Warren Buffett once said that when its comes to stocks, his "favorite holding period is forever." Investors shouldn't blindly apply that idea to all stocks, but holding the best stocks "forever" can mean the difference between a 10% gain and multi-bagger returns. Today, I'll discuss three of my favorite long-term holdings, and why I don't plan to sell them anytime soon.

Amazon

I bought Amazon (NASDAQ:AMZN) back in the low $600s, and it now trades at above $1,700. Yet I plan to keep holding the stock, because its growth story seems more compelling than ever.

A mini-shopping cart, filled with parcels, on top of a laptop keyboard.

Image source: Getty Images.

Amazon generates most of its revenue from its online marketplaces in over a dozen countries. Amazon locks in those customers with Prime, its premium plan, which offers discounts, free shipping, streaming media, and other perks.

The company reported that it had over 100 million Prime members earlier this year, and research firm CIRP estimates that the average Prime member spends $1,300 on the site annually, compared to $700 for non-members. The firm also estimated that Echo owners spend a whopping $1,700 per year. Amazon is also expanding this ecosystem into the brick-and-mortar market through its Whole Foods and Amazon Go stores.

Amazon generates most of its operating profits from AWS (Amazon Web Services), the largest cloud infrastructure platform in the world. The growth of this higher margin business allows the company to expand its lower-margin marketplaces with loss-leading strategies like smart speakers, Kindle devices, and original streaming content.

All told, revenue for the company rose 31% last year, and analysts expect another 34% growth this year thanks to the growth of its marketplaces, AWS, and Whole Foods stores. Its earnings, which rose 26% last year, could more than double this year.

Amazon's stock might seem pricey at 140 times this year's earnings, but it remains an essential long-term play on the e-commerce and cloud markets.

Tencent

I bought Tencent's (NASDAQOTH:TCEHY) OTC shares back in the high $20s, and the stock now trades in the low $50s. The Chinese tech giant's stock tumbled from its all-time high of $61 earlier this year, but I think it's still a compelling investment.

A group of young people use their smartphones.

Image source: Getty Images.

Tencent owns WeChat, the most popular mobile messaging app in China with over a billion monthly active users (MAUs). It also owns the older messaging platform QQ and a related social network called Qzone. Over the past few years, Tencent expanded WeChat into an all-in-one "super app" for ride hailing, deliveries, online purchases, games, and other services.

Tencent is also the largest video game publisher in the world. It owns hit titles like League of Legends, Arena of Valor, and Clash of Clans, and holds major stakes in Activision Blizzard, Ubisoft, PUBG developer Bluehole, and Fortnite publisher Epic Games. Tencent also owns major streaming video and music platforms, and has an expanding presence in next-gen technologies like cloud services and artificial intelligence.

Simply put, Tencent has wide moats in multiple high-growth markets. That's why its revenue rose 56% last year as its non-GAAP earnings rose 43%. Analysts expect its revenue to rise 43% this year as its earnings, slightly throttled by higher ecosystem investments, grow 31%.

Tencent's stock isn't cheap at about 35 times earnings, but it's a reasonable premium for one of China's top tech companies.

Square

I bought shares of Square (NYSE:SQ) in the low $50s earlier this year, and the stock currently trades in the high $60s. The stock isn't cheap at 145 times this year's earnings, but I think the payment services provider's accelerating growth will reduce those multiples in the near future.

Square Register.

Square Register. Image source: Square.

Square's main hardware products -- its credit card-reading dongle Square Reader, its iPad-based POS (point of sale) system Square Stand, and its stand-alone POS system Square Register -- are all aimed at disrupting the market for traditional POS systems. Square links these devices to its cloud services, which help customers manage customer relationships, inventories, payrolls, logistics, website design, and other features.

Square also provides a mobile payments platform called Cash, which is currently the third most popular mobile peer-to-peer payments app in America according to eMarketer. All these products and services are designed to flourish in a cashless society.

Square's adjusted revenue rose 43% last year, and analysts expect another 48% growth this year. Its adjusted earnings, which jumped nearly seven-fold last year, could grow another 70% this year. Square could face tougher challenges as other competitors enter the market, but its first mover's advantage -- particularly with small to medium-sized businesses -- should buoy its long-term growth.

 

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Leo Sun owns shares of Amazon, Square, and Tencent Holdings. The Motley Fool owns shares of and recommends Activision Blizzard, Amazon, Square, and Tencent Holdings. The Motley Fool has a disclosure policy.