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I S&P 500 has been a phenomenal wealth maker, delivering a total return of at least 17% in seven of the past nine years. And in four of those years, it produced a total return of 25% or more!
However, the index is down over the past six months, and some fast-growing technology stocks now look attractive. Here are two that I think are worth considering.
Investing for long-term growth
The first one is Amazon (NASDAQ:AMZN), whose share price has lagged the S&P 500 over the past five years (up just 36%).
However, this is not due to a loss of relevance or disappointing revenue growth. Far from it, as the e-commerce and cloud computing juggernaut is in production $1trn on sale for the year 2028!
So, what’s the problem? Another conclusion of the income statement. Amazon has been prioritizing near-term targets to drive long-term growth. This year alone the company plans to spend around $200bn, including robotics, AI, and internet satellites.
The risk is that this huge investment may not end up paying off, while the global economic downturn may hamper growth in its e-commerce segment. The cloud computing unit (AWS) is also facing a lot of AI competition from Microsoft Azure and Google Cloud.
However, as CEO Andy Jassy said last month: “We have extensive experience in understanding the demand signals in the AWS business and turning that position into a solid return on investment. We are confident that this will be the case here as well.”
In the long run, I think patience will be rewarded. Faster deliveries with order-picking robots and delivery drones should keep consumers on the e-commerce app, while fending off competitors and increasing margins in the long run.
Meanwhile, Amazon continues to monetize its massive consumer data through high-quality digital ads (23% growth by 2025). Now it’s only behind Google again Meta (Facebook and Instagram) in digital marketing.
And, while Amazon prioritizes growth over profit, it’s far from a loss. And based on 2027 forecasts, the forward price-to-earnings (P/E) ratio is 22. Stock is rarely cheap.
Finally, it’s worth noting that the 12-month price average among Wall Street analysts is $280 — about 36% above the current price. Amazon is on my shopping list.
Hyper growth
A second S&P 500 dividend that I think is worth looking at Nvidia (NASDAQ:NVDA). I know, I know. The company is already the largest company in the world, with a market cap of a staggering $4.3trn. How much can Nvidia continue to grow?
However, Wall Street expects the chip company’s revenue to grow further 71% to $369bn this financial year (FY27). That would be an acceleration from last year’s 65% top-line growth. Salaries are expected to increase by 73%.
Demand for enterprise AI infrastructure hardware and software products is not slowing down. And as demand for computing grows exponentially with the rise of autonomous AI agents, future demand should remain strong.
Arguably, the biggest risk is customer focus, with a handful of firms accounting for almost half of the revenue. If they reduce reliance on Nvidia, this could equally hurt sales.
However, with the stock trading at a P/E multiple of 22, I like the risk-reward setup here. Physical AI (humanoid robots, self-driving cars, etc.) has just taken off, promising to expand Nvidia’s customer base significantly.
The $269 price target is 52% higher.
