1. 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.”
While we acknowledge the potential of Amazon.com Inc (NASDAQ: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 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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