On February 28, UBS’ Alli McCartney joined CNBC’s ‘Power Lunch’ to analyze the market’s reaction to the tariff announcements. McCartney referred to the situation as tariff policy ping pong, and highlighted how it adds to the uncertainty in Washington during a time when weak data is emerging from other areas. She explained that this has created a perfect storm of challenges, which includes seasonal pressures that make this time of year difficult. Retail buyers have stepped away from the market, and there is uncertainty for individuals regarding tax policy and for corporations concerning tariffs and taxes. The withdrawal of overleveraged bids has contributed to increased market volatility, which makes it harder for major tech companies to maintain their leadership roles.
The conversation then turned to the influence of key sectors, particularly the MAG7. McCartney noted that when these sectors underperform, they can generate downside pressure on the market, which contrasts with the desire for a broader market trade. She pointed out that while these tech stocks are down year-to-date, the overall market remains materially up and is annualizing at a high single-digit rate. She expressed optimism about market breadth and suggested that this could present a buying opportunity for investors to re-enter big tech.
Tech stocks face short-term volatility due to market uncertainty, but their long-term potential remains intact. In this context, we’re here with a list of the 12 best QQQ stocks to invest in now.
Methodology
We sifted through the Invesco QQQ exchange-traded fund (ETF) holdings to find 12 stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey’s database which tracks the moves of over 900 elite money managers.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
12 Best QQQ Stocks to Invest in Now
12. Costco Wholesale Corp. (NASDAQ:COST)
Number of Hedge Fund Holders: 96
Costco Wholesale Corp. (NASDAQ:COST) is a global retail giant that operates membership warehouses that offer several products and services. These range from groceries and electronics to gasoline and pharmacies, available in both physical locations and online.
The company’s core merchandising business, particularly its non-foods category, is a significant driver of revenue. In FQ2 2025, non-foods comparable sales increased by mid-teens percentages. This growth was fueled by strong sales in big-ticket consumer electronics, such as 98-inch and 100-inch TVs, as well as items like Stern pinball machines and gaming computers. Other double-digit growth areas within non-foods included gold and jewelry, gift cards, toys, housewares, appliances, sporting goods, home furnishings, and small electrics.
Costco Wholesale Corp. (NASDAQ:COST) reported that in February, non-foods were up positive low teens, with jewelry, gift cards, and housewares as better performing departments. Net sales for February came in at $19.81 billion, which is an 8.8% year-over-year increase. The company’s buying teams are introducing new and appealing products at competitive prices, while prioritizing the expansion of the company’s Kirkland Signature private label offerings.
Madison Sustainable Equity Fund stated the following regarding Costco Wholesale Corporation (NASDAQ:COST) in its Q3 2024 investor letter due to the company’s commitment to sustainability:
“Costco Wholesale Corporation (NASDAQ:COST) continues to demonstrate its commitment to sustainability by lowering its emissions. For example, it has converted its Kirkland Signature laundry packs from plastic tubs to a pouch. This has reduced plastic packaging by 80%. It has also moved to localize production of bulky items such as water, paper, and laundry detergents. Manufacturing these goods closer to the countries in which they are sold reduces emissions associated with shipping.”
11. Booking Holdings Inc. (NASDAQ:BKNG)
Number of Hedge Fund Holders: 99
Booking Holdings Inc. (NASDAQ:BKNG) is an online travel and restaurant reservations company. Through its Booking.com, Priceline, Agoda, KAYAK, and OpenTable platforms, it offers services like accommodation, flight, rental car, restaurant reservations, and related travel and advertising services.
The company is expanding its connected trip vision. It aims to create a seamless and personalized travel experience by integrating all aspects of travel planning and booking into a single platform. In Q4 2024, the connected trip transaction growth accelerated to over 45% year-over-year. This represents a high single-digit percentage of the company’s total transactions.
The company’s flight offerings fuel this vision. In 2024, travelers booked ~50 million airline tickets across its platforms, which was a 38% year-over-year increase. Merchant offerings are also critical as merchant gross bookings reached 59% of the company’s total gross bookings. The Genius loyalty program is also integral as travelers in the higher tiers (Levels 2 and 3) represented over 30% of active travelers. Booking Holdings Inc. (NASDAQ:BKNG) plans to continue investing in these areas and utilize GenAI to further enhance the connected trip experience.
