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In 1996, renowned investor Warren Buffett articulated a principle that resonates with many investors today: the aim should be to acquire a stake in a genuinely comprehensible business at a fair price, with the expectation that its earnings will significantly increase over time. In simpler terms, when high-potential stocks are available at attractive prices, they become clear opportunities for investment.
Amazon (NASDAQ: AMZN) and Meta Platforms (NASDAQ: META) exemplify this investment philosophy. Recently, analysts at JPMorgan Chase highlighted both companies as prime selections for 2025. Furthermore, shares of each firm can be acquired for less than $1,000, which enhances their appeal to a diverse range of investors. Below is an exploration of why these two tech giants are considered wise long-term investments.
Amazon stands out with its formidable influence in multiple sectors, including e-commerce, advertising technology, and cloud services. It boasts the largest online marketplace outside of China and ranks as the third-largest player in digital advertising, while also leading the global public cloud space in sales. For investors seeking exposure to various impactful trends, few companies offer the breadth of opportunity that Amazon does.
Brian Nowak from Morgan Stanley recently identified Amazon as a top pick for 2025, highlighting its undervalued position as a frontrunner in artificial intelligence (AI) within both retail and cloud computing domains. The company leverages machine learning not only for enhancing product recommendations and inventory management but also in logistics operations. Moreover, generative AI plays a crucial role in automating tasks for programmers and customer service representatives.
In terms of its cloud division, Amazon Web Services (AWS) is integrating AI across all levels of its offerings, including hardware, software, and services. Notable advancements such as the Trainium and Inferentia AI chips provide cost-effective alternatives to traditional Nvidia GPUs. Additionally, AWS’s Amazon Q software streamlines business intelligence and coding processes while its Bedrock service supports the rapid development of generative AI applications.
Looking ahead, Amazon is expected to release its fourth-quarter results on February 6. Market expectations suggest a remarkable 49% increase in earnings, projected to continue growing by 21% in 2025. This anticipated performance makes the current valuation of 50 times adjusted earnings look appealing. Historically, Amazon has consistently exceeded consensus earnings estimates—by an average of 39%—over the last six quarters, a trend that may persist as their AI investments begin to bear fruit. This pattern presents a compelling case for why Amazon should be considered a prime investment.
On the other hand, Meta Platforms commands a significant share of the social media landscape, owning four of the world’s seven leading platforms, providing it with a substantial competitive edge in data collection and targeted advertising. This strategic positioning has made it the second-largest ad tech company globally, only behind Alphabet‘s Google, and projections indicate continued market share growth through 2026, as noted by eMarketer.
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Meta has made considerable investments in AI technologies; during the earnings call for the fourth quarter, CEO Mark Zuckerberg spoke about the financial benefits gained through the implementation of custom MTIA (Meta Training and Inference Accelerator) chips that enhance ad recommendation processes. Future plans suggest extending the use of this tailored silicon for training operations.
As of December, Meta AI attracted around 600 million monthly active users, making it the leading conversational assistant worldwide. Zuckerberg anticipates this number to exceed 1 billion by 2025, stating that such user scale typically leads to a robust long-term competitive advantage. He also emphasized the potential of the open-source Llama models to emerge as “the most advanced and widely used AI models” by 2025.
CFO Susan Li forecasts that Meta’s capital expenditures could reach $65 billion in 2025, representing a 66% increase from $39 billion the prior year. This financial outlay will primarily support generative AI initiatives alongside its core business. This increase in spending is favorable for Nvidia amidst challenges such as the DeepSeek disruption, while simultaneously benefiting Meta. Investor Dan Niles recently noted on CNBC that Meta’s deployment of AI technologies outshines those implemented by its “Magnificent Seven” counterparts.
Wall Street predicts a 6% increase in Meta’s earnings for 2025. Though this prediction renders the current valuation of 29 times earnings a bit pricey, analysts may adjust their forecasts upwards as the year progresses. With digital advertising spending projected to rise by 11% in 2025, Meta’s history of exceeding consensus estimates—by an average of 13% over the last six quarters—supports the likelihood of positive revisions. Such upward adjustments tend to stimulate stock price growth, illustrating why Meta presents a strong investment opportunity.
Before investing in Amazon, however, it is essential to consider other perspectives:
According to the Motley Fool Stock Advisor team, a collection of the top stocks identified for purchase does not include Amazon. Instead, they highlight 10 stocks that may deliver substantial returns in the future.
For context, consider Nvidia, which made this roster in April 2005. An investment of $1,000 at that time would be worth approximately $735,852 today!*
The Motley Fool Stock Advisor boasts an average return of 903%, significantly outperforming the S&P 500, which sits at 176% over the same period. Investors are encouraged to review the latest top 10 stock recommendations.
*Stock Advisor returns as of January 27, 2025
The Motley Fool has relevant positions in Amazon and Nvidia and recommends investments in other companies, including Alphabet and Meta Platforms. Furthermore, key individuals associated with these companies hold roles within The Motley Fool.
2 No-Brainer AI Stocks to Buy With $1,000 in February 2025 was originally published by The Motley Fool.
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