2. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 269
Amazon.com, Inc. (NASDAQ:AMZN) reported $108.5 billion in sales in the first three months of 2021, up 44% from the prior-year quarter. It also reported $8.1 billion in profit, an increase of 220% from the same period last year. Amazon’s revenue from merchants selling their products on the website increased 64% during that period and revenue from the advertising business rose 77%. Amazon.com, Inc. (NASDAQ:AMZN) is one of the best COVID stocks to buy according to hedge funds.
On November 22, Piper Sandler analyst Thomas Champion maintained an Overweight rating on Amazon.com, Inc. (NASDAQ:AMZN) but trimmed the price target on the stock to $119 from $125. The analyst studied Amazon.com, Inc. (NASDAQ:AMZN)’s Q3 results with a focus on Web Services. While AWS does seem to be slowing, this seems to be an industry-wide scenario rather than specific to the company, the analyst wrote in a research note. The analyst said AWS retains industry leading infrastructure-as-a-service market share of 50% among the “Big-4” providers. He slashed estimates to account for industry headwinds but remains bullish on Amazon.com, Inc. (NASDAQ:AMZN).
According to Insider Monkey’s data, 269 hedge funds were long Amazon.com, Inc. (NASDAQ:AMZN) at the end of Q3 2022, compared to 252 funds in the prior quarter. Jaime Sterne’s Skye Global Management is a significant stakeholder of the company, with 15.5 million shares worth $1.75 billion.
Baron Funds made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest e-commerce retailer and cloud services provider. Shares of Amazon increased 6% in the quarter after the company reported strong results with 7% year-over-year revenue growth driven by 33% growth in Amazon Web Services (AWS), Amazon’s leading cloud computing service, while guiding for an acceleration in third quarter revenue growth, which is expected to be between 13% and 17% year-over-year. Amazon’s share of e-commerce is roughly 40%, far ahead of competition, yet domestic e-commerce accounted for only 14.5% of total retail sales (according to U.S. Census Bureau data for the second quarter of 2022), implying durable growth opportunities ahead. Internationally, the opportunity remains large as Amazon still has less than a 2% market share of international retail spending. Its advertising share is also only 3% and growing, underpinned by the structural closed-loop systems it enables (merchants know exactly whether their ad dollars resulted in a purchase since they are all done on the Amazon platform), which enables accurate targeting and measurement. Lastly, AWS has a good runway for growth as the industry still represents only 9.5% out of the $4.3 trillion of global IT spending according to Gartner. Areas such as logistics and health care present additional optionality.”
