10 Best Stocks To Buy Right Now According To Billionaire Cliff Asness

4. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders In Q2 2024: 308

AQR Funds’ Latest Investment Stake: $1 billion

Amazon.com, Inc. (NASDAQ:AMZN) is an American eCommerce and cloud computing company. The firm has one of the widest and most stable moats on Wall Street due to its dual business. Amazon.com, Inc. (NASDAQ:AMZN)’s eCommerce operations provide it access to a sizeable market where it leads in the market by attracting billions of users (3.25 billion in June) to its website. Its scale also allows Amazon.com, Inc. (NASDAQ:AMZN) to enjoy competitive advantages such as a click to door speed of 1.9 days. Additionally, the cloud computing business enables the firm to beef up its margins, which are notoriously low for the eCommerce sector. It also provides Amazon.com, Inc. (NASDAQ:AMZN) exposure to the AI industry, where it is one of the leaders due to its presence in all layers of the AI stack. This ranges from designing its own chips to having access to a foundational AI model via Claude, and AI end products through AWS.

Albyn Capital Management mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter. Here is what the firm said:

“In his annual letter to shareholders, CEO Andy Jassy underscores Amazon’s commitment to “primitive services” over the last 20 years – creating foundational building blocks that empower rapid development of higher level products and services. Examples include developing core functionalities like payments and search, which eventually led to the Fulfilled by Amazon service, or developing logistics infrastructure, which led to the Buy with Prime service. Amazon is adopting the same approach to the next front, GenAI, from custom AI chips and training/deployment services to empower companies to construct their own core GenAI models, to their Bedrock service which allows customers to use pre-existing models to more quickly develop applications, to Amazon developing their own applications for internal use (think Alexa and a new shopping AI called Rufus).

Amazon’s dominance comes not just from its scale but also from a relentless “customer obsession,” exemplified by its focus on building services that empower customers. This positions Amazon to capture significant shares of the growing retail and cloud markets. With a 45% share of online retail, which only makes up 25% of total retail sales, Amazon is well-placed for growth. The company’s expansion into the grocery sector, backed by investments in same-day delivery, shows promise. Currently, Amazon holds a 20% share of the grocery market, a segment that constitutes 34% of US retail sales but is only 12% penetrated. As online retail trends towards 40-50% penetration, Amazon’s growth potential is meaningful. Similarly, in the cloud sector, only 10% of IT spending has shifted to the cloud, with AWS holding a 35% market share.”