According to a report by Mordor Intelligence, the global augmented reality (AR) market has a market size of $42.48 billion as of 2024. The market is expected to grow at a compound annual growth rate (CAGR) of 42.36% and reach $248.38 billion by 2029. The Asia Pacific region is expected to be the fastest-growing market, but the largest market for the domain is anticipated to be North America.
A significant portion of the market is mobile AR, which leverages the globally spread use of smartphones, tablets, and other smart devices. Estimates show that around 1.7 billion devices are capable of supporting mobile AR as of 2024. The widespread and massive existing smartphone user base lends mobile AR a key advantage.
While AR glasses such as Orion have to face steep challenges to establish themselves as a widespread global phenomenon, mobile AR benefits from “zero-cost” hardware as a majority of people around the globe already own smart devices. A well-known example is Pokémon GO, a 2016 video game where players explore their surroundings to find virtual characters on their phones. The game quickly became a global sensation due to its existing hardware: mobile phones.
Future Trends in the Augmented Reality Industry
Although the AR market is around a decade away from attaining its full potential, several technological advancements in the industry are accelerating its pace. Tech giants have been running after the dream of AR and mixed reality for years, and are investing billions of dollars in the endeavor. According to SkyQuest, the largest investment is being poured into training and industrial maintenance, with figures reaching as much as $4.1 billion in the field of AR. Apart from this, private firms, VCs, and even some governments are financing AR research institutes and teams.
The primary user base of augmented reality includes industries such as aerospace and defense, healthcare, consumer, and retail. Hospitals and other medical care startups are continually taking strides in employing immersive modalities to help healthcare professionals. With surgeons increasingly relying on AR to tackle the potential risks of healthcare procedures, the rate of errors in the industry is expected to continually fall, and so is the number of potentially unsafe surgeries. According to SkyQuest, the AR segment in the healthcare industry is expected to reach $1.2 billion by 2024.
Another expected future trend in the industry is the increased application of AR in the automotive industry. With autonomous vehicles becoming more common across the globe, the integration of AR in these vehicles is supporting the broader AR industry. Through overlaying digital data in the real world, AR technology helps improve the driver and the autonomous system’s comprehension of their environment. In addition to several other features, consumers can interact with virtual 3D models of vehicles with the help of AR technology in showrooms, allowing them to visualize several customizations.
With these positive trends for the AR industry in view, let’s look at the 10 best augmented reality stocks to buy now.
Photo by David Grandmougin on Unsplash
Our Methodology
In this article, we reviewed online rankings and ETFs to determine 25 companies operating in the AR space. We then selected the 10 most popular stocks among elite hedge funds. We sourced the hedge fund data from Insider Monkey’s database, as of Q3 2024. Our focus was on companies producing AR-related hardware, software, or technologies used to develop augmented reality products. However, we also included companies that offer services essential to the AR industry, like semiconductor chips.
At Insider Monkey, we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Best Augmented Reality Stocks To Buy Now
10. Snap Inc. (NYSE:SNAP)
Number of Hedge Fund Holders: 34
Snap Inc. (NYSE:SNAP) is a technology company that runs Snapchat as a visual messaging social application. Snapchat is the company’s core mobile application that employs augmented reality in its various “Lenses.” AR is continually driving engagement on Snapchat. According to Snap Inc.’s (NYSE:SNAP) fiscal Q3 2024 earnings, more than 375,000 developers, creators, and teams from all across the globe have built over 4 million Lenses on the app. For instance, its Past and Future Me AI Lens was viewed over 650 million times in fiscal Q3 2024. The lens allows users to see what their younger and older versions might look like.
The company is building on this AR momentum and has created several generative AI capabilities in Lens Studio, the company’s free design, development and distribution tool for creating AR experiences. These capabilities include Easy Lens, an innovative GenAI tool that creates AR experiences within minutes. Snap Inc. (NYSE:SNAP) is also releasing a new array of GenAI Suite features in Lens Studio, including innovative animation tools that mix different animations together to create full 3D characters. The company is receiving positive response to its Lens Studio innovations, and plans to chase long-term success in the AR industry through its vibrant creator and developer ecosystem.
