We recently compiled a list of the 10 AI News That You Should Not Miss. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other AI stocks.
Generative AI Set to Capture 10% of Total IT Market by 2032
Bloomberg Intelligence projects that the generative AI market will grow at a compound annual growth rate (CAGR) of 42%, reaching $1.3 trillion by 2032, up from $40 billion in 2022. This growth is driven by demand for generative AI products, especially infrastructure for training large language models, digital ads, and specialized software. The market could generate an additional $280 billion in software revenue, with major companies like Amazon, Microsoft, Google, and Nvidia expected to benefit as enterprises increasingly move workloads to the cloud.
By 2032, generative AI is predicted to account for 10% of total IT spending, with significant revenue coming from infrastructure services, AI servers, and software. The technology is also expected to have a transformative impact on life sciences and education. However, the rapid growth of generative AI could disrupt several industries, including semiconductors, hardware, IT services, and advertising.
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Navigating the Evolving Landscape of Generative AI
In a blog post, Carrie Tharp, Vice President, of Strategic Industries, wrote that Generative AI has evolved from a futuristic concept into a vital business strategy, transforming industries by enhancing efficiency and customer engagement. Despite its growth, many organizations are still testing its applications, with a study revealing that a third of businesses are evaluating its use. Key trends include the rise of multimodal AI, AI agents, AI-powered search, customer experiences, and deepfake defense.
In retail, AI is being used for customer service, marketing, and digital commerce, with long-term goals of creating personalized experiences and AI-powered assistants. The financial services industry is leveraging AI for fraud detection, risk management, and efficiency, while healthcare uses AI to reduce administrative burdens and improve patient care. The media and entertainment industry is increasingly adopting AI to improve productivity, content personalization, and operational efficiency.
As AI becomes more sophisticated, businesses need to address challenges like deepfake defense while focusing on high-value use cases. Generative AI is no longer a novelty but a transformative tool, with businesses needing to prioritize AI strategies that align with their specific industry needs and long-term goals.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) is leading advancements in artificial intelligence, utilizing the technology to transform the way we shop, enjoy entertainment, and manage operations.
Business Insider reported that AWS is reducing spending on ZT Systems, a supplier of server and networking equipment, as it increasingly designs its own data center components to cut costs and raise efficiency. AWS spent nearly $2 billion on ZT Systems in 2022, but internal documents and employee statements suggest a shift toward custom hardware, potentially impacting this partnership. Despite the reduction, AWS maintains its business relationship with ZT Systems and plans significant capital investments in data centers for 2025. This move aligns with a broader trend among tech companies like Google and Nvidia to develop in-house hardware for better control and cost savings.
Overall AMZN ranks 1st on our list of the AI stocks you shouldn’t miss. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an 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.
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Disclosure: None. This article is originally published at Insider Monkey.