Amazon’s Q2 results underscored the advantage of owning multiple engines that reinforce each other over time. Net sales rose 13% year over year to $167.7 billion; operating income climbed to $19.2 billion; and each of the company’s major segments contributed. Its online stores segment saw 11% year-over-year growth. Other revenue (this is primarily driven by Amazon’s advertising business) grew 19% year over year. Additionally, Amazon’s high-margin, cloud-computing business, Amazon Web Services (AWS) saw sales rise 17% year over year. These pieces work together, with Prime membership demand and an ever‑denser logistics network supporting retail economics, while AWS and advertising benefit from growing scale and provide higher‑margin revenue streams.

AWS, of course, remains the company’s crown jewel. Segment revenue increased 17.5% year over year to $30.9 billion, with the high-margin segment’s operating profit helping to power companywide earnings even as Amazon steps up capital spending to support artificial intelligence (AI) workloads.

Advertising is another quiet but powerful engine, rising at a healthy clip and benefiting from closed-loop performance data only Amazon can provide at this scale. The combination of AWS, ads, and a more efficient retail network give Amazon multiple ways to grow EPS over a very long horizon. Yes, capital expenditures are heavy as the company builds data centers and invests for the AI era (Amazon spent $31.4 billion on capex during Q2 alone). The question, however, isn’t the spending itself; it’s whether the returns justify it. Fortunately, Amazon has a long track record of front-loading investment to capture decades of utility, and the current cycle looks similar. With multiple profit centers throwing off cash, Amazon can fund growth internally while still improving margins over time.

Both companies have built enviable, self-funding, platform-like business models, creating virtuous flywheels for themselves that seem to constantly expand their competitive advantages over peers. Intuitive’s installed base and recurring procedure economics should compound for years as robotics penetrates more procedures and geographies. Amazon’s diversified engines — retail, advertising, and AWS — reinforce one another, creating operating leverage as scale increases. Sure, with Intuitive Surgical and Amazon’s price-to-earnings ratios sitting at 65 and 34, respectively, these growth stocks are not cheap — and that does bring some risk to the table, making it important for investors to keep their allocations to these stocks small. But these two companies’ potent combinations of durable competitive advantages, recurring revenue characteristics, and large addressable markets make them both compelling candidates to buy and hold for decades.

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Daniel Sparks and his clients have no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Intuitive Surgical. The Motley Fool has a disclosure policy.

2 Growth Stocks With Sky-High Potential to Hold for Decades was originally published by The Motley Fool