1. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Funds Investors: 286
During a recent interview, Brian Nowak, Morgan Stanley senior analyst, talked about Amazon.com Inc (NASDAQ:AMZN) smart home capabilities after the company’s latest event.
“What we’re seeing out of Amazon is now the next phase of what could be more agentic capabilities coming out of Amazon, really coming out of Alexa. I thought Andy Jassy did a great job explaining new sources of consumer utility and new use cases for customers that could ultimately drive more utility, more engagement, more consumer spend, and ultimately more monetization for Amazon. To me, the thing to watch here is, number one, it’s very notable that if you’re a Prime member, you’re going to get access to the Alexa Plus capabilities as part of your Prime membership—that was better than expected. And then, number two, the fact that all of the current Echo devices are going to be backward and forward compatible with this really opens up the available number of people who could use these new capabilities pretty quickly,” he said.
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) 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. 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 10 Best Performing Fintech Stocks to Buy According to Analysts and the 10 AI Stocks on Wall Street’s Radar Right Now.