Nasdaq Correction: 1 Magnificent Stock Down 20% From Highs to Buy Now and Hold Forever

Jennifer Saibil, The Motley Fool

Tue, Mar 25, 2025, 3:45 AM 5 min read

The Nasdaq Composite (NASDAQINDEX: ^IXIC) is making its way back up after falling into correction territory, and as of Monday's close, it's down almost 6% this year. That's an average of about 2,500 stocks, so some are doing much better, and some are doing much worse.

Amazon (NASDAQ: AMZN) is about 16% off of its highs even though it reported a fabulous performance in the 2024 fourth quarter, and it's an incredible opportunity to buy shares on the dip. Here's why.

Artificial intelligence (AI) is opening up new avenues of growth for many companies, including Amazon. Amazon has used AI in its business for decades, but the classic type, which gathers and sorts data. The company used it to determine the best delivery routes for shipments, what merchandise to carry, and what products to recommend to customers, among other things.

What's new about AI over the past few years is that it's becoming generative, which means it can take the data gathering a step further and generate content and other creative output. There are the "inference" and "reasoning" steps that take it to the next level.

Amazon offers a huge assortment of services for its Amazon Web Services (AWS) cloud computing clients to develop or use foundation models (FMs) and bring generative AI into their platforms.

It partners with Nvidia to offer AWS clients the capabilities to create their own FMs from the ground up for the highest levels of customization, using their own data. It offers more cost savings when clients use Amazon Bedrock, which uses Amazon's FM. It offers a large selection of FMs for clients to train on,  and it recently launched its own FM, called Nova. It also offers many tools for clients, such as SageMaker, which is a platform that unifies AI tools like machine learning and analytics, and Amazon Q, an AI assistant that can be prompted to take care of any number of actions.

Management is excited about the opportunities in AI, seeing it as a once-in-a-decade development that has incredible long-term potential. CEO Andy Jassy envisions generative AI applications as becoming an essential element of any app being built going forward, and he said it's the biggest opportunity since the cloud, and "probably the biggest technology shift and opportunity in business since the internet."

I would also note that what makes Amazon even more compelling is that this isn't its only business, and at this point, it's not even its biggest. If AI doesn't end up taking off and changing the world, like most people are expecting today, Amazon has plenty to fall back on.