Top 10 Stocks to Buy According to Two Sigma Investments

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

Number of Hedge Fund Holders as of Q4: 339

Two Sigma Investments’ Equity Stake: $974.62 Million 

Two Sigma Investments recently increased its holdings in Amazon.com, Inc. (NASDAQ:AMZN) by 122%, boosting its stake from 2 million shares in Q3 2024 to 4.44 million shares in Q4 2024. This investment, valued at over $974 million, positions Amazon as the hedge fund’s fourth most valuable holding in its 13F filings for the quarter ending December 2024. Hedge fund interest in the company also increased, with 339 funds tracked by Insider Monkey holding positions worth nearly $69.04 billion by the end of the quarter, up from 286 funds in Q3.

Amazon.com, Inc. (NASDAQ:AMZN) experienced a substantial rise in operating income for the fourth quarter of 2024, climbing to $21.2 billion from $13.2 billion in the same period the previous year. Net income saw an even more impressive surge, doubling to $20 billion. The company’s cloud computing segment, Amazon Web Services (AWS), continued to be a significant growth driver, achieving a 19% increase in quarterly revenue, bringing it to $28.8 billion. For the full year, its net sales expanded by 11% to $638 billion, while operating income nearly doubled, reaching $68.6 billion. Net income for the year rose to $59.2 billion, and the company posted a record-high operating income, marking an 86% increase from the previous year. The rapid growth of AWS, fueled by increased enterprise adoption of artificial intelligence (AI) applications, continues to be a fundamental factor in Amazon.com, Inc. (NASDAQ:AMZN)’s long-term expansion.

Despite these strong financial results, some investors remained concerned about Amazon’s substantial capital expenditures as it plans to allocate $100 billion in capital expenditures for 2025, a sharp rise from the $77.7 billion spent in 2024. The majority of this investment is targeted toward AI infrastructure within AWS, aligning with Amazon.com, Inc. (NASDAQ:AMZN)’s strategy to strengthen its position in cloud computing. While CEO Andy Jassy remains optimistic about this aggressive investment approach, some market participants fear that such high expenditures could pressure profit margins.