Billionaire David Tepper’s Top 10 Stock Picks Heading into 2025

3. Amazon.com, Inc. (NASDAQ:AMZN)

Appaloosa Management LP’s Stake Value: $596.26 Million

Number of Hedge Fund Holders: 286

Amazon.com, Inc. (NASDAQ:AMZN) is a technology company that dominates e-commerce and cloud computing. Best known for offering a platform for selling and buying items, it’s also making a mark amid the digital revolution with the most significant cloud computing platform.

Amazon.com, Inc.’s (NASDAQ:AMZN) cloud computing division, Amazon Web Services (AWS), continues to be a key growth and profitability driver. The unit delivered a 19% increase in revenue in the third quarter. Even though the growth rate has leveled off, it is still higher than that of many rivals in the cloud services industry.

Amazon.com, Inc.’s (NASDAQ:AMZN) significant investments in AI infrastructure for AWS are anticipated to support future revenue growth. Amazon has raised its capital expenditure forecast for 2024 to about $75 billion, primarily to meet the demand for AI services on AWS.

In addition to growth in cloud computing, Amazon.com, Inc.’s (NASDAQ:AMZN) core e-commerce business is also doing well. Thanks to a robust supply and logistics network, the company is staring at another record-breaking holiday shopping season. Black Friday sales are already up by an average of 7%. Same-day and next-day delivery services are also up, growing at over 30% year-over-year.

AMZN has also moved to strengthen its grip on the e-commerce business with the launch of Amazon Haul. The launch seeks to improve the company’s push into the discount storefront business with products priced at less than $20. With the launch, it should take on Temu and TikTok shops, therefore expanding its market reach.

Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter. Here is what the fund said:

“The largest absolute detractors were Alphabet, Airbnb, and Amazon.com, Inc. (NASDAQ:AMZN). Amazon’s position as a notable detractor speaks more to the size of the position than the magnitude of the underperformance, as the company delivered a solid set of results during the quarter.

We trimmed our positions in Amazon, Alphabet, and Microsoft during the quarter. As we have previously, we trimmed Amazon slightly to bring the weight back to 15% for risk management purposes. We remain very optimistic about our investment thesis of strong revenue growth, even more substantial earnings, and free cash flow growth continuing over the next few years.”