Investment management company Vulcan Value Partners recently released its second quarter 2022 investor letter. A copy of the same can be downloaded here. The firm carries five strategies and all these strategies trailed their benchmark index in the second quarter of 2022. The fund’s Large-Cap Composite returned -28.4% net of fees and expenses, Small Cap Composite returned net -25.8%, Focus Composite returned net -22.8%, Focus Plus composite returned net -22.9% and All Cap Composite returned net -29.1% during the quarter. You can check the top 5 holdings of the fund to know its best picks in 2022.
Vulcan Value Partners discussed stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter letter. Headquartered in Seattle, Washington, Amazon.com, Inc. (NASDAQ:AMZN) is an American retailer. On August 23, 2022, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $133.62 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) rose to 10.46% and its shares lost 19.00% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.361 trillion.
Here is what Vulcan Value Partners specifically said about Amazon.com, Inc. (NASDAQ:AMZN):
“Amazon.com, Inc. (NASDAQ:AMZN) has three components to its business model: online retail, cloud-based Amazon Web Services (AWS), and online advertising. We believe that the stock price has declined primarily due to its disappointing online retail results. Retail was extremely successful during COVID, and Amazon spent immensely to protect the consumer experience including buying extra inventory, buying inventory ahead of time, securing alternate shipping routes and adding extra warehouse space. We believe this long-term behavior has been successful for Amazon as customer retention and engagement remain at high levels. Post-COVID, the company is in the process of rightsizing its cost structure, and it is facing a tough period of comparisons. The retail segment is the smallest contributor to our overall value. The majority of the company’s value is in AWS, which we believe is one of the best businesses in the world. AWS’ revenue is expected to be approximately $80 billion this year, which is nearly double the amount in 2020. The company’s online advertising has turned into an attractive business that did not exist 15 years ago, and we estimate its revenue to be around $40 billion this year.”
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Our research shows that Amazon.com, Inc. (NASDAQ:AMZN) performed well in this quarter and the stock gained the first position in the list of 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was held by 252 hedge fund portfolios at the end of the second quarter compared to 271 in the previous quarter.
We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared Alphyn Capital Management’s views on the company. You can check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other prominent investors.
Disclosure: None. This article is originally published at Insider Monkey.
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.
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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.
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