Lakehouse Capital, a Sydney-based investment manager, released its “Lakehouse Global Growth Fund” February 2025 investor letter. A copy of the letter can be downloaded here. February was a volatile month for global equities due to the deluge of Trump headlines. However, the portfolio’s holding companies continue to press their advantages and execute on their growth opportunities. The Fund returned -1.0% net of fees and expenses for the month compared to -0.3% for its benchmark. Since its inception in December 2017, the Fund has returned 250.6%, compared to 136.1% for its benchmark, the MSCI All Country World Index, Net Total Returns (AUD). In addition, please check the fund’s top five holdings to know its best picks in 2025.
In its February 2025 investor letter, Lakehouse Global Growth Fund emphasized stocks such as Amazon.com, Inc. (NASDAQ:AMZN). Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products, advertising, and subscription services through online and physical stores that operate through North America, International, and Amazon Web Services (AWS) segments. The one-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -13.19%, and its shares lost 8.08% of their value over the last 52 weeks. On April 8, 2025, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $170.66 per share with a market capitalization of $1.809 trillion.
Lakehouse Global Growth Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its February 2025 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) posted a solid quarterly result with ongoing cost discipline driving significant operating leverage across the business. Net sales grew 10% year-over-year (11% in constant currency terms) to $187.8 billion whilst operating income grew 61% to $21.2 billion, well ahead of guidance and analysts’ expectations. Growth within the core e-commerce business remained healthy as the company delivered a record breaking Black Friday and Cyber Monday holiday shopping event. For the past two years now, management has been laser focused on driving efficiencies across the retail operations and these efforts are continuing to pay off. Notably, retail margins for their international segment have now been positive for four straight quarters and currently sit at 3.0%, which is pretty remarkable considering that just over two years ago they sat at -8.9%.
The company’s second largest segment, Amazon Web Services (AWS), also performed well with growth steady at 19% year-on-year. AI demand remains strong with management noting that AI related revenue is still growing triple digits. Big picture, AWS remains the leading cloud provider (in what is an increasingly two-horse race with Microsoft’s Azure) and with 85% of global IT spend still on-premises there is still plenty of runway for future growth. At current levels, Amazon’s valuation is attractive at 13x EBITDA, and we remain confident that patient shareholders will be treated well as the company is set to deliver many years of solid revenue growth and margin expansion.”
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN) is in first position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 339 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the fourth quarter compared to 286 in the third quarter. In Q4 2024, Amazon.com, Inc. (NASDAQ:AMZN) achieved global revenue of $187.8 billion, representing an 11% year-over-year growth excluding the impact of foreign exchange. While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
We covered Amazon.com, Inc. (NASDAQ:AMZN) in another article, where we shared the list of best stocks to buy according to billionaire Steve Cohen. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.