TCW funds, an investment management company, released its “TCW Relative Value Large Cap Fund” fourth-quarter 2025 investor letter. A copy of the letter can be downloaded here. Equities ended the year on a positive note, with the S&P 500 Total Return (USD) increasing by 2.65% and achieving a remarkable 17.9% in 2025. The AI sector continued to thrive following Trump’s tariff announcements. While there are concerning indicators similar to the Dot-Com bubble, the underlying companies appear to be defying odds with technological advancements, strong financials, and reasonable valuations. The Fund (I share) returned 4.29% in the quarter compared to 3.81% for the Russell 1000 Value Index. YTD, the Fund delivered a return of 19.32% compared to 15.91% for the Index. In addition, please check the Fund’s top five holdings to know its best picks in 2025.
In its fourth-quarter 2025 investor letter, TCW Relative Value Large Cap Fund highlighted Amazon.com, Inc. (NASDAQ:AMZN) as its newly acquired position. Amazon.com, Inc. (NASDAQ:AMZN) is a multinational technology and retail company known for its leading online marketplace and cloud platform. On April 06, 2026, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $212.79 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was -0.72%, and its shares gained 24.69% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $2.28 trillion.
TCW Relative Value Large Cap Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2025 investor letter:
“Amazon.com, Inc. (NASDAQ:AMZN) is a $2.3 trillion internet company headquartered in Seattle, WA. Amazon.com is an online retailer that also offers personalized shopping services, web-based credit card payment, and direct shipping to customers. AMZN is the largest e-commerce platform in the US with a ~40% market share. Amazon’s secret sauce is their logistics infrastructure that allows for superior delivery times and lower costs than peers, which they use to delight their loyal Prime membership base. Amazon also operates a cloud platform offering services globally through Amazon Web Services (AWS), a fantastic second business with growth opportunities in cloud migrations and AI workloads. Advertising is increasingly important to the overall business with nearly $70 billion of annualized revenues, driven by Sponsored Listings as well as Fire TV/Prime Video ad inventory (e.g., during Thursday NFL games). At initiation in October 2025, shares of AMZN met two of the five valuation factors (price-to-sales; price to-cash flow).
The investment catalyst is new products/markets. AWS has been less impacted by the wave of AI spending than its hyperscale peers as they have top heavy clients that are particularly driving growth (i.e., OpenAI for MSFT† Azure). However, it is set to close the gap as corporates and start-ups begin to scale their inference workloads as they introduce AI-powered products. Additionally, AWS is supply constrained but is set to get significantly more capacity in the next 6-12 months, both from third party providers like NVDA as well as their own custom-designed silicon (Trainium 2). On the retail side, the company is demonstrating operational excellence with consistent improvements in its cost to serve. We expect this to continue and receive a mix benefit as advertising continues to grow as a percent of its North America and International segments. As Amazon leadership execute these strategic initiatives, the company can grow cash flow and earnings materially over the medium term.”
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Amazon.com, Inc. (NASDAQ:AMZN) is in top position on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 381 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the fourth quarter, up from 332 in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) delivered $213.4 billion in revenue for the fourth quarter of fiscal 2025, an increase of 12% year over year, excluding the impact from foreign exchange rates. While we acknowledge the risk and potential of Amazon.com, Inc. (NASDAQ: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 Amazon.com, Inc. (NASDAQ:AMZN) and that has 10,000% upside potential, check out our report about this cheapest AI stock.
In another article, we covered Amazon.com, Inc. (NASDAQ:AMZN) and shared the list of best S&P 500 stocks to buy. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
