Amazon and Apple: Top Picks for Long-Term Investment
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 2 days ago
0mins
Source: Fool
- Amazon's Growth Potential: Amazon's market cap stands at $2.9 trillion, with North American operating income surging 43% year-over-year in Q1, alongside a 12% sales increase, indicating that its e-commerce profitability is accelerating and is likely to continue leading the market.
- Cloud Computing Leadership: Amazon's AWS is the world's largest profitable business, and with skyrocketing demand for AI services, its revenue is expected to keep accelerating, particularly bolstered by partnerships with Anthropic and OpenAI that enhance its competitive edge.
- Apple's Ecosystem Advantage: Apple commands over 60% of the U.S. smartphone market, and its services segment consistently grows at mid-teens rates, showcasing strong customer retention and profitability driven by its ecosystem lock-in.
- High-Margin Business Model: Apple's services have higher gross margins than its devices, and through revenue-sharing agreements with Google and the use of Apple Pay, it further solidifies its position in high-profit areas, ensuring long-term financial health.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 274.000
Low
175.00
Averages
280.01
High
325.00
Current: 274.000
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Amazon's AI-Driven Growth Potential is Significant
- AI Chip Partnership: Amazon's collaboration with Meta Platforms, which will utilize Amazon's Graviton5 processors, not only opens new sales opportunities for Amazon's custom chip business but also strengthens its internal tech stack's competitiveness.
- Cloud Infrastructure Growth: Amazon Web Services (AWS) reported a 28% year-over-year revenue increase to $37.59 billion in Q1, surpassing Wall Street estimates, indicating that AI demand is driving higher utilization rates and promising future growth.
- E-commerce and Digital Advertising Integration: As the world's largest online retailer, Amazon's advertising revenue grew 24% year-over-year to $17.24 billion in Q1, with AI integration expected to enhance profitability and market share in both e-commerce and advertising sectors.
- Profit Driver: Although AWS accounted for only 20.7% of total sales in Q1, it generated the majority of profits, and with the cloud business accelerating, Amazon's earnings outlook is increasingly positive, boosting investor confidence.
See More
Deutsche Bank Warns New Glenn Explosion Could Disrupt Launch Schedule
- Launch Schedule Disruption: Deutsche Bank warned that the explosion of Blue Origin's New Glenn rocket could significantly disrupt the launch schedule, likely causing substantial damage to the launchpad and requiring an extended restoration period, thereby jeopardizing AST SpaceMobile's satellite rollout plans.
- Stock Price Plunge: AST SpaceMobile shares tumbled nearly 18% in Friday morning trading, with analysts expressing concerns that the 'catastrophic' explosion of Blue Origin's rocket could delay ASTS's launch targets for this year.
- Deployment Timeline Delay: Deutsche Bank now expects that AST SpaceMobile's goal of placing 45 satellites in orbit by the end of 2026 may be delayed by approximately six months due to the lack of access to Blue Origin's launch capacity, impacting the company's deployment timeline.
- Broader Market Implications: Analysts at Roth Capital cautioned that the explosion could push AST SpaceMobile's commercial constellation deployment from Q4 2026 to Q1 2027, potentially slowing Amazon's low-Earth orbit satellite deployment and affecting competitive dynamics in the satellite communications market.
See More
SpaceX IPO Valuation Could Reach $2 Trillion
- IPO Valuation Comparison: SpaceX's IPO is targeting a valuation between $1.75 trillion and $2 trillion, which is approximately 4,000 to 4,600 times larger than Amazon's $438 million valuation at its IPO in 1997, highlighting the vast market potential.
- Retail Investor Allocation: SpaceX may allocate up to 30% of its IPO shares to retail investors, which is three times the typical allocation, although the high valuation could limit potential upside for these investors.
- Indirect Investment Opportunity: Alphabet invested $1 billion in SpaceX in 2015, securing nearly 10% of the company, but due to dilution, its stake has decreased to about 5%, which could still be worth around $100 billion at a $2 trillion valuation.
- Business Outlook Analysis: While SpaceX is not yet profitable overall, its Starlink satellite network generated nearly $11.4 billion in revenue in 2025, and the upcoming Starship rocket system could facilitate larger deployments, enhancing the value of Alphabet's investment over time.
