These Stocks Trade Near All-Time Highs but Remain Solid Long-Term Buys

Shares of Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) are looking to lead the bull market higher in 2026, having recently hit new highs. These are large companies with trillion-dollar market capitalizations, but their high valuations are supported by robust revenues and profitability, making them relatively safe long-term investments.

Amazon and Alphabet operate services that millions of people use every day. It's this foundation that can produce shareholder returns for years, if not decades, to come. Here's more on why these companies are worthy long-term holdings for your portfolio.

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Amazon

Amazon has been a rewarding investment for many years, with the stock up 700% over the last decade. The e-commerce giant is investing massive amounts in artificial intelligence (AI), which is driving growth across the business.

AI is enhancing customer experiences in Amazon's online store, providing advanced tools for advertisers, improving operational efficiencies, and facilitating cloud computing (Amazon Web Services). In e-commerce, 250 million customers have used Amazon's Rufus shopping assistant to more easily find what they are looking for with the power of AI. This is leading to higher sales conversions, contributing to the online store's 10% year-over-year sales increase last quarter on a constant-currency basis.

The company further compounds the impact of AI by deploying over 1 million robots at its fulfillment centers. This is significantly driving down costs, speeding up order processing, and helping Amazon convert more sales into profit.

Most of Amazon's operating profit, however, comes from growth in cloud services and advertising revenue. Amazon Web Services remains the leading enterprise cloud partner, with $132 billion in annualized revenue, where demand for AI cloud services is the key driver of this business.

However, some investors might be surprised to learn that advertising is now generating $71 billion in annualized revenue, making it Amazon's fastest-growing business. Ad revenue grew 22% year over year on a currency-neutral basis in the third quarter. AI is driving growth here as well by streamlining ad creation, targeting, and analytics, thereby improving the return on investment for ad buyers.

Amazon is not just an e-commerce business; it is an AI powerhouse. The stock delivered modest gains in 2025, but it's trading at a reasonable valuation relative to its earnings growth potential. Multiple growing revenue streams provide a solid foundation for increasing profits, which in turn supports higher share prices over the long term. Analysts expect Amazon's earnings per share to grow at an annualized rate of 18% in the next several years.

Alphabet (Google)

Alphabet is firing on all cylinders. The stock has more than doubled since the April lows of last year, as investor sentiment improves regarding Google's competitive position in the AI sector. The company is investing heavily in AI infrastructure, positioning it to deliver better services to consumers and businesses over time.

While management credits its investments in chips and data centers for driving a 16% year-over-year increase in revenue last quarter, its fundamental advantage is its massive installed base of users. Without it, Alphabet would be unable to generate advertising revenue, its primary source of revenue.

There are 2 billion users across Search, YouTube, Maps, and other services. Google also has 300 million paid subscribers, including Google One and YouTube Premium, contributing to a 14% year-over-year increase in services revenue last quarter.

With billions of people using its services, Google has access to valuable data on what people are searching for, watching, and so on. This ultimately makes Google Gemini smarter, which has emerged as one of the most widely used AI models over the last year.

The company reported that it processed over 1.3 quadrillion units of data, or tokens, during the third quarter -- a 20-fold increase compared to 2024. In addition to its own services, Gemini is also powering other third-party applications, expanding its reach and solidifying Google's competitive position.

As Gemini becomes smarter, it enhances the rest of Google's services. This is particularly evident in the booming demand for AI services in Google Cloud, which is becoming a key driver of the company's growth. Cloud revenue grew 34% year over year, and is now generating an annualized run rate of $60 billion in revenue.

Alphabet generated $124 billion in net income on $385 billion of revenue over the last year, and analysts forecast its earnings to grow about 15% per year over the next several years.

This is a financially strong business that's built to last.

John Ballard has positions in Amazon. The Motley Fool has positions in and recommends Alphabet and Amazon. The Motley Fool has a disclosure policy.