5 Best AI Stocks for 2024

2. Amazon.com Inc (NASDAQ:AMZN)

Number of Hedge Fund Investors: 286

Amazon.com Inc (NASDAQ:AMZN) remains one of the top AI stocks thanks to its Cloud business since Amazon.com Inc (NASDAQ:AMZN) is rolling out several AI-related features that would help companies develop and deploy AI applications on the Cloud.

Amazon.com Inc’s (NASDAQ:AMZN) ecommerce business is also set to benefit from the AI boom. BMO Capital’s Brian Pitz recently started covering Amazon.com Inc (NASDAQ:AMZN) with an Outperform rating and explained how AI would help ecommerce companies. The analyst said AI would help ecommerce companies in product recommendations and same-day delivery.

“…AI is helping with product recommendation, while companies with same-day delivery and regionalization of their fulfillment networks have made it easier to get products into the hands of consumers,” Pitz said.

In its fourth quarter 2023 investor letter, ClearBridge Large Cap Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN):

“Much of that differential can be attributed to the performance of the Magnificent Seven (Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, Nvidia and Tesla), a basket of mega cap growth stocks that accounted for 47.8% of the benchmark return for the quarter and 65.4% for 2023.

The ClearBridge Large Cap Growth Strategy maintains exposure to six of the seven stocks, with overweights in Amazon.com, Inc. (NASDAQ:AMZN), Meta and Nvidia. Amazon benefited from strong margin expansion across segments, most notably its core e-commerce business, while Meta saw accelerated revenue growth and share gains in online advertising.

Active management of our mega cap exposure contributed to the Strategy outperforming the benchmark both in the fourth quarter and through the narrow leadership market of 2023. We also attribute these improved results to solid stock picking, being opportunistic in adding to or initiating new positions in growth companies at or near the bottom of their earnings cycle, and maintaining a commitment to diversification across our three buckets of growth: select, stable and cyclical.”