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Well good day subscribers and welcome into a segment i like to call jeremy’s story time where i take you back in time to look at a stock today a very small company named amazon.com and we’re gonna ask ourselves how did a stock like this go from under $200 a share to $2,000 a share in a six year time frame and most people have no clue on how this actually happened
How it’s women and went down okay i’m gonna go ahead and fully disclose how this actually happened i think this is really beneficial not for like looking at amazon stock but for actually eyeing future stocks that have something really exciting going that you know a business model that might be disrespected in the short term actually turns out to be huge in the long
Term okay so once again amazon stock you could have bought the stock in 2012 for under 200 bucks a share okay amazon was trading under $200 a share in 2012 most of 2012 you could have paid 200 200 something dollars for that stock and then we fast-forward a 20-18 and it’s a 2000 dollar stock a 10x in literally a six year span how in the world does a move like that
Happened that is absolutely incredible okay no i would bet any money in that if i ask the average person why did amazon stock 10x from 2012 to basically 2018 why did it go up that much the average person will say man it’s because that retail business right they got all those warehouses their retail business is so big that must be why the stock 10x over the course
Of that time right that’s why amazon stock went up so much right and i can tell you if you believe that you are a hundred percent incorrect the retail side of their business has been baked in for quite a while okay the retail side of their business as soon as like pretty much around 2010 2011 especially 2012 like by that time most of wall street like understood
Amazon’s retail opportunity was going to be among the biggest opportunities if not the biggest opportunity in retail and litter in the world okay like most folks understood that it was going to be like them and wall probably like the two biggest retailers in the world amazon and clearly already won the number one spot in e-commerce retail e-commerce continue to
Grow into the future so everybody and their grandma pretty much on wall street understood amazon’s retail business and their retail opportunity by 2012 so a lot of that was already baked into the stock but they started a very small business in 2006 and this business was never looked upon it was never respected until pretty much after 2012 okay there’s a small
Business they started called amazon web services they started this business in 2006 okay now once again this business was was like no one paid attention to this business for the longest time there were a few bowls that did pay attention to amazon web services and did talk about their opportunity in the future jeff bezos had mention a couple interviews and things
Like that in the past on their opportunity when it came to amazon web services i remember there was a quote you know something was many years ago now and that ye said something like amazon web services could be maybe even bigger than the retail business people are like what is he even talking about this guy’s crazy or something okay and so there’s a small business
Called amazon web services and it got no respect for a longest time okay from xx basically 2006 to 2012 amazon stock rose quite considerably it made about a four or five x move but that was on the back at that time that was on the back of the retail business basically 2006 you go back in time amazon.com was basically this thing that was you know what they said
Was burning money like crazy and a lot of people weren’t sure if that was just gonna be some niche thing but then you fast forward like 2012 and most folks had already understood like you know what though this is first jar because the numbers could just continue to grow like crazy ecommerce numbers continue to grow like crazy amazon was the number one player in
E-commerce so from 2006 to 2012 that whole stock price moved there was a hundred percent because of the retail side of business and people realizing like how big the opportunity was on the retail side of the business but this amazon web services it was like it was never talked about really it was a like completely forgotten about okay and this little little teeny
Business grows into a goliath giant this chart shows you the annual revenue of amazon web services from 2013 to 2018 and what we can’t even see is how small the numbers really were back in 2010 2011 2012 the numbers were teeny-tiny okay but look at the catastrophic growth from 2013 to 2018 from a business that was doing just over three billion dollars in revenue
In 2013 to now over twenty five billion dollars they just did in 2018 absolutely on real growth that most folks out there on wall street did not get amazon any credit for did not foresee as being as big of a business and going in the future okay amazon had this business like you could have researched it they knew about it they would talk about it from time to time
Like it was there anybody could research this business for the longest time people chose to like you know just give it a blind eye or just didn’t have the vision for it and then all sudden you see the numbers and it gets impossible to ignore it and that’s how you get amazon stock to go up 10x in literally about a six year span okay and the best thing about amazon
Web services is it’s not like the growth is done with this this is this business a model or anything okay amazon web services this was the latest quarter they just grew revenue 41 percent for that cloud computing division okay seals the amazon web services rose to seven point seven billion dollars from five point four four billion a year earlier okay on real unreal
Numbers this business has been put enough okay and that might not even be the best part of the amazon web services the fact that revenue is growing so substantially but then you look at what it’s doing for profitability of amazon stock and you just use mine is simply blown okay here go aps was around 20 bucks however this year they’re expected to do over $27 of eps
A massive move upward there and then next year expected to do over $38 in eps there and i wouldn’t be surprised if those numbers were actually a little low okay this is perfect example of a business that was inside of a business that most folks did not foresee being even close to being as big as it was most people didn’t pay attention to it even you know nowadays
If you’re looking into amazon stock it’s impossible to ignore the amazon web services business go back six seven eight nine ten years ago in most folks that were looking in the amazon stock did not have the vision to see where amazon web services was going to be able to go over time okay now this is not the only stock we have a situation kind of like this we have
A somewhat similar situation with the stock named nvidia nvidia was a stock that basically did nothing i mean absolutely nothing for about seven years okay nvidia was a stock that literally went pretty much nowhere for seven years all right this was a stock that in that to that time frame you know jensen who’s a ceo over there at nvidia he would always talk about
