Amazon (AMZN) stock reached a record high of $215.90 in November 2024. And with the holiday retail season upon us, investors may push that record even higher.
Just how good of a year has Amazon had? How does it compare to the S&P 500 as a benchmark? Is it a good stock to invest in? What’s Amazon’s outlook moving forward?
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Consider this a snapshot update of Bezos’ behemoth retailer and tech giant.
$1,000 Invested in Amazon a Year Ago
On November 20, 2023, Amazon’s stock closed at $146.13. It was trading at $202.21 in mid-November.
That marks a 38.4% rise year over year. If you bought $1,000 worth of Amazon stock a year ago, you’d own 6.84 shares, which would’ve been worth $1,383.77 as of mid-November.
For 2024, Amazon’s stock has jumped 33.04% as of this writing.
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Amazon vs. the S&P 500
To get a true sense for how Amazon has performed, you need to compare it with the broader U.S. stock market.
The S&P 500 hasn’t exactly slouched over the past year either. It’s up around 29.6% over the past year as of this writing.
Note that the S&P 500 pays dividends, while Amazon stock does not. Dividend yields for the S&P 500 have hovered around 1.4% this year, so tack that on to S&P 500’s performance for a total return of around 31%.
So Amazon has outperformed the S&P 500 by around 2 percentage points.
What’s Driving Amazon’s Growth?
When Amazon announced earnings in late October, it soundly beat analysts’ expectations. The company reported $158.9 billion in net sales, for an 11% bump since last year’s third quarter.
But the real star of Amazon’s show was cloud computing. The company’s Amazon Web Services division grew at an annual clip of 19%.
Amazon continues to invest heavily in artificial intelligence (AI), and so far, investors seem pleased with the results.
Amazon Outlook
Analysts largely look bullish on Amazon’s stock movement over the next year.
The analyst consensus at Stock Analysis is a “Strong Buy,” and the average analyst forecasts a stock price of $236.62 in a year from now. Of the 42 stock analysts surveyed, none of them issued a “Sell” recommendation.
Analysts forecast an average revenue growth rate of 13.82% and an increase in earnings per share of 19.58%.
As the company pushes deeper into AI, logistics and healthcare, it stands to further diversify its revenue beyond its mainstays in retail and cloud computing.
Beware of Hidden Concentration
Amazon is, of course, one of the largest corporations in the world. It sees enormous daily trading volume, and many individual investors buy shares of it directly.
But investors may not realize just how much exposure they already have to Amazon through their index funds and other exchange-traded funds (ETFs).
With a market cap over $2 trillion, Amazon makes up 3.24% of the weighting of the S&P 500. If you own shares in an index fund mirroring the S&P 500, you already own significant holdings in Amazon. The same goes for other large cap U.S. stock ETFs.
You may also own Amazon through other ETFs as well. For instance, if you invest in funds that mirror the Nasdaq, such as the Invesco QQQ Trust (QQQ), you also own significant Amazon holdings. The company trades on the Nasdaq stock exchange, and its weighting makes up 5.24% of the Nasdaq 100.
If you buy shares of Amazon stock directly, just make sure that you take into account the indirect holdings that you already own through ETFs and mutual funds.
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This article originally appeared on GOBankingRates.com: If You Invested in Amazon Stock Over the 2023 Holiday Season, Here’s How Much It’d Be Worth Now
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
