We recently compiled a list of the 10 Important AI News and Ratings for Today. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other AI stocks.
DeepSeek, a Chinese AI startup, claims to have developed a GPT-4-level model at a fraction of the usual cost, spending just around $6 million. It has emerged as a significant disruptor in the AI landscape, showing its ability to deliver high-performing models like R1 with remarkable efficiency in terms of time, cost, and hardware. Its open-source approach has contributed to its rapid adoption and has allowed developers worldwide to refine and expand its capabilities. The model’s success raised questions about traditional AI development methods, especially the reliance on expensive, high-powered chips.
DeepSeek’s Impact on AI Chips Viewed as Limited by Experts
On January 27, the tech stocks felt huge aftershocks from the news, and major tech indices fell significantly. However, many experts have a different opinion. BofA downplayed concerns about reduced AI semiconductor demand following DeepSeek’s release of its R1 model, which reportedly outperforms leading Western AI models like GPT-4 while being developed with minimal resources.
While the model’s efficiency could suggest a reduced need for high-end AI chips, BofA believes this worry is overstated. The R1 model likely relies on foundational models like Meta’s Llama, where most infrastructure costs occur. Llama’s parent’s plans to increase 2025 capex by over 56% to $60-$65 billion highlight the rising demand for compute resources. BofA expects growing compute needs driven by foundational models, derivative techniques, and large-scale AI inference.
Furthermore, Wedbush analyst, Dan Ives called it a buying opportunity for American tech stocks. He wrote in a post on X:
“DeepSeek is a competitive LLM model for consumer use cases…launching broader AI infrastructure a whole other ballgame and nothing with DeepSeek makes us believe anything different. It’s about AGI for Big Tech and DeepSeek’s noise. Also no US tech using this tech. Buying oppy.”
For this article, we selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 286
Amazon.com, Inc. (NASDAQ:AMZN) uses AI to improve its shopping experience, entertainment services, and operations, while also driving AI innovation through investments in projects like Anthropic, AWS partnerships, and Tranium.
On January 24, lead tech analyst at I/O Fund, Beth Kindig suggested that Amazon’s in-house AI chip shipments for its AWS cloud service are expected to increase significantly in 2025. She wrote on X:
“Amazon’s $AMZN in-house AI chip shipments to support AI demand at AWS are reportedly expected to rise ~70% YoY in 2025.“
Amazon’s Annapurna Labs designs and builds custom chips in-house to improve performance in cloud services and machine learning. By developing its own silicon, including Graviton processors, AWS can deliver faster and more efficient products. The chips undergo rigorous testing in the lab before being used in real-world applications, which ensure high performance and energy efficiency.
Overall AMZN ranks 1st on our list of the important AI stocks in news and ratings today. While we acknowledge the potential of 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 time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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