Key Points
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Amazon needs to compound earnings at 20% per year for the stock to double by 2030.
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Continued growth in non-retail services, including AWS, can do the heavy lifting for earnings.
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Amazon’s custom chips and operating leverage could expand margins, even with near-term capex pressure.
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Amazon (NASDAQ: AMZN) stock has a real shot at doubling over the next four years. Analysts are projecting about 20% annual earnings growth, while the stock trades at 20 times forward earnings.
Using Amazon’s recent share price of $251.35 on Sept. 9, 2026, 100 shares would cost $25,135. Four years of 20% earnings growth would roughly double earnings. If the stock is still trading at 20 times earnings in four years, which is a reasonable valuation, the stock could double too, turning that stake into about $50,000.
What analysts seem to be counting on is double-digit revenue growth with higher margins driving faster earnings growth. This is definitely in the cards, given management’s recent comments and the sources of revenue growth.
Amazon’s most profitable business just grew 37% year over year
Amazon’s trailing 12-month revenue hit $775 billion in the second quarter of 2026, up 15.8% year over year. Most of Amazon’s growth is coming from non-retail businesses that generate much higher margins than e-commerce. This includes revenue from advertising, seller services, subscriptions, and Amazon Web Services (AWS). Overall, revenue from all non-retail sources grew 24% year over year in Q2, reaching $124 billion.
AWS is the main engine, with its revenue rising 37% year over year in Q2 2026 to $42 billion. Growth is accelerating, with a massive $496 billion backlog to work through.
Demand for cloud services and AI compute — especially workloads running on Amazon-designed chips — has CEO Andy Jassy bullish about AWS’s trajectory. He believes AWS could become a $1 trillion annual revenue business over time. That is significant because AWS is already doing all the heavy lifting for Amazon’s profits, generating 60% of the company’s operating income last quarter.
Custom chips can lower costs and improve AWS margins
Amazon’s earnings rose 242% year over year in Q2 to $5.75 per share, though much of that increase came from non-operating gains tied to its investment in Anthropic.
Even so, margins are improving. Amazon’s trailing 12-month operating margin climbed to 12.7%, up from 6.5% in 2023. That points to real leverage as revenue grows faster than operating expenses.
Meanwhile, demand for Amazon’s custom chips (Trainium and Graviton) is now generating more than $25 billion in annualized revenue and growing at triple-digit rates. That can lower costs for customers and, more importantly, lift AWS margins.
In the 2025 shareholder letter, Jassy wrote: “At scale, we expect Trainium will save us tens of billions of capex dollars per year, and provide several hundred basis points of operating margin advantage versus relying on others’ chips for inference.”
Amazon’s earnings may not grow every quarter, as the company absorbs higher transportation costs and ramps up spending on new data center capacity.
Still, analysts see the same tailwinds and headwinds and are modeling a little over 20% annualized earnings growth over the next several years. Billionaire Bill Ackman, whose Pershing Square holds a large position in Amazon, has the same forecast. If AWS continues to track toward management’s expectations, Amazon can deliver, putting the share price on track to potentially double by 2030.
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John Ballard has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
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