1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Analyst Upside as of October 13, 2024: 17%
Amazon.com, Inc. (NASDAQ:AMZN) ranks first on our list of the most promising long-term stocks according to hedge funds. The technology company is an e-commerce giant that also provides streaming and data cloud services.
The company launched its e-commerce platform in 1994 and is now close to capturing 40% of the market in the United States. Amazon Web Services (AWS), its proprietary cloud service, reported an 18.8% revenue growth during the second quarter of 2024.
This year, the company achieved significant milestones. Amazon.com, Inc. (NASDAQ:AMZN) has not only been actively involved in the development of AI hardware and software but has also signed partnerships with the government and AI startups. Speaking of innovation, on October 11, the company launched its first autonomous robot, Proteus. The autonomous robot fulfills miscellaneous tasks in the Amazon fulfillment centers independently and safely.
On the artificial intelligence front, AWS is housing the next generation of Llama models from Meta, enabling customers to build and deploy AI applications freely. In addition to that, the company also launched an AI personal assistant in September that helps Amazon sellers meet the unique needs of their customers.
Overall, Amazon.com, Inc. (NASDAQ:AMZN) is poised to become a complete artificial intelligence company as it adapts to autonomous technologies and AI-backed systems, contributing to its ranking on our list.
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 most promising long-term stocks according to hedge funds. While we acknowledge the potential of cloud and e-commerce 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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