If I Could Only Buy and Hold a Single Stock, This Would Be It

  • August 16, 2025
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If I Could Only Buy and Hold a Single Stock, This Would Be It

Key Points

One of the golden rules of investing is to never put all your eggs in a single basket. By diversifying your portfolio across a wide range of stocks, bonds, and other assets, you reduce its volatility and help insulate yourself from market downturns. That's why it's sometimes smarter to simply invest in an S&P 500 index fund or exchange-traded fund, instead of individual stocks.

But if I could only invest in a single stock, I'd pick one with a market-leading position, a diversified business model, and a wide moat. I'd also pick one that has consistently outperformed the S&P 500. One stock checks all of those boxes: Amazon (NASDAQ: AMZN) , the world's largest e-commerce and cloud infrastructure company.

If I Could Only Buy and Hold a Single Stock, This Would Be It

Why did Amazon consistently beat the market?

Amazon went public on May 15, 1997, at a split-adjusted price of $0.075 per share. It has rallied 293,233% since then, so a $1,000 investment in its IPO would be worth $2.93 million today. That same investment in an S&P 500 index fund would have only grown to about $7,600. It also delivered market-beating gains for investors who didn't hop aboard its IPO right away. Over the past 10 years, its stock rallied more than 730% as the S&P 500 rose nearly 210%.

From 1997 to 2024, Amazon's annual revenue grew at a compound annual growth rate (CAGR) of 36%, from $148 million to $638 billion. It turned profitable on a generally accepted accounting principles (GAAP) basis in 2003, and its net income increased at a CAGR of 42%, from $35 million to $59.2 billion, over the following 21 years. Those explosive growth rates attracted a stampede of bulls and helped it consistently crush the market.

What are Amazon's core growth engines?

Amazon's growth was fueled by the expansion of its e-commerce marketplace, which grew from just 1.5 million customers at the time of its IPO to an estimated 310 million active users today. It has locked more than 240 million of those customers into its Prime subscriptions, which provide exclusive discounts, free shipping options, streaming media services, and other perks. It reinforces the stickiness of that ecosystem with its Alexa-enabled devices, and it reaches even more brick-and-mortar shoppers through its Whole Foods Market stores (which it acquired in 2017).

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