Jim Cramer’s Hottest 10 Stock Picks

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

Number of Hedge Fund Investors: 302

Amazon.com, Inc. (NASDAQ:AMZN)’s cloud computing division, Amazon Web Services (AWS), is experiencing significant growth, with a 19% year-over-year revenue increase and a 75% jump in operating income last quarter. This success is largely fueled by the strong demand for AI services and the ongoing transition of corporate IT infrastructure to the cloud. Additionally, Amazon.com, Inc. (NASDAQ:AMZN)’s entry into the healthcare market, particularly through Amazon Pharmacy, is showing promising results, with growing consumer adoption and increasing market share.

Despite a recent dip in Amazon.com, Inc. (NASDAQ:AMZN)’s stock price, Wall Street analysts remain optimistic, consistently rating the stock as a “buy” and projecting substantial upside. Recent business developments, including securing NBA media rights and a successful Prime Day event, further support Amazon.com, Inc. (NASDAQ:AMZN)’s strong growth outlook.

Jim Cramer explained that investors are hesitant to buy Amazon.com, Inc. (NASDAQ:AMZN) because they are concerned about the potential threat from Meta. They fear that Meta Platforms, Inc. (NASDAQ:META) might catch up to and even surpass Amazon.com, Inc. (NASDAQ:AMZN). This concern is well-founded, as Meta Platforms, Inc. (NASDAQ:META)’s advancements could pose a significant challenge to Amazon.com, Inc. (NASDAQ:AMZN)’s market position.

Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter:

“Among our top individual contributors in Q2 were Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Internet retail and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. Shares also received a boost amid growing optimism around the demand for AWS as Amazon customers’ investments in generative AI projects continue growing.”

While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN), 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 timeframe. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

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