We recently published a list of 10 Best Growth Stocks to Invest in for the Next 10 Years. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other best growth stocks to invest in for the next 10 years.
On March 8, Ben Snider, Goldman Sachs senior equity strategist, joined CNBC to discuss the state of the economy today. Snider noted that the key struggle has been the market struggle to assess the forward trajectory of the economy. The market entered this year with optimism for the growth trajectory. However, over the past few weeks, we have seen a very sharp downturn. There is good news to extract from the scenario. Snider explained that if we look at where the market is priced today, it seems much more reasonable. Therefore the base case remains the same the economy is in good shape and is growing. He also noted that a confirmation of the growth came in with the jobs report, moreover, earnings are still growing, meaning that the equity market should be moving higher too.
However, the key question that remains unanswered is what sectors investors should look forward to. Most of the sectors have been volatile. Therefore, as per Snider, the best approach would be not to go all in for a single sector. He likes healthcare, which has been one of the best-performing sectors in the market so far. This is because despite the performance the sector is still trading at the lowest valuations compared to the market. Snider mentioned that this may be a good buying period as historical data tells us that when an investor buys the S&P 500 down 5%, it generates a positive return on investment over the next 5 months 85% of the time.
Moreover, Goldman Sachs has anticipated moderate yet resilient global growth in 2025, driven by the strong performance of the United States. The firm expects the US economy to be a primary driver of global growth, supported by a robust labor market, consistent consumer spending, solid credit conditions, sufficient liquidity, and increased capital spending related to AI. In addition, regarding the tariff situation, Goldman Sachs believes that the “Fed Put” will come into play and ease monetary policy, however, terminal rates are expected to be higher than previously anticipated.
Our Methodology
To curate the list of the 10 best growth stocks to invest in for the next 10 years, we looked at various online rankings. Using these rankings we aggregated a list of best growth stocks for the next 10 years. Next, we checked the sales growth of each stock from Seeking Alpha and added only those companies that have grown more than 15% over the past 5 years. Lastly, we ranked the stocks in ascending order of the number of hedge fund holders, sourced from Insider Monkey’s Q4 2024 database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
5-Year Sales Growth: 17.86%
Number of Hedge Fund Holders: 339
Amazon.com, Inc. (NASDAQ:AMZN) is a multinational technology company involved in e-commerce, cloud computing, online advertising, digital streaming, and artificial intelligence. On March 12, Barclays analyst Ross Sandler maintained a Buy rating on the stock, with a price target of $196.59.
Meridian Hedged Equity Fund in its Q4 2024 investor letter mentioned Amazon.com, Inc. (NASDAQ:AMZN). It views the company as a global leader in e-commerce and cloud computing, with a unique position to capitalize on the increasing prevalence of digital commerce and enterprise cloud adoption. The fund also believes that the company can sustain growth through its retail platform, AWS cloud infrastructure, and high-margin businesses like advertising and logistics. The company exceeded expectations in its fiscal third quarter of 2024 due to investments in operational efficiency, particularly in inventory management and automation, which drove margin expansion.
During the fiscal fourth quarter of 2024, Amazon.com, Inc. (NASDAQ:AMZN) reported a 10% increase in net sales, reaching $187.8 billion compared to $170.0 billion in the fourth quarter of 2023. The AWS segment was notable with 19% year-over-year growth to $28.8 billion in revenue. Management noted the company’s share price gained 44% in 2024 and outperformed the NASDAQ 100. It is the best growth stock to invest in for the next 10 years.
Meridian Hedged Equity Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a global leader in e-commerce and cloud computing, uniquely positioned to benefit from the secular growth in digital commerce and enterprise cloud adoption. Our investment in Amazon reflects its ability to compound growth through its dominant retail platform, AWS cloud infrastructure, and emerging high-margin businesses like advertising and logistics services. The company delivered strong third-quarter results, exceeding expectations for both revenue and operating income despite mixed macro signals. Amazon’s investments in operational efficiency, particularly in inventory management and automation, have driven meaningful margin expansion. AWS maintained its leadership position in cloud infrastructure, securing significant new customer wins and showing healthy demand for new workloads. Looking forward, we see multiple drivers of value creation through retail margin expansion, continued cloud growth, and the scaling of high-margin businesses.”
Overall, AMZN ranks 1st on our list of best growth stocks to invest in for the next 10 years. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.