1 Top AI Stock to Buy and Hold for the Next Decade

It's been a jittery week for stocks. The Federal Reserve wrapped up its first meeting under new Chair Kevin Warsh by holding rates steady but hinting that a rate hike later this year is back on the table, knocking the Nasdaq and S&P 500 lower before a partial rebound. And add an early June sell-off across AI and chip names.

But has this volatility created some opportunities? In some areas, I think so. Periods like this are a great time to go look for stocks that may have pulled back more than they deserve.

With this in mind, which AI stock could you buy today and hold for the next 10 years?

One name that keeps rising to the top for me is Amazon (NASDAQ: AMZN).

As of this writing, shares sit around $244, about 12% below the record high of $278.56 they reached in early May. And beneath the volatility, the part of Amazon that matters most for the long term just had one of its best quarters in years.

Image source: Getty Images.

A powerful AI catalyst

Most people still picture Amazon as a store. But the reason to own it for the long haul is its cloud arm, Amazon Web Services (AWS). And it's accelerating. Amazon's first-quarter AWS revenue rose 28% year over year to $37.6 billion -- its fastest growth in 15 quarters and up from 24% in the fourth quarter of 2025 and 20% the quarter before, lifting AWS to a $150 billion annual revenue run rate.

"It is very unusual for a business to grow this fast on a base this large, and the last time we saw growth at this clip, AWS was roughly half the size," said Amazon CEO Andy Jassy on the company's first-quarter earnings call.

Artificial intelligence (AI) is the accelerant. AWS's AI revenue has gone from essentially nothing three years ago to an annual run rate above $15 billion -- and its order backlog hit $364 billion before counting a recent Anthropic commitment worth more than $100 billion.

AWS isn't just Amazon's fastest-growing business -- it's by far its most profitable. The unit drove about 21% of Amazon's $181.5 billion in first-quarter revenue but about 59% of its operating income, lifting companywide operating margin to a record 13.1%.

Amazon is also building more of the hardware underneath all this. Its custom chips now run at more than a $20 billion annual revenue run rate -- up nearly 40% from the prior quarter. In fact, the company says it holds more than $225 billion in commitments for its Trainium chips.

Designing its own chips lets Amazon lean less on outside suppliers and, management says, save tens of billions in capital expenditures a year while adding several percentage points to AWS's margins over time.

The cost of the build-out

But the company will need to invest heavily to capitalize on this growth opportunity.

Amazon plans to spend about $200 billion on capital expenditures in 2026, laying out $43.2 billion in the first quarter alone -- mostly on AWS and AI. That spending has all but erased free cash flow, which shrank to about $1 billion over the past 12 months -- a fraction of what Amazon generated a year earlier.

But the company believes the investment will be worth it.

"[W]e do view this as truly a once-in-a-lifetime opportunity where every application that we know of is going to be reinvented," said Jassy on the call.

So what do investors have to pay to get in on this growth story?

Amazon's price-to-earnings ratio is about 31. So shares aren't cheap. But they're not expensive either.

But there are some risks worth taking seriously -- and most trace back to that spending. If the AI payoff proves to be lower than expected, for instance, years of heavy investment could pressure profits and cash flow longer than investors would like. Additionally, component costs are climbing. Jassy noted memory prices have soared as demand outstrips supply.

Still, if I'm choosing one AI stock to buy and hold for the next decade, this is probably it.

Amazon runs the world's largest cloud platform, and it's seeing accelerating momentum. In addition, its backlog is surging. The company also increasingly designs the chips that power it, which should bend its costs lower over time. Ultimately, I think the heavy spending is simply the cost of staying in front of what Jassy calls a once-in-a-lifetime opportunity. And if there's a company to spend this much, it's Amazon. The company throws off plenty of cash to keep funding it.

It won't be a smooth ride, and weeks like this one prove it. But over the next 10 years, I think Amazon stock could work out nicely from here.

Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.