10 Best AI Stocks to Buy According to Carolina Panthers Owner Billionaire David Tepper

2. Amazon.com Inc (NASDAQ:AMZN)

Billionaire David Tepper’s Stake: $671,543,750

Mark Mahaney, Evercore ISI head of internet research, recently reshuffled his portfolio after which Amazon.com Inc (NASDAQ:AMZN) is one of his three top picks. During a CNBC program, the analyst said that many are still questioning whether major companies like Amazon.com Inc (NASDAQ:AMZN) will get any returns on their AI investments. He thinks, “if you look hard enough” you will see these tech companies have started to get a “little bit of a bang” on the bucks they are spending.

For Amazon, Mahaney likes “AWS growth acceleration.”

AWS’s revenue growth accelerated from 17.2% in Q1 to 18.8% in Q2, driven by a shift from on-premises infrastructure to cloud solutions and increasing demand for AI capabilities. Amazon.com Inc (NASDAQ:AMZN) advertising segment added over $2 billion in revenue year-over-year, indicating significant potential in video advertising and opportunities within Prime Video offerings.

Like other tech companies, fears stemming from high CapEX are keeping investors on the sidelines. Amazon.com Inc (NASDAQ:AMZN) spending is expected to rise amid broadband project Project Kuiper and AI growth. Investors are still figuring out whether AI monetization and ROI will come anytime soon. Amazon.com Inc (NASDAQ:AMZN) is also facing a slowdown in consumer spending, especially for higher-ticket items like electronics and computers.

Based on Amazon.com Inc (NASDAQ:AMZN) Q3 guidance, its revenue growth would be 11%. The stock is trading 35x its fiscal 2025 earnings estimates set by Wall Street. This shows the stock is fairly priced and investors looking for strong growth could look elsewhere.

Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:

“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”