Wedgewood Partners stated the following regarding Booking Holdings Inc. (NASDAQ:BKNG) in its Q2 2024 investor letter:
“Booking Holdings Inc. (NASDAQ:BKNG) contributed to performance as travel spending across the U.S. and Europe remains quite healthy, whereas the Company took share in alternative accommodations, and looks set to expand margins after a few years of reinvestment. The Company has also been aggressively reducing its share count at reasonably attractive valuation multiples. Booking should be able to compound earnings at an attractive, double-digit rate for the next few years given these various initiatives.”
10. Adobe Inc. (NASDAQ:ADBE)
Number of Hedge Fund Holders: 117
Adobe Inc. (NASDAQ:ADBE) is a technology company that provides digital media and marketing solutions. Through its Creative Cloud, Document Cloud, and Digital Experience segments, it helps individuals and businesses create, publish, and manage digital content and customer experiences across various platforms.
The company is advancing in AI with tools like Adobe Firefly, which is a GenAI suite for image creation. Morgan Stanley’s Keith Weiss maintained a Buy rating on the company with a $660 price target towards the end of February. This sentiment was supported by the company’s Firefly Video model’s tiered pricing as a strategic move. This pricing aims to boost user adoption and monetization.
The Firefly suite has seen significant adoption with over 16 billion generations across the company’s tools as of Q4 2024. The Firefly Video model, which is integrated into Premiere Pro, has driven a 70% increase in Premiere Pro beta users. Adobe Inc. (NASDAQ:ADBE) is introducing a new and higher-priced Firefly offering that includes the video models. It aims to monetize new users, provide additional value to existing customers, and increase ARPU. This tiered pricing strategy is designed to expand user adoption and improve monetization opportunities.
Polen Focus Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) in its Q3 2024 investor letter:
“We added to several existing positions in the quarter including Adobe Inc. (NASDAQ:ADBE), Workday, Shopify, MSCI, and Paycom Software. We feel Adobe is poised for re-accelerating revenue and earnings growth partially due to the monetization of its Firefly GenAI product embedded in its creative software.”
9. Tesla Inc. (NASDAQ:TSLA)
Number of Hedge Fund Holders: 126
Tesla Inc. (NASDAQ:TSLA) is a leader in EVs and sustainable energy. It operates through Automotive and Energy Generation and Storage segments. It designs, manufactures, and sells EVs, solar energy systems, and energy storage solutions. It also provides services like supercharging, financing, and insurance.
The company is focused on AI in autonomous driving and robotics. On March 10, Morgan Stanley kept an Overweight rating on the stock with a $430 price target. The analyst sees the stock’s pullback from December highs as a buying opportunity, despite factors like poor sales data and negative sentiment. The company’s stock may rise due to the Austin robotaxi launch (which is unsupervised FSD/Full Self-Driving as a paid service prepared for June-August), new autonomous vehicle rules, and an Optimus AI/Humanoid demonstration.
The company’s autonomous driving and AI-related initiatives, which include its Optimus robot program, could eventually contribute 90% of the company’s valuation. The company believes Optimus can generate over $10 trillion in revenue. Tesla Inc. (NASDAQ:TSLA) is designing all components of Optimus from scratch. Internal plans call for building ~10,000 Optimus robots in 2025, with significant production ramp-up expected in subsequent years. Optimus training needs are expected to be at least 10x greater than those for autonomous vehicles.
Tesla Inc. (NASDAQ:TSLA) profitability comes from its energy segment growth, upcoming model launches, AI advancements, and improved delivery data. This reinforces investor confidence in its future. Baron Partners Fund stated the following regarding the company in its Q4 2024 investor letter:
“Tesla, Inc. (NASDAQ:TSLA) designs, manufactures, and sells electric vehicles, related software and components, and solar and energy storage products. Shares rose on growth in the energy segment, the promise of new model launches in 2025, and increasing investor confidence in Tesla’s AI initiatives. Despite macroeconomic challenges, delivery data in major markets like China have shown considerable improvement. The energy and automotive segments demonstrated stronger-than-expected profitability. Tesla also expanded its advanced computing center in Texas, released improved version of its software-enhanced driving solution, and is set to launch new mass market vehicles years after the initial rollouts of Models 3 and Y. Expectations of deregulation under the incoming administration point to the potential acceleration of new technology rollouts, which could enhance Tesla’s leadership position in real world AI and bolster investor confidence that Tesla will benefit from these large and attractive growth opportunities.”
