When investors think of top tech stocks, it's often the "Magnificent Seven" that come to mind. These are the most successful, valuable, and high-profile names in the sector. They have incredible growth prospects while being some of the safer stocks to own for the long haul.
This year, however, has been a bit more challenging for the Magnificent Seven as investors have grown concerned about high spending on tech and artificial intelligence (AI). The spotlight isn't as much on growth as it is on return or investment, specifically when it comes to AI.
There's one stock in the group that stands out the most today, not only for its relatively modest valuation but also because it may have the most upside: Amazon (AMZN -1.72%).
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Amazon has tremendous growth opportunities ahead
AI has been a big part of Amazon's business for years, as the company has used robots in its warehouses to add efficiency. It's always been involved in cutting-edge tech in one way or another. These days, the tech company is front and center with generative AI, as it now has a shopping assistant on its e-commerce sites to help shoppers find what they're looking for.
In addition, the company has been investing in autonomous driving, and Zoox, a wholly owned subsidiary, has begun offering robotaxi rides in multiple cities across the country. Amazon has also considered selling its highly efficient Trainium AI chips to customers, which could generate billions in revenue.
Amazon, which has generated an incredible $91 billion in profit over the trailing 12 months, has deep pockets that can fund its many ventures, which is why it can be a top growth stock to own, especially given its relatively modest-looking valuation. Currently, it trades at around 30 times its trailing earnings, which is far lower than the levels it's been at in previous years.
NASDAQ: AMZN
Key Data Points
The stock can be an excellent pillar for any portfolio
Amazon's stock is up just 7% this year, in what has been a lackluster start for the tech giant; the S&P 500 has risen by approximately 10%. With so many growth opportunities driven by AI, it's a stock many investors may be overlooking right now while they chase the latest, hottest trends. Meanwhile, with a robust business and varied opportunities, Amazon may end up being one of the best AI stocks to own, without the risk of smaller, more speculative options.
This is a top stock to own for the long haul, and it can be a solid pillar to build any portfolio around and hang on to for not just years but potentially decades.
