1. Amazon.com, Inc. (NASDAQ:AMZN)
Potential Upside: 28.72%
Expected 2026 Revenue Growth: 11%
Number of Hedge Fund Holders: 332
On December 29, Evercore ISI named Amazon.com, Inc. (NASDAQ:AMZN) as its top large-cap Internet pick for 2026. Analyst Mark Mahaney and his team highlighted the continued momentum at Amazon Web Services, following the AWS unit’s 20% year-over-year growth in the third quarter. This marked its fastest growth rate in the 11 quarters. For the first time since the third quarter of 2022, the growth rate surpassed that of Microsoft Azure. The analyst noted that the artificial intelligence narrative surrounding AWS has become more positive, supporting investor confidence.
Mahaney expressed his views by saying:
”At the end of the day, AMZN remains a high-quality compounder (25% EPS CAGR), with solid double-digit revenue growth, expanding operating margins, and free cash flow likely to inflect up materially in a 24-month timeframe.”
Looking forward to 2026, Evercore ISI identified several additional catalysts for Amazon beyond AWS, including Trainium chips, ramping Alexa+ engagement, the grocery business, Amazon Pharmacy, Amazon Leo, Zoox’s robotaxi service, and renewed focus on the Amazon for Business segment.
Following a strategic review, the company announced on December 28 that it had paused its plans for commercial drone deliveries in Italy.
In an emailed statement to Reuters, the company spokesperson said:
”Despite positive engagement and progress with Italian aerospace regulators, the broader business regulatory framework in the country does not, at this time, support our longer-term objectives for this program.”
Amazon.com, Inc. (NASDAQ:AMZN) is involved in the retail sale of subscription services, advertising, and consumer products through physical and online stores. It operates in the International, North America, and Amazon Web Services (AWS) segments.
While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMZN and that has 100x upside potential, check out our report about this cheapest AI stock.
READ NEXT: Goldman Sachs Value Stocks: 10 Stocks to Buy and 14 Best Precious Metals Stocks to Buy Now.
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.
