8 Best Robinhood Stocks to Buy According to Analysts

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

Average Upside Potential: ~41.7%

Number of Hedge Fund Holders: 339

Moody’s Ratings changed Amazon.com, Inc. (NASDAQ:AMZN)’s outlook to positive from stable, reflecting the company’s continued improvement in operational performance as it managed to generate significant FCF in a bid to support acceleration in capital spending while also maintaining low leverage and increased cash balances. Amazon.com, Inc. (NASDAQ:AMZN) has a powerful global brand, which remains synonymous with online retail, and possesses the strength and profitability of Amazon Web Services, which is the market segment leader in the cloud computing market. Moody’s believes that the company remains well-placed to support the increased capital investment with internal cash flow as it ramps up its capital spending on AWS and its generative Artificial Intelligence investments.

Amazon.com, Inc. (NASDAQ:AMZN)’s investments in AI technology can fuel strong growth and efficiency improvements throughout its various business segments. In e-commerce, AI could enhance personalization, improve demand forecasting, and can also optimize logistics, resulting in better customer experiences and lower costs. Furthermore, for AWS, AI innovations can result in the development of new, high-value cloud services, bringing in more enterprise customers as well as premium pricing. Also, in advertising, AI-powered tools can result in improved ad targeting and effectiveness.

Diamond Hill Capital, an investment management company, released its Q4 2024 investor letter. Here is what the fund said:

“Among our top individual contributors in Q4 were General Motors and Amazon.com, Inc. (NASDAQ:AMZN). Internet retail and cloud infrastructure company Amazon continues taking share in non-discretionary categories. Retail margins also increased in the quarter, particularly international margins. Amazon Web Services’ (AWS) revenue growth accelerated in the quarter, and, despite increased AI-related capital expenditures, margins improved to all-time highs.”

While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for a deeply undervalued AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

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