RiverPark Funds, an investment management company, released its “RiverPark Large Growth Fund” second quarter 2022 investor letter. A copy of the same can be downloaded here. The second quarter was extremely difficult for the fund which returned -34%. Year to date, the fund returned -47%. In addition, you can check the top 5 holdings of the fund to know its best picks in 2022.
RiverPark Funds discussed stocks like Amazon.com, Inc. (NASDAQ:AMZN) in the second quarter investor letter. Headquartered in Redmond, Washington, Amazon.com, Inc. (NASDAQ:AMZN) is a multinational company that provides products and subscriptions. On September 20, 2022, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $122.19 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -8.68%, and its shares lost 27.70% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $1.245 trillion.
Here is what RiverPark Funds specifically said about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a company that has been “reinventing normal” since its formation in 1994. In his 2015 shareholder letter, Jeff Bezos wrote that a dreamy business has at least four characteristics: “customers love it, it can grow to very large size, it has strong returns on capital, and it’s durable in time – with the potential to endure for decades.” Jeff’s advice was that “When you find one of these, don’t just swipe right, get married.” Unlike most mere mortal businesses that are lucky to have one such business, at the time, Amazon had three. Today, Amazon has five dreamy businesses under its one roof: AWS, Marketplace, Prime, Advertising and Logistics. Notably, each of these businesses were planted as tiny seeds and have grown mainly organically, quickly into meaningfully large businesses.7 And, given management’s belief that it is still “Day 1” of the internet, their focus on relentless innovation, and the tiny seeds they have recently planted, more dreamy businesses may soon follow.
In each of its current businesses, Amazon is the (or is one of the top two or three) dominant force in the world. For example, Amazon leads online retail with 41% market share, while the next ‘largest’ 11 companies each have single digit market share. AWS has 33% share in the cloud infrastructure market, exceeding the market share of its two largest competitors, Microsoft and Google, combined. 8 In Prime (launched in 2005), AMZN has well over 200 million subscribers,9 and with $31 billion of advertising revenue last year, AMZN is already the third largest advertising company (behind Google/YouTube and the Facebook family of apps). And finally, in its newest potential “dreamy” business logistics (encompassing both Fulfillment by Amazon and its recently launched “Buy with Amazon”), AMZN has the largest fulfillment and distribution capacity among U.S. retailers. Amazon has ~375 million square feet of total distribution capacity, dwarfing Walmart’s ~145 million square feet. Amazon is projected to surpass UPS in U.S. package volume in 2022, and in five years have a logistics network large enough that it won’t need to rely on UPS or the U.S. Postal Service.
In response to the pandemic, Amazon’s management team made the decision to interrupt its march towards higher margins and higher returns on capital to respond aggressively to its consumer’s demand explosion across its retail and its AWS infrastructure. This has resulted in lower operating margins within the income statement and much higher capital expenditures, reducing near-term free cash flow, but we believe, widening and deepening Amazon’s moats across all of its businesses. The fruits of these investments (increasing margins, expanding free cash flow and increasing ROIC) will ripen over the next few years, which will be one of the catalysts, we believe, that will drive the company’s stock materially higher…” (Click here to read the full text)
Amazon.com, Inc. (NASDAQ:AMZN) is in 2nd position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 252 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the second quarter which was 271 in the previous quarter.
We discussed Amazon.com, Inc. (NASDAQ:AMZN) in another article and shared stocks that Jim Cramer is monitoring for market recovery. In addition, please check out our hedge fund investor letters Q2 2022 page for more investor letters from hedge funds and other leading investors.
Disclosure: None. This article is originally published at Insider Monkey.
When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.
Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.
At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.
Do the math. According to Musk, this technology could be worth $250 trillion by 2040.
Put another way, that’s roughly equal to:
175 Teslas
107 Amazons
140 Metas
84 Googles
65 Microsofts
And 55 Nvidias
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Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.
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Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.
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