If I could only invest in one “Magnificent Seven” stock over the next decade, it would be this one

Over the past year, investors have turned to the “The Magnificent Seven“Stocks seeking outsized gains, and for good reason.

Very high-capitalization technology companies such as Nvidia, Microsoft, AlphabetAnd Meta-platforms have all surpassed the S&P 500 And Nasdaq Composite Index over the past 12 months. Much of these gains can be attributed to a growing interest in artificial intelligence (AI), a market dominated by the Magnificent Seven.

Yet despite the impressive performance of the above companies, I consider another member of the Magnificent Seven to be a superior choice for long-term investors.

E-commerce and cloud computing giant Amazon (NASDAQ: AMZN) has underperformed the Nasdaq over the past year and has generated returns broadly in line with the S&P 500.

With shares down about 14% over the past month, I think now is a great opportunity to buy the dip in Amazon.

Let’s take a closer look at how Amazon is quietly disrupting the AI ​​landscape and assess why it now looks like a lucrative opportunity to buy back shares at a dirt-cheap valuation.

Don’t call it a comeback

One of the biggest opportunities surrounding AI is cloud computing. Amazon faces fierce competition in the cloud infrastructure market from Microsoft Azure and Alphabet’s Google Cloud Platform (GCP).

Over the past 18 months, Microsoft has rapidly expanded its Azure platform thanks to the company’s $10 billion investment in ChatGPT developer OpenAI. Additionally, Alphabet has done a respectable job of entering the cloud space through a series of acquisitions, including MobiledgeX, Forseeti, Siemplify, and Mandiant.

These moves by Microsoft and Alphabet initially appeared to have a negative impact on Amazon’s cloud revenue growth and profitability. However, the chart below illustrates some encouraging new trends in Amazon’s cloud segment, Amazon Web Services (AWS).

Data source: Investor Relations

The numbers above illustrate a very positive scenario for Amazon. Over the past year, AWS has gone from a steadily decelerating business to a growing business for three consecutive quarters, while significantly increasing its operating income.

Amazon is a money printing machine

It’s nice to see a return to revenue and profit growth, but that’s only part of the bigger story for Amazon.

The majority of Amazon’s operating profits come from AWS. For this reason, the reacceleration of the cloud business has had a direct impact on Amazon’s overall cash profile. For the quarter ended June 30, Amazon generated $53 billion in free cash flow on a trailing 12-month basis. Moreover, with a balance sheet showing $86 billion in cash and cash equivalents, Amazon has little shortage of aggressive investments and competition from its competitors.

History…