We just covered Billionaire Ken Fisher’s Latest Portfolio: 10 Best AI Stocks to Buy. Amazon.com, Inc. (NASDAQ:AMZN) ranks #5 (see the 5 Best AI Stocks to Buy).
Billionaire Ken Fisher’s Stake: $7.75 billion
AWS remains the biggest long-term growth catalyst for Amazon.com Inc (NASDAQ:AMZN) because it holds roughly 30–32% share of the global cloud infrastructure market, maintaining its position as the largest provider ahead of Microsoft Azure and Google Cloud. AMZN ranks fifth in our list of the best AI stocks to buy according to Billionaire Ken Fisher.
But how does AWS benefit from the rise of AI usage around the world? Businesses often prefer AWS because of its scale, reliability and long operating history, while the AWS segment typically generates operating margins estimated at around 30%, significantly higher than traditional retail margins. AWS also 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 also has another moat: its ecosystem of services. 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 explained in its investor letter how AMZN can keep growing its cash flow and earnings materially, and also discussed the stock’s catalysts. (Click here to read the full text).
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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.
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