We just covered the 10 Best Stocks to Buy According to AI Bull Brad Gerstner. Amazon.com, Inc. (NASDAQ:AMZN) ranks #5 (see the 5 Best Stocks to Buy According to AI Bull Brad Gerstner).
Altimeter Capital’s Stake: $511,418,641
Amazon shares have performed relatively well compared with several other major tech stocks this year. But does the stock have more room to run?
Amazon holds roughly a 30–32% share of the global cloud infrastructure market and is ahead of Microsoft Azure and Google Cloud. But how does AWS benefit from the rise of AI usage around the world? AWS usually generates operating margins estimated at around 30%, significantly higher than traditional retail margins. AWS has a strong moat because of the reliability and scalability it provides to large corporations. It benefits from high switching costs and long-term contracts, as migrating enterprise systems can cost millions and take years, helping maintain stable recurring revenue.
AWS ecosystem of services is another strong business moat. Unlike Microsoft Azure and Google Cloud, AWS offers 240+ cloud services, allowing companies to build, train and deploy AI models, store data, run applications and manage cybersecurity within one platform, increasing switching costs and strengthening customer lock-in over time.
E-commerce and ads are strong growth fundamental catalysts for the stock. Amazon.com Inc (NASDAQ:AMZN) controls roughly 40% of U.S. e-commerce, which gives the company access to consumer purchase data. This creates a goldmine for advertisers to target users, and Amazon.com Inc (NASDAQ:AMZN) is tapping into that opportunity. Amazon’s ad segment has been growing around 20% annually in recent years and already generates tens of billions in yearly revenue, making it one of the largest digital advertising platforms behind Google and Meta.
TCW Relative Value Large Cap Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2025 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a $2.3 trillion internet company headquartered in Seattle, WA. The investment catalyst is new products/markets. AWS has been less impacted by ….” (Click Here To Read The Letter in Detail)
Copyright: prykhodov / 123RF Stock Photo
While we acknowledge the risk and potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN and that has 10,000% upside potential, check out our report about this cheapest AI stock.
READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy.
Disclosure: None. Follow Insider Monkey on Google News.