3 Actions That Turned $1,000 Into $1 Million (or More)

For a stock to turn a $1,000 investment into $1 million, it would have to grow 99,900%. The S&P 500 has grown 5,240% over the past 50 years – so it might seem impossible to find that rare growth stock that could generate big millionaire earnings.

However, three of today’s most valuable companies — Apple (AAPL -0.44%), Amazon (AMZN -0.74%)and Berkshire Hathaway (BRK.A -0.59%) (BRK.B -0.48%) — has actually generated those staggering gains over the past few decades. Let’s see how they turned their most patient investors into millionaires and if they can continue to grow in the near future.

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1. Apple

Apple went public at an adjusted price of $0.10 per share on December 12, 1980. A $1,000 investment in its initial public offering (IPO) would be worth $2.28 million today. Apple is now the most valuable publicly traded company in the world, with a market capitalization of $3.47 trillion.

The company was once an underdog PC maker in a market dominated by Windows PCs. Its business stagnated in the late 1980s and early 1990s before its co-founder Steve Jobs returned as CEO in 1997. Under Jobs, Apple reignited its growth by releasing the iMac, iPod, iPhone and iPad. It attracted a new generation of consumers with its new devices and premium price tags and locked them into its service garden.

Many investors questioned whether Apple could continue to grow after Jobs’ death in 2011, but his successor, Tim Cook, maintained the company’s momentum by modernizing its core devices, launching new products like the Apple Watch and AirPods, and expanding its ecosystem of services. Apple has also returned a lot of cash to its investors through buybacks and dividends.

From fiscal year 1997 to fiscal year 2023 (which ended last September), Apple’s revenue grew at a compound annual growth rate (CAGR) of 17%. Its business is maturing, but it could continue to grow as it launches new artificial intelligence (AI) devices and services.

2. Amazon

Amazon went public at an adjusted price of $0.075 per share on May 15, 1997. A $1,000 investment in its IPO would have grown to $2.55 million. Amazon is now worth $2.01 trillion, making it the fifth most valuable public company in the world.

Amazon initially sold books through its online store, but later expanded its marketplace to sell other types of products. It has also opened up its marketplace to third-party sellers. In 2002, it launched Amazon Web Services (AWS), which became the world’s largest cloud infrastructure platform over the next two decades.

Many skeptics thought Amazon’s capital-intensive business model was unsustainable, but economies of scale eventually kicked in in its marketplace and diluted its fulfillment expenses. It also subsidized the expansion of its lower-margin retail business with AWS’s higher-margin revenue and locked its buyers into its Prime subscriptions.

From 1997 to 2023, Amazon’s revenue grew at an astounding CAGR of 37%. Its growth has slowed over the past decade, but the company remains a balanced way to profit from the secular expansion of the e-commerce and cloud infrastructure markets. Feverish demand for new AI applications should also generate strong tailwinds for AWS over the next few years.

3. Berkshire Hathaway

Berkshire Hathaway was founded in 1839, but its modern history begins with Warren Buffett’s complete takeover of the company in 1965. After 15 years of expanding and restructuring its business, Berkshire Hathaway listed its Class A shares at an IPO price of $290 on March 16. 1980.

A $1,000 investment in those shares would be worth $2.36 million today. Berkshire now has a market capitalization of $980 billion, making it the eighth most valuable public company in the world.

Berkshire Hathaway operates two primary engines of growth. First, it directly owns a long list of insurance, railroad, utility and consumer staples companies. These subsidiaries are mostly recession-proof businesses that generate a lot of cash.

Second, Berkshire pours a lot of that money into its closely watched investment portfolio, which consists of more than 50 stocks and exchange-traded funds (ETFs). His top holdings — which were handpicked by Buffett himself — include Apple, American Express, Bank of Americaand Coca cola.

Berkshire’s well-diversified business has been built to withstand recessions and has consistently outperformed the S&P 500 since its IPO. From 1980 to 2023, operating earnings (which exclude investment gains and losses) grew at a CAGR of 17%.

Some investors may question whether Berkshire can maintain its momentum after Buffett hands over the reins to his successor Greg Abel. I believe his evergreen business can continue to beat the market for decades to come.