5 Most Promising AI Stocks According to Hedge Funds

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

Number of Hedge Fund Holders: 286

Amazon.com, Inc. (NASDAQ:AMZN) is a Washington-based tech company that is driven to integrate AI in its numerous services and tools like its generative artificial intelligence (AI) powered assistant called Q, Amazon Polly, and more.

On December 18, it was reported that Amazon.com, Inc. (NASDAQ:AMZN) is pushing to obtain more sports media rights by considering investing in Diamond Sports Group. The sports group owns the media rights for several major league baseball teams and several national hockey league teams.

On November 28, Amazon.com, Inc. (NASDAQ:AMZN)’s Amazon Web Services unveiled a new generative artificial intelligence chatbot known as Q.

Amazon.com, Inc. (NASDAQ:AMZN) was mentioned in Polen Capital’s third quarter 2023 investor letter. Here is what it said:

“Amazon continues to showcase its place as one of the most competitively advantaged companies in the world. The company has made significant progress in managing costs and better leveraging existing capacity, driving a strong recovery in its profitability. We think there’s additional room for improvement.

AWS growth seems to be stabilizing even while management continues to work with clients to optimize their infrastructure spend. Roughly 90% of global IT spending remains on premise. We believe this will eventually flip, with most IT spending ultimately moving to the cloud over time. We think AWS will be a significant beneficiary of this transition.

Further, our investment case on company profitability driven by AWS and advertising continues to unfold, delivering nearly $8 billion in free cash flow over the trailing twelve months and a net margin of 5%. We expect both to move higher with the mix shift of more profitable businesses growing fastest continuing to take effect.

At Amazon’s current price, we believe the company is well positioned to deliver a mid-teens or higher total shareholder return for our clients over the next five plus years without a Herculean effort from the business. It simply needs to continue executing on current businesses and growing into the capacity it built during and immediately after the pandemic.”

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