Wall Street Says The Best S&P 500 Artificial Intelligence (AI) Stocks to Buy Now (Hint: Not Nvidia)

Among the Wall Street analysts who follow them Amazon (NASDAQ: AMZN)95% currently rate the stock as a Buy, while the remaining 5% think the stock is a Hold. According to him, no analyst currently recommends selling Amazon shares Evidence-based research.

Microsoft is the only other company on the market S&P500 (SNPINDEX: ^GSPC) with the same percentage of buy recommendations, but 2% of analysts recommend selling the stock, which reduces its net result by two points. Nvidia is also near the top, with 94% of analysts rating the stock as a buy and the remaining 6% as a hold.

In short, while Microsoft and Nvidia are close competitors, Amazon is the best artificial intelligence (AI) stock in the S&P 500 index to buy right now if “best” is defined as the company with the highest percentage of net buy ratings. Here’s what investors need to know.

Amazon uses artificial intelligence to operate in its three business segments

Amazon has a strong competitive position in three large markets: e-commerce, digital advertising and cloud computing. The company uses artificial intelligence (AI) to increase revenues and improve performance across all three business segments.

Amazon operates the largest e-commerce marketplace in terms of sales in North America and Western Europe Morgan Stanley analysts expect that by 2028 it will be the largest market in the world. According to analysts, faster delivery times should help increase market share, and a wider shift to online shopping should give the company greater control over prices over time.

The consequence of its retail dominance is a highly engaged consumer base and rich data. This combination helped Amazon become the largest retail advertiser and the third largest advertising company in the world. According to eMarketer, its market share is expected to reach 9.4% in 2025, an increase of almost two points compared to 2023.

Finally, Amazon Web Services (AWS) is the largest public cloud, as measured by its 40% market share. In this context, AWS is uniquely positioned to benefit as demand for AI infrastructure and platform services drives greater cloud spending. AWS seized this opportunity by designing custom AI training and inference chips and introducing a generative AI development platform called Bedrock.

Amazon is also making money from AI in more subtle ways. For example, buyers spend $443,000 per minute in the marketplace. Transactions generate data that not only informs the machine learning models powering the adtech software, but also the generative AI shopping assistant Rufus. Additionally, Morgan Stanley claims that AI-powered supply chain optimization can increase a company’s operating margin by 4 percentage points.

Amazon looked good in the second quarter

Amazon reported solid financial results in the second quarter. Revenue increased 10% to $148 billion on strong momentum in advertising and cloud computing, and general accounting principles (GAAP) net income increased 94% to $1.26 per diluted share. However, Amazon did not provide revenue estimates and management issued conservative guidance, so the company’s shares fell about 10% after the report was released.

On the other hand, CFO Brian Olsavsky told analysts that Amazon achieved the fastest delivery speeds for Prime members this year, strengthening its position in everyday essentials. In turn, Prime members shop more often and spend more money, which means Amazon further strengthens its position as an e-commerce leader.

Additionally, CEO Andy Jassy said, “Our AI business continues to grow dramatically, reaching multi-billion-dollar revenues, even though it was early days.” He also told analysts that Bedrock has the largest selection of models and the best generative AI capabilities in areas such as model evaluation, information retrieval and AI agent development.

Amazon’s stock price is fair, but it’s not the only AI stock worth buying

Amazon shares have mostly recovered from the post-earnings decline, but are still trading at an attractive price in context. Wall Street expects Amazon’s earnings to grow 22% annually over the next three years. This makes the current valuation of 43.5 times earnings seem reasonable. Investors should feel confident buying a small position in shares of this AI company today.

Note: While Wall Street analysts are extremely bullish on Amazon – more so than any other S&P 500 company, based on net percentage of buy ratings – the smartest way to take advantage of AI is to build a basket of high-quality stocks. Amazon is just one part of this basket. Investors should never limit themselves to one AI stock.

Is it worth investing $1,000 in Amazon now?

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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a board member of The Motley Fool. Trevor Jennewine holds positions at Amazon and Nvidia. The Motley Fool covers and recommends Amazon, FactSet Research Systems, Microsoft and Nvidia. The Motley Fool recommends the following options: long $395 Microsoft calls in January 2026 and short $405 Microsoft calls in January 2026. The Motley Fool has a disclosure policy.

The Best Artificial Intelligence (AI) Stocks in the S&P 500 to Buy Now According to Wall Street (Hint: Not Nvidia) was originally published by The Motley Fool