We recently published a list of the 10 Best Machine Learning Stocks to Buy Now. In this article, we are going to take a look at where Amazon.com Inc. (NASDAQ:AMZN) stands against other machine-learning stocks.
Grand View Research reported that the global machine-learning market was valued at $36.73 billion in 2022. It’s now expected to grow at a 34.8% CAGR from 2023 to 2030. Machine learning helps machines and systems learn from experience instead of through explicit programming. It uses algorithms to improve and analyze vast amounts of complex data to make informed decisions. Machine learning is quickly progressing as AI is rapidly expanding and transforming how businesses and individuals operate. These technological advancements are revolutionizing consumer experiences, and enabling convenient creation of digital services, products, and optimized supply chains. With this, startups can focus on specific solutions while larger companies can deliver comprehensive AI platforms.
On April 10, Amazon CEO Andy Jassy joined CNBC’s ‘Squawk Box’ to discuss the cost of AI and what has to happen to bring it down. Jassy emphasized that the growth in data center demand is now so significant that there is no foreseen attenuation here, even with ongoing macroeconomic uncertainties under tariffs. While there’s a general belief that the emergence of DeepSeek could now reduce the need for extensive data centers, processing power, and energy consumption previously forecasted at different tech companies, Jassy thinks that DeepSeek’s introduction did not disrupt any of this. Despite cost reductions that occurred have already over time, AI deployment still requires significant investment. He thinks that the current AI operations are expensive due to chip costs and other factors, but big techs, including his own company, would welcome any reductions in AI costs for customers moving forward.
Jassy underscored the demand for data centers despite tariff impacts and reflected optimism regarding lowering costs, which would potentially drive innovation and expanded use of AI across industries. AI is still limited and requires substantial human oversight as of now but it has massive potential across various sectors.
Our Methodology
We sifted through ETFs and financial media reports to compile a list of the top ML stocks. We then selected the 10 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
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).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) offers consumer products, advertising, and subscription services through online and physical stores. The company operates through North America, International, and Amazon Web Services (AWS) segments. It uses machine learning to personalize e-commerce experiences, provide cloud-based AI services, and also power the Alexa voice assistant.
Recently, JMP Securities analyst Nicholas Jones reaffirmed a Market Outperform rating on the company with a $285 price target because of Amazon.com Inc.’s (NASDAQ:AMZN) advertising strategies. The analyst believes in the company’s potential to attract more advertisers as it moves into retail media advertising and consequently increase the allocated budget for ads in retail media. In Q4 2024, the advertising revenue for the company improved by 18% year-over-year.
Amazon.com Inc.’s (NASDAQ:AMZN) integration of AI in the ad segment also drives its growth. Some of the company’s well-known AI-powered features and tools include the AI Creative Studio and Audio Generator, which assists creators in producing audio and visual content. Similarly, other GenAI tools help lower creative barriers for advertisers and also expand their reach. Video and Image Generators help advertisers showcase their products more effectively.
Nightview Capital is bullish on the company and stated the following regarding Amazon.com Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Artificial intelligence is no longer just a promise—it’s becoming the defining force of the modern economy. From self-driving vehicles to humanoid robotics, intelligent systems are not only enhancing efficiency but unlocking entirely new markets. These systems process and learn from vast amounts of real-world data, iterating and improving at a scale no human could achieve.
In our view, this isn’t just innovation; it’s exponential evolution. Companies leading the AI revolution are building formidable data moats, making it nearly impossible for latecomers to compete. Every mile driven by an autonomous vehicle, every task completed by an industrial robot—these actions feed a cycle of continuous improvement.
Amazon.com, Inc. (NASDAQ:AMZN): Core Opportunity: Amazon’s growth is anchored by three high-potential areas: retail margin expansion, a rapidly growing advertising business, and the continued growth and need for Amazon Web Services (AWS). Together, these pillars position Amazon for the next leg of growth and profitability.
Competitive Advantage: Retail Margin Expansion: With e-commerce still accounting for only 16% of retail sales in the United States (per the U.S. Census Bureau)—and even less globally—Amazon has significant room for growth. CEO Andy Jassy’s emphasis on AI-driven efficiencies, such as a possible 25% reduction in cost-to-serve, underscores the company’s ability to unlock new profitability in their now three-decade-old core business. More than a decade after the Kiva robotics acquisition, we see the potential for the next wave of automation to reduce variable cost per unit (VCPU) on the “pick and pack” and transportation side of the business as the decade progresses. Overall, we see EBIT margins expanding steadily throughout the next several years…” (Click here to read the full text)
Overall, AMZN ranks 1st on our list of the best machine learning stocks to buy now. While we acknowledge the growth potential of AMZN, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. 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.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.