8. Netflix Inc. (NASDAQ:NFLX)
Number of Hedge Fund Holders: 144
Netflix Inc. (NASDAQ:NFLX) offers a library of TV series, films, documentaries, and games across diverse genres and languages. Through its streaming platform, which is accessible on various internet-connected devices, it delivers entertainment to members in about 190 countries.
The company has seen remarkable adoption of its ad-supported plan, with over 55% of new sign-ups in ad-supported countries opting for this tier. The company’s ad-supported plan offers a lower-priced subscription option to consumers in exchange for viewing advertisements during their streaming experience. Viewer engagement on the ad-supported plan is on par with the standard and non-ad-supported plan, which indicates that viewers are finding value in the ad-supported experience.
In Q4 2024, ad revenue doubled year-over-year, and Netflix Inc. (NASDAQ:NFLX) projects it will double again in 2025. The company is scaling up and enhancing its ad tech to capitalize on the growing demand. A crucial step in this process is the rollout of the company’s own ad stack, which starts with the US in April. This move is designed to improve the buyer experience and offer flexibility to advertisers. It ultimately aims to capture a larger share of the over $25 billion connected TV ad spend market.
The company’s strong earnings, subscriber growth from new initiatives, and optimistic financial projections made it a top contributor to the RiverPark Large Growth Fund’s performance. The fund stated the following regarding Netflix Inc. (NASDAQ:NFLX) in its Q4 2024 investor letter:
“Netflix, Inc. (NASDAQ:NFLX): NFLX was a top contributor in the fourth quarter powered by a 3Q earnings report that included stronger-than-expected revenue and operating income, solid subscriber additions, and positive forward commentary. Anti-password sharing and ad tier initiatives continue to drive subscriber growth while improving revenue per user trends, from recent price increases, drive margin expansion. The company was optimistic about future revenue growth, margin expansion, free cash flow generation and future return of capital programs.
The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its free cash flow.”
7. Broadcom Inc. (NASDAQ:AVGO)
Number of Hedge Fund Holders: 161
Broadcom Inc. (NASDAQ:AVGO) is a global technology leader that designs and develops semiconductor and infrastructure software solutions. Operating through its Semiconductor Solutions and Infrastructure Software segments, it provides products like networking components, connectivity solutions, and software infrastructure.
On March 7, Piper Sandler maintained an Overweight rating for the company with a $250 price target due to its AI-driven performance and networking growth. The company exceeded January quarter estimates and provided strong April quarter projections. Revenue from XPU and AI-related networking reached $4.1 billion in the FQ1 2025, which marked a 77% year-over-year increase. It is projected to be $4.4 billion in the April quarter, which represents a 44% rise.
This growth is driven by shipments of networking solutions to hyperscale customers who are investing in next-generation AI models. Broadcom Inc. (NASDAQ:AVGO) anticipates a serviceable addressable market (SAM) of $60 to $90 billion from its three primary hyperscale customers by FY27. Four additional hyperscale customers are now collaborating with Broadcom Inc. (NASDAQ:AVGO) to develop custom AI accelerators.
Broadcom Inc. (NASDAQ:AVGO) has exceeded expectations, solidified its AI leadership, and projected substantial growth in the AI market. This has led to a trillion-dollar market capitalization. Columbia Threadneedle Global Technology Growth Strategy stated the following in its Q4 2024 investor letter:
“Broadcom Inc. (NASDAQ:AVGO) soared after the company reported quarterly results in December that defied expectations and further solidified the company’s already compelling AI narrative. The technology infrastructure powerhouse with leading positions across wireless, data center networking, AI semiconductors and infrastructure software reported strong results, including the usual prodigious cash flow generation, resulting in a double-digit increase to its dividend. More importantly, investors cheered the increased clarity concerning the company’s AI market opportunity, now estimated at $60 to $90 billion by 2027, up from $15 to $20 billion in 2024. This sizable uptick — and increased confidence provided by the management team about the AI opportunity — drove a re-rating in the stock and the company’s market cap eclipsed $1 trillion in value.”
6. Apple Inc. (NASDAQ:AAPL)
Number of Hedge Fund Holders: 166
Apple Inc. (NASDAQ:AAPL) is a technology company that designs, manufactures, and markets consumer electronics like iPhones, Macs, iPads, and wearables. It also offers software and services, such as the App Store, AppleCare, and cloud services. Its subscription-based offerings include Apple Music and Apple TV+.
