We recently published a list of Top 10 AI Stocks Trending On Wall Street. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other top AI stocks trending on Wall Street.
The tech world may be steering in a new direction with the emergence of DeepSeek and the cheaper and more efficient models it promises. In the latest news, bulls from Europe have deemed that the sector may have further to run, despite the emergence of these Chinese copies. This news emerged after January 27, when the tech world witnessed a broad market sell-off driven by DeepSeek’s advancements, investors’ concerns regarding West’s huge investments in chipmakers and data centers, valuation risks, and increasing competition from alternative AI models. In short, DeepSeek sparked a rout in the tech world.
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With the emergence of these models, companies are readjusting their approaches, focusing more on efficiency rather than demand. Even big AI names such as OpenAI have been prompted to rethink their strategies. The AI startup is reportedly thinking of “figuring out a different open-source strategy” after DeepSeek released a lower-cost open-source AI model, Seeking Alpha reported Saturday. Moreover, OpenAI Chief Product Officer Kevin Weil recently unveiled that the company was considering open-sourcing older AI models. This reflects a broader industry shift toward efficiency and accessibility.
Nevertheless, since the sell-off, tech stocks have thankfully rebounded. European markets in particular are hitting new highs, Reuters reports. One economic theory, known as the “Jevons Paradox” seems to be the answer. According to the paradox, when a resource becomes more efficient to use, demand may increase rather than the other way around. This is because the price of using the resource drops.
“I hadn’t discussed it until Monday (last week), and then suddenly it’s everywhere. This paradox highlights one of the uncertainties at the moment,” said Jewell, flagging that a key question for European stock-pickers is whether data centres and their suppliers will be less in demand.”
-Helen Jewell, Chief Investment Officer at BlackRock Fundamental Equities, EMEA, as reported on Reuters.
For this article, we selected AI stocks by going through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) is an American technology company offering e-commerce, cloud computing, and other services, including digital streaming and artificial intelligence solutions. On February 4th, Citi reiterated the stock as “Buy”, stating that it is bullish on Amazon ahead of earnings later this week. Amazon (NASDAQ:AMZN) is expected to exceed consensus estimates due to its robust holiday sales, positive online advertising climate, and increasing demand for cloud services. Concerning the projection for Amazon Web Services, AWS is expected to grow 19% year-over-year particularly due to spending improvements led by generative AI. Additionally, the holiday e-commerce segment is also expected to do well based on quicker shipping times and improved conversion rates. Other factors complementing this boost are higher margins, improved retail conversion, and growing AWS demand despite currency exchange challenges.
“Amazon (NASDAQ:AMZN) reports 4Q24 results on Thursday, 02/06 AMC [after market close], and given solid holiday sales, a healthy online advertising environment, and improving cloud demand, we believe results are likely to come in better than consensus expectations.”
Overall, AMZN ranks 2nd on our list of top AI stocks trending on Wall Street. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. 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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Disclosure: None. This article is originally published at Insider Monkey.
