We recently published a list of the 10 Best Growth Stocks To Invest In Now. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other best growth stocks.
What Does the Santa Claus Rally Mean for Stocks?
Is a December rally in store for stocks in 2024? Some investors are expecting a surge in stocks from the 24th of December to the 3rd of January, 2025, also referred to as the Santa Claus Rally. On December 17, Ryan Detric, Chief Market Strategist at Carson Group, Joined Catalysts on Yahoo Finance to discuss whether he expects December to be a record-breaking month for the stock market.
Historically, the first half of December is usually slow for the stock market, while the second half is faster, suggested Detric. He also added that compared to election years in the past, this December has been very “flattish” so far. He also suggested that the Fed is going to continue the easing cycle and with the CPI declining, the current market conditions are favorable. Detrick then added that despite macroeconomic conditions and the performance of the Dow Jones index recently, he expects to see a record surge this month and expects “Santa Claus” to make an appearance this year.
“It’s a Bullish Environment for Big Tech”
Since the elections, stocks have been rallying with high hopes for the future. On December 18, Dan Ives, Managing Director at Wedbush Securities, joined Market Domination on Yahoo Finance to discuss his outlook on Big Tech and the new administration. Ives emphasized that the autonomous robotics and disruptive technologies sectors are going to benefit strongly from the new administration and its policies, despite concerns over tariffs. He also discussed the growing relationship between the new administration and Elon Musk, and how the two parties “need each other” to thrive, suggesting that Musk’s company has solid growth potential in the coming year and AI innovation will strengthen the collaboration immensely.
He also added that the environment is extremely bullish for Big Tech and expects growth in the coming year. Ives shared that while there are a few road bumps, especially from the Chinese market, the environment in retrospect is positive. Speaking of the electric vehicle market, he emphasized that new policies in the US coupled with international consolidation, especially in Europe and Asia, will benefit EV makers in the United States immensely.
The expectations from growth stocks are immense as the AI revolution takes precedence.
Our Methodology
To come up with the 10 best growth stocks to invest in now, we went over multiple rankings on the internet to compile an initial list of growth stocks. We then examined the hedge fund sentiment of each stock and picked the most popular ones. Our list is in ascending order of the number of hedge fund holders as of Q3 2024.
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).
A close-up of a computer monitor showing a complex web of cloud-based technology.
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) ranks first on our list of the best growth stocks to invest in right now. In addition to its growing customer base in e-commerce and cloud, the company also has a strong cash flow situation. For the trailing 12 months ended September 30, Amazon.com, Inc. (NASDAQ:AMZN) generated $112.7 billion in operating cash flow, up by 57% from the trailing 12 months ended September 30, 2023. During the same period, the company increased its free cash flow to $47.7 billion, up from $21.4 billion in 2023.
For the fourth quarter of 2024, Amazon.com, Inc. (NASDAQ:AMZN) expects net sales to range between $181.5 billion and $188.5 billion, up by 7-11% year-over-year. Operating income, on the other hand, is expected to range between $16 billion and $20 billion, up from $13.2 billion during the fourth quarter of 2023. Overall, AMZN is seeing significant growth in AWS sales and its international segment, with sustained growth in its North America segment.
Amazon.com’s (NASDAQ:AMZN) performance explains why analysts are bullish on the stock. On December 14, Wedbush Securities managing director of equity research Scott Devitt joined Yahoo Finance to discuss his thesis on AMZN heading into 2025. He suggested that all three businesses led by AMZN are expected to perform extremely well in 2025, for the first time since the pandemic. He added that the stock surged throughout 2024, and the momentum is expected to carry forward into 2025. Devitt also emphasized that previous slowdowns in retail were due to the macroeconomic conditions of the country, and with a solid economic recovery expected, AMZN’s retail aspect is also going to benefit.
Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:
“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”
Overall, AMZN ranks 1st on our list of the best growth stocks to invest in. While we acknowledge the potential of AMZN to grow, our conviction lies in the belief that certain 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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. This article is originally published at Insider Monkey.
