Amazon's stock has been doing a whole lot of nothing for five years, and it's honestly one of the most fascinating case studies in why investors need the patience of a saint and the perspective of a wise old owl.
Back in August 2020, Amazon shares were trading around $175 (that's split-adjusted, mind you). Today? Hovering around $200. That's... well, that's barely a pulse over half a decade—the kind of flatline performance that makes growth investors question their life choices.
But here's the kicker—and it's a big one. During this same period, the actual business has absolutely exploded.
Look at the raw numbers for a second. In Q2 2020, Amazon pulled in revenue of $96 billion with profits of $6.3 billion. Fast forward to their most recent quarter and they're raking in $188 billion in revenue with a whopping $20 billion in profits.
That's not just growth. That's a metamorphosis. Revenue nearly doubled. Profits more than tripled. And yet... crickets from the stock chart.
I've been covering tech stocks since the dot-com bubble, and this disconnect between business performance and stock performance is something I've seen play out repeatedly. It's maddening, but it's also instructive.
What happened? Simple market mechanics (though they never feel simple when your money's on the line). During the pandemic, Amazon caught a serious tailwind. Everyone was ordering everything online, businesses were rushing to the cloud, and investors—bored, flush with stimulus cash, and dreaming big—priced Amazon like it was going to own the entire economy by 2025.
The stock price baked in years of growth... and then Amazon went ahead and delivered exactly that growth. Problem was, the market had already captured it in the price.
This ain't unusual, by the way. Microsoft spent thirteen years—thirteen!—trading sideways from 2000 to 2013 while dramatically expanding its business. Cisco's been wandering the stock price desert for decades despite becoming massively more valuable as a company.
It's like the market throws these epic parties for certain stocks, everyone gets carried away, and then the companies have to spend years sobering up even while doing everything right.
For individual investors, this creates a psychological minefield. When your stock goes nowhere for years, you start second-guessing yourself. "Did I miss something obvious? Is this business secretly struggling?" These doubts creep in even when the numbers tell you you're absolutely right.
(And between us, I've sold winning positions far too early because of exactly this kind of doubt. Patience isn't just a virtue—it's a profit strategy.)
This is precisely why focusing only on stock price movements is financial suicide. It'd be like judging a restaurant solely by how long the line is outside—sometimes the best meals happen when there's no wait at all.
I cannot emphasize this enough: if you're judging your investment thesis based on recent stock movements rather than business fundamentals, you're playing a game you cannot win. The market will make you doubt yourself precisely when your analysis is most solid.
What truly matters? Whether the business is creating more value over time. And Amazon unquestionably is.
For the patient investor, these disconnects aren't problems—they're gifts wrapped in frustration. The market is essentially offering you the chance to buy a much larger, more profitable business at effectively the same price as years ago.
The stock will eventually catch up to the business reality. It always does... eventually. The market gets there in its own sweet, maddening time.
Just don't hold your breath waiting for it. You might turn as blue as Amazon's logo.
