 billion in 2020 to $93.7 billion in the 12 months through June, up 23%, with AWS contributing $54.7 billion, about 58% of the total. Net purchases of property and equipment rose $66.1 billion over the trailing 12 months, mainly for AI, and free cash flow over the same span was a $7.6 billion outflow. The author expects earnings to grow about 15% a year through 2031 and sees the stock beating the index by a couple of percentage points a year, despite trading at about 25 times expected 2027 earnings.
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AmazonvaluationS&P 500AI investment
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Related tickers and likely impact
AMZN
• NeutralAmazon
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Consumer Discretionary |
| Industry | Broadline Retail |
| Market cap | $2.7T |
| Close on 10/20/2026 | 262.76 |
| Change that session | +0.12% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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