Wells Fargo’s Tech Stocks To Beat The S&P: 14 Top AI & Non-AI Stocks

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

Number of Hedge Fund Holders In Q3 2024: 286

NTM EPS Estimate: $5.85

Amazon.com, Inc. (NASDAQ:AMZN) is the world’s largest eCommerce retailer and one of the dominant players in the cloud computing industry. The dual nature of its operations means that the firm benefits from a high-volume business through eCommerce and high-margin operations via cloud computing. Amazon.com, Inc. (NASDAQ:AMZN)’s eCommerce business depends on the firm’s ability to make fast deliveries, strive towards last-mile deliveries, modernize its warehouse operations, and lead the industry in these metrics. It benefits from its scale which enables Amazon.com, Inc. (NASDAQ:AMZN) to extract favorable deals from sellers. Additionally, the firm’s AWS business provides it with exposure to the enterprise demand for AI services. The firm’s sizable resources have provided it with access to a foundational AI model through Anthropic’s Claude, and looking ahead, Amazon.com, Inc. (NASDAQ:AMZN) depends on the ability to capture business AI spending via AWS and maintaining volumes and margins with its eCommerce business.

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.”