We just covered Here is How Billionaire Philippe Laffont’s Top 10 Picks Crushed The Market. Amazon.com Inc. (NASDAQ:AMZN) ranks #4 (see the Here is How Billionaire Philippe Laffont’s Top 5 Picks Crushed The Market).
YTD Stock Performance: +14%
Philippe Laffont’s Stake: $2.29 Billion
Amazon is in the spotlight after posting upbeat quarterly results and a better-than-expected outlook. But beyond the quarterly numbers, let’s see the core business catalysts for the stock.
Amazon.com Inc. (NASDAQ:AMZN) has quickly evolved from just an e-commerce and cloud company into a broader AI infrastructure giant, with growth coming from cloud services (AWS), advertising, and now its own AI chips business. A key part of this is Amazon.com’s (NASDAQ:AMZN) custom chips like Trainium and Graviton, along with networking hardware such as Nitro. These chips are used to train and run AI models more efficiently, helping both Amazon and its customers reduce reliance on external chipmakers like Nvidia.
The scale of this business is already significant, with an annual revenue run rate of over $20 billion and growing at triple-digit rates year over year. Demand is coming from major customers hungry for AI chips. Meta recently announced a deal with Amazon Web Services (AWS) to bring tens of millions of AWS Graviton cores into Meta’s compute portfolio. OpenAI has committed to spending around $100 billion on AWS over time in exchange for large-scale infrastructure access, and Anthropic has also expanded its relationship with Amazon.com Inc. (NASDAQ:AMZN) with multibillion-dollar investments.
Cloud remains the biggest long-term catalyst for Amazon.com Inc. (NASDAQ:AMZN). It has a roughly 30–32% share of the global cloud infrastructure market, ahead of Microsoft and Google. AWS moat remains strong because the reliability and scalability it provides to large corporations. Switching costs in the cloud market are high as migrating enterprise systems can cost millions and take years, helping maintain stable recurring revenue.
AWS ecosystem of services is another strong business moat. 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.
Vulcan Value Partners stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2026 investor letter:
“Amazon’s capital spending is forecast to increase over 50% in 2026 to approximately $200 billion. We expect a solid return on this capital spending. Bears believe that Amazon is investing…(Click Here to Read the Letter in Detail).”
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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