Top 10 Stocks to Buy According to Marshall Wace LLP

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

Number of Hedge Fund Holders as of Q4: 339

Marshall Wace LLP’s Equity Stake: $2.48 Billion 

Amazon’s stock fell 2.66% on March 14, 2025, closing at $193.91, as investors reacted to growing concerns over potential tariff impacts following new policy discussions from the Trump administration. While Amazon.com, Inc. (NASDAQ:AMZN) doesn’t primarily deal in alcoholic beverages, the announcement of a possible 200% tariff on European imports raised broader fears about trade policies affecting major retailers. This drop extends Amazon’s challenging start to 2025, with shares down 11.7% year-to-date and nearly 20% below their February peak of $242.06. However, Amazon’s financial health remains strong, reporting a return on equity of 24.68% and a return on assets of 10.49%. With a price-to-earnings ratio of 35.01, near its 10-year low, this could serve as a top stock to buy for long-term investors.

Despite recent stock volatility, Amazon.com, Inc. (NASDAQ:AMZN) delivered record-breaking financial results in 2024. The company’s operating income for Q4 surged to $21.2 billion from $13.2 billion the previous year, while net income doubled to $20 billion. For the full year, Amazon’s net sales grew 11% to $638 billion, and operating income nearly doubled to $68.6 billion. The main driver of this success was Amazon Web Services (AWS), which saw a 19% jump in quarterly revenue to $28.8 billion. With enterprises increasingly turning to AWS for artificial intelligence (AI) applications, the cloud division remains a critical component of Amazon’s long-term growth strategy.

However, investor concerns over Amazon.com, Inc. (NASDAQ:AMZN)’s aggressive capital expenditures have weighed on the stock. The company plans to increase capital spending to $100 billion in 2025, up from $77.7 billion in 2024, with most of the investment focused on expanding AI infrastructure for AWS. While CEO Andy Jassy remains confident in the strategy, investors worry that such high spending could pressure profit margins, especially as Amazon.com, Inc. (NASDAQ:AMZN) projects its full-year 2025 operating income to decline by $700 million.

Parnassus Core Equity Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) posted better-than-expected quarterly earnings, lifting investor confidence in the e-commerce giant’s ability to generate margin while continuing to invest into its large AI and retail end markets.

Amazon’s shares experienced volatility throughout the year as IT spending and the company’s margin structure came under scrutiny. Despite this, the stock outperformed as sentiment and results improved across both the overall environment for Amazon Web Services and the company’s ability to show margin.”