2 Top Stocks Long-Term Investors Should Buy in February

Successful investing is not complicated. Focusing on companies that offer services people use every day can help you avoid many mistakes and put you on the path to a happy retirement.

Amazon (NASDAQ: AMZN) and Booking Holdings (NASDAQ: BKNG) are two dominant leaders in e-commerce, cloud computing, and travel. Here's why these stocks are strong long-term investments.

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Amazon

Amazon is a relentless innovator that has greatly benefited long-term shareholders. Its dominance in e-commerce and its growing revenue streams in advertising and cloud computing provide multiple ways for the company to increase the value of your investment over time.

Amazon's online retail business has a durable competitive advantage built on its extensive infrastructure and same-day delivery to customers in cities across the U.S. While other large retailers have stepped up their e-commerce game in recent years, Amazon continues to stay a step ahead. In the third quarter, management noted that its Rufus AI-powered shopping assistant had reached 250 million active users and was projected to hit $10 billion in incremental annualized sales for 2025.

Adding to its e-commerce advantages, the company's large customer base has turned into an advertising magnet. Revenue from ad services now has a $85 billion annual run rate, with ad service revenue up 22% year over year in the fourth quarter. As more brands shift their ad spending to digital platforms, Amazon is clearly positioned to benefit.

However, Amazon Web Services (AWS) remains the company's AI growth engine. Its investments in custom chips and data center capacity are helping organizations reduce the cost of using AI services in the cloud. AWS revenue rose 24% year over year in the fourth quarter and generated roughly half of Amazon's profits.

An investment in Amazon should lead to compounding returns for years to come. The growth in e-commerce, advertising, and cloud services offers strong prospects for the business. Analysts expect its earnings per share to rise at an annualized rate of 17% in the coming years.

Booking Holdings

Booking Holdings has quietly built fortunes for investors over the last few decades. It's the owner of Booking.com, Priceline, Agoda, Kayak, and OpenTable. The company attracts recurring spending from users through loyalty rewards and its Connected Trips, which link customers to flights, rental cars, and attractions. This is its competitive advantage.

Strong demand and pricing power, as reflected in rising average daily room rates, continue to drive solid results. Room nights hit 323 million in the third quarter, up 8% year over year. This drove a 13% year-over-year increase in revenue and a 19% year-over-year increase in adjusted earnings per share.

Management believes it can maintain similar growth over the long term. Specifically, it targets 8% annual increases in gross bookings and revenue, translating into a 15% rise in adjusted earnings.

Booking is not resting on its laurels. It is investing to protect its competitive position with its Connected Trip initiative and AI capabilities to offer personalized recommendations. Management is leveraging a significant amount of data within the company -- an overlooked competitive advantage.

With a consistent operating history and prospects of double-digit earnings hikes, Booking Holdings stock is one of the best ways to profit from a growing travel industry.

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