2 Unstoppable Growth Stocks to Buy and Hold for the Next Decade

If you're looking for stocks to buy and hold for the next decade, I'd target companies with durable businesses and wide moats that can compound over the long term. The good news is that you don't have to look far, as many of these market leaders supply the essential products and services we use daily.

Two of the best growth stocks that fit these criteria are Apple (NASDAQ: AAPL) and Amazon (NASDAQ: AMZN). Let's take a look at what makes these growth stocks special, and why you can buy and hold them for the long haul.

Image source: The Motley Fool

Apple: A compounding machine

Apple has done what few companies in the electronics industry have managed to do: position its products at the intersection of consumer technology and high-end status. The company has rarely been at the cutting edge of technology, instead focused on aesthetics and a seamless user experience. Apple doesn't look to rush a technology to market; it looks to perfect it.

This is evident in its new foldable smartphone, the iPhone Duo. Apple didn't debut its first foldable smartphone until nearly eight years after these products hit the market. However, with its elegant hardware-software integration, the iPhone Duo looks poised to be a growth driver for the company and to bring what had been a niche product into the mainstream.

Apple controls the high-end of the important smartphone market, particularly in the U.S. This does two things. The first is that it leads to a more predictable upgrade cycle, giving the company an almost recurring revenue stream from its hardware. Second, its closed ecosystem locks in a large, affluent customer base from which it generates high-margin service revenue. This includes everything from its search revenue-sharing deal with Alphabet to selling cloud storage, to the commission it gets selling third-party apps and subscriptions, and the take rate it gets with Apple Pay.

This all helps make Apple one of the best compounding businesses on the planet. It consistently grows its service revenue by double-digit percentages, which leads to even stronger earnings growth. This compounding business model is why the stock is a top pick to hold for over the next decade.

Amazon: The e-commerce and cloud market leader

Amazon is both the market leader in e-commerce and cloud computing. The company has created a wide moat in its e-commerce business through years of heavy investments in its warehouse and logistics network. However, it hasn't stopped there.

It's also become the largest manufacturer and operator of robots in the world, with over 1 million robots in its fulfillment centers, all coordinated by its DeepFleet AI model. It also uses AI to optimize driver routes, help drivers locate hard-to-find locations in places like apartment complexes, and determine the best locations to store inventory to reduce last-mile delivery distances. This is leading to faster delivery times while creating strong operating leverage in its e-commerce business.

Amazon's largest business by profitability, meanwhile, is cloud computing. The company created the infrastructure-as-a-service industry, and today Amazon Web Services (AWS) remains the largest cloud computing company on the planet. This business is growing quickly, with revenue growth accelerating. Amazon is investing heavily in AI infrastructure to maintain its momentum, backed by a huge backlog and partnerships with leading frontier labs, including Anthropic, in which it holds a large stake, and OpenAI. The company has said it sees a clear path for AWS becoming a $1 trillion revenue business in the future.

The economics of Amazon's cloud business are strong, with the company saying it gets a payback within two to three years while locking in five-year or longer contracts. As it expands its custom chip business, I'd expect the economics to improve further over time. Back in April, it said its chips business is at a $20 billion run rate, or $50 billion when including internal use.

Given its leadership position in e-commerce and cloud computing, Amazon is a great stock to own for the next 10 years.

Geoffrey Seiler has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Apple. The Motley Fool has a disclosure policy.