Investment management company Miller Value Partners recently released its Q2, 2022 investment letter, a copy of which can be downloaded here. The firm faced notable challenges due to continued volatility in the last couple of years. In the second quarter, Miller Opportunity was down by -29.3%, extending its first half return to -31.08% net of fees. Over the last 10 years, the fund generated an annualized return of 11.83%. Take a look at the fund’s top 5 holdings to have an idea about their best picks for 2022.
In the Q2 2022 investment letter, the firm analyzed and explained the reasons for the underperformance of the fund. The letter discussed the performance of the stocks like Amazon.com, Inc. (NASDAQ:AMZN) and believes that it will cover the earnings gap in the coming years. Amazon.com, Inc. (NASDAQ:AMZN) is an American company headquartered in Seattle, Washington which has a market capitalization of $1.231 Trillion. The stock of Amazon.com, Inc. (NASDAQ:AMZN) closed at $120.97 per share on 27 July 2022. Amazon.com, Inc. (NASDAQ:AMZN) had a return of 13.90% for the past month whereas its 12-month returns plunged to -32.79%
Here is what Miller Value Partners specifically said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor’s letter:
“AMZN looks more expensive on this year’s earnings, but we believe it is massively underearning its long run potential. We expect it to close that gap over the coming years. Consensus earnings estimates for 2027 are ~$10 per share so it trades at less than 11x 4.5 year out earnings. Costco trades at close to 39x. A multiple in the low 20’s seems conservative in most scenarios, which would imply a doubling. That may understate the potential as you can easily argue that Amazon Web Services (AWS) is currently worth the entire value of the business. Either way, we think these compounders are undervalued. In contrast, there are still many quality companies that appear expensive.”
Our research shows that Amazon.com, Inc. (NASDAQ:AMZN) performed well in this quarter and the stock gained the top position in our list of the 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 271 hedge fund portfolios in Q1,2022 compared to 279 in Q4,2021. Amazon.com, Inc. (NASDAQ:AMZN) shares lost 33.28% of their value over the last 52 weeks.
In our recently published article we shared Oak Mark Funds’ views on Amazon.com, Inc. (NASDAQ:AMZN). Please check out our hedge fund investor letters 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.
It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.
Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
How could anything be worth that much?
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In fact, Verge argues this company’s supercheap AI technology should concern rivals.
Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.
Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
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