We recently compiled a list of the 10 Best Stocks to Invest in According to AI. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other stocks.
The rise of artificial intelligence in finance has led many investors to question whether AI-powered tools like ChatGPT can effectively pick stocks. While ChatGPT and similar large language models (LLMs) can process vast amounts of financial data, market news, and historical trends, their ability to consistently outperform human experts or quantitative models remains debatable. Instead, investors should look towards AI-driven hedge funds, such as Renaissance Technologies and Two Sigma, that have historically outperformed the market using machine learning models. For example, the Medallion Fund of the former achieved an annualized return of 66% before fees from 1988 to 2018. These funds rely on proprietary algorithms, high-frequency trading, and massive datasets.
Read more about these developments by accessing 10 Best AI Data Center Stocks and 10 Buzzing AI Stocks According to Goldman Sachs.
One indicator of hedge funds being ahead of the curve when it comes to stocks and the broader market in general is a recent Goldman Sachs note to investors which details that top hedge funds navigated the recent tech selloff without significant losses, even managing to post nominal gains since the turn of the year despite a big dropoff in the market amid concerns over trade tariffs and an AI bubble. Per a report by news agency Reuters, US President Trump has delayed tariffs on Canada and Mexico by one month, fueling wild swings in currency, bond and share markets. Despite the turmoil, stock-picking hedge funds that take bets based on company fundamentals recorded an average 2.6% return, their best month since February 2024, given a broader market rally, the report claimed.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.
The stocks listed below were mentioned in articles by prominent finance publications as some of the best ChatGPT stock picks over the past six months. The return of each stock since the publication of these articles is mentioned as well. These stocks are also popular among 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
Stock Return Over Past Six Months: 41%
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. The company recently posted earnings for the fourth quarter of 2024, reporting earnings per share of $1.86, beating analyst expectations by $0.38. The revenue over the period was $187 billion, up more than 10% compared to the revenue over the same period last year and beating estimates by $560 million. During the earnings call, CEO Andy Jassy noted advancements in AWS, with a $115 billion annualized revenue run rate and 19% year-over-year growth. He also outlined the company’s focus on custom AI silicon, including Trainium 2 and upcoming Trainium 3 and 4 chips, to enhance the cost efficiency of AI workloads.
Overall AMZN ranks 1st on our list of the best stocks to invest in according to AI. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a 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.
