1 Unstoppable Artificial Intelligence (AI) Stocks to Buy and Hold Forever

2d437e016bd2a3d1c63e455a92cda556

Artificial intelligence (AI) is the next big thing. The technology is evolving rapidly and could contribute substantially to the growth of companies that become leaders in this field.

Many investors also want to make money by investing in companies that appear to be leading the way. There are many options, but e-commerce is titanic Amazon (NASDAQ: AMZN) is one of the best. Let's take a look at why it's a great AI game to buy and hold forever.

Amazon's position in AI

The company has taken several steps in the field of AI. Last year it announced Bedrock, a service it provides through its cloud computing platform Amazon Web Services (AWS). Bedrock helps developers build generative AI applications like ChatGPT, whether they focus on voice, images, or videos.

Amazon also invested $4 billion in Anthropic, an AI-focused company that developed Claude, a family of generative AI platforms that compete with GPT-4, the latest version of ChatGPT.

Claude is also the name of the great language model developed by Anthropic which Amazon now offers through Bedrock. A $4 billion investment may seem like a lot, but it's not that much for Amazon, which generated about $32 billion in free cash flow last year. Management seems confident that investments in AI will pay for themselves several times over, and AWS has a run rate of $100 billion.

AI isn't yet responsible for a large percentage of that total, but CEO Andy Jassy said he believes it will “generate tens of billions of dollars in revenue in the coming years.” AWS is already one of Amazon's key growth drivers, especially in terms of the bottom line, with its much higher margins. Last year, Amazon's total net sales of $574.8 billion rose 12% year over year.

AWS's revenue grew slightly faster, 13.3% year over year, to $90.8 billion – or just 15.8% of the company's total revenue. But its operating income of $24.7 billion made up almost 67% of Amazon's total operating income of $36.9 billion. And Amazon's AI work will only improve AWS's performance.

More than an AI game

There are many ways to invest in AI, and doing so through a company like Amazon is a great way to mitigate risk. A pure AI company could soar, but it could also sink if its initiatives don't bear fruit or if the industry doesn't become as big as many analysts currently think.

However, Amazon's business is strong enough and diversified enough to handle these potential outcomes. The company remains a leader in e-commerce, with a 37.6% share of the US market last year. Ecommerce There is still a long road to growth, so Amazon will continue to benefit from this market for years to come. The e-commerce business benefits from the network effect: the platform becomes stronger and more valuable as more sellers and buyers join it.

This also makes the company's website more attractive to advertisers. According to management, advertising activity continues to grow rapidly. Elsewhere, the company is a leader in video and music streaming.

In addition to leadership in several sectors ripe for growth and a strong competitive advantage, there's something else that makes it an excellent stock for good: the company has developed a culture of innovation and a focus on customer satisfaction.

Amazon didn't become a leader in e-commerce or cloud computing by accident. And the country is likely to continue investing in promising areas, including its work in healthcare, which is slowly but surely taking shape.

The bottom line: Amazon is an excellent stock to benefit from the rise of AI, the growth of e-commerce and cloud computing. Long-term investors should not be mistaken about this robust, versatile company.

Should You Invest $1,000 in Amazon Now?

Before you buy stock in Amazon, consider this:

The Motley Fool stock advisor The analyst team has just identified what they think is the 10 best stocks for investors to buy now… and Amazon wasn't one of them. The ten stocks that survived the cut could deliver monster returns in the coming years.

Think about when Nvidia made this list on April 15, 2005… if you had $1,000 invested at the time of our recommendation, you would have $488,186!*

Stock Advisor provides investors with an easy-to-follow blueprint for success, including portfolio building guidance, regular analyst updates, and two new stock picks per month. The Stock Advisor is on duty more than quadrupled the return of the S&P 500 since 2002*.

View the 10 stocks »

*Stock Advisor returns April 22, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Prosperity Junior Bakiny has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has one disclosure policy.

1 Unstoppable Artificial Intelligence (AI) Stocks to Buy and Hold Forever was originally published by The Motley Fool

Related Posts

  • Finance
  • May 15, 2024
  • 13 views
  • 3 minutes Read
Here are the top ten picks for the Mormon church's $55 billion stock portfolio

Getty Images The investment arm of the Mormon church disclosed some of its assets in a 13F filing on Wednesday. The church has built a portfolio of individual stocks worth…

  • Finance
  • May 15, 2024
  • 17 views
  • 4 minutes Read
Florida lawmakers are proposing to change the tax code to provide premium relief for homeowners

Florida lawmakers are proposing to change the tax code to provide premium relief for homeowners Florida Congressman Byron Donalds is working with his colleague Senator Rick Scott on a bill…

Leave a Reply

Your email address will not be published. Required fields are marked *

You Missed

Russia's wealthy elite could face higher income taxes if authorities propose a new, progressive system

  • May 28, 2024
Russia's wealthy elite could face higher income taxes if authorities propose a new, progressive system

Chairman of the Libertarian Party appears to insinuate support for Trump as the party faces backlash over the appointment of a radical left party | The Gateway expert

  • May 28, 2024
Chairman of the Libertarian Party appears to insinuate support for Trump as the party faces backlash over the appointment of a radical left party |  The Gateway expert

Bill Walton was unique in media and life, with a message we all understood

  • May 28, 2024
Bill Walton was unique in media and life, with a message we all understood

Stumbling but breathing: How Steve Cohen's casino team will move forward

  • May 28, 2024
Stumbling but breathing: How Steve Cohen's casino team will move forward

J Lo's $1M-per-show deal for Las Vegas residency is in jeopardy as new album, concert tour flops

  • May 28, 2024
J Lo's $1M-per-show deal for Las Vegas residency is in jeopardy as new album, concert tour flops

Inter Miami vs. Atlanta United prediction, odds, line, start time: 2024 MLS picks, experts' best bets for May 29

  • May 28, 2024
Inter Miami vs.  Atlanta United prediction, odds, line, start time: 2024 MLS picks, experts' best bets for May 29

How leaflet distribution can boost local business growth

  • May 28, 2024
How leaflet distribution can boost local business growth

NATO allies are bracing for a possible Trump victory in 2024

  • May 28, 2024
NATO allies are bracing for a possible Trump victory in 2024

AI models have favorite numbers because they think they are people

  • May 28, 2024
AI models have favorite numbers because they think they are people

“Other” Celtics still have more work to do, but so far they have passed every test

  • May 28, 2024
“Other” Celtics still have more work to do, but so far they have passed every test

New lawsuit filed in Pennsylvania to prevent mail-in ballots from being thrown out

  • May 28, 2024
New lawsuit filed in Pennsylvania to prevent mail-in ballots from being thrown out