It might be difficult to envision holding on to one stock for 10 years. But long-term investing is ideal because it gives a company time to execute its business strategies while smoothing out short-term volatility and the impacts of temporary geopolitical crises or the business cycle.
For Amazon (AMZN +0.56%), the next decade will be crucial. The company appears to be at a crossroads, where it must decide if it wants to transition into a mature and stable business built around its currently reliable cash cow segments, or continue to pour money into pursuing new growth drivers that may or may not perform as expected. The choices that management is making today could impact its stock price performance over the next 10 years and beyond.
NASDAQ: AMZN
Key Data Points
Amazon is a burgeoning logistics leader
Under CEO Andy Jassy, Amazon has made impressive progress in improving the efficiency of its e-commerce business. This strategy has involved breaking up its U.S. distribution network into eight independent hubs that serve their specific regions. And it has helped speed up delivery times and bring down transportation costs.
Over the coming decade, investors can expect Amazon to leverage its logistics edge in novel ways. This month, the company surprised many on Wall Street by opening its distribution network to other businesses through a platform called Amazon Supply Chain Services.
In this, it followed a path that was remarkably similar to the one that led to the creation of Amazon Web Services, which emerged after the company realized the internet infrastructure it had created for internal use could become an industry-leading business in its own right. The company is now using the same playbook in logistics, where it will compete directly with UPS and FedEx, potentially transforming distribution from a costly part of its e-commerce business into a new engine for long-term growth and revenue diversification.
Amazon has many advantages that could help it outcompete the incumbents. Just like with AWS, the company's internal operations will give it economies-of-scale cost savings that it can pass on to clients.
Management is betting big on generative AI
Amazon's long-term growth story isn't limited to logistics. In fact, generative artificial intelligence (AI) will probably play a much bigger role in its stock price performance. This year, the company plans to spend an eye-popping $200 billion on AI-related capital expenditures such as data centers and custom AI chips.
To put this number in perspective, Amazon's operating income was "just" $80 billion in 2025. So naturally, pouring so much more money into data centers could hurt the company's stock performance if there isn't a clear and substantial payoff in the future.
That said, Jassy is hugely optimistic, telling CNBC that the company believes AI will "reinvent every single customer experience we know and altogether new ones we never imagined." And while he acknowledges that it could take years for the current spending to pay off, he believes investors will eventually be rewarded, just like when Amazon began investing heavily in its AWS infrastructure in the 2000s.
Image source: Getty Images.
Will these bets play out over the next 10 years?
Many mature companies tend to focus on cutting costs and maximizing profits, which can then be returned to shareholders through stock buybacks and dividends. Amazon is doing the first part of that equation (cutting costs), but it is pouring the extra cash into new long-term growth drivers.
The company's logistics push has a high probability of success because it is essentially already an industry leader. However, it might be more difficult for Amazon to find success in generative AI because of the immense costs involved in building and running data centers, on top of the rising competition in this unproven industry.
Amazon still looks like a long-term winner. But AI-related uncertainty will likely pressure the stock's growth for a few years until there is more clarity about when management's massive capital spending will pay off.
