We recently compiled a list of the AI News That Broke The Internet This Week. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other AI stocks that broke the Internet this week.
Artificial Intelligence is increasingly becoming indispensable for large businesses, providing them with tools to drive efficiency, innovation, and competitive advantage. As AI technology continues to evolve, the importance it has to large enterprises is underscored by significant investments and impressive returns. For example, the ability of AI to automate and optimize business processes is one of the most significant advantages for large companies. AI-driven automation can streamline supply chain management, optimize logistics, and improve customer service through chatbots and personalized recommendations. According to a report by McKinsey, companies that fully leverage AI could see a 20-25% increase in cash flow.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 10 AI Stocks That Could Go Parabolic.
In financial services, AI is transforming risk management, fraud detection, and customer insights. JPMorgan Chase, for instance, uses AI to review legal documents, a task that used to take thousands of hours of manual work, now accomplished in mere seconds. In the pharmaceutical industry, AI is accelerating drug discovery processes. For instance, companies like Pfizer have used AI to analyze vast datasets to identify potential drug candidates much faster than traditional methods. This not only speeds up the time-to-market for new drugs but also significantly reduces research and development costs, which are estimated to average around $2.6 billion per drug.
Moreover, AI is enabling companies to offer more personalized experiences to customers. Retail giants like Amazon and Walmart use AI algorithms to analyze customer behavior and preferences, tailoring recommendations that enhance the shopping experience and increase sales. Amazon’s recommendation engine, powered by AI, is responsible for 35% of the company’s total sales. NVIDIA, a leader in AI hardware, exemplifies how AI can drive business success. In the second quarter of fiscal 2025, the company reported $30 billion in revenue, with AI contributing significantly to this figure. The company’s GPUs are the backbone of AI models used across industries, from autonomous vehicles to large-scale data analysis, demonstrating the critical role AI plays in both revenue generation and technological advancement.
Read more about these developments by accessing Billionaire Stan Druckenmiller Is Betting On AI Infrastructure, Tobacco and Industrial Stocks and 10 Tech Stocks to Monitor Amid Market Volatility According to Bernstein Analyst..
Our Methodology
For this article, we selected AI stocks that have been in the news this week. 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: 308
Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products, advertising, and subscriptions service through online and physical stores in North America and internationally. Recent reports indicate that Amazon will use Anthropic’s AI model, developed by a California-based startup, to power the latest updates to its virtual assistant, Alexa. This decision hints at shortcomings in Amazon’s in-house AI models, with some sources telling Reuters that these internal models suffer from lag times of six to seven seconds and issues with consistency and accuracy. The tech giant plans to charge $5 or $10 per month for Alexa’s advanced AI features.
Amazon.com, Inc. (NASDAQ:AMZN) is also in the news after recent reports in the media claimed that Chinese companies are bypassing US export bans on AI-related products, software, and technology by leveraging American cloud service providers. These providers, including Amazon’s AWS, have integrated AI features into their platforms over the past few months to meet the rapidly growing demand for advanced technology. A report initially published by Reuters alleges that Amazon has granted Chinese entities access to high-end AI chips and advanced models such as Claude.
Overall AMZN ranks 3rd on our list of the AI stocks that broke the Internet this week. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.