It’s been a worrying week for the stock market. The Fed ended its first meeting under new Chairman Kevin Warsh by leaving interest rates unchanged but indicating that raising rates this year would be on the table again, sending the Nasdaq and S&P 500 lower before a partial rebound. Additionally, AI and chip names could drop all at once in early June.
But has this volatility created some opportunities? I think so in some areas. Times like this are a great time to look for stocks that may have fallen in price.
With this in mind, which AI stocks can you buy today and hold for the next 10 years?
One name that keeps rising to the top for me is; Amazon (AMZN +3.01%).
As of this writing, the stock is trading around $244, about 12% below the all-time high of $278.56 reached in early May. And under volatility, Amazon’s most important long-term division had one of its best quarters in years.
Image source: Getty Images.
Powerful AI catalyst
Most people still think of Amazon as a store. But the reason to own the company for the long term is its cloud division, Amazon Web Services (AWS). And it’s accelerating. Amazon’s first quarter AWS revenue increased 28% year over year to $37.6 billion, the highest growth in 15 quarters, up from 24% in Q4 2025 and 20% in the previous quarter, bringing AWS’ annual revenue to $150 billion.
“It’s very unusual for a business to grow this quickly on such a large base, and the last time we saw growth at this clip, AWS was about half the size,” Amazon CEO Andy Jassy said during the company’s first-quarter earnings call.
Artificial intelligence (AI) is the accelerator. AWS’s AI revenue has grown from virtually nothing three years ago to more than $15 billion in annualized utilization, with an order backlog of $364 billion, counting the recent Anthropic commitment of more than $100 billion.
AWS is not only Amazon’s fastest growing business, but also by far its most profitable. The division accounted for about 21% of Amazon’s $181.5 billion in first-quarter sales, but about 59% of its operating profit, pushing the company’s overall operating margin to a record high of 13.1%.
Amazon is also building more hardware underneath all of this. The company’s custom chips now generate more than $20 billion in annual revenue, an increase of nearly 40% from the previous quarter. In fact, the company says it has more than $225 billion in contracts for its Trainium chips.
By designing its own chips, Amazon will reduce dependence on outside suppliers, saving tens of billions of dollars in annual capital investment while increasing AWS’s profit margins by several percentage points over time, executives said.
Today’s changes
(3.01%) $7.15
current price
$244.65
Key data points
Market capitalization
$2.6 trillion
daily range
$236.06 -$245.72
52 week range
$196.00 – $278.56
volume
2.1M
average volume
45.1M
gross profit
50.60%
Expenses for extension
However, the company needs to make significant investments to take advantage of this growth opportunity.
Amazon plans to spend about $200 billion in capital spending in 2026, with $43.2 billion in the first quarter alone, mostly on AWS and AI. The spending has all but wiped out free cash flow, which has shrunk to about $1 billion over the past 12 months, a fraction of what Amazon generated last year.
But the company believes the investment is worth it.
”[W]We think this is truly a once-in-a-lifetime opportunity where all applications as we know them will be reinvented,” Jassy said by phone.
So what do investors have to pay to participate in this growth story?
Amazon’s price-to-earnings ratio is approximately 31 times, so the stock is not cheap. But they aren’t expensive either.
But there are some risks worth taking seriously, and most of them go back to that spending. For example, if AI returns turn out to be lower than expected, the large investments over many years could squeeze profits and cash flow for a longer period of time than investors would like. Additionally, component costs are increasing. Jassy pointed out that memory prices are rising because demand has exceeded supply.
Still, if I had to pick one AI stock to buy and hold for the next 10 years, it would probably be this one.
Amazon operates the world’s largest cloud platform, and its momentum is accelerating. Furthermore, the backlog of orders is rapidly increasing. The company is also working on the design of the chip that provides the power, which should bring down the cost over time. At the end of the day, I think spending a lot of money is simply the cost of staying in front of what Jassy calls “a once-in-a-lifetime opportunity.” And if there’s any company that can spend this much money, it’s Amazon. The company is spending large amounts of cash to continue raising funds.
It’s not going to be a smooth road, and weeks like this one prove that. But I think Amazon stock could do well from here over the next 10 years.