Furthermore, Snap Inc. (NYSE:SNAP) introduced the fifth generation of its Spectacles in fiscal Q3 2024. These see-through, standalone augmented reality glasses allow developers to use AR Lenses and explore the world with their friends in unique ways. Snap OS powers Spectacles, which is the company’s new operating system specialized to mimic natural interactions between people. Developers can create immersive AR experiences with Spectacles, and can even browse the internet, interact with My AI, and get their work done from anywhere with multiple screen layouts. AR partners and developers are already developing AR experiences for Spectacles, including Peridot, a unique and friendly AR pet from Niantic, and BRICKTACULAR BY The LEGO Group.
RiverPark Large Growth Fund stated the following regarding Snap Inc. (NYSE:SNAP) in its first quarter 2024 investor letter:
“Snap Inc. (NYSE:SNAP): SNAP was our top detractor in the quarter despite reporting fourth quarter results generally in line with or better than expectations. Revenue growth of 5% was roughly in line with investor estimates and at the high end of guidance, and EBITDA of $159 million was $49 million better than estimates. Daily Active Users (DAUs) were also ahead of investor expectations, ending the quarter at 414 million (about 2 million better), driven by continued innovation in Snap’s offerings. Revenue guidance for 1Q24 was also roughly in line with investor estimates, but EBITDA guidance of negative $55-95 million was well below estimates. The company pointed to increased infrastructure costs and a US focused marketing campaign for the lower-than-expected margin guidance.
Although the company continues to face near-term macro headwinds, we believe SNAP can accelerate its revenue growth over the next several years. With 2023 revenue expected to be $4.6 billion (as compared with Meta’s $134 billion), we believe SNAP has a long runway for both revenue growth and expanded profitability as it improves platform functionality, continues to grow its audience (daily active users continue to grow at a double-digit rate), and expands its monetization.”
9. Autodesk, Inc. (NASDAQ:ADSK)
Number of Hedge Fund Holders: 70
Autodesk Inc. (NASDAQ:ADSK) offers three-dimensional design, engineering, and entertainment technology solutions for engineering, architecture, construction, product design, media, manufacturing, and entertainment industries. The company’s professional 3D software programs, like AutoCAD, allow professionals to design industry components, 3D models, and buildings.
Its CAD-to-AR for Autodesk Inventor integrates Unity Software’s game engine with the EasyAR™ augmented reality engine and is a technology demonstration of viewing Inventor 3D models in AR. Its main features enable the user to integrate it into the Inventor UI, alter model opacity in AR, capture screenshots of the AR scene, view Inventor 3D models in AR, track and choose a submodel, and undertake several other functionalities.
Autodesk Inc. (NASDAQ:ADSK) delivered 12% revenue growth in fiscal Q3 2025, reflecting the company’s sustained business momentum, successful execution of its growth strategies, and seamless implementation of its new transaction model in Western Europe after its implementation in North America. According to the company, the new transaction model forms a direct relationship between Autodesk Inc. (NASDAQ:ADSK) and its customers, with the actual transaction happening between the two only.
The model is expected to create new opportunities for Autodesk Inc. (NASDAQ:ADSK) and partners to redirect emphasis from transaction revenue sharing to value creation for customers. Once complete, the new transaction model and subsequent go to market optimization is anticipated to increase sales and marketing efficiency for the company, delivering GAAP margins among the best in the industry and positioning the company to invest in its other initiatives. The company takes the ninth spot on our list of the 10 best augmented reality stocks to buy now.
Polen Focus Growth Strategy stated the following regarding Autodesk, Inc. (NASDAQ:ADSK) in its Q2 2024 investor letter:
“Autodesk, Inc. (NASDAQ:ADSK) and Accenture were also notable absolute detractors in the quarter. With Autodesk, most of the stock’s price weakness came in April. The company announced that it would delay the release of its earnings and 10-K filing as it launches an internal investigation regarding its practices on some non-GAAP financial metrics. Upon further analysis, we were encouraged to hear that they were taking this very seriously and being very comprehensive in their investigation. Ultimately, Accenture announced it was closing the investigation and that no re-statements would be required. As discussed in the following section, we chose to exit the position in favor of a more attractive investment.
