We recently published a list of Analysts Are Talking About These 10 AI Stocks. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other stocks analysts are talking about.
Marco Argenti, Chief Information Officer at Goldman Sachs, recently said that in 2025, the world will witness the full potential of AI that has been in development. He used the analogy of a child raised in a library, now ready to step out into the world.
“What if they, we make them interact with sensory data, with vision data, with, uh, you know, like basically opening that door of the library and making this child walk into the real world? I think this creation of word models, like they’re called generally in the industry, where you combine multimodal information, that is not only text but is also videos, but is also sensory data. It might be temperature, it might be anything you can perceive around you, could actually unlock the next level of capabilities,” Argenti said, according to CNBC.
Despite high hopes, a potential plateau in performance improvements in AI systems, high energy consumption of AI data centers and transparency remain key issues tech companies will continue to grapple with in 2025.
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For this article, we picked 10 AI stocks currently trending based on latest news and analyst ratings. With each stock, we have mentioned the number of hedge fund investors. 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 Investors: 286
Jessica Inskip from Stock Brokers said while talking to Schwab Network in a latest program that Amazon.com Inc (NASDAQ:AMZN) AI system Claude is a key rival to ChatGPT and the company has an edge in the AI infrastructure space because of AWS:
“I want to focus on those models, so Amazon has Claude, which is Anthropic. That, to me, is a very, very true rival to ChatGPT. But what Amazon.com Inc (NASDAQ:AMZN) has is this infrastructure and these large language models that can be implemented. There is something very important when we’re considering this revolution and what that’s going to look like. What I talked about last week when we’re going into AI agents, open-source modeling, and coders’ preference, what I think is very interesting is due to the infrastructure and AWS, there are a lot of different verticals that this can fall into with Amazon.com Inc (NASDAQ:AMZN) and Anthropic. That investment in Anthropic and the way coders can really utilize AWS in tandem with that, because they’re open-source large language models—which is very important within the development world—allows them to be streamlined, integrated within that infrastructure, and then see some enhancements. Eventually, those AI agents, which I am looking for and think will be the next catalyst for AI, can emerge.”
Qualivian Investment Partners stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Amazon’s Q2 2024 results missed consensus revenue expectations slightly while beating EPS expectations nicely. Revenue grew 10.0%, including continued reacceleration in AWS (Amazon Web Services) which grew 19%; however, North American and International ecommerce revenue growth both showed slight deceleration in their growth rates from prior quarters. Advertising revenues grew 20%, which decelerated a bit from prior quarters as well.
Encouragingly, the company continued its streak of delivering impressive cost efficiencies in Q2 with operating margins jumping 420 bps vs. Q2 2023. Q3 2024 guidance was also a bit lower than consensus expectations sparking some short-term concerns about the strength of the consumer. We remain comfortable with our long-term outlook for Amazon’s ecommerce and AWS businesses, and expect they have new avenues of growth to exploit in scaling their advertising and generative AI business in the years ahead. However, we recognize that there is trepidation about the level of capex spending required to scale their generative AI business.”
Overall, AMZN ranks 1st on our list of stocks analysts are talking about. While we acknowledge the potential of AMZN, our conviction lies in the belief that under the radar 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.
