5. Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders as of Q4: 338
Bourgeon Capital’s Equity Stake: $15.08 Million
Amazon.com, Inc. (NASDAQ:AMZN) is a global technology powerhouse specializing in e-commerce, cloud computing, digital streaming, online advertising, and artificial intelligence. The company has diversified its operations through key subsidiaries such as Amazon Web Services (AWS), Zoox, Ring, Twitch, IMDb, Kuiper Systems, Whole Foods Market, and Amazon Lab126, strengthening its footprint across multiple industries.
Amazon.com, Inc. (NASDAQ:AMZN) demonstrated strong financial performance in Q3 2024, reporting $158.88 billion in revenue—an 11% increase year-over-year—slightly surpassing analyst expectations by 0.3%. Additionally, its earnings per share (EPS) reached $1.86, exceeding forecasts by 25.3%, underscoring its consistent profitability. With its dominant market position, continued expansion into high-growth sectors, and resilient financial results, Amazon.com, Inc. (NASDAQ:AMZN) remains a compelling stock for investors seeking both stability and long-term growth in the technology sector.
Italian authorities are investigating whether Amazon.com, Inc. (NASDAQ:AMZN) evaded 1.2 billion euros in value-added tax (VAT) that should have been collected from certain third-party sellers between 2019 and 2021. A law introduced in Italy in 2019 made e-commerce platforms responsible for VAT owed by non-EU sellers shipping goods to Italian customers, a regulation that preceded an EU-wide VAT reform in 2021. According to Italy’s financial crimes police, penalties could push Amazon’s total liability to as much as three billion euros. The investigation, launched in early 2024 and concluded in December, reviewed transactions that allegedly resulted in unpaid VAT. While Amazon declined to comment on the ongoing probe, the company emphasized its commitment to tax compliance and noted it had paid 1.4 billion euros in direct and indirect taxes to Italy in 2023. A preliminary investigation does not automatically lead to formal charges, but the case emerges amid broader discussions on trade relations, with former U.S. President Donald Trump proposing reciprocal tariffs against EU VAT policies.
Recurve Capital stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) – 5.1% of assets as of 12/31/2024
Amazon has been an agent of disruption for a long time in retail, cloud computing, and beyond. Its consumer business is incomparable for small parcel, general merchandise. Prime delivery windows keep shrinking, which keeps pulling more market share Amazon’s way. It has an amazing transportation, fulfillment, and logistics network capable of service levels that were unthinkable at current prices just a couple decades ago. Additionally, AWS is a leader in cloud verticalization, powered by proprietary semiconductors, hardware, software, facilities, and more. Amazon’s customer-centricity is the driving force behind its continuous innovation and disruption. As the juggernaut disruptor, it is likely the world’s best company at solving really hard problems for customers at massive scale.
Amazon does not trade at a mid-single multiple of medium-term FCF/share or EPS. Our cost basis was less than 10x our estimate of 2028 FCF. However, few companies reinvest at the rate Amazon does and, theoretically, it could double the free cash flow I model simply by moderating its reinvestments for a year or two – but that may not be a great outcome for long-term investors. This is why it is important to evaluate companies based on owner’s earnings, not reported earnings. For instance, a private owner of Amazon might shut down Project Kuiper and Alexa and massively increase EPS and FCF/share.”