We sold our small position in Autodesk to help fund our purchase of Shopify. We still think Autodesk is an advantaged business, with 95%+ recurring revenue, dominant in its end market, and nice tailwinds behind digitization in that end market. It should be a durable grower over time, perhaps with continued fits and starts, but we found the risk-reward around Shopify to be more compelling.”
8. QUALCOMM, Inc. (NASDAQ:QCOM)
Number of Hedge Fund Holders: 74
QUALCOMM Inc. (NASDAQ:QCOM) develops and commercializes foundational technologies for the wireless industry, including 3G, 4G, and 5G wireless connectivity and high-performance and low-power computing, including on-device AI. The company operates across various high-growth markets, including autonomous vehicles and smartphones. It supplies chips to key industry players, including BMW, Huawei, and Samsung. QUALCOMM’s Snapdragon augmented reality technology is the next generation of mobile computing, merging the actual world with virtual objects to create a seamless reality.
In fiscal Q4 2024, it delivered revenue of $10.2 billion, with its chipset business accounting for a significant share: $8.7 billion. The company recently unveiled its latest flagship mobile platform Snapdragon 8 Elite, featuring its second-generation custom Oryon CPU. The release created considerable positive momentum for the company, so it expanded its portfolio further with the addition of the Snapdragon X Plus 8-core compute platform.
QUALCOMM Inc. (NASDAQ:QCOM) now has 58 platforms either in development or launched across this X series portfolio. It is working with Meta (NASDAQ:META) to enable spatial computing, as Meta’s Quest 3S is powered by the Snapdragon XR2 Gen 2. In addition, the Ray-Ban Meta glasses are also powered by Snapdragon AR1 Gen 1. They are being advanced with new AI features, such as navigation and location assistance, hands-free access to user digital lives, and real-time speech translation.
QUALCOMM Inc. (NASDAQ:QCOM) is also powering Snap Inc’s (NYSE:SNAP) recently unveiled next-generation Spectacles through the dual Snapdragon processors. These Spectacles are aimed at creators diving into advanced AR experiences.
O’keefe Stevens Advisory stated the following regarding QUALCOMM Incorporated (NASDAQ:QCOM) in its Q2 2024 investor letter:
“During the quarter, the A.I. rally broadened beyond the obvious players of Nvidia, AMD, and hyperscalers. QUALCOMM Incorporated (NASDAQ:QCOM), a long-standing investment, is gaining recognition for integrating artificial intelligence into mobile phones. Qualcomm’s A.I. on-device capabilities enable real-time language translation, improved voice recognition, and sophisticated imaging techniques as A.I. becomes more integral to mobile experiences. Qualcomm benefits by leading the market in providing robust, efficient, and versatile A.I. solutions. A.I. could be the first technology advancement in several years to accelerate the smartphone replacement cycle as users desire these advanced capabilities.”
7. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 107
Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company focused on high-performance computing, visualization technologies, and graphics. The company plays a significant role in the AR industry by producing chips that power immersive experiences in various AR and VR devices. It powers Sony’s PlayStation 5 and Microsoft’s Series X|S game consoles. In addition, the company’s Radeon Pro Duo with its LiquidVR SDK is a powerful platform aimed at all aspects of VR content creation. This ranges from education and medicine to journalism, entertainment, and cinema.
Its fiscal Q3 2024 results reflected a strong operational model, with revenue increasing 18% year-over-year to a record $6.8 billion. This growth was attributed to record product sales for Instinct and EPYC, along with robust demand for the company’s Ryzen PC processors. Significantly higher Data Center and Client Processor sales also played a role, with Data Center segment revenue growing by 122% to a record $3.5 billion.
