1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 302
Amazon.com, Inc. (NASDAQ:AMZN) is a US-based global technology firm that runs through three main segments, North America, International, and Amazon Web Services (AWS). It tops our list of the best consumer discretionary stocks to buy according to hedge funds.
Through its famous e-commerce platforms, Amazon.com (NASDAQ:AMZN) provides an extensive selection of products ranging from electronics and clothing to groceries. In addition to its retail offerings, the company delivers cloud computing solutions through AWS, digital streaming with Prime Video, and a range of consumer electronics, including Kindle e-readers and Echo devices.
In the first quarter, 302 hedge funds had stakes in Amazon.com (NASDAQ:AMZN), with total positions worth $60.37 billion. As of March 31, Fisher Asset Management is the largest shareholder in the company and has a position worth $7.68 billion.
Amazon.com (NASDAQ:AMZN) has established itself as a dominant force in two of the most significant trends of recent years, online retail and cloud computing. Since its early days in 1999, when it generated $650 million in sales, the company has transformed from a small player into a major force in e-commerce.
Even with its immense size, Amazon.com (NASDAQ:AMZN) continues to see robust revenue growth. In the second quarter, the company reported a 10% increase in consolidated revenue compared to the previous year, driven by growth across all its business segments.
The key driver of its profitability is Amazon Web Services (AWS), which leads the global cloud infrastructure market with a 32% share, according to Solganick, an independent investment banking and M&A advisory firm. AWS has proven to be a vital component of Amazon’s financial success, supporting its overall growth.
Amazon.com’s (NASDAQ:AMZN) website attracts over 3 billion visits each month, underscoring its extensive reach and influence in the online marketplace. Additionally, its advertising services have seen impressive year-over-year growth of around 20%, generating nearly $25 billion in revenue.
With over 310 million active users in its ecosystem, Amazon.com’s (NASDAQ:AMZN) advertising segment remains a significant contributor to its success. The company continues to push boundaries in e-commerce by innovating with features like electric delivery vans, drones, and the Amazon Prime subscription service. These initiatives not only enhance customer experience but also drive further growth and market leadership.
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.”
While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) to grow, 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 NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.
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