On March 6, Goldman Sachs analyst Michael Ng reiterated a Buy rating for the company with a $294 price target due to the unveiling of new Mac products. The firm expects these products to support the company’s FQ2 2025 revenue growth outlook of low-to-mid-single digits. Specifically, the MacBook Air, with its $100 lower launch price, is expected to benefit from the PC refresh cycle. The new 13- and 15-inch MacBook Air models, which were revealed on March 5, feature the M4 chip, AI features, up to 18 hours of battery life, and a 12MP Center Stage camera.
The company’s consumer electronics segment is supported by its Mac lines. In FQ1 2025, Mac revenue surged to $9 billion, which marked a 16% year-over-year increase. Customer satisfaction for Mac in the US remains high at 94%. Apple Inc. (NASDAQ:AAPL) is emphasizing its commitment to sustainability by highlighting the carbon-neutral Mac Mini. Overall product revenue for the company in FQ1 totaled $98 billion, which was a 2% year-over-year increase and was propelled by the growth in Mac sales.
At the same time, the company’s AI-powered iPhone 16 is expected to drive a major upgrade cycle and continued growth. Tsai Capital stated the following regarding Apple Inc. (NASDAQ:AAPL) in its Q4 2024 investor letter:
“We initiated our investment in Apple Inc. (NASDAQ:AAPL) in 2016 and elevated it to a core holding in 2018, the same year the company introduced its redesigned 13-inch and 15-inch MacBook Pro models. Under Tim Cook’s visionary leadership, Apple has consistently redefined innovation in hardware and software.
The September 2024 launch of the iPhone 16, with its groundbreaking AI capabilities, including enhanced image generation tools, marks another inflection point. We believe this transformative device is the foundation for an AI-driven supercycle and could entice approximately 100 million consumers to upgrade, reinforcing Apple’s leadership in the industry.
Today, Apple’s ecosystem spans over two billion active devices, supported by a rapidly-growing base of subscription services. This strategy has helped to turbocharge customer engagement and spending. In the most recent fiscal year, which ended in September 2024, Apple’s high-margin services division accounted for 39.3% of total gross profits, up from 32.8% just two years ago.
Apple’s financial footing remains exceptional, with approximately $50 billion in net cash and marketable securities. Looking ahead, we expect earnings-per-share growth to outpace revenue growth, driven by margin expansion and continued share buybacks.”
5. NVIDIA Corp. (NASDAQ:NVDA)
Number of Hedge Fund Holders: 223
NVIDIA Corp. (NASDAQ:NVDA) is a computing infrastructure company that provides graphics, compute, and networking solutions globally. Through its Compute & Networking and Graphics segments, it delivers products and services like GPUs, data center platforms, AI software, and autonomous driving solutions.
On February 27, Bernstein analyst Tom O’Malley raised the company’s price target from $175 to $185, while maintaining an Outperform rating. The analyst cited record data center revenues of $35.6 billion in FQ4 2025 as a reason for this sentiment, which was driven by the Blackwell ramp-up. It represented a 93% year-over-year improvement.
Total revenue for FY25 reached $115.2 billion, which more than doubled year-over-year. Blackwell sales alone reached $11 billion in FQ4. Blackwell is designed for AI inference, with 25x higher throughput and 20x lower cost than previous models. Its demand is huge as major cloud providers like Azure and AWS are deploying it. NVIDIA Corp. (NASDAQ:NVDA) expects FQ1 2026 revenue to reach $43 billion. This growth will be driven by both Blackwell and networking, with AI applications expanding rapidly across industries.
NVIDIA Corp. (NASDAQ:NVDA) continues to dominate the AI market. It’s exceeding expectations with strong performance and high demand for its new products. Columbia Threadneedle Global Technology Growth Strategy stated the following in its Q4 2024 investor letter:
“NVIDIA Corporation (NASDAQ:NVDA) continued to outperform the market during the fourth quarter. The technology giant and top position in the fund delivered on sky-high expectations during the quarter and reported quarterly expectations that exceeded expectations. The red-hot company provided forward-looking expectations which were regarded as slightly lackluster as compared to prior quarters that smashed expectations. While the stock did churn a bit in the quarter, the AI giant remains top of mind for investors, especially as the company is on pace to satisfy the ‘staggering’ demand for its new product, Blackwell, which is poised to enter the market over the next year. The company’s position of owning all the major pieces of the evolving AI data center enables it to strengthen its competitive position and to define the technology roadmap for generations to come.”
4. Alphabet Inc. (NASDAQ:GOOGL)
Number of Hedge Fund Holders: 234
Alphabet Inc. (NASDAQ:GOOGL) is a technology company that offers products and platforms through its Google Services, Google Cloud, and Other Bets segments. Google Services provides popular tools like Search, YouTube, and Android, while Google Cloud delivers AI infrastructure and enterprise solutions.
