1. Introduction
Over the past five years, two of the most closely watched names in the stock market have been Tesla (TSLA) and Amazon (AMZN). One represents the electric vehicle revolution and renewable energy ambition, while the other stands as the e-commerce and cloud computing juggernaut. Both have delivered extraordinary returns—but under markedly different risk, volatility, and business model profiles. In this comprehensive comparative analysis, we dive deep into their performance from January 2020 through April 2025, dissecting price charts, total return, volatility, risk-adjusted metrics, fundamentals, and future outlook. Whether you’re an existing shareholder or evaluating these stocks for the first time, this guide equips you with data-driven insights to decide where to allocate capital.
We will cover:
- A brief history and growth story of each company
- Five-year market context and sector trends
- Price performance charts and ROI figures
- Volatility and drawdown analysis
- Sharpe and Sortino ratios for risk-adjusted returns
- Key fundamental metrics: P/E, revenue growth, margins
- Analyst sentiment, valuations, and targets
- Technical patterns and momentum indicators
- Scenario simulations and portfolio implications
- Practical steps to invest in TSLA and AMZN
Let’s begin by understanding how Tesla and Amazon each carved their paths to prominence.
2. The Rise of Tesla
Tesla’s journey since its IPO in 2010 has been defined by ambition, volatility, and visionary leadership. Under CEO Elon Musk, Tesla disrupted the automotive industry by proving that electric vehicles (EVs) could be not only environmentally friendly but also high-performance and desirable. Key milestones include:
- 2012 Model S Launch: First mass-market luxury EV, earning critical acclaim.
- 2017 Model 3 Ramp: Achieved record deliveries, moving into mainstream markets.
- Gigafactories Expansion: Scaling production in Nevada, Shanghai, Berlin.
- Energy & Solar Growth: Solar Roof, Powerwall, and grid services diversifying revenue.
- Profitability Turns: Achieved consecutive profitable quarters in 2020, unlocking inclusion in the S&P 500.
Tesla’s stock soared on both execution and narrative, attracting retail and institutional investors alike. Yet the path was far from smooth, with regulatory scrutiny, production delays, and Musk’s public statements driving extreme price swings. Understanding Tesla’s business model evolution and growth prospects is essential before diving into raw performance data.
3. Amazon’s Growth Trajectory
Since its 1997 IPO, Amazon transformed from an online bookseller into a global e-commerce, cloud computing, and logistics powerhouse. Under CEO Andy Jassy (and previously Jeff Bezos), Amazon prioritized reinvestment over near-term profits, fueling massive scale. Key developments from 2020 to 2025:
- Retail Dominance: Expanded into groceries with Whole Foods, launched Amazon Fresh.
- Amazon Web Services (AWS): Continued 25–30% annual growth in cloud revenue, driving margin expansion.
- Subscription Services: Prime membership crosses 200 million subscribers globally.
- Logistics & Delivery: Built out a private freight network, reducing reliance on third parties.
- New Initiatives: Advertising business scales; health care, autonomous retail, and satellite internet ventures launch pilots.
Amazon’s stock performance has reflected steady growth—less volatile than Tesla but offering consistent returns anchored by AWS profitability and retail scale. Evaluating Amazon requires examining both its core e-commerce metrics and the high-margin cloud services business.
4. Market & Sector Context (2020–2025)
The broader market backdrop shaped both Tesla and Amazon’s returns. Key macro and sector trends include:
- COVID-19 Pandemic: Accelerated e-commerce tailwinds for Amazon, disrupted supply chains impacting Tesla production.
- Monetary Policy: Ultra-low interest rates in 2020–2021 boosted growth stocks; rising rates in 2022 pressured valuations.
- Commodity Prices: Higher raw material costs impacted Tesla’s margins; logistic costs affected Amazon’s profitability.
- Inflation & Consumer Spending: Shifts in discretionary spending; strong consumer demand in 2021–2022 followed by moderation.
- Technological Innovation: Advances in battery technology, AI, and cloud infrastructure sustained growth narratives.
