Top 10 Stocks Analysts are Watching as AI Selloff Deepens

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1. Amazon.com Inc (NASDAQ:AMZN)

Number of Hedge Funds Investors: 286

Stephanie Link, CIO at Hightower, explained in a latest program on CNBC why she recently started selling her stake in Amazon.com Inc (NASDAQ:AMZN).

“I started trimming it a couple of weeks ago. I went from really very much overweight to market weight—now I’m slightly underweight. It’s still about a 32% position for me, but you have 95% of the sell side with buys on this thing—just about everybody owns it on the buy side too. I think that it’s had a nice run, it’s up 23% from its August lows, and I just thought I could take that cash and put it elsewhere into names that have just gotten hammered.”

Mar Vista Global Quality Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:

“Amazon.com, Inc.’s (NASDAQ:AMZN) profitability was the key highlight of the third quarter financial results, with AWS and International Retail achieving record operating margins, and North America Retail posting its second-best margin in five years. Even more impressive was the fourth quarter operating income forecast, projecting up to $20 billion, significantly exceeding the expected $16 billion and suggesting a record 11% margin. This exceptional performance was driven by economies of scale, logistics efficiencies, successful AI implementations, increasing ad revenue, and accelerated AWS growth.

We keep our investment in Amazon due to several factors: AWS growth has further potential, Amazon Prime Video monetization is in its initial stages, and the company is expanding into promising sectors like Pharmacy and Logistics. Furthermore, with strengthening profitability and cash reserves exceeding $100 billion, the possibility of substantial capital returns increases. By continuing to innovate and invest in technologies like AI and cloud computing, Amazon is well-positioned to keep its competitive edge.”

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 AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below. You can also look at the Top 10 AI Stocks News: Latest Analyst Ratings And Upgrades and the 9 AI News Updates Investors Should Not Miss.

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