Investment management company First Pacific Advisors recently released its “FPA U.S. Core Equity Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. In the second quarter, the fund returned -18.92% net of fees and expenses compared to a return of -16.10% for the S&P 500 Index. The fund’s underperformance in the quarter was attributed to the greater exposure to low-performed consumer discretionary, communication services, and information technology sectors. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
First Pacific Advisors discussed stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter 2022 investor letter. Headquartered in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) engages in the sale of consumer products and subscriptions. On November 04, 2022, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $90.98 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -21.43%, and its shares lost -48.80% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.216 trillion.
Here is what First Pacific Advisors specifically said about Amazon.com, Inc. (NASDAQ:AMZN) in its investor letter:
“The five biggest detractors to performance were the Fund’s five largest holdings, with Amazon.com, Inc. (NASDAQ:AMZN) being the biggest loser. As interest rates rose further in 2022 during the second quarter, higher EPS multiple stocks such as Amazon.com fared relatively poorly. While Amazon’s AWS business is doing extremely well (growing fast and generating robust free cash flow), its retail operations are not growing nearly as fast nor are they as profitable. That segment is being impacted by a host of issues—some self-inflicted such as overbuilding local warehouse capacity for faster delivery of more goods to customers and some more out of its control such as supply chain disruptions and higher than expected wage inflation. Amazon.com is discussed in our previous letters so please reference those for a more detailed view on the company.”
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Amazon.com, Inc. (NASDAQ:AMZN) is in 2nd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 252 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the second quarter which was 271 in the previous quarter.
We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared Lakehouse Capital’s views on the company. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.
It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.
And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.
What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.
In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.
Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…
But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.
And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…
This prediction might not be bold at all:
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