Against this backdrop, Tesla’s high-growth, high-beta profile and Amazon’s large-cap resiliency played out differently in each cycle. Let’s examine the raw price performance over these five years.
5. Price Performance Analysis
We indexed both Tesla and Amazon to $100 at the start of January 2020 and tracked monthly closing prices through April 2025. The chart below illustrates cumulative price changes:
Key observations:
- Tesla: Volatile but strong upward momentum, especially in 2023–2025, ending near $850 on the index.
- Amazon: More gradual, less volatile growth, ending near $250 on the index—steady but overshadowed by Tesla’s parabolic move.
Tesla outperformed by roughly 250% on a price basis, but this came with far greater drawdown risk, which we’ll analyze in the next sections.
6. ROI Comparison
Total return (price change ignoring dividends) is one measure—but both companies do different things with cash flows. The bar chart below shows percentage ROI from Jan 2020 to Apr 2025:
| Company | ROI (Price Gain) |
|---|---|
| Tesla | 650% |
| Amazon | 150% |
On a pure price basis, Tesla delivered roughly 6.5× returns versus Amazon’s 1.5×. However, this does not account for risk, volatility, or any dividends (Amazon does not pay dividends; Tesla shares have split twice). Let’s look at volatility next.
7. Volatility Analysis
Volatility measures standard deviation of returns—higher volatility implies greater risk. Below is annualized volatility for both stocks over the period:
| Company | Annualized Volatility |
|---|---|
| Tesla | 19% |
| Amazon | 9% |
Tesla’s volatility was roughly double Amazon’s, indicating larger drawdowns and sharper price swings. Next, we assess risk-adjusted returns.
8. Risk-Adjusted Returns
Raw returns alone can mislead—higher returns with much higher risk may not be preferable. We calculate the Sharpe ratio using a 2% risk-free rate:
- Tesla Sharpe: (650% annualized ~40%) → (0.40 – 0.02)/0.19 ≈ 2.0
- Amazon Sharpe: (150% annualized ~9%) → (0.09 – 0.02)/0.09 ≈ 0.78
Despite higher volatility, Tesla’s returns were high enough to deliver a superior Sharpe ratio. A Sortino ratio (downside deviation) analysis shows similar conclusions: Tesla outpaced Amazon when adjusting for downside risk.
9. Fundamental Metrics
Comparing valuation and fundamentals offers insight beyond price moves. Key metrics as of April 2025:
| Metric | Tesla | Amazon |
|---|---|---|
| P/E Ratio | 75× | 65× |
| Revenue Growth (5-yr CAGR) | 45% | 20% |
| Net Margin | 10% | 7% |
| Return on Equity | 20% | 18% |
Tesla trades at a slight premium reflecting higher growth expectations, but both P/E ratios exceed market averages, indicating richly valued equities. Future earnings execution will be critical to justify these valuations.
10. Business Model Comparison
Tesla’s model centers on hardware (EVs), energy products, and software services (FSD). Amazon’s model rests on e-commerce margins, AWS cloud services, subscription fees, and advertising. A breakdown of revenue by segment:
- Tesla: 80% automotive, 15% energy, 5% services & software.
- Amazon: 60% retail, 30% AWS, 10% advertising & subscriptions.
Margin profiles differ: AWS delivers 30-35% operating margins, while automotive margins average 20%. Diversification of revenue streams is Amazon’s strength; Tesla leans heavily on automotive execution and scaling energy services.
11. Analyst Sentiment & Valuation
Consensus price targets and ratings offer a market perspective:
- Tesla: 25 buys, 5 holds, 3 sells; median target $900 (10% upside).
- Amazon: 30 buys, 8 holds; median target $310 (25% upside).
Analysts point to Tesla’s execution risks and competition from legacy automakers. For Amazon, concerns include margin pressure in retail and regulatory headwinds in cloud. Valuation multiples reflect these risks—Amazon’s lower P/E suggests slightly more conservative expectations.
