Billionaire Phillipe Laffont’s Top 10 “Mostly AI” Stock Picks

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

Amazon.com, Inc (NASDAQ:AMZN) witnessed an increase of 12.5% YoY in the first quarter revenue whereas its adjusted EPS more than tripled. In addition to AWS business generating operating margins above 37% in the first quarter, digital ads also contributed to Amazon.com, Inc’s (NASDAQ:AMZN) revenue as the segment reported an increase of 24% YoY to $11.8 billion in the first quarter. Revenue in North America and International segments grew as well.

The largest shareholder in Amazon.com, Inc. (NASDAQ:AMZN), according to Insider Monkey’s database of hedge funds, is Fisher Asset Management that holds 42 million shares worth over $7 billion while Coatue Management holds 10 million shares worth $1.8 billion.

Baron Fifth Avenue Growth Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its first quarter 2024 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest retailer and cloud services provider. Shares increased 18.7% on quarterly results that exceeded consensus expectations, with revenue growth of 13% year-over-year and operating margins of 7.8% (up from 1.8% a year ago). We believe that Amazon is well positioned in the short to medium term to continue improving its core North American margins, which have reached 6.1% in the fourth quarter, the seventh straight quarter of margin improvement and an overall improvement of 800bps. Amazon has been rearchitecting its fulfillment network, improving efficiency, reducing cost-to-serve and accelerating delivery speeds thanks to initiatives such as regionalization, with the number of items delivered during the same day or overnight increasing by nearly 70% year-over-year. Reducing the cost to serve also enables Amazon to sell lower priced items and expand its addressable market to everyday purchases. Additionally, Amazon continues to benefit from its fast-growing, margin-accretive advertising business winning market share in digital advertising thanks to its structural advantages of a closed loop system, which enables a deterministic calculation of Return on Ad Spending. We also believe that e-commerce still has long duration growth ahead as it still accounts for less than 15% of retail. Similarly, Amazon’s cloud service, AWS, remains relatively early in its S-curve with cloud representing around 13% of worldwide IT spending13 incremental tailwinds across the three layers of the GenAI stack – infrastructure with NVIDIA’s own AI chips (Trainium and Inferentia) as well as with its offering of NVIDIA chips, platform (Bedrock), and applications (first and third party).”