1 Reason I'd Still Buy Amazon Stock Hand Over Fist and Never Sell
Key Points
The biggest reason to own Amazon is its ability to evolve and innovate.
The company has helped pioneer both the e-commerce and cloud computing industries.
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Amazon's (NASDAQ: AMZN) stock is starting to regain some momentum, up 50% over the past year. That comes after its share price had been essentially flat for the prior four years.
Despite its recent gains, there is still one reason why I'd continue to buy the stock hand over fist and not sell. That reason is that the company is still willing to bet big and innovate. Amazon has always been bold, and that has not changed. It helped pioneer modern-day e-commerce and digital marketplaces, aggressively investing in warehouses and logistics to create a dominant position.
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Amazon invests in innovation
While the company wasn't getting credit for it in recent years, behind the scenes it was building one of the largest and most innovative robotics companies on the planet. Today, these efforts are driving huge efficiency gains in its e-commerce operations.
Amazon also invented the entire cloud computing industry with the introduction of Amazon Web Services (AWS). Analysts were left scratching their heads as to why the company was spending so aggressively building out this business, while today it is its largest segment by profitability and its fastest revenue grower.
Not to be overlooked, Amazon has also aggressively invested in developing its own custom chips. Its Trainium chips are running a large data center dedicated to leading artificial intelligence (AI) company Anthropic, and it just expanded its partnership with the large language model (LLM) maker for the next decade.
Amazon has also developed its own custom central processing unit (CPU), Graviton, which positions it well for agentic AI, as right now there is starting to be a data center CPU shortage.
Another bold bet
Amazon's innovation and making bold bets don't stop there. The company is also better off on space being the next frontier. It is in the process of building out a large, low-orbit satellite network that can provide satellite internet service, and it has just agreed to acquire Globalstar and its valuable spectrum and technology to speed up its efforts.
Not only will this allow Amazon to offer satellite internet directly to consumers without the need for any additional equipment, but it also creates a secure path for the transfer of data to and from devices and AWS without the need for public internet. That is a powerful differentiator in the AI race.
If you plan to own a stock for more than a decade, more likely than not you need to find a company that has a history of evolving and innovation. Few have been better at this than Amazon, which is why this is still a great growth stock to buy for the long term.
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Geoffrey Seiler has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
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