Two of the biggest names in artificial intelligence (AI) have climbed sharply this year, which raises a fair question for long-term investors: Is it too late to buy? Amazon (AMZN 2.45%) is up about 8% year to date as of this writing, while Alphabet (GOOG 0.76%)(GOOGL 0.69%) is up roughly 13% and has more than doubled over the past year.
But the AI infrastructure build-out arguably still looks early, and both companies run the kind of cash-generating machines that can fund it for years. Even more, they’re the type of formidable, diverse businesses likely to not just survive but thrive during a period of significant technological change like the one we’re in today.
Here’s a closer look at why I’d buy and hold each for the next decade.
Image source: Getty Images.
Amazon: a cloud business that keeps accelerating
The heart of the case for Amazon is Amazon Web Services (AWS), its cloud computing business, and its most profitable operation. AWS revenue rose 28% year over year in the first quarter of 2026 to $37.6 billion — its fastest growth in more than three years and an acceleration from 24% in the fourth quarter of 2025 and 20% in the third quarter. For a segment already at a $150 billion annual revenue run rate, this acceleration is particularly impressive.
“It’s very unusual for a business to grow this fast on a base this large,” said Amazon CEO Andy Jassy in the company’s first-quarter earnings call.
Today’s Change
(-2.45%) $-6.29
Current Price
$250.23
Key Data Points
Market Cap
$2.8T
Day’s Range
$247.72 – $257.06
52wk Range
$196.00 – $278.56
Volume
1.9M
Avg Vol
45M
Gross Margin
50.60%
The growth comes alongside a custom-chip effort aimed at lowering the cost of AI computing.
Amazon’s chips business — inclusive of Graviton, Trainium, and Nitro — has exceeded a $20 billion annual revenue run rate and is growing at a triple-digit rate. Additionally, Amazon’s advertising, a high-margin business, grew 24% to more than $17 billion in the quarter.
The cash from these businesses funds an enormous build-out. Amazon has guided to about $200 billion in capital expenditures in 2026. And first-quarter capital spending alone reached $44 billion.
With this said, the company’s trailing-12-month free cash flow has dwindled to around $1 billion. The risk, therefore, is that spending stays high longer than it takes the payoff to show up in margins.
Trading at around 30 times earnings as of this writing, the stock isn’t cheap. But the underlying business is looking exceptionally good.
Alphabet: even faster cloud growth and a resilient core
Alphabet’s growth story is arguably even more exciting.
Its Google Cloud segment grew 63% year over year in the first quarter to $20 billion, accelerating from 48% in the fourth quarter of 2025 and 34% in the third, making it the fastest-growing of the major cloud platforms. Additionally, Google Cloud backlog, or contracted revenue not yet recognized, nearly doubled from the prior quarter to more than $460 billion. Yes, that’s nearly half a trillion dollars.
“Our enterprise AI solutions have become our primary growth driver for Cloud for the first time,” said Alphabet CEO Sundar Pichai in the company’s first-quarter earnings call. And Pichai added that “revenue from products built on our gen AI models grew nearly 800% year over year.”
Today’s Change
(-0.76%) $-2.71
Current Price
$355.68
Key Data Points
Market Cap
$4.4T
Day’s Range
$354.38 – $362.50
52wk Range
$163.33 – $404.47
Volume
43M
Avg Vol
19.4M
Gross Margin
60.43%
Dividend Yield
0.23%
And the core business that is helping fund Alphabet’s build-out to capitalize on this massive backlog is also seeing strong momentum.
Revenue from Alphabet’s “Google search and other” segment rose 19% year over year, stifling worries that AI chatbots would chip away at search.
Highlighting the company’s overall momentum, Alphabet’s total revenue grew 22% to $109.9 billion.
Like Amazon, Alphabet is spending aggressively, too.
The company raised its 2026 capital expenditures guidance to a range of $180 billion to $190 billion, and chief financial officer Anat Ashkenazi said 2027 spending would rise significantly from there. To help fund it, Alphabet recently announced plans to raise more than $80 billion through an equity offering.
The stock trades at about 27 times earnings as of this writing. So, like Amazon, shares aren’t expensive, but they’re not cheap either.
Why I’d hold both for a decade
Both Amazon and Alphabet are pouring capital into AI at a scale that is squeezing near-term free cash flow, and either could disappoint if that spending outruns the returns. Additionally, regulatory scrutiny hangs over both companies — and it may only intensify as these businesses grow.
But these are two of the sturdiest businesses in technology, with dominant core franchises and cloud units that are still accelerating years into the AI era. If the infrastructure build-out has another decade to run — and these spending plans suggest both companies are betting it does — each looks positioned to compound through it. Buying and holding both for the long haul, while keeping any single position sized sensibly given the risks, seems like a decent idea — even after these stocks’ strong run-ups.
