Billionaire DE Shaw’s Latest Portfolio: Top 5 Stock Picks

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

DE Shaw’s Stake Value: $1,159,739,000

Percentage of DE Shaw’s 13F Portfolio: 1.35%

Number of Hedge Fund Holders: 252

Amazon.com, Inc. (NASDAQ:AMZN) is a consumer discretionary company working in the retail space for the sale of consumer products and subscriptions. The company operates in North America and internationally.

On August 24, Bernstein’s Mark Shmulik reiterated an Outperform rating on Amazon.com, Inc. (NASDAQ:AMZN)  shares. The analyst also has a $160 price target on the stock.

This August, Bank of America noted that Amazon.com, Inc. (NASDAQ:AMZN) saw a marked increase in its e-commerce growth rates in the third quarter. The company’s growth increased to about 17% from 5% in the previous quarter.

There were 252 hedge funds long Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter, with a total stake value of $30.1 billion.

L1 Capital International, an investment management company, mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its second quarter 2022 investor letter. Here’s what they said:

Amazon.com, Inc. (NASDAQ:AMZN) was the largest negative contributor to the Fund during the quarter. Q1 2022 results and Q2 2022 profit guidance were below market expectations. Amazon has been operating in an extraordinary environment since the start of the COVID-19 pandemic. Lockdowns led to an exceptionally rapid shift in retail activity online and Amazon benefitted from a dramatic increase in revenue. Management responded by doubling fulfilment and logistics capacities over a 2-year period – a response which has proven to be somewhat excessive.

Too much capacity, combined with elevated shipping and logistics costs, employee inefficiencies and a resetting of higher share-based compensation have pressured near-term profitability of Amazon’s retail (non-Amazon Web Services) operations. Management changes have exacerbated market uncertainty. We consider these issues to be real and negative to valuation, but somewhat transitory and more than reflected in Amazon’s current share price. Meanwhile Amazon Web Services (AWS) continues to deliver strong, profitable growth, ahead of our base case.

To describe our perspectives on Amazon we are reminded of the opening line in A Tale of Two Cities by Charles Dickens – “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…”. In our tale, one city is Amazon Web Services (AWS), while the other is everything else, which we will refer to as Retail and Other…” (Click here to read the full text)

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