The U.S. equity market has been anything but calm in 2025, as several factors, including persistent trade tensions, rising macroeconomic uncertainties, and geopolitical challenges, have weighed on overall investor sentiment.
But seasoned investors know this: Periods of market volatility offer a chance to acquire fundamentally strong, high-quality stocks with robust growth prospects and a strong competitive moat at attractive valuation levels. Historically, this strategy has yielded handsome returns for patient investors.
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Against this backdrop, here's why these four stocks can prove exceptional buy-and-hold picks in the next decade.
1. Microsoft
Few companies are better positioned to ride the artificial intelligence (AI) wave than Microsoft (MSFT 0.28%). The company plays a critical role in building AI infrastructure worldwide. Its deep partnership with ChatGPT developer OpenAI enabled it to infuse AI across its entire ecosystem. Copilot, its AI-powered assistant, integrated across the Office 365 productivity suite and GitHub, is all set to become a key revenue driver in the coming years.
Then there's Azure, Microsoft's cloud computing platform, which now commands a 22% market share globally in the AI infrastructure space. The company is also building new data centers globally, opening new facilities in 10 countries in the third quarter alone. This has laid the foundation for Azure's future growth.
Its highly diversified business model with recurring revenue streams truly sets Microsoft apart. The company's annuity mix (the proportion of its revenue derived from recurring sources like subscriptions and long-term contracts) was a very high 98% in the fiscal third quarter of 2025, which ended March 31. Commercial remaining performance obligations, a barometer to gauge future revenue visibility, also grew 34% year over year to $315 billion. The balance sheet is also robust, with a cash balance of $79.6 billion. This has allowed Microsoft to pursue an aggressive AI investment strategy while returning $9.7 billion to shareholders as dividends and share repurchases.
All these factors make Microsoft a smart pick now.
2. Meta Platforms
Meta Platforms' (META -0.54%) dominance in digital advertising and solid growth prospects make it attractive for long-term investors. The company generated nearly $41.4 billion in revenue in the recent quarter by reaching 3.4 billion people daily across its social media applications, almost 40% of the global population.
Meta's AI investments are already showing tangible returns. The company's AI-powered content recommendation system has increased time spent on Facebook by 7% and Instagram by 6% in the past six months. The new AI-powered ads recommendation model for Reels has boosted the ad conversion rates by 5%. The Meta AI virtual assistant has nearly 1 billion monthly active users.
Furthermore, there are also other avenues to monetize Meta's large customer base. The company aims to leverage WhatsApp's massive user base to strengthen its business messaging and mobile commerce position in developed markets.
Meta is a highly profitable and free cash flow-positive company that plans to invest nearly $64 billion to $72 billion in fiscal 2025. Considering the robust tailwinds, Meta seems a worthwhile pick now.
3. Amazon
Amazon (AMZN -0.37%) stands to benefit from several growth catalysts in the next decade. AWS dominates the cloud infrastructure services market with a 29% share. The cloud computing platform achieved a $117 billion annualized revenue run rate with a 40% margin as of the end of the first quarter of fiscal 2025.
The company's e-commerce business is also getting stronger thanks to a newly redesigned inbound network, increasing adoption of robotics and automation, and expansion of the same delivery sites. Finally, advertising has also become a significant growth driver, generating $13.9 billion in revenue in the first quarter.
Amazon is also leveraging its advanced AI capabilities across e-commerce, cloud computing, advertising, and all other business areas to boost productivity and improve cost efficiencies. CEO Andy Jassy confirmed the AI business is already a "multibillion-dollar annual run rate" that is "growing [at] triple-digit year-over-year percentages," despite being in its nascent stages. The company offers custom Trainium 2 chips, which have 30% to 40% better price-to-performance ratios than competitors. Meanwhile, their proprietary Nova foundation models and Bedrock platform are helping multiple large clients build custom AI applications.
With a robust core business and a rapidly growing AI business, Amazon can become a significant wealth-generating machine in the coming years.
4. Vertex Pharmaceuticals
Vertex Pharmaceuticals' (VRTX 0.31%) dominance in the cystic fibrosis (CF) market and its successful diversification into pain management position it as an exceptional long-term investment opportunity now.
Vertex generated over $10 billion in annual revenue from the CF franchise. The company's triple combination CF drug Trikafta (also known as Kaftrio outside the U.S.) is the primary revenue driver and can treat nearly 95% of CF patients in core markets. Additionally, the recently approved CF drug Alyftrek has demonstrated even better therapeutic efficacy in clinical trials and is effective for 31 additional genetic mutations of CF not covered by Trikafta. Plus, the drug offers improved patient convenience with once-daily dosing as compared to Trikafta's twice-daily dosing. This can further expand Vertex's penetration in the CF market.
Beyond CF, Vertex's pain management drug Journavx is showing strong early adoption and expanding payer coverage. With the U.S. government policy firmly in favor of non-opioid pain management alternatives, the company sees tremendous growth potential for this oral non-opioid drug.
Vertex's pipeline includes multiple late-stage programs with three potential filings expected by 2026. The company's acquisition of Alpine Immune Sciences has also added multiple potential kidney disease drug candidates to its research pipeline.
Vertex is financially stable with $11.4 billion in cash on its balance sheet. Hence, the company has significant financial flexibility to invest in organic and inorganic growth initiatives. Considering Vertex's multiple tailwinds and financial strength, the stock is a compelling pick now.