Advanced Micro Devices, Inc. (NASDAQ:AMD) is building strong momentum with large Enterprise customers, especially with wins with large energy, technology, financial services, and automotive companies in fiscal Q3 2024. These included Airbus, FedEx, Truck, Walgreens, Daimler, HSBC, Siemens, and others. Advanced Micro Devices, Inc. (NASDAQ:AMD) takes the seventh spot on our list of the 10 best augmented reality stocks to buy now.
Meridian Contrarian Fund stated the following regarding Advanced Micro Devices, Inc. (NASDAQ:AMD) in its fourth quarter 2023 investor letter:
“Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor chip maker specializing in central processing units (CPUs), which are considered the core component of most computing devices, and graphics processing units (GPUs), which accelerate operations running on CPUs. We invested in 2018 when it was a mid-cap value stock plagued by many years of underperformance due to lagging technology and lost market hi share versus competitors Intel and Nvidia. Our research identified that changes and investments made by current management under CEO Lisa Su had, over several years, finally resulted in compelling technology that positioned AMD as a stronger competitor to Nvidia and that its latest products were superior to Intel’s. We invested on the the belief that AMD’s valuation at that that time did not reflect the potential for its technology leadership to generate significant market share gains and improved profits. This thesis has been playing out for several years. During the quarter, AMD unveiled more details about its upcoming GPU products for the AI market. The stock reacted positively to expectations that AMD’s GPU servers will be a viable alternative to Nvidia. Although we pared back our exposure to AMD into strength as part of our risk-management practice, we maintained a position in the stock. We believe AMD will continue to gain share in large and growing markets and is reasonably valued relative to the potential for significantly higher earnings.”
6. Adobe, Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 123
Adobe Inc. (NASDAQ:ADBE) is a US-based global technology company that offers services, products, and solutions to fuel digital experiences and imagine, manage, optimize, and engage with content across surfaces.
Adobe Inc.’s (NASDAQ:ADBE) approach to AR is integrated into its Creative Cloud platform, which employs tools like Adobe Aero. Aero is an all-in-one authoring and viewing platform that allows users to create creative interactive AR experiences without the need for advanced coding skills. This makes the platform user-friendly and highly accessible. The company is working to improve the platform to make it better for intuitive storytelling.
The company’s digital media segment, centered around Adobe Document Cloud and Adobe Creative Cloud, also offers platforms like Adobe Firefly, Adobe Express, Photoshop, and other tools for creative professionals and other consumers. Adobe Inc.’s (NASDAQ:ADBE) vision revolves around its deep technology platforms across Creative Cloud, Document Cloud, and Experience Cloud. When integrated, these platforms provide significant value and differentiation. The company’s focus led these segments to exhibit strength in fiscal Q3 2024, undergoing an 11% year-over-year growth and attaining a revenue of $5.41 billion.
The company is boosting creativity and productivity by allowing the convergence of products like Express, Photoshop, and Acrobats. It is also bringing together content creation and production, collaboration and workflow, and campaign activation and insights across Express, Experience Cloud, and Creative Cloud.
Alger Focus Equity Fund stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q1 2024 investor letter:
“Adobe Inc. (NASDAQ:ADBE) is a diversified software company that provides document and creative software to a wide audience, including creative professionals and enterprises. Its flagship products, such as Photoshop, Acrobat, and Creative Suite, set industry standards like PDF and Flash, supporting a broad range of Adobe applications. As such, we believe Adobe is a primary beneficiary of the digitization (i.e., converting analog information into digital format) spending theme. Recently, the company announced a generative Al (Gen Al) tool called Firefly which is a family of creative GenAl models which will be incorporated into Adobe’s product suite, which can be utilized by consumers and enterprises to potentially save time and effort by automating tasks like image and text generation. We believe Adobe has the potential to leverage Al by integrating software programs into its existing products and enhancing developer Application Programming Interfaces (APIs) to facilitate Al-driven workflows. While the company delivered strong fiscal first quarter operating results, shares detracted from performance after management lowered their fiscal second quarter guidance with Al related growth acceleration being pushed out into the second half of 2024 due to difficult year-over-year pricing comparison. particularly within their creative vertical segment.”
