Baron Funds: “Amazon.com (AMZN) to Grow Into its Retail Capacity in the Quarters to Come.”

Baron Funds, an asset management company, released its “Baron Global Advantage Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund fell 32.3% compared to a 15.7% decline for the MSCI ACWI Index and 20.2% for the MSCI ACWI Growth Index. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.

Baron Funds discussed stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter investor letter. Headquartered in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) engages in the retail sale of consumer products and subscriptions. On September 8, 2022, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $129.82 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -9.56%, and its shares lost 25.16% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.323 trillion.

Here is what Baron Funds specifically said about Amazon.com, Inc. (NASDAQ:AMZN)  in its Q2 2022 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services provider. Shares of Amazon declined 35% in the quarter due to weaker-than-expected profits resulting from an overcapacity of resources coming out of COVID. We expect Amazon to grow into its retail capacity in the quarters to come, which would enable it to improve profitability accordingly. Amazon remains one of our largest holdings due to its durable competitive advantages with a leading position in multiple trillion-dollar markets with a long runway for growth.

According to the U.S. Census Bureau, domestic e-commerce was only 14.3% of retail as of the first quarter of 2022. Internationally, the opportunity is even earlier as Amazon has still less than 2% market share of international retail spending. Its advertising share is roughly 3% and growing, underpinned by its structural closed loop, which enables accurate targeting and measurement.

Lastly, Amazon Web Services or AWS, remains the leading cloud provider, while cloud computing still represents only 9.5% out of the $4.3 trillion of global IT spending according to Gartner. Areas such as logistics and health care present additional optionality.”

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Amazon.com, Inc. (NASDAQ:AMZN) performed well in this quarter and the stock gained the second position on the list of 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 252 hedge fund portfolios at the end of second quarter compared to 271 the previous quarter.

We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared L1 Capital International’s views on the company. Please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.

Disclosure: None. This article is originally published at Insider Monkey.