5 Cash-Rich Stocks To Buy According To Hedge Funds

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

Number of Hedge Fund Holders: 269

Latest Cash and Short-Term Investments: $58.66 billion

Amazon.com, Inc. (NASDAQ:AMZN) is a Seattle, Washington-based diversified technology led by its e-commerce and cloud computing services business.

Following a 20-1 stock split in March 2022, Amazon.com, Inc. (NASDAQ:AMZN) also initiated a $10 billion share buyback plan to boost shareholder returns. Over the years, the company has efficiently used its cash reserves to expand its operations. In 2017, Amazon.com, Inc. (NASDAQ:AMZN) used $13 billion to increase its footprint in the grocery business through the acquisition of Whole Foods. In March 2022, the company also completed the $8.5 billion takeover of MGM Studios.

On December 16, Doug Anmuth at JPMorgan gave Amazon.com, Inc. (NASDAQ:AMZN) stock a target price of $130 along with an Overweight rating. The analyst believes that a “significant secular shift” toward e-commerce and cloud businesses is expected to take place. Furthermore, Amazon.com, Inc. (NASDAQ:AMZN) should benefit from easier retail comparables in 2023.

Here’s what Farnam Street Investments said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2022 investor letter:

“Change doesn’t just impact investors. Business people also bet for or against change. Jeff Bezos was once asked this exact question:

“You can build a business strategy around the things that are stable in time. It’s impossible to imagine a future ten years from now where a customer comes up and says, ‘Jeff, I love Amazon, I just wish the prices were a little higher.’ Or, ‘I love Amazon, I just wish you’d deliver a little slower.’ Impossible. So we know the energy we put into these things today will still be paying off dividends ten years from now. When you have something you know is true, you can afford to put a lot of energy into it.”

A lot of energy… and more than $172 billion in capital expenditure in the last fifteen years.

Deeper, slower moving layers turn exponential growth into “S-curves.” A rapidly dividing bacteria crashes into the resource-wall of its Petri dish. Nineteenth-century commercial robber barons were smacked by the governance layer of the Sherman Antitrust act. Amazon (NASDAQ:AMZN) Prime free shipping leaned on the creaking infrastructure of the U.S. Postal Service until it was forced to invest in its own infrastructure (all those delivery vans you see driving around).

Hopefully, next time you’re thinking about change, you can recall pace layers as a helpful construct to understand how successful systems change.