5 Best Large-Cap Stocks to Buy in 2024

2. Amazon.com Inc (NASDAQ:AMZN)

Number of Hedge Fund Investors: 286

Amazon.com Inc’s (NASDAQ:AMZN) Q4 results show the company’s ecommerce business is thriving while its AWS business is again showing acceleration thanks to AI. This has cemented Amazon.com Inc’s (NASDAQ:AMZN) position in the Magnificent Seven group. Piper Sandler analyst Thomas Champion  recently said in a note that new deals of AWS with companies related to AI helped the Cloud segment post stronger growth. The analyst has a $220 price target on the stock.

Polen Focus Growth Strategy stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2023 investor letter:

“For the full year, the top relative and absolute contributors were Amazon.com, Inc. (NASDAQ:AMZN), Salesforce, and ServiceNow. Amazon shares appreciated 88% in 2023, driven primarily by rapidly expanding operating profit margins and free cash flow growth. After the pandemic, Amazon experienced a period of inefficiency and overinvestment in its distribution and logistics infrastructure. Amazon is now leveraging these investments as growth returned to its e-commerce business in 2023 after a highly unusual 2022. At the same time, Amazon’s rapidly growing and high-margin advertising business is contributing strongly to the entire company’s operating profit growth. The AWS (Amazon Web Services) cloud infrastructure and services business continued to slow in 2023 as customers anticipating a more difficult economic environment looked to save money on their cloud spend, but these cloud spending optimizations began to stabilize in the second half of 2023. We now expect customer interest in generative AI will begin to contribute to growth.”