2 Tech Stocks You Can Buy and Hold for the Next Decade

We have seen a sharp shift in sentiment this year. Animal spirits and bull market enthusiasm have evaporated quickly, especially with technology stocks. The Nasdaq Composite index has fallen sharply from all-time highs, with plenty of stocks down 20%, 30%, or more in just a few short weeks.

This provides contrarian investors with a buying opportunity in technology stocks. It may sound risky to buy when everyone is panicking, but these are the exact moments when your best investments can be made.

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Here's why two top technology stocks -- Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) -- are well worth buying and holding for the next decade.

Alphabet's dominance in AI

Alphabet, the parent company of Google, YouTube, and Google Cloud, is currently in a 20% drawdown to start 2025. This is providing investors an opportunity to scoop up shares on the cheap.

Some investors fear that Google Search will be disrupted in the age of artificial intelligence (AI), with applications such as ChatGPT growing quickly in usage. However, Alphabet is fighting back and innovating at a blistering pace. It has launched AI overviews in Google Search, Circle to Search, and Google Lens to help broaden the amount of ways people can search for things through Google. Gemini -- the company's personal AI assistant -- is now available on smartphones and is growing in usage quickly.

We can't see any disruption in Alphabet's financials, either. Google Search revenue grew to $54 billion in Q4 2024 compared to $48 billion in the same period in 2023. YouTube revenue keeps climbing, and the company is making major inroads with its Waymo self-driving taxi network. However, the most promising might be Google Cloud, which is taking advantage of all the demand for AI tools from third-party software providers. Google Cloud revenue grew 30% year over year last quarter to $12 billion and is now generating $2 billion in quarterly operating income.

Growth shows no signs of slowing down at Alphabet. Today, you can buy shares of Alphabet at a price-to-earnings ratio (P/E) of 20.5, which is well below the S&P 500 average of 28.3. This makes Alphabet stock an easy buy for your portfolio right now.

AMZN PE Ratio data by YCharts

Betting on scale advantages at Amazon

Amazon stock does not look as cheap as Alphabet with a P/E ratio of 35, but it may be even cheaper when you factor in forward earnings potential.

The e-commerce titan and leader in cloud computing hit a staggering $638 billion in revenue in 2024, making it one of the largest businesses by revenue in the world. Cloud computing revenue at Amazon Web Services (AWS) grew 19% year over year in 2024 to $107.6 billion, making the division significantly larger than Google Cloud. International and North American retail sales both saw solid growth in the period, posting 9% and 10% year-over-year growth, respectively, in 2024.

More importantly, Amazon has been enjoying a major profit margin expansion due to cost discipline being implemented by new CEO Andy Jassy. Its operating margin reached a record of 10.75% over the trailing 12 months, and I think it has plenty of room to expand over the next few years as well. Amazon's fastest-growing divisions -- subscriptions, advertising, and cloud computing -- are also its highest-margin segments. As these become larger parts of the business, the profit margin will inch higher.

Over the next few years, I expect Amazon's revenue to reach $750 billion a year. Through steady cost discipline and growing revenue at these high-margin segments, I think profit margins can easily surpass 15% on a consolidated basis, if not reach 20% in an optimistic scenario. 15% profit margins on $750 billion in revenue equals $112.5 billion in annual earnings for Amazon in a few years compared to $68.6 billion in 2024. Today, Amazon stock has a market cap of $2 trillion, meaning that future earnings would bring its P/E ratio below 20 based on these current financials.

Amazon stock looks cheap right now and even cheaper for those with a long-term time horizon.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $314,847!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $41,848!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $524,186!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

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*Stock Advisor returns as of March 24, 2025

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Brett Schafer has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.