We recently published a list of Top 10 Buzzing AI Stocks to Watch Now. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other top buzzing AI stocks to watch now.
Doug Clinton, Deepwater Asset Management co-founder, said in a latest program on CNBC that the AI trade is still intact but the market is going through a period of “doubt” and many major AI stocks have lost their momentum.
“The vibe has shifted, and I think investors, more broadly, almost want to believe the AI trade is over. They’re looking for evidence, reasons to doubt. That’s the hard part for this trade right now—momentum has lost its momentum. From our perspective, the AI trade is still real. I don’t think this boom is over; I still see two to four years ahead. But in every technology-driven boom, we go through periods of doubt. That’s a healthy part of the cycle, and we just need to work through it.”
When asked about high valuations, the analyst said many of the AI stocks have “reasonable” valuations and upside.
“If you look at the hyperscalers, I think their valuations are still largely reasonable, even though they make up a big share of the market, which concerns some investors. We’re talking about mid-20s PEs for them. Some of the more growth-driven momentum names still have upside. Their multiples look expensive now, but as they continue to grow—and that’s the key question—those multiples will actually appear higher now than they will in the future.”
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 AI stocks the market is talking about these days. With each stock, we have mentioned the number of hedge fund investors. 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).
Copyright: prykhodov / 123RF Stock Photo
Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Investors: 338
Jim Cramer in a recent program on CNBC recommended investors to buy Amazon.com (NASDAQ:AMZN) shares on a pullback.
“Amazon is what I call money side up, and I think you ought to understand this about it. This thing can go down, and when it goes down, what do you do? You buy it. That’s what I’m going to tell club members. I regard this stock going down as a gift—you wouldn’t be able to get it otherwise. This thing is amazing, and it’s like people who order from Amazon are selling the stock. I mean, think about that. That makes no sense to me.”
Alger Spectra Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a renowned online retailer and leader in cloud computing. The company’s Amazon Web Services (AWS) division offers utility-scale cloud solutions that support corporate America’s digital transition. During the quarter, Amazon’s shares contributed to performance as the company reported better-than-expected fiscal third-quarter results, with revenues and earnings beating analyst estimates. Operating margins expanded to 11%, driven by efficiency gains in logistics and robust AWS performance. Notably, AWS revenue growth accelerated during the quarter, along with recording its highest-ever operating margin of 38.1%, driven by easing cloud cost optimizations, renewed workload migrations, and an increasing contribution from AI workloads. On their earnings call, management highlighted plans to increase capital expenditures to enhance their technology infrastructure, catering to the surging demand for AI-driven computing.”
Overall, AMZN ranks 1st on our list of top buzzing AI stocks to watch now. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that under the radar 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.
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.