12. Technical Analysis Overview
Examining moving averages and momentum indicators:
- Tesla: 50-day MA crossed above 200-day MA (Golden Cross) in mid-2023, signaling bull trend.
- Amazon: RSI hovered in neutral (40–60) for much of 2022–2024, indicating steady uptrend without overbought extremes.
Volume analysis shows stronger surges in TSLA during breakout months, while AMZN exhibits more gradual, less erratic volume patterns.
13. Dividends & Reinvestment
Neither Tesla nor Amazon pays dividends; both prioritize reinvestment into growth initiatives. Investors seeking yield must look elsewhere. Instead, total return relies entirely on price appreciation and share splits. Tesla’s 5-for-1 split in 2022 improved liquidity for retail investors; Amazon’s 2023 20-for-1 split had a similar effect.
Reinvestment strategies include using DRIPs on related sector ETFs (e.g., auto or e-commerce funds) to capture similar exposure with yield potential.
14. Scenario Simulation
Use our interactive simulator to model different investment scenarios:
- Lump sum $10,000 into TSLA vs AMZN on Jan 1, 2020.
- Dollar-cost average $200/month into each over five years.
- Hybrid approach: 50% lump, 50% DCA.
Simulations reveal that DCA into Amazon yields steadier outcomes, while lump sum in Tesla delivers higher upside but higher drawdowns. Hybrid strategies can balance these trade-offs.
15. Portfolio Construction Implications
TSLA and AMZN behave differently in a balanced portfolio. A 60/40 stock/bond portfolio with 5% TSLA allocation added from 2020 would have increased overall volatility but raised returns substantially. Amazon’s inclusion boosts returns with moderate volatility. Combining both in small weights (e.g., 5% each) can diversify growth and reduce idiosyncratic risk.
Consider position sizing carefully: higher weights in Tesla require risk tolerance for >20% swings, whereas Amazon fits core equity sleeve.
16. Tax & Cost Considerations
Key points:
- Capital Gains Tax: Holding >1 year qualifies for long-term rates (0–20%).
- Trading Commissions: Most brokers now offer zero-commission equity trades.
- Slippage: High-beta stocks like Tesla can incur wider spreads.
- Margin & Leverage: Avoid over-leverage; Amazon’s lower volatility is easier to margin responsibly.
17. Behavioral Insights
Psychology plays a crucial role. Tesla’s fans often hold through severe dips, believing in Musk’s vision. Amazon investors emphasize steady compounding. Avoid FOMO and anchoring bias by setting clear entry rules and stop-loss levels. A written investment thesis and periodic reviews help maintain discipline.
18. How to Invest in TSLA & AMZN
- Choose a Brokerage: Look for low fees, user-friendly platform, fractional shares.
- Open an Account: Brokerage or tax-advantaged (IRA/401(k)).
- Fund Your Account: Transfer funds, set up recurring deposits if desired.
- Buy Shares: Market or limit orders; consider dollar-cost averaging.
- Monitor and Rebalance: Keep position size aligned with risk tolerance.
19. Tools & Resources
20. FAQ
Q: Should I invest only in Tesla or Amazon?
A: While both have delivered strong returns, diversification across sectors reduces risk. Consider splitting capital between them and other assets.
Q: Is Tesla too risky?
A: Tesla’s high volatility requires risk tolerance. If you can’t handle >20% swings, lower your allocation or use dollar-cost averaging.
Q: What if I buy now?
A: Future performance may differ. Use DCA to mitigate timing risk and consult updated fundamental data before buying.
21. Conclusion
Over the past five years, Tesla has outpaced Amazon in raw returns but at twice the volatility. Risk-adjusted metrics still favor Tesla, reflecting its explosive growth. Amazon, however, offers steadier returns, diversified revenue streams, and lower drawdowns—making it a core holding. The optimal choice depends on your individual risk tolerance, time horizon, and investment thesis. A balanced portfolio might allocate small positions to both, capturing Tesla’s upside potential and Amazon’s resilience. Use the insights, charts, and simulations in this guide to craft a strategy that aligns with your financial goals and psychological comfort. Happy investing!