We recently published a list of 11 Best Predictive Analytics Stocks to Buy According to Analysts. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other best predictive analytics stocks to buy according to analysts.
Predictive analytics, sometimes called big data analytics, is an integral part of today’s corporate arsenal. It is a subset of advanced analytics that makes use of statistical algorithms and machine learning techniques to predict future occurrences and gain insights from previous data. In addition, it includes tools and processes such as data mining and modeling, all aimed at examining data, identifying trends, and making informed predictions. According to Fortune Business Insights, the global predictive analytics industry was valued at $14.71 billion in 2023, and is predicted to reach $95.3 billion by 2032, with a compound annual growth rate (CAGR) of 23.1%.
Companies are always looking for ways to stay ahead of the competition and make smart choices that lead to success. This has led to a growing reliance on data-driven decisions. With consolidated analytics, machine learning models, and AI technologies, it’s now possible to analyze more companies in a larger area range at a faster rate than ever before. This is especially true for the practice of venture capitalism. Many early-stage startup investors use data-driven decision-making to guide their lead sourcing and investments. While the instinct for scouting great investment opportunities is typically developed over years of experience, venture capital firms and associates can improve their scouting process by analyzing a variety of ecosystems. According to a data-driven VC analysis, by this year, data, analytics, and artificial intelligence would be used to guide investment decisions in 75% of all VC deals. This access to high-quality data reduces venture capitalists’ risk of losing out on opportunities and assists them in identifying high-potential firms that might otherwise go undiscovered. Moreover, the combination of predictive analytics with artificial intelligence has resulted in a significant improvement in the depth of data insights. According to a Fortune Business Insights report on the AI sector, it is predicted to grow rapidly, with a CAGR of 29.2%. This rise is expected to bring the industry’s size to $1.7 trillion by 2032, a significant increase from the $233.46 billion in 2024.
Predictive Analytics in Healthcare
Much like many other industries, predictive analytics can be a boon for the healthcare sector. Due to its data-driven approach, it offers the potential to improve preventative care, resource management, and operational efficiency. In this perspective, the global healthcare predictive analytics market was valued at $12.96 billion in 2023 and is expected to rise at a compound yearly growth rate of 35% between 2024 and 2032. Furthermore, the growing volume of healthcare data from numerous sources, including wearable devices, mobile health applications, and electronic health records (EHRs), creates new opportunities for sophisticated analytics solutions. To illustrate this, the World Economic Forum estimates that hospitals create 50 petabytes of data every year.
Our Methodology
To come up with our list of the 11 best predictive analytics stocks to buy, we went through a variety of online publications, ETFs, and stock screeners. We then looked at the analyst upside of each company and ranked the ones with the highest upside potential. Our ranking is arranged in ascending order of analyst upside as of March 10, 2025. Additionally, we have included the hedge fund sentiment around each stock, as of Q4 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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
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Amazon.com Inc. (NASDAQ:AMZN)
Analysts’ Upside: 35.55%
Number of Hedge Fund Holders: 339
Amazon.com, Inc. (NASDAQ:AMZN) is a major American multinational technology company that engages in a variety of industries, including e-commerce, cloud computing through Amazon Web Services (AWS), online advertising, digital streaming, and artificial intelligence. The company has been a pioneer in harnessing data analytics and recommendations for e-commerce, using technologies like DynamoDB, Redshift, and EMR.
On February 24, Truist Securities’ analyst Youssef Squali reiterated a Buy rating and a $265 price target for Amazon.com, Inc. (NASDAQ:AMZN). Squali’s research is based on data through February 17, revealing that North American revenue is marginally outperforming consensus forecasts for the quarter to date. According to Squali, this gives Amazon an advantage over its smaller competitors while keeping its reputation as a major player in the Broadline Retail business.
Amazon.com, Inc.’s (NASDAQ:AMZN) financial performance in the fourth quarter of 2024 showed notable growth, with the company beating expectations by raking in an EPS of $1.86 and revenues of $187.8 billion. Operating income also increased to $21.2 billion in Q4 2024 from $13.2 billion the previous year, while net income more than doubled to $20 billion, thanks mostly to AWS.
Polen Focus Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Consistent with our thesis, Amazon.com, Inc. (NASDAQ:AMZN) has continued to see operating margins expand, hitting 11% in the most recent quarter after bottoming around 2% at the end of 2022. This march higher in margins stems from a mix shift towards faster-growing, higher-margin segments like Amazon Web Services (AWS) and Advertising, combined with better fulfillment efficiency in the e commerce business following significant investments in recent years. Further, speaking to its runway ahead, CEO Andy Jassy noted the company’s AI business is a “multi-billion-dollar business growing triple digits,” 3x faster than AWS did itself at the same stage in its evolution. While we trimmed our position during the quarter, Amazon remains our largest position, as we expect approximately 20% earnings growth over the next five years driven by a mix of solid organic revenue growth and continued margin expansion.
We trimmed our positions in UnitedHealth Group, Amazon, ServiceNow, and Gartner during the quarter. Amazon continues to deliver excellent results with all businesses growing robustly and profit margins expanding. When we significantly increased Amazon’s weighting in the portfolio about two years ago, its operating margins were at 2%, and we anticipated they would expand to the mid-teens over the next few years. Today, they stand at 11%, and we expect them to expand closer to the high-teen level in the next few years. The earnings growth potential from here is roughly 20% per annum based on our expectation for revenue and profit margin expansion. While this still represents excellent potential and Amazon remains our largest position, we no longer feel it merits a maximum position size.”
Overall, AMZN ranks 3rd on our list of best predictive analytics stocks to buy according to analysts. While we acknowledge the potential of AMZN as an investment, 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.
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Disclosure: None. This article is originally published at Insider Monkey.
