Goldman Sachs’ Best Phase 2 AI Stocks: Top 24 High Conviction AI Stocks

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

Year To Date Share Price Gain: 25.94%

Number of Hedge Fund Investors in Q2 2024: 308

Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest eCommerce company and a dominant player in the cloud computing industry. This offers it an unmatched business diversification, with the eCommerce business providing high volume top line contributions and the cloud business offering a high margin business with stable revenues. Amazon.com, Inc. (NASDAQ:AMZN)’s partnership with Anthropic, a firm set up by former OpenAI employees, has provided it with access to a foundational AI model. When coupled with its in house processors and data center infrastructure, it makes Amazon.com, Inc. (NASDAQ:AMZN) one of the few firms in the world to provide an end to end AI stack to businesses and other users. The firm’s AI software also allows it to improve merchant advertising on its eCommerce site and become an AI beneficiary. Amazon.com, Inc. (NASDAQ:AMZN)’s tools such as Amazon Bedrock provide generative AI for application development and enable broader AI access in the industry.

Patient Capital Management mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter. Here is what the fund said:

“Amazon.com Inc. (AMZN) moved higher throughout the second quarter as AI demand helped to reaccelerate growth in their AWS business. It looks as though the cloud business is finally past the customer cost optimization period with customers restarting their cloud migrations as well as expanding spend on AI projects. Despite the top and bottom-line improvement seen in the first quarter, the company is significantly underearning its long-term potential as it continues to reinvest aggressively in the business. With 80% of global retail sales still being done in physical stores and 85% of global IT spending still on-premises, we see a long-run way for the dominant player in the cloud, retail, and increasingly logistics and advertising space.”