Over the years, Amazon (NASDAQ: AMZN) has created a lot of millionaires. There have been ups and downs along the way, but $20,000 invested in Amazon stock when the company was listed back in 1997 would be worth close to $55m today!  

Amazon’s growth story continues, notably with its big push into AI.

So, what would someone who invested £20k in Amazon stock a month ago be sitting on now?

Solid one month performance

Over the past month, Amazon stock is up by 11%.

So, excluding exchange rate movements, £20k invested just one month ago in the middle of December already ought to be worth around £22,200.

For a well-known, huge company, that sort of shareholder return in the space of a few weeks is attractive in my view.

Taking the long-term view

As a general approach, however, I do not think about investing in a share just for one month.

My long-term approach to investing means that the preferred timeline is more likely to be in years or even decades, rather than weeks or months.

Still, might now be a suitable moment to buy some Amazon stock for my portfolio with an eye on the longer term?

Amazon’s best days could be ahead of it

Amazon has done tremendously well building up its online retail business and marketplace.

But there is a lot more to it than the consumer-facing part of the business. A key plank of Amazon’s strategy over the past few years has been expanding its web services division, known as AWS.

AWS is already huge business, generating close to a fifth of Amazon’s sales revenues in its most recently reported quarter.

AI could help AWS grow dramatically in coming years.

Amazon has some compelling strengths here, from an installed user base with limited hassle-free switching options to deep technical prowess.

That could help make AWS an even bigger profit engine in future than it is already. Its operating income in the most recent quarter alone was already over $11bn.

Time to buy?

Over time, strong growth potential not only in AWS but in the rest of Amazon’s business could push earnings up substantially – and with them perhaps the stock price too.

But that is not guaranteed. As a massive data centre operator, equipping its sites with the right AI chips and gear is a costly business for Amazon.

That poses a risk to short- to medium-term profits. Meanwhile, the profitability of AI over time remains to be seen. Maybe it will be huge, or perhaps technological developments will push down customer pricing and profit margins.

I see Amazon as a well-run business, but there is also a risk that juggling AI and web services alongside different operations like its online retail business could spread management attention too thinly.

On balance, though, I like the business and would invest without hesitation at the right price.

But following its 11% price rise in the past month, Amazon stock now sells for 35 times earnings. That is too rich for my taste, so I will not be investing.