The best artificial intelligence (AI) stock in the S&P 500 to buy now, according to Wall Street (hint: not Nvidia)

Among the following Wall Street analysts Amazon (AMZN 2.50%)95% currently rate the stock a buy and the remaining 5% rate the stock a hold. Not a single analyst recommends selling Amazon stock right now, according to the report FactSet Research.

Microsoft is the only other company in the S&P 500 (^GSPC 0.90%) with the same buy rating percentage, but 2% of analysts recommend selling the stock, which lowers its net score by two points. Nvidia it’s also near the top, with 94% of analysts rating the stock a buy and the remaining 6% rating the stock a hold.

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

Amazon is putting AI to work in its three business segments

Amazon has a strong competitive position in three large markets: e-commerce, digital advertising and cloud computing. And the company is using artificial intelligence (AI) to increase revenue and improve efficiency across all three business segments.

Amazon leads the largest e-commerce market in North America and Western Europe in terms of sales and Morgan Stanley analysts expect it to be the world’s largest by 2028. Faster delivery times should help increase market share, while a wider shift to online shopping should give the company more staying power of prices over time, according to analysts.

A corollary of its dominance in retail is a highly engaged consumer base and rich data. This combination has helped Amazon become the largest retail advertiser and third largest ad technology company in the world. Its market share is expected to reach 9.4% in 2025, up nearly two points from 2023, according to eMarketer.

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 higher cloud spending. AWS seized this opportunity by designing custom chips for AI training and inference and introducing a generative AI development platform called Bedrock.

Amazon is also monetizing AI in more subtle ways. For example, buyers spend $443,000 per minute on the market. Transactions generate data that informs not only the machine learning models that power its adtech software, but also its generative AI shopping assistant Rufus. In addition, Morgan Stanley says that AI-driven supply chain optimization could increase operating margin by 4 percentage points.

Amazon looked strong in the second quarter

Amazon reported solid financial results in the second quarter. Revenue rose 10% to $148 billion on a strong push in advertising and cloud computing, and GAAP net income rose 94% to $1.26 per share diluted. But Amazon missed revenue estimates and management provided conservative guidance, so the stock fell about 10% following the report.

On the bright side, CFO Brian Olsavsky told analysts that Amazon achieved its 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 is further cementing itself as a leader in e-commerce.

Additionally, CEO Andy Jassy said, “Our AI business continues to grow dramatically at a multi-billion dollar revenue rate despite being so early.” 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 right, but it’s not the only AI stock worth buying

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

As a caveat, while Wall Street analysts are extremely bullish on Amazon — more so than any other stock in the S&P 500, based on net percentage buy ratings — the most prudent way to benefit from AI is to build a basket of quality stocks. Amazon is just one component of that basket. Investors should never limit themselves to just one AI stock.