1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 302
Amazon.com, Inc. (NASDAQ:AMZN) operates in the retail sale of consumer products in North America and internationally. The company also offers Amazon Web Services and manufactures and sells electronic devices. The stock was held by 302 hedge funds in Q1 2024, with total stakes worth $60.37 billion. Diamond Hill Capital is the top shareholder of the company with a position worth $474.3 million.
The company expanded its operations in the autonomous vehicle segment when it acquired Zoox in 2020. Since then the company has made significant strides in autonomous vehicles and is developing fully autonomous robot taxis. Zoox unlocked a key milestone in February 2023, when it released its fully automated robot taxi on the roads of Foster City, California. Unlike its competitors, Zoox taxis are completely autonomous and have space for 4 adult passengers.
Moreover, Amazon.com Inc. (NASDAQ:AMZN) also plays a critical role in developing and deploying Advanced Driver Assistance Systems (ADAS). AWS offers a range of solutions tailored for the autonomous mobility industry, enabling companies to develop, test, and deploy their self-driving technologies efficiently. The company has entered into notable strategic partnerships with BMW, Lyft and Toyota for data processing, machine learning, and simulation capabilities.
The company posted a successful second quarter of 2024. Net sales of the company increased 11% year-over-year to reach $148 billion. Net sales were driven by strong growth in the AWS segment and grew 19% year-over-year to reach $26.3 billion. The AWS segment, which also provides ADAS to automotive companies, was able to grow its operational income by 7.2% subsequently reaching $9.3 billion.
What sets Amazon.com Inc. (NASDAQ:AMZN) apart from its competitors is its robust cloud infrastructure, which provides scalable computing power, storage, and advanced data analytics capabilities. For instance, Amazon EC2 enables high-performance computing, Amazon S3 allows data storage, and Amazon SageMaker service has accelerated the autonomous driving capabilities of its subsidiary Zoox.
Amazon.com, Inc (NASDAQ:AMZN) has grown its top line by 22% and bottom line by 74% during the last 10 years. 65 analysts have a Strong Buy rating on the stock, with their 12-month median price target of $220 presenting an upside of 32% from current levels.
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.
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