We recently published a list of Long-Term Stock Portfolio: 15 Best Stocks for 15 Years. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other best stocks for 15 years.
Russell Investments believes that 3 features are defining the market outlook for 2025. These include the elevated level of the S&P 500 forward P/E ratio, the potential for further US dollar strength, as well as the direction of the US 10-year Treasury yield. The active equity managers have been challenged by the severe market concentration. The firm opines that a flattening out of such trends— which can be seen due to policy shifts or change in sentiments related to earnings growth and valuations for mega caps — can support active manager outperformance.
Russell Investments remains focused on sectors in which AI adoption has been ramping up, including industrials, healthcare, and consumer goods. As per the firm, companies that leverage AI for productivity improvements remain well-placed to gain a lasting competitive edge and provide healthy returns. Therefore, skilled active managers are required to look for such companies, primarily those that are in less-covered segments of the market.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In.
Sectors Providing Investment Opportunities
With respect to real assets, Russell Investments sees attractive investment opportunities in real estate and infrastructure, mainly sectors that can benefit from the stabilization of long-term interest rates and favorable relative valuations in comparison to other growth assets. The application of AI in real estate, like data centers and healthcare facilities, continues to emerge as a critical growth area. Furthermore, the infrastructure investments continue to gain momentum from energy utilities and pipeline exposures, given the US administration’s emphasis on expanding LNG (liquified natural gas) production.
The firm also believes that an early focus on deregulation and tax cuts would likely be well-received by equity investors. Overall, an expected US soft landing, together with anticipated policy moderation on trade and immigration, creates specific opportunities for well-positioned portfolios, says Russell Investments.
Our Methodology
We sifted through the holdings of iShares Core S&P 500 ETF and shortlisted the companies that have 10-year revenue growth of over ~10%. Next, we selected stocks that were the most popular among elite hedge funds. We have ranked the stocks in ascending order of hedge fund sentiment.
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 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A customer entering an internet retail store, illustrating the convenience of online shopping.
Amazon.com, Inc. (NASDAQ:AMZN)
10-Year Revenue Growth: ~21.7%
Number of Hedge Fund Holders: 339
Goldman Sachs reiterated a “Buy” rating on Amazon.com, Inc. (NASDAQ:AMZN)’s stock with a price objective of $255.00 amidst new tariffs introduced by President Trump. Despite the potential rise in costs for the company, Eric Sheridan, the firm’s analyst, lauded Amazon.com, Inc. (NASDAQ:AMZN)’s ability to mitigate such impacts through various strategies. The potential mitigating actions consist of negotiations with vendors to share the challenges related to the increased input costs, adjustment of prices on some items for customers, as well as shifting the mix of vendors and products sold on its platform to those witnessing reduced tariffs or to the US domestic alternatives.
Amazon.com, Inc. (NASDAQ:AMZN)’s investments in AI technology place it well to reap the benefits coming from the increased demand for AI-driven solutions. Such investments can result in improved product recommendations in e-commerce, more efficient logistics operations, and enhanced cloud services for the enterprise customers. Overall, the AI integration throughout Amazon.com, Inc. (NASDAQ:AMZN)’s ecosystem can help create a competitive advantage and fuel growth throughout multiple business segments.
Lakehouse Capital, a Sydney-based investment manager, released its February 2025 investor letter. Here is what the fund said:
“Amazon.com, Inc. (NASDAQ:AMZN) posted a solid quarterly result with ongoing cost discipline driving significant operating leverage across the business. Net sales grew 10% year-over-year (11% in constant currency terms) to $187.8 billion whilst operating income grew 61% to $21.2 billion, well ahead of guidance and analysts’ expectations. Growth within the core e-commerce business remained healthy as the company delivered a record breaking Black Friday and Cyber Monday holiday shopping event. For the past two years now, management has been laser focused on driving efficiencies across the retail operations and these efforts are continuing to pay off. Notably, retail margins for their international segment have now been positive for four straight quarters and currently sit at 3.0%, which is pretty remarkable considering that just over two years ago they sat at -8.9%.
The company’s second largest segment, Amazon Web Services (AWS), also performed well with growth steady at 19% year-on-year. AI demand remains strong with management noting that AI related revenue is still growing triple digits. Big picture, AWS remains the leading cloud provider (in what is an increasingly two-horse race with Microsoft’s Azure) and with 85% of global IT spend still on-premises there is still plenty of runway for future growth. At current levels, Amazon’s valuation is attractive at 13x EBITDA, and we remain confident that patient shareholders will be treated well as the company is set to deliver many years of solid revenue growth and margin expansion.”
Overall, AMZN ranks 1st on our list of best stocks for 15 years. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for a deeply undervalued AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.