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Amazon.com’s (AMZN) Long-Term Growth Outlook Remains Strong Despite Weaker Third-Quarter Guidance

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The significant move by the FED to cut the interest rate helped the market to stabilize. In the quarter, the fund appreciated 6.19% (net), outperforming its benchmark, the S&P […] Read More...

Meridian Funds, managed by ArrowMark Partners, released its “Meridian Hedged Equity Fund” third quarter 2024 investor letter. A copy of the letter can be downloaded here. The significant move by the FED to cut the interest rate helped the market to stabilize. In the quarter, the fund appreciated 6.19% (net), outperforming its benchmark, the S&P 500 Index, which returned 5.89%, and its secondary benchmark, the CBOE S&P 500 Buy/Write Index’s 5.54% return. It anticipates that capital preservation in bear markets will eventually play a significant role in the long-term compounding of returns. In addition, you can check the fund’s top 5 holdings to determine its best picks for 2024.

Meridian Hedged Equity Fund highlighted stocks like Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter. Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products, advertising, and subscription services through online and physical stores that operate through North America, International, and Amazon Web Services (AWS) segments. The one-month return of Amazon.com, Inc. (NASDAQ:AMZN) was 10.38%, and its shares gained 40.83% of their value over the last 52 weeks. On November 27, 2024, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $205.74 per share with a market capitalization of $2.163 trillion.

Meridian Hedged Equity Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter:

“Amazon.com, Inc. (NASDAQ:AMZN) is a leading e-commerce company that operates a vast online marketplace for third-party sellers, sells its own products, and provides cloud infrastructure services through Amazon Web Services (AWS). We own Amazon because we believe AWS and advertising will continue to drive long-term revenue growth and profitability improvements. Although the stock didn’t perform well this quarter, we attribute this to a mix of short-term factors, including macroeconomic headwinds impacting consumer and enterprise spending, slowing retail revenue growth, and retail margin expansion falling short of market expectations. Additionally, increased investment in longer-term initiatives like satellite broadband and other experimental projects put further pressure on margins. Despite weaker-than-expected third-quarter guidance, we believe Amazon’s long-term growth story remains strong. We see multiple levers for improved profitability and free cash flow generation over time. We maintained our position in the company during the period.”

A customer entering an internet retail store, illustrating the convenience of online shopping.

Amazon.com, Inc. (NASDAQ:AMZN) is in first position on our list of 31 Most Popular Stocks Among Hedge Funds. As per our database, 286 hedge fund portfolios held Amazon.com, Inc. (NASDAQ:AMZN) at the end of the third quarter which was 308 in the previous quarter. In the third quarter, Amazon.com, Inc. (NASDAQ:AMZN) delivered $158.9 billion in revenue, up 11% year-over-year. While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, our conviction lies in the belief that 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 as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

In another article, we discussed Amazon.com, Inc. (NASDAQ:AMZN) and shared the list of AI stocks on the radar of Wall Street analysts. In addition, please check out our hedge fund investor letters Q3 2024 page for more investor letters from hedge funds and other leading investors.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

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