Cisco Systems, Inc. (CSCO), Amazon.com, Inc. (AMZN): Top Two Tech Picks of Billionaire Investors

While Amazon.com, Inc. (NASDAQ:AMZN) is best known for its trendsetting online marketplace business model, it is fast becoming a force to reckon with in the up-and-coming cloud service segment. Its cloud offering is Amazon Web Services, launched in 2006. Amazon targets enterprise customers with its services and its business is likely to grow to $24 billion in annual revenue by 2022. Amazon.com, Inc. (NASDAQ:AMZN) runs on razor thin margins in its retail business segment and hence needs to develop alternate revenue streams to ensure its long-term survival. Its current lead in cloud segment bodes well for the company’s future.

Solid fundamentals

While Amazon.com, Inc. (NASDAQ:AMZN)’s profitability always remains under scrutiny owing to its thin margins, the company displays a robust balance sheet. It has grown its net sales by 227% since 2009. At the very same time, the company is also spending a hefty amount on capital outlays, which impaired its free cash flow but also ensured that the company remains competitive.

Amazon.com, Inc. (NASDAQ:AMZN) stock is up more than 8% this year so far, lagging behind broader markets. However, given its past growth performance, it is expected to gain traction. In its latest earnings announcement, the company easily surpassed the earnings estimates.

With the latest endorsement from SAC Capital, Amazon seems to be a good candidate for any long-term oriented portfolio.

The article Top Two Tech Picks of Billionaire Investors originally appeared on Fool.com and is written by Sharma Rina.

Sharma Rina has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Cisco Systems. The Motley Fool owns shares of Amazon.com. Sharma is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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