Citigroup’s Top 5 AI Stocks to Buy

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

Number of Investors in Q1 2023: 243

Amazon.com, Inc. (NASDAQ:AMZN) has always dominated the cloud computing segment and has now turned to artificial intelligence to cement its dominance. While facing significant competition from Microsoft and Google, the e-commerce giant is set to compete on pricing.

 Given that AI models like ChatGPT require immense computing power to train and operate, Amazon is set to provide the power at a much lower price than its peers. By reducing the cost, the tech giants hope to trigger demand for their AI models, often referred to as Titan.

 In addition to leveraging AI on cloud computing to pursue growth opportunities, the company is also using the technology to enhance its e-commerce business. With the technology, its been able to better manage its inventory levels, therefore positioning products where they are mostly needed. With generative AI, Amazon can stay with consumer purchasing patterns and therefore place products close to the market in the race to enhance same-day and next-day deliveries.

There were 243 hedge funds long Amazon.com, Inc. (NASDAQ:AMZN) during the first quarter, with a total stake value of $25.76 billion. CICC initiated coverage of Amazon.com, Inc. (NASDAQ:AMZN), giving it an ‘Outperform’ rating and setting a price target of $140 on July 10.

ClearBridge Investments, an investment management company Amazon.com, Inc. (NASDAQ:AMZN) in its second-quarter 2023 investor letter:

“2023 has so far marked a return to mega cap leadership, with Apple, Microsoft, Alphabet, Amazon.com, Inc. (NASDAQ:AMZN) and Nvidia accounting for approximately two thirds of the benchmark return. At 41.3%, the five largest stocks in the market represent the highest concentration in the 26-year history of the Russell 1000 Growth Index. Among these names, we maintain overweights to Nvidia (+246 bps) and Amazon (+117 bps), underweights to Microsoft (-353 bps) and Apple.

The Strategy’s IT holdings also drove performance in the second quarter, led by the continued rerating of graphics chipmaker Nvidia as a key beneficiary of the generative AI boom. AI-connected holdings Microsoft and Amazon also delivered strong gains.”