We recently published a list of Top 10 Stocks to Watch as Investors Brace for Potential Recession. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other top stocks to watch as investors brace for potential recession.
President Donald Trump’s new reciprocal tariff announcement is hammering stock markets around the world as countries face a new reality and trade dynamics. The rising volatility has increased recession risks. Goldman Sachs recently said that it sees a 35% chance of a recession in the next 12 months, up from 20% previously. The bank also cut its 2025 GDP forecast to just 1% and raised its year-end unemployment rate outlook by 0.3 percentage points to 4.5%.
China and key European countries are beginning to respond to the latest tariffs and will likely impose retaliatory tariffs on US products, causing a further downturn in consumer sentiment. Kara Reynolds, an economist at American University, told ABC News that a pullback in spending from consumers and businesses due to these uncertainties can tip the US into a recession.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 stocks currently on Wall Street’s radar. 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Investors: 286
Jed Ellerbroek from Argent Capital said in a latest program on Schwab Network that Amazon.com, Inc. (NASDAQ:AMZN) is one of his fund’s biggest holdings amid the company’s strong retail and AWS business.
“Amazon is our favorite stock, and it’s the largest holding in Argent’s large-cap portfolio. We like it because both of their businesses are performing exceptionally well. The retail business that we’re all familiar with—where we’re seemingly receiving packages every day—is one of the few U.S. retail businesses actually growing revenue today. The others are Walmart and Costco, but Amazon is taking the lion’s share of that growth.
We also love their AWS business. The cloud computing unit is growing as businesses shift from on-premises to cloud data storage, and they’re also using the cloud more for AI purposes as they work toward deploying that technology in their operations every day. We like both businesses, think they both have a great growth outlook, and believe today is a great buying point.”
Diamond Hill Large Cap Concentrated Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Among our top individual contributors in Q4 were General Motors and Amazon.com, Inc. (NASDAQ:AMZN). Internet retail and cloud infrastructure company Amazon continues taking share in non-discretionary categories. Retail margins also increased in the quarter, particularly international margins. Amazon Web Services’ (AWS) revenue growth accelerated in the quarter, and, despite increased AI-related capital expenditures, margins improved to all-time highs.”
Overall, AMZN ranks 1st on our list of top stocks to watch as investors brace for potential recession. While we acknowledge the potential of AMZN, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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 this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
