1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) started as an online bookstore. Today it has grown to become a $1.85 trillion company and is recognized as one of the largest online retailers, has operations in cloud computing, and digital streaming, and is also investing heavily in artificial intelligence.
AMZN is the best technology stock to buy for the long term, we say this because it was held by 308 hedge funds in Q2 2024, with total stakes worth $65.85 billion. Fisher Asset Management is the top shareholder of the company, with a position worth $8.46 billion.
Amazon.com, Inc. (NASDAQ:AMZN) reported a significant increase in revenue and operating income during its latest quarter. Its top line reached $148 billion after increasing 11% year-over-year. Revenue growth was driven by a strong performance in its AWS division, which grew 18.8% to reach $26.3 billion.
Amazon.com, Inc. (NASDAQ:AMZN) enjoys the benefit of repeat spending from its subscription-based services, thereby providing it with significant operating income. During Q2 2024, its operating income soared 91% year-over-year to reach 14.7 billion, out of which $9.3 billion came from its AWS operations.
The stock did take a hit with the market indexes falling in 2022, however, since then it has continued to improve and the stock hit all-time highs this year. Management’s effort to significantly improve inventory management has resulted in the company making record-free cash flow. Amazon.com, Inc. (NASDAQ:AMZN) free cash flow was up 572% year-over-year and was recorded to be more than $52.9 billion during the quarter. This strong cash generation can be profitable for both the company as it can invest in its AI development and for investors as they will get increased returns.
Over the past decade, the company has grown its revenue and net income by 22% and 73% indicating robust financials and long term growth opportunities from its recurring revenues.
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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