Jim Cramer on the Magnificent Seven Stocks Plus Netflix

1. Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 308

Cramer thinks that Amazon.com, Inc. (NASDAQ:AMZN) has various growth avenues, especially AWS. He said:

“Amazon’s easy. It got hammered down from $187 to $161 after that last quarter, but it’s back above $187 now. I think the company simply has too many levers, including the incredible growth for the Amazon Web Services, which [can] take it back, I think, to its $200 high.”

Amazon (NASDAQ:AMZN) is one of the most famous global technology companies and it specializes in online retail, advertising, and subscription services. A significant aspect of its operations is its cloud computing division, Amazon Web Services (AWS), which has emerged as a crucial source of operating profit. Over the past year, AWS has seen accelerating sales growth, reflecting a broader trend as businesses increasingly migrate their data systems to the cloud.

The transition is particularly relevant as companies seek to leverage artificial intelligence tools, presenting substantial opportunities for Amazon’s future expansion. In the second quarter, AWS reported sales of $26.3 billion, marking a 19% increase compared to the previous year. Alongside its cloud segment, the company has also identified advertising as a key growth area. In the same quarter, revenue from advertising services rose by 20% year-over-year, slightly outpacing the growth experienced by AWS.

Recently, on October 10, Amazon (NASDAQ:AMZN) revealed that its Prime Big Deal Days event set new records for October shopping events. This year, a greater number of Prime members participated compared to the previous year, taking advantage of early holiday promotions. The two-day event kicked off the holiday shopping season with record sales, surpassing all previous October events in terms of items sold.

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 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: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

Disclosure. None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and investors. Please subscribe to our daily free newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.