---
title: "Prediction: Amazon Stock Will Soar Over the Next 5 Years. Here's 1 Reason Why."
description: "Amazon (AMZN) has been a strong performer for long-term investors but has lagged behind the S&P 500 in 2024. Despite a 17.5% stock rise this year compared to the S&P's 19.5%, analysts predict signific"
type: "news"
locale: "en"
url: "https://longbridge.com/en/news/213295402.md"
published_at: "2024-09-03T10:11:50.000Z"
---

# Prediction: Amazon Stock Will Soar Over the Next 5 Years. Here's 1 Reason Why.

> Amazon (AMZN) has been a strong performer for long-term investors but has lagged behind the S&P 500 in 2024. Despite a 17.5% stock rise this year compared to the S&P's 19.5%, analysts predict significant growth over the next five years, fueled by advancements in artificial intelligence and an expanding AWS cloud services and digital advertising business. The company is on track for its highest operating margin as macroeconomic pressures ease, making it likely that ongoing improvements will lead to higher profits and stock value.

**Amazon** (AMZN 3.71%) has been one of the biggest winners since the start of this millennium and has delivered stellar returns for long-term investors. On the other hand, the e-commerce and cloud-computing giant has actually been lagging behind the broader market in 2024.

While Amazon stock has risen roughly 17.5% across this year's trading, the **S&P 500** index has delivered a dividend-adjusted total return of 19.5% as of this writing.

Even though Amazon has underperformed the benchmark index this year, investors shouldn't bet on that continuing to be the case over the long term. In fact, the stage appears to be set for the stock to deliver market-crushing returns over the next five years -- and artificial intelligence (AI) could be at the center of an incredible transformation.

## Amazon can still deliver huge earnings growth

Take a look at the chart below, which tracks Amazon's quarterly operating margin over the last five years.

AMZN Operating Margin (Quarterly) data by YCharts.

As the chart shows, the tech giant's operating margin has seen some big swings -- but it's trending in an encouraging direction. Some key macroeconomic pressures began easing in 2023, and performance across two quarters in 2024 seemingly has the company on track to record its highest-ever annual operating margin. There are good reasons to think that performance will continue to improve.

Driven by the still growing, higher margin Amazon Web Services (AWS) cloud services business, and the rapidly expanding -- and highly profitable -- digital advertising business, overall margins have expanded since 2023.

While the e-commerce business still accounts for the majority of total sales, AWS and the digital ads business should continue to account for a growing portion of sales, helping push margins and overall profits higher. Even better, there's a good chance its massive online retail business will become significantly more profitable thanks to the rise of AI and robotics.

Despite generating huge amounts of revenue, e-commerce is still a relatively low-margin business for Amazon. If automation meaningfully reduces costs for this segment, the company's earnings and share price should soar.

### Related Stocks

- [AMZN.US - Amazon](https://longbridge.com/en/quote/AMZN.US.md)

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> **Disclaimer**: This article is for reference only and does not constitute any investment advice.