5. Apple, Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 158
Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets personal computers, smartphones, tablets, wearables, accessories, and various related services and platforms. It also manages Darwin AI, specializing in visual quality inspection using its Explainable AI platform. The company is also a major player in the AR industry, significantly contributing to it by releasing the Apple Vision Pro mixed reality headset in February.
The Apple Vision Pro has more pixels than a 4K TV for each eye, and blends digital content with a user’s physical space seamlessly. It is continuing to deliver unique spatial experiences, including immersive experiences like Submerged, the new short film. Vision Pro boasts more than 2,500 native spatial apps and 1.5 million compatible apps for visionOS 2. Apple Inc. (NASDAQ:AAPL) is continuing to work on the platform, recently announcing plans to bring Vision Pro to the UAE and Korea.
Apple Inc. (NASDAQ:AAPL) has one of the largest AR platforms in the world, with hundreds of millions of AR‑enabled devices, and thousands of AR apps on the App Store. Its AR apps on iPad help students learn and visualize better. In addition, US San Diego Health is the first hospital across the globe using Apple Vision Pro’s spatial computing apps in clinical trials for patient surgery in the operating room, reflecting its continued momentum.
The company reported a revenue of $94.9 billion in fiscal Q4 2024, making a September record and experiencing a 6% growth from last year. Much of this growth was attributed to the iPhone growing in every geographic segment, setting a new September quarter revenue record for the category. The company’s Services segment also set an all-time record, increasing by 12% year over year.
The company announced Apple Intelligence in June, an advanced personal intelligence system amalgamating the power of generative models with personal context. Apple Inc. (NASDAQ:AAPL) recently made the first set of Apple Intelligence features available in US English for iPad, iPhone, and Mac users, including a more conversational Siri, systemwide Writing Tools, a more intelligent Photos app, and more.
Apple Inc. (NASDAQ:AAPL) is set to release additional intelligence features in December, including more powerful Writing Tools, ChatGPT Integration, a new visual intelligence experience building on Apple Intelligence, and several others. More features are expected to roll out in the coming months. The stock ranks fifth on our list of the best augmented reality stocks to buy now.
4. Alphabet Inc. (NASDAQ:GOOG)
Number of Hedge Fund Holders: 202
Alphabet Inc. (NASDAQ:GOOG) is a holding company with segments including Google Services, Google Cloud, and Other Bets. The Google Services segment operates various services and products, including Android, Google Maps, Google Play, Chrome, Search, and YouTube.
Google employs AR in several ways. For instance, the Live View segment on Google Maps allows users to orient themselves to the area around them and view directions on a live screen of their surroundings. In November, Google introduced a new augmented reality feature in Google Maps that allows users across the globe to interact with and explore the most iconic landmarks in Paris from the comfort of their homes.
Similarly, Google Lens allows users to search for what they see promptly. Users can identify plants and animals and even scan and translate text. They can also visualize several other elements, such as how makeup products would look on their face, and how furniture pieces would look in their houses.
In its quest to advance in the field of AR, the company is testing new language capabilities on its AR glasses prototypes, seeing how communication would take place between a user and someone who speaks a different language or might be deaf. Alphabet Inc. (NASDAQ:GOOG) ranks fourth on our list of the 10 best augmented reality stocks to buy now.
3. NVIDIA Corporation (NASDAQ:NVDA)
Number of Hedge Fund Holders: 193
NVIDIA Corp (NASDAQ:NVDA) is a full-stack computing infrastructure company that engages in accelerated computing to help solve challenging computational problems. The company powers some of the leading AR and VR devices across the globe. For instance, the NVIDIA Cloud RX delivers VR and AR experiences over Wi-Fi and 5G networks, allowing users to stream AR content wirelessly. The company is also advancing technology to employ AR technology in vehicles, with its NVIDIA Drive AR processor collecting data and displaying it to drivers through AR.
