We recently compiled a list of the 19 Trending AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other AI stocks.
Exciting new developments in the artificial intelligence space have continued to pour in over the past few days as the stock market recovers from a major tech selloff. Some of the most trending ones relate to electronics giant Apple, Microsoft-backed AI startup OpenAI, and software firm Adobe. Apple has doubled down on AI with the release of macOS Sequoia, which integrates AI features designed to enhance device performance and user experience. These AI enhancements include real-time content generation and AI-driven privacy tools. With iPhone sales slowing, Apple is banking on AI to reinvigorate interest in its devices, setting itself apart in an increasingly competitive tech market.
Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and AI News You Should Not Have Missed.
On September 13, OpenAI released the highly anticipated Strawberry model, which aims to tackle complex challenges in AI development, including more nuanced decision-making and language processing. This model is expected to advance the capabilities of OpenAI in both consumer-facing tools and enterprise applications. Similarly, Adobe is also making major moves with the Firefly AI video tools, set to debut by the end of 2024. These tools allow users to generate videos from text and images, offering functions like Generative Extend to enhance existing videos. This positions Adobe at the forefront of generative AI for content creation, with a focus on commercial safety by using licensed datasets.
Looking ahead, Wall Street analysts project significant revenue and earnings growth for key players in the AI space, particularly in semiconductor companies that power AI applications. NVIDIA, for example, is forecast to achieve an impressive 27% annual revenue growth, outperforming both the semiconductor industry and the broader US market. The total revenue for the chipmaker in 2025 is expected to reach around $123 billion, with earnings projected to grow by over 24%. The upcoming Blackwell GPU architecture, which offers a 3.7x performance improvement over a predecessor, is seen as a critical driver of AI growth for NVIDIA in the next few months.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.
Our Methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Amazon.com, Inc. (NASDAQ:AMZN)
Number of Hedge Fund Holders: 308
Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. The company recently announced that it would invest £8 billion in the United Kingdom over the next five years as part of a major push to expand data center infrastructure across the country. Other tech giants, like Google and Microsoft, have also previously announced plans to boost data center infrastructure in the UK. The former plans to invest $1 billion in the UK while the latter has confirmed around £2.5 billion to expand AI growth. The cloud departments of these tech giants are leading these investments.
Wells Fargo recently lowered the price target on Amazon.com, Inc. (NASDAQ:AMZN) stock to $225 from $232 and kept an Overweight rating. In an investor note, the advisory noted that heavy upfront costs related to satellite launches, commencing in the second half of 2024, reduce operating income forecasts for Amazon from 2025 through 2027. The note further detailed that Kuiper presented an attractive opportunity longer term for Amazon, but also unclear synergy with core operations.
Overall AMZN ranks 3rd on our list of the 19 trending AI stocks on latest analyst ratings and news. While we acknowledge the 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 timeframe. If you are looking for an AI stock that is more promising than Amazon.com, Inc. (NASDAQ:AMZN) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
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