1. Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) is a global e-commerce and technology giant. It operates through its North America, International, and Amazon Web Services (AWS) segments. It engages in retail sales, cloud computing, digital streaming, and AI. Its products and services include e-commerce, cloud infrastructure, digital content, and consumer electronics.
On February 27, TD Cowen analyst John Blackledge reiterated a Buy rating on the company with a $265.00 price target. The analyst highlighted the company’s recent launch of GenAI-powered Alexa+ assistant, which emphasizes its impact across Amazon Web Services (AWS), eCommerce, and advertising. Blackledge forecasts AWS’s GenAI revenue to grow from $7.1 billion in 2025 to $56.3 billion in 2030.
AWS revenue hit a $115 billion annual run rate in Q4 2024, which was up 19% year-over-year. Customers are moving to the cloud to use AI and driving demand. The company’s own AI chips, Tranium 2, are 30-40% cheaper than competitors. So they attract big clients like Anthropic. Amazon Bedrock is a key AI service, which offers various AI models. Amazon Q, which is an AI assistant, is saving companies time and money and showcases practical AI use. AWS is heavily investing in data centers for AI and expecting similar spending in 2025.
RiverPark Large Growth Fund stated the following regarding Amazon.com Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Amazon was our top contributor in the fourth quarter following third quarter results of slightly better than expected revenue and much stronger than expected operating income. 3Q operating income of $17.4 billion exceeded company guidance of $11.5-15 billion (and Street estimates of $14.7 billion), driven by margin expansion across all three major segments, including gross/net margins of 38% at AWS, up from 30%. In addition, the company reported an acceleration in e-commerce demand both domestically and internationally, and accelerated growth of Prime paid memberships. The company guided to 4Q operating income of roughly $18 billion driven by the same positive factors that impacted 3Q.
With its ability to continue its market share gains in its three leading businesses (e-commerce, web services and online advertising), plus a multi-year operating margin expansion opportunity (from improved e-commerce margins and greater contribution from the faster growing, higher margin AWS and advertising segments), we believe Amazon remains one of the best-positioned global growth companies in the world.”
While we acknowledge the growth potential of Amazon.com Inc. (NASDAQ:AMZN), our conviction lies in the belief that AI stocks hold great promise for delivering high 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
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