Amazon Stock Alert: Buy This Mega-Cap Tech Pick Now and Keep It Forever

For those looking for a top mega-cap technology stock to buy and hold, Amazon (NASDAQ:Amazon) has proven to be an excellent long-term pick. In fact, AMZN stock has seen an impressive run-up this year, making its way into the $2 trillion club. Amazon continues to show strength and growth in generative AI, e-commerce, and cloud computing. In fact, its AWS cloud services business holds a 31% market share in the cloud market, meaning there’s likely more upside where this came from.

The use of AI has helped the company boost its core e-commerce business. Amazon set a delivery record, with 60% of Prime orders arriving within one day in March. AI-powered improvements are expected to further boost growth, with net sales expected to increase 7% to 11% in the second quarter.

Amazon is highly diversified, a leader in e-commerce and cloud computing, and expanding into media, advertising, streaming, grocery, smart home technology, robotics, and gaming. This flexibility strengthens its competitive advantage. Recent investments in generative AI promise further growth and position Amazon ahead of other tech giants.

Buy Ahead earnings in Q2

In my opinion, investors should consider buying AMZN shares ahead of the Q2 report on August 1. Amazon stock has risen 40% over the past year, recovering from pandemic-era difficulties and bear market declines post-2022. Despite the challenges, Amazon has emerged stronger, making it a promising investment for long-term investors.

Analysts at Bernstein and Truist recently raised their price targets on AMZN, which has continued to outperform most of the Magnificent 7 stocks recently. On August 1, Amazon will release its second-quarter earnings report, which many market analysts are eagerly awaiting.

Well-known analyst Youssef Squali recently reiterated his buy rating on AMZN and raised his price target to $230 per share. He expects strong second-quarter results, citing positive sales and advertising trends as well as growth in Amazon Web Services. Squali emphasized Amazon’s resilience and competitive advantage in global e-commerce despite a weakening consumer market.

Bernstein maintained its Buy rating on Amazon and raised its price target to $215. Analysts expect Amazon to grow its operating profit and free cash flow while continuing to improve efficiency. Despite lowering cloud and e-commerce revenue forecasts, these analysts expect higher estimates for advertising revenue due to strong demand for Prime Video advertising.

AI is key to this mega-cap technology stock’s thesis

A series of upgrades has certainly led to a positive development for Amazon recently. There are many reasons for such an optimistic assessment, from the company’s great potential in the field of AI to its dominant position in the world of e-commerce and cloud computing.

If revenue grows more than 18% year over year, this stock could see a big upside after the earnings report. And while many other mega-cap tech stocks have taken a hit after their recent reports, Amazon is a different ball game. This company is highly diversified into a number of very profitable segments, which should bode well for its long-term investment strategy among buy-and-hold investors.

As of the publication date, Chris MacDonald did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s disclosure policies.

At the time of publication, the editor in charge did not hold any positions (either directly or indirectly) in the securities mentioned in this article.