Similarly, the NVIDIA Omniverse delivers the first full-fidelity, fully ray traced XR experiences in the world. Creators, engineers, and end-user designers can develop 3D virtual worlds at human scale through the Omniverse XR application. Content can be seen in augmented reality, with users bringing virtual assets into the real world. It can also be viewed as a VR virtual camera with a “window” for navigating a 3D scene or experience.
The company reported 17% sequential revenue growth in fiscal Q3 2025, setting a new record and reaching $35.1 billion. This translates to a 94% year-on-year growth. The growth was attributed to all market platforms posting strong sequential and year-over-year growth, boosted by the adoption of NVIDIA accelerated computing and AI.
Polen Focus Growth Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“In the second quarter, the dominant narrative in markets continued to be generative AI (GenAI). If it wasn’t immediately evident from NVIDIA Corporation’s (NASDAQ:NVDA) meteoric rise to among the largest companies in the world, one need only look so far as the Semiconductor and Technology Hardware industries as a gauge of sentiment, collectively accounting for greater than 70% of the Russell 1000 Growth (“the Index”) and 85% of the S&P 500 headline return quarter to date.
Our Portfolio has no exposure to NVIDIA or other Semiconductor companies currently benefiting from demand for foundational AI Hardware. The largest relative detractors in the quarter were NVIDIA, Apple, and Salesforce.
For the second quarter in a row, NVIDIA represented the top detractor to relative performance as the stock climbed another 37%, bringing the year-to-date return to +150%. As of this writing, NVIDIA is the third largest company in the world, but for a brief moment, it surpassed Microsoft to become the largest company in the world. Yet again, the company delivered blowout results that surpassed already lofty expectations, reinforcing the narrative that NVIDIA is the only obvious “AI winner” due to the amount of revenue it is currently generating.”
2. Meta Platforms, Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 235
Meta Platforms, Inc. (NASDAQ:META) builds technological products that allow people to share, connect, grow businesses, and find communities. These products help people connect through personal computers, mobile devices, virtual reality (VR), mixed reality (MR) headsets, and wearables.
The company has made significant progress toward AR and VR technologies, recently releasing an augmented reality prototype called Orion, one of its most ambitious projects. Reality Labs, Meta Inc.’s (NASDAQ:META) division dedicated to AR and VR innovations, is known for its substantial financial investments in these emerging consumer platforms.
Meta Inc. (NASDAQ:META) is increasingly becoming a powerhouse in AI and AR. The company’s Reality Labs attained several milestones this quarter, revolving particularly around the integration of AI and wearables. Its Ray-Ban Meta AI glasses are a popular product, which are great-looking glasses that allow users to take photos and videos, listen to music, and even take calls. In addition, they are fitted with Meta AI.
Meta Inc.’s (NASDAQ:META) new updates will enable these glasses to not only answer user questions throughout the day but also help users remember things, offer them suggestions, and even translate other languages right in the ear for them. Demand for these advanced glasses continues to be very strong, as its new clear edition, released at Connect in September, sold out almost immediately. The company takes the second spot on our list of the best augmented reality stocks to buy now.
Alger Focus Equity Fund stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q1 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META) operates the world’s largest social network, with over 3 billion monthly active users across its platform. The company generates revenue predominantly from advertising. which accounts for over 95% of its total revenue, evenly split between North America and international markets. During the quarter, shares contributed to performance following the release of strong fiscal fourth quarter operating results, with revenues and earnings surpassing analyst estimates. The better-than- expected revenues were attributed to strong advertiser demand and Al-driven ad improvements. Moreover, the company materially raised its fiscal first quarter sales and earnings guidance above analysts’ estimates, buoyed by continued strong advertiser demand trends and enhancements to Reels. Advantage+. Click-to-message, and Shop Ads. Further, management noted that ongoing investment in Al is enhancing user engagement and advertiser returns through improved targeting and measurement. Separately, Meta authorized a new share repurchase plan representing approximately 5% of its market capitalization and announced the initiation of its first dividend, implying an approximate 0.4% yield.”
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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