Goldman Sachs’ Best Hedge Fund Stock Picks: Top 20 Stocks

Page 19 of 19

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

Number of Hedge Fund Investors in Q2 2024: 308

GS’ Number Of Funds: 99

Amazon.com, Inc. (NASDAQ:AMZN) is the world’s biggest eCommerce retailer. Along with its eCommerce platform, the firm is a key player in the lucrative enterprise computing market through its Amazon Web Services (AWS) business division. These two are Amazon.com, Inc. (NASDAQ:AMZN)’s biggest businesses, and its sizeable resources have enabled the firm to become another key player in the AI race through its work with Anthropic. Anthropic allows Amazon.com, Inc. (NASDAQ:AMZN) with access to a foundational AI model called Claude. Like OpenAI’s ChatGPT, Meta’s Llama, and Google’s Gemini, Claude allows Amazon.com, Inc. (NASDAQ:AMZN) and its customers to build AI powered experiences for a multitude of use cases such as chat bots. The firm’s eCommerce business also makes it a key player in the advertising industry, especially since it attracted 3.25 billion users in June. Data shows that a growing number of advertisers are now focused on customized advertising through sites such as Amazon, and AI enables Amazon.com, Inc. (NASDAQ:AMZN) to improve its advertising product portfolio for merchants and publishers. However, legal headwinds in the form of predatory merchant practices or anti trust action could create troubles for the firm.

Patient Capital Management mentioned Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2024 investor letter. Here is what the fund said:

Amazon.com Inc. (AMZN) moved higher throughout the second quarter as AI demand helped to reaccelerate growth in their AWS business. It looks as though the cloud business is finally past the customer cost optimization period with customers restarting their cloud migrations as well as expanding spend on AI projects. Despite the top and bottom-line improvement seen in the first quarter, the company is significantly underearning its long-term potential as it continues to reinvest aggressively in the business. With 80% of global retail sales still being done in physical stores and 85% of global IT spending still on-premises, we see a long-run way for the dominant player in the cloud, retail, and increasingly logistics and advertising space.”

AMZN tops our list of Goldman Sachs’ top hedge fund stocks. But our conviction lies in the belief that some 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 more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.

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.

Page 19 of 19