On March 5, BofA reiterated a Buy rating and a $225 price target on the company. This sentiment came from the company’s disclosure that it now processes over 5 trillion annual searches, up from 2 trillion in 2016. Google’s search volume has a 12% CAGR from 2016 to 2024, while the money it makes from those searches has a 19% CAGR. BofA suggests that the company’s search revenue growth comes from increased usage and monetization. This huge amount of search data will also help Google’s AI get better.
AI features like Circle to Search and AI Overviews are driving this improvement in the segment, especially among younger users. Circle to Search lets you search anything on your screen by circling, highlighting, or scribbling on it. AI overviews are the AI-generated summaries that appear at the top of Google search results, which provide quick answers to queries. Visual searches via Lens are also a major contributor, with over 20 billion monthly queries. Alphabet Inc. (NASDAQ:GOOGL) is testing Gemini 2.0 in search results and focusing on voice, camera, and visual search.
Alphabet Inc.’s (NASDAQ:GOOGL) strong Q3 earnings, particularly in its growing cloud division driven by AI demand, made it the Oakmark Equity and Income Fund’s top contributor. The fund has continued confidence in its long-term AI-driven value and stated the following in its Q4 2024 investor letter:
“Alphabet Inc. (NASDAQ:GOOGL) was the top contributor during the quarter. Despite ongoing litigation with the Department of Justice in its antitrust case, the U.S.-headquartered interactive media and services company’s stock price rose after posting solid third-quarter earnings. In the Search division, the company generated low-teens year-over-year revenue growth and management highlighted that they’re seeing strong user engagement with their new AI Overviews feature. The biggest upside surprise came from the Cloud division, where revenue growth accelerated to 35% and margins reached a record of 17%. This performance was driven by client demand for AI Infrastructure and Generative AI Solutions as well as core Google Cloud Platform (GCP) products. We continue to believe Alphabet is a collection of great businesses that can unlock further value over the long term through its world-class AI capabilities.”
3. Meta Platforms Inc. (NASDAQ:META)
Number of Hedge Fund Holders: 262
Meta Platforms Inc. (NASDAQ:META) is a technology company that focuses on connecting people through its diverse platforms. Operating through its Family of Apps (FoA) and Reality Labs (RL) segments, it provides social networking services like Facebook, Instagram, Messenger, Threads, and WhatsApp. It also develops virtual, augmented, and mixed reality technologies.
On February 18, Morgan Stanley reiterated an Overweight rating on the company due to its potential to lead in robotics. This follows a report from February 14 that detailed the company’s substantial investment in AI-powered humanoid robots designed to perform human-like physical tasks. The AI-powered humanoid robots are a part of the company’s vision to create personalized AI experiences, where robots could be tailored to individual needs and preferences.
Meta Platforms Inc. (NASDAQ:META) believes that achieving a breakthrough in AI engineering agents, which is crucial for advanced robotics, will provide an advantage in the AI landscape. The company’s emphasis on AI robotics is a key component of its broader embodied AI strategy, which aims to integrate AI with the physical world.
Meta Platforms Inc. (NASDAQ:META) has delivered a strong 22% IRR, which aligns with its growth, and is expected to continue mid-teens growth with potential to exceed estimates. Rowan Street Capital stated the following regarding the company in its Q4 2024 investor letter:
“Meta Platforms, Inc. (NASDAQ:META): Investment Initiated: April 2018: Internal Rate of Return (IRR*): 22% *IRR represents the annualized rate of return on an investment, accounting for the timing and magnitude of cash flows over the holding period.
For META, our 22% IRR aligns closely with the company’s compounded growth in earnings per share (EPS) and free cash flow per share during the 6 years holding period.
Looking ahead, Meta is expected to grow its revenues, earnings, and free cash flow per share at mid-teens rates over the next two years. There’s a good possibility that it could exceed these estimates, considering the breadth of growth initiatives currently in place, such as advancements in Al, monetization of Reels, expansion into business messaging, and the ongoing development of the metaverse…” (Click here to read the full text)
2. Microsoft Corp. (NASDAQ:MSFT)
Number of Hedge Fund Holders: 317
Microsoft Corp. (NASDAQ:MSFT) is a global technology leader that provides software, services, and hardware solutions. It operates through its Productivity and Business Processes, Intelligent Cloud, and More Personal Computing segments. It offers products like Microsoft 365, Azure, Windows, and Xbox.
