1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com Inc (NASDAQ:AMZN) ranks first on our list of the 10 stocks to buy and hold for the next decade. Amazon.com Inc (NASDAQ:AMZN) is a technology company that specializes in e-commerce, online retail, streaming, and data cloud services. Its e-commerce platform is functional in 20 countries and ships to over 100 countries.
The company was first launched in 1994 and is on track to capture over 40% of the e-commerce market in the United States. Its proprietary cloud service, Amazon Web Services (AWS), increased its revenue by 18.8% in Q2 and has reported 30% plus operating margins consistently for the past five quarters.
Over the past few months, the company has not only forged partnerships with AI startups and the government but it has also been actively involved in the development of AI hardware. Recent chips produced by the company include Trainium and Inferentia. On Prime Day, Amazon deployed a quarter million Graviton Chips and 80,000 custom AI chips to manage the surging activity on its platforms.
Speaking of AI, AWS is now housing the next generation of Llama models from Meta, giving customers more choices to build, deploy, and scale generative AI applications. On September 19, Amazon.com Inc (NASDAQ:AMZN) launched Project Amelia, a selling assistant backed by generative AI, allowing sellers to offer better customer assistance and reach.
Overall, AWS has close to 31% market share in cloud computing, indicative of its dominance in the market. Now that AWS is increasingly adopting AI-backed systems, the company is poised to become a fully AI-run company in the next few years.
Analysts are bullish on AMZN and their 12-month median price target of $220 points to a 20% upside from current levels. According to our Insider Monkey database, AMZN was held by 308 hedge funds at the close of Q2 2024 with total stakes amounting to $65.85 billion.
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.”
Overall, AMZN ranks first among the 10 stocks to buy and hold for the next decade. While we acknowledge the potential of online retail and cloud companies, our conviction lies in the belief that 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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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