1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) is the most prominent online retailer and marketplace for independent contractors. Around 75% of the total revenue comes from retail, with the remaining 15% coming from cloud computing, storage, databases, and other services provided by Amazon Web Services, and the remaining 5% to 10% coming from advertising services. Between 25% and 30% of Amazon’s non-AWS sales come from international markets, with Germany, the UK, and Japan leading the way.
Particularly in e-commerce and cloud services, Amazon is the market leader in the areas it serves. Due to its size and scope, it has become the undisputed leader in e-commerce and has a number of competitive advantages that provide customers with an unrivaled assortment of affordable products. The company is growing its market share despite its size, continuing the secular trend toward e-commerce. Customers who make more frequent purchases from Amazon’s properties provide a consistent flow of high-margin recurring revenue through Prime, which connects Amazon’s e-commerce endeavors. Customers receive unique video content, one-day shipping on millions of items, and other benefits in exchange, creating a powerful positive feedback loop that draws buyers and sellers together. The ecosystem is further strengthened by the Kindle and other devices, which help draw in new users and entice current ones to stick around.
Alger Spectra Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a renowned online retailer and leader in cloud computing. The company’s Amazon Web Services (AWS) division offers utility-scale cloud solutions that support corporate America’s digital transition. During the quarter, Amazon’s shares contributed to performance as the company reported strong fiscal first-quarter results, with revenues and operating income beating analyst estimates. Notably, AWS revenue growth accelerated, driven by easing cloud cost optimizations, renewed workload migrations, and an increasing contribution from AI workloads. On their earnings call, management highlighted plans to increase capital expenditures to enhance their technology infrastructure, catering to the surging demand for AI-driven computing.”
It is also the “Large Cap Stock Jim Cramer Can’t Stop Talking About.” He says:
“We recently bought more Amazon shares because I believe the market was too harsh on their last quarter. Amazon is a buy, and I think it will continue to perform well.”
Evercore ISI lifted its price target for the firm from $225 to $240 and maintained an Outperform rating for the company’s shares, which are still regarded as the analyst’s “Number 1 Large Cap Long” on the Internet due to the growth of Prime Video content and more ad revenue. Amazon’s ad growth in 2025 might be bolstered by $3 billion to $5.9 billion in additional revenue from APV.
Among the hedge funds tracked by Insider Monkey, Ken Fisher’s Fisher Asset Management was the largest shareholder in the company, with 43,780,397 shares worth $8.46 billion.
While we acknowledge the potential of the 12 Best Growth Stocks To Buy According To Hedge Funds, our conviction lies in the belief that some 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 NVDA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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