See More
Market Dynamics and Corporate Performance Analysis
- Dell's Quarter Performance: Dell reported a quarter that exceeded expectations, with shares rising over 30%, indicating strong performance across all business levels, particularly in data center servers, which is expected to boost overall market confidence.
- Costco Membership Renewal Rates Up: Costco's latest earnings report showed improved membership renewal rates in the U.S. and Canada; although market reaction was muted, record performance in its gas business is likely to enhance membership loyalty and solidify its market position.
- Anthropic Surpasses OpenAI: Anthropic raised $65 billion at a $965 billion valuation, becoming the most valuable AI startup, a significant increase from $380 billion in February, showcasing explosive revenue growth and wealth creation potential in the AI sector.
- Cybersecurity Market Volatility: Okta beat expectations in its earnings report, with shares rising over 8%, while Zscaler's stock fell due to disappointing guidance, highlighting a divergence in the cybersecurity industry that affected the performance of other companies, including CrowdStrike.
See More
Major Wall Street Rating Changes Overview
- Dell Upgrade: Susquehanna upgraded Dell from neutral to positive, citing increased confidence in a sustainable 8-10% operating margin and a 6% free cash flow margin, which supports a potential rerating of its EV/sales multiple to 3x, indicating strong market potential.
- Viper Energy Initiation: RBC initiated coverage of Viper Energy with an Outperform rating and a $58 price target, highlighting its advantages in scale and core Permian focus, positioning it as a best-in-class mineral and royalty company.
- SentinelOne Buy Rating: Bank of America upgraded SentinelOne from neutral to buy, viewing its solid quarterly performance as a strong entry point after an 18% decline in after-hours trading, reflecting confidence in its future growth prospects.
- XPeng Upgrade: Macquarie upgraded XPeng from neutral to outperform, noting its volume growth in the Chinese EV market, while future investments in humanoids and robotaxis provide additional upside potential for its stock.
See More
SpaceX IPO Outlook and AI Investment Risks
- IPO Anticipation: SpaceX's planned IPO on June 12 is one of the most awaited public debuts in years, drawing significant investor interest in its future growth potential.
- AI Investment Scale: The company allocated $12.7 billion to artificial intelligence, significantly exceeding the $3.8 billion spent on its space segment, indicating a strategic pivot towards AI despite the associated high risks.
- Operating Loss Comparison: SpaceX's operating loss in AI reached $6.3 billion, far surpassing the $657 million loss from its space operations, raising concerns about the financial implications of such an imbalance for potential investors.
- Market Outlook and Risks: While SpaceX estimates a total addressable market of $26.5 trillion for AI, the uncertainty surrounding its massive expenditures and the ability to capture a significant market share necessitates careful risk assessment by investors considering the IPO.
See More
Amazon's AI-Driven Growth Potential is Significant
- AI Chip Partnership: Amazon's collaboration with Meta Platforms, which will utilize Amazon's Graviton5 processors, not only opens new sales opportunities for Amazon's custom chip business but also strengthens its internal tech stack's competitiveness.
- Cloud Infrastructure Growth: Amazon Web Services (AWS) reported a 28% year-over-year revenue increase to $37.59 billion in Q1, surpassing Wall Street estimates, indicating that AI demand is driving higher utilization rates and promising future growth.
- E-commerce and Digital Advertising Integration: As the world's largest online retailer, Amazon's advertising revenue grew 24% year-over-year to $17.24 billion in Q1, with AI integration expected to enhance profitability and market share in both e-commerce and advertising sectors.
- Profit Driver: Although AWS accounted for only 20.7% of total sales in Q1, it generated the majority of profits, and with the cloud business accelerating, Amazon's earnings outlook is increasingly positive, boosting investor confidence.
See More
Deutsche Bank Warns New Glenn Explosion Could Disrupt Launch Schedule
- Launch Schedule Disruption: Deutsche Bank warned that the explosion of Blue Origin's New Glenn rocket could significantly disrupt the launch schedule, likely causing substantial damage to the launchpad and requiring an extended restoration period, thereby jeopardizing AST SpaceMobile's satellite rollout plans.
- Stock Price Plunge: AST SpaceMobile shares tumbled nearly 18% in Friday morning trading, with analysts expressing concerns that the 'catastrophic' explosion of Blue Origin's rocket could delay ASTS's launch targets for this year.
