1. Amazon.com Inc (NASDAQ:AMZN)
Number of Hedge Fund Investors: 286
Jason Brown from The Brown Report in November explained his bullish thesis for Amazon.com Inc (NASDAQ:AMZN) during a program on Schwab Network. The analyst believes AWS and ecommerce growth are the two key engines for the stock that can drive its price further.
Here is what he said about the stock:
“According to analysts, eCommerce is growing 88.5% this year, while retail is growing at about 3.6%. That means people going online are growing at double the pace of those going to a physical location. That’s good news for Amazon.com Inc (NASDAQ:AMZN). They have the branding and trust where people are willing to put their credit cards in.
Here’s another interesting statistic: North American sales increased by 9% to $95.5 billion, and international sales grew by 12% to $35.9 billion. So, you’ve got a company doing over $100 billion in sales in a quarter.
But here’s where the growth is coming from—AWS revenue grew 19% to $27.5 billion, and their advertising generated about $14.3 billion, a 19% increase. If you take AWS and their advertising services together, they’re just shy of $50 billion, which is nearly 50% of North American sales in total.
They have another growth engine outside of the eCommerce platform. While dominating eCommerce, this additional growth engine bodes well for the stock.”
Montaka Global Investments stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter:
“Secondly, in August, we sold some of our holdings in two tactical positions in the tail of Montaka’s portfolio – Advanced Micro Devices (AMD) and Kyndryl Holdings (KD) – to take advantage of a near-20% drawdown in the stock price of Amazon.com, Inc. (NASDAQ:AMZN).
We still see plenty of upside in AMD and KD, but Amazon has more substantial and higher-probability upside that demanded we allocate even more of Montaka’s capital to the online retailer.
Investment opportunities always compete for capital. Through this lens, Montaka’s largest investments act as a kind of ‘benchmark’: Any new investment must be more attractive than these holdings to get included in our portfolio.
Because we believe Montaka’s largest investments remain so attractive, our annualized portfolio turnover has been low for many years now – typically around 25%.
We continually identify quality global businesses with upside potential – but few new investment opportunities have greater upside than Montaka’s existing portfolio investments.
While Montaka is focused on investing over the long term, and most days don’t require any action on our part, paradoxically we need to be agile on a daily basis. That is, we must be ready to act if stock price changes throw up attractive investment opportunities.”
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.
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