We recently compiled a list of the 10 Important AI News on Investor Radars. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other AI stocks.
The Stakes of AI Infrastructure and Competition in 2025
In an interview at CNBC’s ‘Squawk Box,’ Alexandr Wang, founder, and CEO of Scale AI, shared his insights on the ongoing AI competition between the U.S. and China, and emphasized its critical importance. Wang noted that while the U.S. has been ahead in AI for the past decade, Chinese labs, especially DeepSeek, are narrowing the gap. He said:
“It has been true for a long time that the United States has been ahead. And that’s been true for, you know, maybe the past decade. That being said, you know, the very recent event, on Christmas Day, you know, about a month ago, DeepSeek released a model, which by the way, I think is symbolic that the Chinese lab releases, you know, an earth-shattering model on Christmas Day when, you know, the rest of us are sort of celebrating the holiday. And they released it to much fanfare, and then they followed up with their Reasing Model, DeepSeek R1, which is the one that we evaluated as top of the leaderboard. You know, the reality is, yes and no. So, you know, the Chinese labs, they have more H100s than people think, you know.”
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He revealed that DeepSeek has access to around 50,000 H100 chips, despite U.S. export controls, and suggested that Chinese AI development may be more advanced than many expect. Wang also discussed the quick pace of AI model development and mentioned that different models excel in different areas. For example, OpenAI’s models are strong in reasoning, while Anthropic’s models are good at coding.
Regarding the new $500 billion Stargate project, Wang stressed that the U.S. needs significant infrastructure and computational power to maintain its AI leadership. He expressed concern that the growing competition will require the U.S. to rapidly build more data centers and invest in energy to fuel AI progress. While there are discussions around the future of AI models and whether fewer, larger companies will dominate, Wang believes the market is set for exponential growth, and could potentially become a trillion-dollar scale as AI advances toward superintelligence or artificial general intelligence in the next few years.
For this article, we selected AI stocks by reviewing 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).
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Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) uses AI to enhance its shopping experience, entertainment services, and operational efficiency, while also investing in AI through initiatives like Anthropic, AWS partnerships, and Tranium to strengthen its position in AI development.
On January 22, Cantor Fitzgerald analyst Deepak Mathivanan reiterated an Overweight rating on Amazon, maintaining it as a top pick with a price target of $270. Mathivanan highlighted the potential upside for Amazon in both the fourth quarter of 2024 and the first quarter of 2025, driven by accelerated AWS growth and retail margin expansion. He noted that AWS is set to benefit from increased AI workloads, while retail margins should improve due to fixed cost leverage. Despite challenges from the Kuiper launch, the outlook for 2025 remains positive.
Overall AMZN ranks 1st on our list of the important AI stocks on investor radars. 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 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.
