1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
The most renowned online store and marketplace for independent contractors is Amazon.com, Inc. (NASDAQ:AMZN). Approximately 75% of overall revenue is generated by retail, with the other 15% coming from services offered by Amazon Web Services, including databases, cloud computing, storage, and other services, and the remaining 5% to 10% from advertising. Germany, the UK, and Japan are the top three overseas markets for Amazon’s non-AWS sales, which account for between 25% and 30% of total revenues.
Amazon leads the market in the categories it covers, especially e-commerce and cloud services. Owing to its scale and reach, it has emerged as the clear leader in e-commerce and enjoys a variety of competitive advantages that give buyers the best selection of reasonably priced goods available. Despite its modest size, the company is increasing its market share and pursuing the long-term trend of e-commerce. Through Prime, which links Amazon’s e-commerce initiatives, customers who make more frequent purchases from Amazon’s properties consistently generate high-margin recurring revenue. In return, customers get exclusive video content, one-day shipping on millions of items, and other perks that attract both buyers and sellers and create a potent positive feedback loop. The Kindle and other gadgets, which encourage both new users to join and existing ones to stay, further reinforce the ecosystem.
Alger Spectra Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a renowned online retailer and leader in cloud computing. The company’s Amazon Web Services (AWS) division offers utility-scale cloud solutions that support corporate America’s digital transition. During the quarter, Amazon’s shares contributed to performance as the company reported strong fiscal first-quarter results, with revenues and operating income beating analyst estimates. Notably, AWS revenue growth accelerated, driven by easing cloud cost optimizations, renewed workload migrations, and an increasing contribution from AI workloads. On their earnings call, management highlighted plans to increase capital expenditures to enhance their technology infrastructure, catering to the surging demand for AI-driven computing.”
It is also the “Large Cap Stock Jim Cramer Can’t Stop Talking About.” He says:
“We recently bought more Amazon shares because I believe the market was too harsh on their last quarter. Amazon is a buy, and I think it will continue to perform well.”
The rise of Prime Video content and increased ad revenue has led Evercore ISI to raise its price objective for the company from $225 to $240 while maintaining an Outperform rating for the shares. The company’s shares are still considered the analyst’s “Number 1 Large Cap Long” on the Internet. A potential $3 billion to $5.9 billion in increased revenue from APV might support Amazon’s ad growth in 2025.
Ken Fisher’s Fisher Asset Management is the largest shareholder in the company from among the funds in Insider Monkey’s database. It owns 43,780,397 shares worth $8.46 billion as of Q2.
While we acknowledge the potential of the 10 Best Internet Content Stocks to Buy, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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