For those seeking a top mega-cap tech stock to buy and hold, Amazon (NASDAQ:AMZN) has proven to be an excellent long-term pick. Indeed, AMZN stock has seen an impressive surge 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 could service business holds 31% market share in the cloud market, meaning there’s likely more upside where this came from.
The company’s use of AI has boosted its core e-commerce business, with Amazon setting a delivery record with 60% of Prime orders arriving within a day in March. AI-driven improvements are expected to elevate growth further, with net sales projected to rise 7% to 11% in Q2.
Amazon is highly diversified, leading in e-commerce and cloud computing, and expanding into media, advertising, streaming, groceries, smart home tech, robotics and gaming. This flexibility strengthens its competitive edge. Recent investments in generative AI promise further growth, positioning Amazon ahead of other tech giants.
Buy Ahead Q2 Earnings
It’s my view that investors may want to consider buying AMZN stock before its Q2 report on Aug. 1. Amazon stock has risen 40% over the past year, rebounding from pandemic-era struggles and post-2022 bear market declines. Despite challenges, Amazon has emerged stronger, making it a promising investment for long-term investors.
Analysts at Bernstein and Truist recently raised their price targets for AMZN, which has continued to outperform most Magnificent 7 stocks of late. On Aug. 1, Amazon will release its Q2 earnings report, which many market analysts are looking forward to.
Well-known analyst Youssef Squali recently reiterated his buy rating for AMZN, raising his price target to $230 per share. He expects strong Q2 results, citing positive sales and advertising trends, and growth in Amazon Web Services. Squali highlighted Amazon’s resilience and competitive edge in global e-commerce despite a weakening consumer market.
Bernstein maintained a buy rating on Amazon and raised its price target to $215. Analysts expect Amazon to boost operating income and free cash flow while continuing to improve efficiency. Despite lowering cloud and e-commerce revenue forecasts, these analysts see increased ad revenue estimates due to strong demand for Prime Video ads.
AI is Key to the Thesis of This Mega-Cap Tech Stock
A series of upgrades have certainly been bullish for Amazon of late. There are many reasons to take such a bullish view, from the company’s strong potential in AI to its dominant position in the world of e-commerce and cloud computing.
If revenue grows at a better than 18% clip year-over-year, this is a stock that could see big upside following its earnings report. And while many other mega-cap tech stocks have seen dips following their recent reports, Amazon is a different beast. This is a company that’s highly diversified across a number of very profitable segments, which should bode well for its long-term thesis among buy and hold investors.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.