Where Will Amazon (AMZN) Stock Be in 5 Years?

Stock Market

After years of astounding growth, Amazon (NASDAQ:AMZN) is currently out of favor among investors. Some traders reacted negatively to Amazon’s third-quarter 2022 earnings report. Others didn’t like to see the e-commerce giant halting some of its hiring activity. Yet, there are reasons to believe that AMZN stock will return to its all-time high and then reach the $200 mark in five years.

It was all over the financial headlines and social media: Amazon got kicked out of the Trillion Dollar Club recently. To put it more precisely, the company’s market capitalization fell below $1 trillion for the first time since April 6, 2020.

Does this mean that Amazon shares aren’t a good buy-and-hold anymore? Let’s not jump to conclusions before checking the company’s financial stats. You might be surprised to discover that Amazon is still a robust revenue generator as well as a profit powerhouse.

Hiring Freeze Isn’t the End of the Road for Amazon

For one thing, the Trillion Dollar Club is a “construct.” By this, I mean it’s something people invented in their minds though it doesn’t necessarily have actual significance. Just because Amazon’s market cap fell below a figure with lots of zeros, doesn’t mean that the company is failing as a business venture.

Besides, as we’ll discuss in a moment, Amazon’s financial growth suggests that the company will re-enter the Trillion Dollar Club in due time. Yet, there’s another news item that seems to be bothering some investors.

In particular, Amazon is reportedly freezing its hiring activity. However, this is only for the company’s corporate-level employees. Also, this hiring pause is only anticipated to “be in place for a few months.” In addition, Beth Galetti, senior vice president of people experience and technology at Amazon, assured that the company still plans to hire a “meaningful number of people” next year.

Amazon Met or Beat Quarterly Expectations

AMZN stock declined sharply after the company reported its Q3 2022 financial results. However, nervous investors should delve into the numbers before pronouncing their judgment on Amazon.

Starting with the top-line results, Amazon’s revenue grew from $110.8 billion in the year-earlier quarter, to $127.1 billion in 2022’s third quarter. Plus, this result was practically in line with Wall Street’s forecast of $127.39 billion.

Furthermore, Amazon reported a quarterly profit of 28 cents per share. Analysts had anticipated 22 cents per share. So, that’s a notable beat for Amazon.

Some traders probably expected a huge revenue beat, but perhaps they’re forgetting that this is a challenging time for e-commerce. The persistently strong U.S. dollar has hindered Amazon’s growth this year. However, no currency stays strong forever. Once the dollar’s rally stalls, Amazon’s growth trajectory should get back on track.

So, Where Will AMZN Stock Be in Five Years?

Instead of thinking like a short-term trader, I invite you to look past today’s obstacles and consider Amazon’s long-term growth narrative. The bull market in the U.S. dollar won’t last forever. Besides, Amazon’s quarterly results weren’t terrible, by any means.

When Amazon is back in Wall Street’s favor again someday, the company should easily return to the Trillion Dollar Club. Then, AMZN stock will be free to run much higher. Consider $200 an easy target for five years, and think about holding your Amazon shares for outstanding long-term returns.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.