1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) is a reputable big tech company operating in the e-commerce space. It is based in Seattle, Washington.
Amazon.com, Inc. (NASDAQ:AMZN) has been entering the generative AI space, which has created a lot of hype around the stock over the past two years. This hype also seems to have some substance since more and more customers are now using the company’s AI tools and finding value in them. The primary indicator of Amazon.com, Inc.’s (NASDAQ:AMZN) AI-driven growth can be seen in its Amazon Web Services business.
In the second quarter, AWS saw sales growth rise to 18.8% year-over-year. This business is also currently the leading cloud platform, with a 31% market share in cloud computing, well ahead of Microsoft’s Azure with its 25% share and Google Cloud with its 11% share. Additionally, Amazon.com, Inc. (NASDAQ:AMZN) has a lot more to look forward to outside of AI since it has been focusing on advertising for quite some time now, and ad revenues saw a 20% rise year-over-year in the second quarter.
In total, 308 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN), with a total stake value of $65.8 billion.
Hayden Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2024 investor letter:
“Our portfolio is still recovering from the 2022 downturn, although we’ve made meaningful progress in the last two years. While that experience has taught us many lessons, that dislocation also provided a rich vein of opportunities that we continue to mine today
Some of our biggest winners in the last two years, have been “re-acceleration” stories. These are cases where once rapidly growing companies suddenly put the brakes on during a weak economy. There could be several reasons for this – customers pulling back during a recession, the company proactively curtailing growth spend as a precaution, needing to cut costs & right-size the business to become profitable quickly, or many other reasons.
But the commonality seems to be that as soon as growth stops, the market narrative turns suddenly from positive, to “this company is finished”. They go from being valued for many years of rapid growth, to being priced like a mature company that will never realize significant growth again. But often neither scenario is true, with the ultimate future path somewhere in between.
I find the fact this type of opportunity even exists, fascinating. Especially since it seems to happen every bear-market – perhaps indicating it’s embedded in human nature (and thus persistent & likely minable throughout one’s investing career). For example, I gave the examples of Amazon.com, Inc.’s (NASDAQ:AMZN) stock performance in our Q1 2022 letter (please re-read this piece for more context; LINK)…” (Click here to read the full text)
While AMZN is an exceptional investment, we believe that AI stocks hold promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than the ones mentioned in our list but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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