5 Most Popular Stocks on Robinhood in 2024

2. Amazon.com Inc (NASDAQ:AMZN)

Number of Hedge Fund Investors: 293

Huge spending on AI-related software is a major growth catalyst for Amazon.com Inc (NASDAQ:AMZN), since Amazon.com Inc’s (NASDAQ:AMZN) AWS platform enables developers to make and deploy AI apps. Wedbush Securities recently named Amazon.com Inc (NASDAQ:AMZN) as one of the beneficiaries of the increased ad spending in 2024 as the firm’s survey shows that marketers and advertisers are signfincalty increasing their ad spend budgets this year.

Alphyn Capital Management stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its first quarter 2024 investor letter:

“My previous analysis (Q4 2022 letter) highlighted the significant growth in Amazon.com, Inc.’s (NASDAQ:AMZN) fulfillment expenses since 2015, masking the true earnings potential of its retail business. Though initially costly, the recent restructuring into regional fulfillment centers has yielded lower fulfillment costs and faster shipping times, leading to increased purchase frequency, especially among Prime members.

Following the regionalization effort, over the last couple of years, Amazon prioritized cost control and reduced capital expenditures. At a high level, the North American segment’s operating income swung from a $240 million loss in 2022 to a healthy $6.4 billion profit (6% margin) in 2023. Combined with continued strength in AWS and advertising, Amazon’s free cash flow (as reported, excluding equipment finance leases and principal repayments) surged from negative $13 billion to positive $36 billion.

Amazon stands out for pioneering the public market strategy of prioritizing long-term growth through sustained low margins and reinvestment, with the ability to later “turn on the taps” for profit. While many public tech companies have tried to replicate this approach, Amazon’s scale and execution capabilities make it one of the few that have successfully pulled it off.”