5 Best Internet Content Stocks to Buy

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 240

Amazon.com, Inc. (NASDAQ:AMZN)’s Cloud platform AWS is used by major media and streaming companies for content storage and delivery over the internet. AWS customers include Comcast, Discovery Inc., Netflix, ViacomCBS, among other big names.

Amazon.com, Inc. (NASDAQ:AMZN) also has its own streaming service, Amazon Prime, which has over 200 million subscribers.

Amazon.com, Inc. (NASDAQ:AMZN) is one of the most popular stocks among the elite hedge funds tracked by Insider Monkey. A total of 240 hedge funds have stakes in Amazon.com, Inc. (NASDAQ:AMZN).

Polen Global Growth Strategy made the following comment about Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2023 investor letter:

“We raised our position in Amazon.com, Inc. (NASDAQ:AMZN). During 2022, Amazon’s business experienced revenue deceleration from pre-pandemic levels combined with higher expenses resulting from inflation pressures as well as costs in their fulfillment segment. The fulfillment costs were set in motion during the pandemic when demand overwhelmed their network. More recently, AWS – along with Azure and GCP – experienced a deceleration in growth as customers globally feel pressure to optimize their usage in this tough macroeconomic environment. We don’t expect this deceleration to persist for the long-term given the secular trend of companies transitioning to the cloud.

For long-term investors, we believe this combination provides an opportunity and that Amazon is now poised to re-accelerate revenue growth, of which we are already seeing signs, while expanding margins and free cash flow. With respect to margins, given the fast growth in AWS and advertising, the latter generating almost $40 Billion in sales and growing at greater than 30% recently, the resulting mix-shift could result in operating margins of 10% or higher over time. This level would represent a 5x increase over 2022 levels. In sum, we are capitalizing on what we believe is arguably one of the most competitively advantaged business in the world, which is growing well, poised to accelerate that growth and expand margins, and is trading at an attractive price.”

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