We recently compiled a list of the 10 Best Stocks for Beginners with Little Money According to Hedge Funds. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other beginner-friendly stocks.
Headlines from the US Stock Market
Uncertainty sweeps across the US with the incoming administration’s potential policies. Simultaneously, the Federal Reserve has decided to pause its rate-cutting cycle and the decision to resume easing is doubtful amidst Trump’s trade policies which are being deemed inflationary. Tariffs on foreign imports are considered a risk of reviving inflation. According to Reuters, Dustin Reid, chief strategist of fixed income at Mackenzie Investments in Toronto, reiterated the uncertainty looming as follows:
“Everything that is going on right now, from economic data to markets news and tariffs, adds up to a lot more uncertainty across all markets”
Recently, technology stocks benefitting from the business potential of AI witnessed a deep shock as Chinese startup DeepSeek revealed a large language model that can compete with American AI giants but at a fraction of the cost of OpenAI’s, Google’s, or Meta’s popular AI models. DeepSeek unveiled a free, open-source large language model that it claims took only two months and less than $6 to build.
The event raised a lot of concerns over America’s leadership in the AI sector and how big tech giants are investing heavily in AI models and data centers while DeepSeek somehow developed a highly competitive model without having as much compute as U.S. hyperscalers, as pointed out by Srini Pajjuri, semiconductor analyst at Raymond James. While the US has been trying to limit China’s access to the chips powering advanced AI systems, the news about DeepSeek’s chatbot making it to most-downloaded free app in the US on Apple’s App Store demonstrates the country’s rapid gains in the sector.
Our Methodology:
In order to compile a list of the 10 best stocks for beginners with little money according to hedge funds, we used a consensus of similar rankings as well as blue-chip ETFs. Moving on, we shortlisted the top 10 stocks from our list which had the highest number of hedge fund holders. The 10 best stocks for beginners with little money according to hedge funds have been arranged in ascending order of their hedge fund holders as of Q3.
At Insider Monkey we are obsessed with 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 customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) is a leading e-commerce company that has grown in a variety of businesses such as its core e-commerce operations, cloud services, as well as digital advertising. Additionally, Amazon manufactures and sells electronic devices such as Kindle, Ring, Blink, Fire tablet, Fire TV, and Echo.
Amazon.com, Inc. (NASDAQ:AMZN) serves as a global leader in e-commerce, cloud computing, and digital streaming. The company posted better-than-expected earnings and revenue for its most recent quarter, with Amazon’s cloud and advertising units showing strong growth. Ahead of the new earnings for Q4 2024 which are to be released on February 6, several Wall Street firms agree the e-commerce and cloud giant boasts the strongest setup among the mega-cap tech companies going into the earnings season, as reported by CNBC.
Jefferies analyst Brent Thill maintained a Buy rating on the stock and set a price target of $275. On January 24, Amazon.com, Inc. (NASDAQ:AMZN) also got a Buy rating from Scotiabank’s Nat Schindler. Lisa Schreiber from Gradient Investments emphasized Amazon.com Inc (NASDAQ:AMZN) being one of her top picks for 2025 as follows:
“It’s the leader in online retail and is very well-diversified with its cloud-based business, where it’s also a leader. Additionally, its ad business is gaining momentum and doing very well. Together with the fact that the path to AI monetization seems clearer for Amazon.com Inc (NASDAQ:AMZN) compared to other big names, we just have to recall their latest commentary around their cloud business, where they plan to introduce their own AI chip, which could potentially rival Nvidia down the road. The introduction of their AI agents is also increasing efficiency in their online retail. I think all of that presents great opportunities for 2025.”
Overall AMZN ranks 1st on our list of the best stocks for beginners with little money according to hedge funds. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued 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: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
