“Right-sizing is a common strategy among model developers, who are releasing LLMs in multiple sizes to suit diverse use cases and on-device constraints. Zoho’s strategy of creating “right-sized” and efficient AI models will allow the company to make cost and compute-efficient offerings a key part of its value proposition,” said Mohit Agrawal, research director of AI & IoT at Counterpoint Research.

Zoho’s full-stack AI bet

Zoho’s approach with Zia LLM differs from enterprise AI rivals like Microsoft’s Copilot, Salesforce’s Einstein, and Google’s Gemini as the company owns the full AI stack. While most competitors integrate third-party foundation models, Zoho’s models are trained, deployed, and run entirely on its own infrastructure and cloud.

“Training your own models is technically complex, resource-intensive, and rare among software companies,” said Chirag Mehta, vice president and principal analyst at Constellation Research. “Zoho’s decision to build its own LLMs is rooted in its strategy to maintain independence and flexibility. It reduces dependencies on hyperscalers while still allowing integration when customers want it. Since outcomes from LLMs are tightly linked to context and data, Zoho’s early investment positions it to deliver differentiated, domain-specific intelligence where it already has deep experience.”

The artificial intelligence (AI) revolution is well under way. The AI market was valued at around $190 billion in 2023. By 2033, however, the United Nations predicts the market will be worth nearly $5 trillion.

Fortunes will be made over this time period, sending investors on a determined search to find the next big AI stock. The overlooked AI stock below, however, may be your best long-term bet.

This famous company is actually an AI giant

Most consumers think of Amazon (AMZN 0.39%) as an e-commerce business. And that’s true. Last year, most of Amazon’s revenues came from e-commerce sales and support. When you look at operating profits, however, the picture changes. Most of the company’s operating profits last year didn’t come from e-commerce. Instead, it came from a valuable business segment called Amazon Web Services — more commonly referred to as AWS.

Last quarter, AWS revenue jumped by 17% year over year. E-commerce sales in North America, meanwhile, rose by just 8%, with international e-commerce sales rising by just 5%. But it’s really AWS’ profitability that is most impressive. The segment’s operating profits last quarter jumped to $11.5 billion, with record operating margins of around 39.5%. Companywide operating profits, meanwhile, totaled just $18.4 billion, making AWS the most critical component to Amazon’s near-term and long-term profitability.

What is causing AWS to grow so quickly and experience such impressive profitability? There’s one major cause: the rise of artificial intelligence.

AI companies don’t typically build out their own infrastructure to train and run their models. Instead, they effectively rent out space from cloud infrastructure providers. Most estimates still peg AWS as the largest cloud infrastructure providers in the world, with a market share of around 30% — nearly as much as the next two competitors combined. Rising demand and spending for AI services, therefore, result in a direct increase in demand for AWS services.

Two reasons why Amazon is your best AI stock pick

A lot of money will be made over the next decade with AI stocks. But as previous cycles like the dot-com bubble have proven, not all AI companies will end up winners. That’s what makes investing in Amazon so appealing right now. AWS isn’t an idea — it’s a reality. Amazon already has incredible scale in the cloud-computing world, with arguably greater investment power than any of its competitors.

But it’s not just Amazon’s existing scale that should get investors interested. Due to the size of Amazon’s e-commerce division, Amazon’s AWS division is arguably undervalued. As one Wall Street analyst commented this week, “We believe AI is a key driver of digital transformation and that AI can help drive AWS growth to accelerate, as the AWS opportunity remains underappreciated.” For years, other analysts have been calling on AWS to be spun off into a separate business entity in order to realize its full value.

Whether or not a spin-off occurs, AWS will continue to become a bigger part of the Amazon story. Because AWS has higher margins and growth rates than the e-commerce division, this shift should help the stock’s overall valuation. Amazon isn’t the trendiest AI stock to buy right now, but it likely offers one of the best balances between risk and reward. The rise of AWS could persist for years, if not decades, generating impressive lifetime returns for patient shareholders.

Finding hot artificial intelligence (AI) stocks is an easy task. For example, shares of both Nvidia (NVDA 1.06%) and Palantir Technologies (PLTR 2.13%) have skyrocketed by roughly 50% in just the past three months.

But predicting which AI stocks will be huge winners in the future isn’t so easy, at least not with a high degree of confidence. However, Wall Street analysts think one AI stock will soar 64% higher over the next 12 months.

Wall Street loves this Chinese AI stock

The stock I’m referring to isn’t Nvidia or Palantir, by the way. The consensus 12-month price target for Nvidia reflects an upside potential of less than 3%. Many analysts are downright pessimistic about Palantir’s near-term prospects, with an average price target that’s more than 30% lower than the current share price.

However, Wall Street loves JD.com (JD 3.35%). The consensus price target for this Chinese AI stock is $51.82. This number indicates that analysts, on average, believe that JD.com’s share price could soar roughly 64% over the next 12 months. The most optimistic analyst surveyed by LSEG thinks that the stock could vault 123% higher during the period.

The upbeat view about JD.com is nearly universal, too. Of the 37 analysts surveyed by LSEG in July, seven rated the stock as a “strong buy.” Another 26 analysts rated it as a “buy.” The four outliers recommended holding JD.com. Not a single analyst contacted by LSEG thought selling shares was a good idea.

The “Amazon of China”

Why does Wall Street think so highly of JD.com? At least part of the appeal is the company’s solid business. JD.com is sometimes called the “Amazon (AMZN 0.39%) of China.” Like Amazon, it runs a large e-commerce platform and major logistics operations.

Also similar to Amazon, JD.com has expanded into the healthcare arena. JD Health is one of China’s largest online healthcare platforms. It provides telehealth services and healthcare products (including prescription drugs) to customers. While JD Health is traded publicly, it’s still a subsidiary of JD.com.

JD.com is well positioned to benefit from the integration of AI into its online platforms and logistics operations. It should also profit more directly from AI via its 43.6% stake in JD Technology. In 2021, JD.com transferred its AI and cloud business to JD Technology.

Analysts also have to like JD.com’s valuation. The stock trades at only nine times forward earnings. That’s inexpensive compared to Nvidia’s forward price-to-earnings ratio of 38 and dirt cheap compared to Palantir’s forward earnings multiple of 263. But while those two AI stocks have surged in recent months, JD.com remains more than 30% below its 12-month high.

Should you buy this beaten-down AI stock?

Investors shouldn’t buy JD.com solely because Wall Street recommends the stock. However, it’s wise to consider the reasons why analysts like it. JD.com’s dominance in the Chinese e-commerce market is impressive. The stock’s valuation is attractive.

To be sure, JD.com isn’t delivering the kind of growth that Nvidia and Palantir are. Of course, it isn’t priced at the premium those two stocks are, either. But JD’s year-over-year revenue growth of nearly 16% in the first quarter of 2025 isn’t too shabby. The Chinese e-commerce leader is also consistently profitable and generates strong free cash flow.

Keep in mind, though, that JD.com faces some risks associated with being headquartered in China that U.S.-based companies don’t have to worry about. For example, the company acknowledged in a regulatory filing to the U.S. Securities and Exchange Commission that the Chinese government “may intervene or influence our operations at any time.”

I don’t think JD.com is an ideal stock for risk-averse investors to buy. However, more aggressive investors might like this beaten-down AI stock that’s a Wall Street favorite.