Investing can be as simple as buying great stocks when they’re on sale, even if you’re a billionaire.
Wall Street works for everyone, but some of the ultra-wealthy billionaires seem to have a certain aura about them, as if they have some inside track on the market’s pulse. These folks tend to manage money for clients or themselves and, because the amount they manage is so large, they are required to maintain some transparency by filing quarterly 13F filings to reveal their recent trades. These filings give individual investors clues about what the market’s big money is focused on.
Investors should always make their investing decisions based on their own needs, but it’s at least noteworthy when Wall Street’s billionaires start piling into a stock. The most recent 13F filings revealed one hot stock still trading at roughly the same price it did when billionaires were likely buying it. This company has already made millions for investors, which shows that even billionaires keep it simple.
Here is the millionaire-making stock and why it’s still a great long-term opportunity today, whether you are a billionaire or not.
Billionaires are scooping up Amazon
Tech giant Amazon (AMZN -0.43%) isn’t some bold, new stock idea. It probably won’t impress your co-workers when you sling ideas around at the office. Yet, billionaires are keeping it simple and scooping up shares anyway. According to 13F filing data, several billionaire investors bought shares of Amazon during the quarter ending June 30, 2024:
| Name | Fund Managed | Net Worth | Amazon Shares Added |
|---|---|---|---|
| Ken Fisher | Fisher Asset Management | $11 billion | 1.21 million |
| Ray Dalio | Bridgewater Associates | $14 billion | 1.6 million |
| Paul Tudor Jones | Tudor Investment | $8 billion | 72,609 |
| Ken Griffin | Citadel Advisors | $43 billion | 1.11 million |
| John Overdeck | Two Sigma Advisers | $7 billion | 216,400 |
Source: 13F filings on Hedge Follow and net worth data from Forbes.
It’s important to remember that 13F filings show what happened months ago. The risk is that investors are working on outdated information. A billionaire could have bought and sold the stock long before the next 13F filings come out. Amazon stock did bounce and dip a bit over the past few months, so maybe they sold for profits. Maybe they held the stock. Perhaps they added more. That’s not the point.
The more important takeaway is that Amazon’s valuation hasn’t changed much since April. Everyone, even billionaires, has individual opinions and agendas. Instead, focus on what might have attracted them to Amazon in the first place.
Continued growth ahead for Amazon’s core businesses
As alluded to before, Amazon is a well-known company, and it’s arguably a less-exciting stock because everyone knows it. Yet, the company’s returns over time have been anything but bland. Thanks to sustained growth in e-commerce first, then in cloud computing services, the stock has turned modest sums into generational wealth over the past few decades.
Today, Amazon is the leader in both of its core business segments. The company has an estimated 40% market share of e-commerce in the U.S. and an estimated 31% share of the global cloud services market, where it competes with Microsoft‘s Azure and Alphabet‘s Google Cloud, among others.
The great thing about Amazon’s core businesses is that they ride massive long-term growth trends that still have room to run. E-commerce is still only 16% of total U.S. retail spending. Companies are still migrating their computer systems to the cloud, and the arrival of artificial intelligence (AI) only adds to that. According to Goldman Sachs, the cloud computing market could grow to $2 trillion by 2030. This doesn’t even factor in emerging business opportunities, such as Amazon’s advertising segment, which is on track to do roughly $50 billion in revenue this year and growing at 20%.
It’s still a strong buy today
You can value a stock in several ways, but since Amazon invests so much of its profits back into the business, I like to look at the cash flow generated by its day-to-day activities and base its valuation on that.
Below, you can see the ratio of Amazon’s price to its operating cash flow:
AMZN Price to CFO Per Share (TTM) data by YCharts
Its current ratio of 18.5 is near Amazon’s decade-low point. In other words, it’s about as good a time as any in the past 10 years to buy Amazon stock. This assumes that Amazon invests its cash flow wisely, but the company has a strong record here, with an average return on invested capital of 10.9% over the past decade.
So, to sum up the stock’s appeal, you could say that Amazon is a great business that trades at a great price. Sometimes, it’s as simple as that, whether you are a billionaire or not.
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Goldman Sachs Group, and Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
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