1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) provides its customers with a range of products and services. It offers advanced tools for AR and VR developers through its Amazon Web Services (AWS) platform. Some of its offerings in the AR/VR space include Room Decorator, which allows users to visualize various pieces of furniture in their space, and Virtual Try-On, which enables users to see how clothing might look on them.
Amazon.com, Inc.’s (NASDAQ:AMZN) AWS segment grew by 19.1% year-over-year in fiscal Q3 2024, and now stands at an annualized run rate of $110 billion. The company has seen significant reacceleration of growth in its AWS segment for the last four quarters as of fiscal Q3 2024. Much of this growth is attributed to its broad functionality, strong security, solid operational performance, and deep partner community, lending it a competitive industry advantage.
Amazon.com, Inc. (NASDAQ:AMZN) is also seeing more enterprises grow their footprint in the cloud, reflected in part by the recent customer deals with companies like Toyota, Sony, National Australia Bank, Booking.com, Capital One, ANZ Banking Group, Itaú Unibanco, Fast Retailing, and T-Mobile.
Patient Capital Opportunity Equity Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) moved higher throughout the second quarter as AI demand helped to reaccelerate growth in their AWS business. It looks as though the cloud business is finally past the customer cost optimization period with customers restarting their cloud migrations as well as expanding spend on AI projects. Despite the top and bottom-line improvement seen in the first quarter, the company is significantly underearning its long-term potential as it continues to reinvest aggressively in the business. With 80% of global retail sales still being done in physical stores and 85% of global IT spending still on-premises, we see a long-run way for the dominant player in the cloud, retail, and increasingly logistics and advertising space.”
Overall, AMZN ranks first among the 10 best augmented reality stocks to buy now. While we acknowledge the potential of augmented reality stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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