You know how gpus were gonna be the future and how they could do all these you know unbelievable things and you know it was just a matter of time till things started to work out whatnot and you can go back and watch tons of interviews of jensen back in the day basically you know prior to the the period when the stocks just started going crazy which was essentially
Like you know it is at the end of 2014 then moving into 2015 2016 2017 and he talked about this whole wave that was going to be coming for gpus in the future and how nvidia was gonna be at the forefront of that but for seven years no one cared no one paid attention you like everybody just like didn’t have a vision for it or whatever and then obviously we look at
Him be a stock chart and then literally just a few years span like a two three-year span the stock goes from like a twenty dollar stock to you know nearly approaching $300 at its highs okay even now even now after nvidia’s huge sock crack crash over the past six months the stock is still at one hundred fifty four hundred and fifty five dollars and keep in mind just
A few years ago this was a twenty dollar sock there’s these are these are two perfect examples two slightly different examples but of business models you know a company had that just people didn’t see amazon start an amazon web services no one’s first saw really are most people there were some bulls out of that foresaw like how big the opportunity was for him own
Web services but most folks did not foresee like how big that was gonna be gpus and in videos opportunity in the space and how they could be into all these different products and artificial intelligence and robotics and all these things in the future and high-end you know computing most folks just didn’t have the vision for that at that time even though they had
Proven so much and that you didn’t get that stock to move for seven years okay and and then the stock just goes crazy so here’s the thing if you want a big opportunity okay you want to every once in a while by something speculative if you want to buy something speculative you better be buying something that has massive opportunity that you want to be looking for
Something that has something special underlying in that business that makes you say that this might make this business model really special in the future this might this might be something no one’s paying attention to right now but has the chance to fundamentally transform a company okay and so if i think about you know the speculative stocks out there there’s a
Few that come to mind there’s one in particular that has such an unbelievable thing they’re doing right now in literally everybody is turning a blind eye except the tesla bulls and that is autopilot okay autopilot is one of the most amazing creations we have seen in modern history the autopilot is not new it’s been around for a few years now and it’s basically
Gotten no respect from wall street you can watch videos on youtube or literally just actually you know test driving a test or something like that put it on autopilot and you will be you know you’re gonna be flat-out amazed it’s gonna be one of the most amazing experiences you could ever possibly have in a car okay but literally if you don’t have time to test drive
A tesla is unrealistic or you don’t know anybody that owns a tesla just watch youtube videos on how unbelievable the autopilot system is and this is a business model inside of tesla that is being completely disrespected that no one is paying attention to outside of the most core loyal bulls and no one’s even factoring in other than the super tesla bulls like how
Big this business opportunity is gonna be in the future and how this can fundamentally change the entire transportation system the same way amazon web services has completely changed you know cloud product or nvidia that with their gpus has come you know completely change what computing is and what kind of people kind of think about computing as and things like
That right autopilot system is is shipping in vehicles today it does miracles today like like you would literally just go on youtube and watch countless videos on what these systems can do and no one has paid any attention to this for the most part on wall street you look at tests over the past five years and it is our stock that has done absolutely nothing it’s
Another nvidia stock essentially in video stock didn’t move for seven years and here we are with tesla stock hasn’t moved in five years has gone up it’s gone down it but it hasn’t literally gone anywhere okay and this is what happens sometimes with stocks in particular business models and so when i’m looking at something i want to play as a speculative company i want
Something that’s gonna give me the opportunity to 10x my money and if i look at what a test is doing with their autopilot systems and what they’re gonna be able to do with autonomous vehicles in the future it is such a massive opportunity that it’s so worth me personally taking the risk on it okay now some people are putting their all their money in touch with it’s
A super risky you know you can do whatever you want to do with your money but that is obviously super risky because there are a risk involved with every stock i wouldn’t feel comfortable being all in any stock out there i like to be diversify nowadays okay my days of going all-in and one two or three stocks are long gone you know that’s way past me now i like to
Stay diversified but when i’m looking at speculative opportunities that absolutely on a whole other scale in amazon web services type opportunity i look at tesla’s autonomous opportunity there everybody knows about tesla’s electric vehicles that’s what everybody pays attention to and all the bull you know bulls and bears and everybody gets caught up and what numbers
Tesla’s gonna put up in electric vehicles you know what everybody’s not paying attention to is autonomous opportunity which is beyond it beyond an insane opportunity it’s literally an opportunity that could be worth hundreds of billions if not a trillion plus dollars in the future and almost no one’s paying attention to it okay almost no it’s just like amazon web
Services when no one paid attention to that and it was like amazon’s got this thing and it’s growing and it’s big a bigger and bigger thing and no one cared so that’s my opinion on this this little story time where i try to talk about stock from the past bringing into a stock in the future and kind of talk about you know just the fact that people you know sometimes
Don’t foresee these opportunities and they have years and years to see it and it’s not seen and then when it is seen the price action is ridiculous okay look at the amazon stock look at the nvidia stock look what happens to some of these okay so anyways i hope you guys enjoyed this as always make sure you smash that thumbs up button today thank you for watching and have a great day
Transcribed from video
How Amazon Stock Went From $200 to $2000 In 6 Years By Financial Education
