Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates

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

Consensus Long-Term EPS Growth Estimate: 23%

Number of Hedge Fund Holders: 308

Amazon.com, Inc. (NASDAQ:AMZN) is a dominant player in the eCommerce and cloud computing industries. As a result, its narrative is driven by consumer and enterprise spending. Consumer spending is important for Amazon.com, Inc. (NASDAQ:AMZN) since it enables the firm to generate adequate merchandise volume shipments to maintain margins. Similarly, high enterprise spending means that the company is able to generate revenue through its cloud computing business. Amazon.com, Inc. (NASDAQ:AMZN)’s sizable moats in these two key industries have enabled it to establish a fortress balance sheet as is evident from its $71 billion in cash and equivalents. In turn, the sizable resources have allowed Amazon.com, Inc. (NASDAQ:AMZN) to expand its presence in the AI industry through its partnership with Anthropic. The firm is also one of the leading players in custom chip development for data center workloads, and it is developing custom chips to help reduce reliance on NVIDIA’s expensive GPUs. To sum it up, Amazon.com, Inc. (NASDAQ:AMZN)’s tailwinds depend on robust consumer spending, cost efficiencies in the retail business, and enterprise spending on AI and cloud products.

Polen Capital mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter. Here is what the fund said:

“The largest absolute detractors were Alphabet, Airbnb, and Amazon.com, Inc. (NASDAQ:AMZN). Amazon’s position as a notable detractor speaks more to the size of the position than the magnitude of the underperformance, as the company delivered a solid set of results during the quarter.

We trimmed our positions in Amazon, Alphabet, and Microsoft during the quarter. As we have previously, we trimmed Amazon slightly to bring the weight back to 15% for risk management purposes. We remain very positive on our investment thesis of strong revenue growth and even stronger earnings and free cash flow growth continuing over the next few years.”