- Deployment Timeline Delay: Deutsche Bank now expects that AST SpaceMobile's goal of placing 45 satellites in orbit by the end of 2026 may be delayed by approximately six months due to the lack of access to Blue Origin's launch capacity, impacting the company's deployment timeline.
- Broader Market Implications: Analysts at Roth Capital cautioned that the explosion could push AST SpaceMobile's commercial constellation deployment from Q4 2026 to Q1 2027, potentially slowing Amazon's low-Earth orbit satellite deployment and affecting competitive dynamics in the satellite communications market.
See More
SpaceX IPO Valuation Could Reach $2 Trillion
- IPO Valuation Comparison: SpaceX's IPO is targeting a valuation between $1.75 trillion and $2 trillion, which is approximately 4,000 to 4,600 times larger than Amazon's $438 million valuation at its IPO in 1997, highlighting the vast market potential.
- Retail Investor Allocation: SpaceX may allocate up to 30% of its IPO shares to retail investors, which is three times the typical allocation, although the high valuation could limit potential upside for these investors.
- Indirect Investment Opportunity: Alphabet invested $1 billion in SpaceX in 2015, securing nearly 10% of the company, but due to dilution, its stake has decreased to about 5%, which could still be worth around $100 billion at a $2 trillion valuation.
- Business Outlook Analysis: While SpaceX is not yet profitable overall, its Starlink satellite network generated nearly $11.4 billion in revenue in 2025, and the upcoming Starship rocket system could facilitate larger deployments, enhancing the value of Alphabet's investment over time.
See More
Market Dynamics and Corporate Performance Analysis
- Dell's Quarter Performance: Dell reported a quarter that exceeded expectations, with shares rising over 30%, indicating strong performance across all business levels, particularly in data center servers, which is expected to boost overall market confidence.
- Costco Membership Renewal Rates Up: Costco's latest earnings report showed improved membership renewal rates in the U.S. and Canada; although market reaction was muted, record performance in its gas business is likely to enhance membership loyalty and solidify its market position.
- Anthropic Surpasses OpenAI: Anthropic raised $65 billion at a $965 billion valuation, becoming the most valuable AI startup, a significant increase from $380 billion in February, showcasing explosive revenue growth and wealth creation potential in the AI sector.
- Cybersecurity Market Volatility: Okta beat expectations in its earnings report, with shares rising over 8%, while Zscaler's stock fell due to disappointing guidance, highlighting a divergence in the cybersecurity industry that affected the performance of other companies, including CrowdStrike.
See More
Major Wall Street Rating Changes Overview
- Dell Upgrade: Susquehanna upgraded Dell from neutral to positive, citing increased confidence in a sustainable 8-10% operating margin and a 6% free cash flow margin, which supports a potential rerating of its EV/sales multiple to 3x, indicating strong market potential.
- Viper Energy Initiation: RBC initiated coverage of Viper Energy with an Outperform rating and a $58 price target, highlighting its advantages in scale and core Permian focus, positioning it as a best-in-class mineral and royalty company.
- SentinelOne Buy Rating: Bank of America upgraded SentinelOne from neutral to buy, viewing its solid quarterly performance as a strong entry point after an 18% decline in after-hours trading, reflecting confidence in its future growth prospects.
- XPeng Upgrade: Macquarie upgraded XPeng from neutral to outperform, noting its volume growth in the Chinese EV market, while future investments in humanoids and robotaxis provide additional upside potential for its stock.
See More
SpaceX IPO Outlook and AI Investment Risks
- IPO Anticipation: SpaceX's planned IPO on June 12 is one of the most awaited public debuts in years, drawing significant investor interest in its future growth potential.
- AI Investment Scale: The company allocated $12.7 billion to artificial intelligence, significantly exceeding the $3.8 billion spent on its space segment, indicating a strategic pivot towards AI despite the associated high risks.
- Operating Loss Comparison: SpaceX's operating loss in AI reached $6.3 billion, far surpassing the $657 million loss from its space operations, raising concerns about the financial implications of such an imbalance for potential investors.
- Market Outlook and Risks: While SpaceX estimates a total addressable market of $26.5 trillion for AI, the uncertainty surrounding its massive expenditures and the ability to capture a significant market share necessitates careful risk assessment by investors considering the IPO.
See More
