Amazon.com (AMZN) Fell Due To the Rotation Away from Hyperscalers

Qualivian Investment Partners, an investment partnership focused on long-only public equities, released its Q1 2025 investor letter. A copy of the letter can be downloaded here. The fund outperformed the iShares MSCI USA Quality Factor ETF (QUAL) by 66.0% and 59.4% on a gross and net basis, since inception through March 31, 2025. It also exceeded the S&P 500 by 32.7% and 26.1% respectively, on a gross and net basis. In Q1 2025, the fund outperformed QUAL by 5.3% and 5.2% on a gross and net basis, and we outperformed the S&P 500 by 5.2% and 5.1% on a gross and net basis. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its first-quarter 2025 investor letter, Qualivian Investment Partners highlighted stocks such as Amazon.com, Inc. (NASDAQ:AMZN). Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products, advertising, and subscription services through online and physical stores that operate through North America, International, and Amazon Web Services (AWS) segments. The one-month return of Amazon.com, Inc. (NASDAQ:AMZN) was 6.38%, and its shares gained 11.57% of their value over the last 52 weeks. On July 1, 2025, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $220.46 per share, with a market capitalization of $2.34 trillion.

Qualivian Investment Partners stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2025 investor letter:

“Our bottom 3 contributors in the quarter were Alphabet, Amazon.com, Inc. (NASDAQ:AMZN), and Microsoft, due to the rotation away from hyperscalers due to the DeepSeek announcement. Alphabet and Amazon recovered some of their losses in Q1 following their Q1 earnings reports in late April, while Microsoft recovered all its losses and has gone on to new highs since its Q1 earnings report.

All three companies expressed their confidence in the opportunities before them from their investments in generative AI. Most said customer demand strained their capacity to meet their Cloud and Gen AI services (LLM hosting, training, and inferencing services).

We are closely monitoring these three hyperscalers to see whether the capital spending and resulting returns produce the desired value.”

Amazon.com, Inc. (AMZN): "Alexa's Getting An Upgrade," Says Jim Cramer

A customer entering an internet retail store, illustrating the convenience of online shopping.

Amazon.com, Inc. (NASDAQ:AMZN) is in first position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 328 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the first quarter compared to 339 in the fourth quarter. In Q1 2025, Amazon.com, Inc. (NASDAQ:AMZN) achieved global revenue of $155.7 billion, representing an 10% year-over-year growth excluding the impact of foreign exchange. While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the undervalued AI stock set for massive gains.

In another article, we covered Amazon.com, Inc. (NASDAQ:AMZN) and shared the list of stocks on Jim Cramer’s radar. In addition, please check out our hedge fund investor letters Q1 2025 page for more investor letters from hedge funds and other leading investors. While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.