The technology sector has been a double-edged sword for investors in 2026, with the rise of artificial intelligence (AI) creating both opportunities and challenges. While certain companies have thrived on the AI wave, others are grappling with the threat of obsolescence. This shift has sparked considerable anxiety on Wall Street, contributing to falling share prices for numerous tech firms in recent weeks.
Despite the turmoil, two companies have emerged as appealing long-term investments: IBM and Amazon. Both firms have demonstrated an ability to adapt to changing technological landscapes, making them strong candidates for sustained growth.
IBM, a stalwart in the tech industry with over a century of history, embodies the potential for both growth and income. The company currently offers a dividend yield of 2.8%, having made uninterrupted dividend payments since 1916, thereby appealing to income-focused investors. More importantly, its advancements in quantum computing position it as a future growth stock. Quantum computing utilizes the principles of quantum mechanics to execute complex calculations that would take conventional supercomputers centuries to solve. IBM shares reached an all-time high of $324.90 last November, following announcements of key milestones in its quantum initiatives, suggesting future upward potential as these goals are reached.
One of IBM’s significant achievements is the Nighthawk quantum processor, poised to help the company achieve quantum advantage by the end of the year. This milestone will mark a significant turning point, as it indicates that quantum devices can solve real-world problems more efficiently than traditional computers. IBM is already making strides in this arena, participating in projects with the U.S. Department of Energy and the Missile Defense Agency, further solidifying its position as a leader in this innovative technology.
On the other hand, Amazon has solidified its dominance in the cloud computing sector through its Amazon Web Services (AWS) division, which is critical in the current AI boom. Companies looking to leverage AI technology require extensive computing resources, and AWS is well-positioned to meet this demand. The AI infrastructure market is experiencing explosive growth, with AWS revenue surging; the division reported a 24% year-over-year increase in fourth-quarter revenue to $35.6 billion. Market analysts project that this sector will expand from $59 billion in 2025 to nearly $500 billion by 2034, presenting substantial growth opportunities for Amazon.
However, investors reacted negatively to Amazon’s announcement of approximately $200 billion in capital expenditures planned for the current year, a marked increase from the $128.3 billion spent in 2025. This spooked Wall Street, contributing to a roughly 10% decline in the company’s stock price through March 3, 2026. Notably, this investment is designed to bolster Amazon’s own computing needs while also supporting external businesses. The company employs over 1 million AI-powered robots in its warehouses, which significantly enhance shipping speeds and overall efficiency.
As a result of its enhancements in AI and operational efficiency, Amazon has seen its gross profit margins steadily improve. The company reported an operating income of $25 billion for the fourth quarter of 2025, up from $21.2 billion in 2024, highlighting the positive financial trajectory as it continues to adapt to the evolving tech landscape.
Currently, both IBM and Amazon’s shares are trading well below their 52-week highs, presenting an opportune moment for investors to acquire stocks at reasonable valuations. Their forward price-to-earnings ratios have hovered at low levels throughout the past year, reinforcing the belief that now is a favorable time to invest. This combination of attractive pricing and strong business fundamentals positions both IBM and Amazon as excellent long-term investments for the next decade and beyond.
See also
Aston Martin F1 Team Partners with Cohere to Integrate Generative AI for Enhanced Performance
Amazon, Google, Microsoft Back Anthropic AI Amid Pentagon Risk Label Concerns
CoreWeave Expands AI Inference Infrastructure with Perplexity Deal, Unlocking $250 Trillion Potential
Google Launches AI Research Center in Berlin to Foster Collaboration and Innovation
Perplexica Launches Open-Source AI Search Engine, Promises Local Privacy and Flexibility