On March 10, UBS analyst Karl Kierstead reaffirmed a Buy rating on the company with a $510.00 price target. He attributed the recent performance dip to a slowdown in Azure growth excluding AI, despite the company’s explanation of planned go-to-market changes for mid-2024. The analyst noted that the lack of clarity surrounding the cause and resolution timeline is negatively affecting investor confidence.
As of FQ2 2025, the company’s AI revenue hit a $13 billion annual run rate, which was up 175% year-over-year. Azure AI services alone grew 157%, which contributed 13 points to Azure’s overall growth. Over 200,000 monthly users are already on Azure AI Foundry, and Azure OpenAI app usage doubled. Azure cloud revenue grew 31%. Microsoft Corp. (NASDAQ:MSFT) expects 31-32% Azure growth in the next quarter. It’s investing heavily in AI infrastructure and expects to meet near-term AI demand by the end of FY25.
The company is well-positioned for AI-driven growth, which is evidenced by its large planned investment in data centers and its leading market positions in office software and cloud computing. Mairs & Power Growth Fund stated the following regarding Microsoft Corp. (NASDAQ:MSFT) in its Q4 2024 investor letter:
“Unlike the dot-com companies that operated at the turn-of-the-century, many of today’s technology companies are established businesses with significant cash flows. We have argued, and continue to argue, that many of these investments are perfectly aligned with our investments process in that they embody durable competitive advantages, above-average growth prospects, and excellent management teams.
A perfect example is Microsoft Corporation (NASDAQ:MSFT), which has grown to become the largest holding in the Growth Fund. Microsoft has a near monopoly on the office software productivity market with its Microsoft Office Suite. The company’s Azure platform is a leader in cloud computing and has been steadily gaining share. Thanks to its Office and Azure products, the company is deeply embedded within many enterprise IT ecosystems. Therefore, it should be well-positioned to expand its presence within its customer base, as it rolls out premium-price AI solutions. The company is not resting on its laurels and plans on spending an astounding $80 billion in 2025 to build out AI data centers.”
1. Amazon.com Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 339
Amazon.com Inc. (NASDAQ:AMZN) is a global e-commerce and technology giant. It operates through its North America, International, and Amazon Web Services (AWS) segments. It engages in retail sales, cloud computing, digital streaming, and AI. Its products and services include e-commerce, cloud infrastructure, digital content, and consumer electronics.
On February 27, TD Cowen analyst John Blackledge reiterated a Buy rating on the company with a $265.00 price target. The analyst highlighted the company’s recent launch of GenAI-powered Alexa+ assistant, which emphasizes its impact across Amazon Web Services (AWS), eCommerce, and advertising. Blackledge forecasts AWS’s GenAI revenue to grow from $7.1 billion in 2025 to $56.3 billion in 2030.
AWS revenue hit a $115 billion annual run rate in Q4 2024, which was up 19% year-over-year. Customers are moving to the cloud to use AI and driving demand. The company’s own AI chips, Tranium 2, are 30-40% cheaper than competitors. So they attract big clients like Anthropic. Amazon Bedrock is a key AI service, which offers various AI models. Amazon Q, which is an AI assistant, is saving companies time and money and showcases practical AI use. AWS is heavily investing in data centers for AI and expecting similar spending in 2025.
RiverPark Large Growth Fund stated the following regarding Amazon.com Inc. (NASDAQ:AMZN) in its Q4 2024 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN): Amazon was our top contributor in the fourth quarter following third quarter results of slightly better than expected revenue and much stronger than expected operating income. 3Q operating income of $17.4 billion exceeded company guidance of $11.5-15 billion (and Street estimates of $14.7 billion), driven by margin expansion across all three major segments, including gross/net margins of 38% at AWS, up from 30%. In addition, the company reported an acceleration in e-commerce demand both domestically and internationally, and accelerated growth of Prime paid memberships. The company guided to 4Q operating income of roughly $18 billion driven by the same positive factors that impacted 3Q.
With its ability to continue its market share gains in its three leading businesses (e-commerce, web services and online advertising), plus a multi-year operating margin expansion opportunity (from improved e-commerce margins and greater contribution from the faster growing, higher margin AWS and advertising segments), we believe Amazon remains one of the best-positioned global growth companies in the world.”
While we acknowledge the growth potential of Amazon.com Inc. (NASDAQ:AMZN), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. 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: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
