The 1 Artificial Intelligence Stock I'd Buy With My Last $500

Artificial intelligence (AI) stocks have slipped recently, giving up some of their momentum after three incredible years. These stocks had led indexes higher as investors favored them for their exciting growth stories. AI has the potential to be the next big thing in technology, revolutionizing the way companies operate -- and significantly boosting earnings.

But from late last year through the present time, concerns have upset the performance of these stocks. Investors have questioned the level of spending on infrastructure, for example, and whether the revenue opportunity will make the spending efforts worthwhile.

Still, evidence from AI companies continues to show a bright future -- and that this AI growth story is far from over. With this in mind, here's the one AI stock I'd buy with my last $500.

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An e-commerce empire

This stock is one many of us know, even if we're not particularly focused on the world of AI. I'm talking about Amazon (NASDAQ: AMZN), a company that has built an e-commerce empire. This business generates revenue investors can count on, as it has proven itself over time, and the company's cost structure revamp a few years ago should maximize profitability moving forward.

The fact that Amazon not only sells general merchandise but also essentials like groceries makes it a business that may succeed in any economic environment. So, Amazon offers us a certain element of safety.

At the same time, the company's presence in the AI market is delivering growth, and there should be much more to come. Through Amazon Web Services (AWS), the cloud computing business, Amazon makes a variety of AI products and services available to customers -- from chips to a fully managed service called Amazon Bedrock.

Monetizing AI capacity

And here's the great news for investors: As soon as Amazon makes capacity available, it's monetized. Thanks to the AI business, AWS has reached a $142 billion annual revenue run rate. Customers turn to AWS for tasks such as the training of models or the inference process that helps large language models solve real-world problems. Inference is seen as one of the next major growth drivers in the AI story, and one that may be long-lasting, as it's necessary for the actual use of AI. Here, AWS is well-positioned to benefit.

Meanwhile, Amazon stock is reasonably priced today at 27x forward earnings estimates, down from more than 35x just a few months ago. This offers investors a great opportunity to get in on the shares.

This attractive price, Amazon's solid e-commerce business, and its successes in AI make this the one AI stock I'd buy with my last $500.

Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.