Review of the Top 10 companies in the field of artificial intelligence, valuations and earnings
Technology stocks continue to fall amid concerns that the Federal Reserve is taking too long to cut interest rates, fueled by recent employment data that showed unemployment rising. However, some analysts believe that the latest decline in Artificial Intelligence AI stocks is part of normal market rotation and gives investors a buying opportunity.
This material was written with the aim of introducing the best companies in the Artificial Intelligence industry. Traders of our company (Masters Trade https://masters.trade/ ) consider the growth of Artificial Intelligence companies to be overheated and a possible bubble, although this is only our opinion and this opinion may be wrong.
10. Intel Corporation (NASDAQ:INTC)
Number of hedge fund investors: 77
Shares of Intel Corp (NASDAQ:INTC) have been in a carnage recently following the company's weak second-quarter results and disappointing guidance. The results show that the rise of artificial intelligence that everyone has been talking about won't come cheap. Intel Corp (NASDAQ:INTC) expects its third-quarter gross margin to decline to 34.5% from the 38.7% reported in the second quarter, a significant decline from the company's expectations of 43.5%.
Although Intel Corp (NASDAQ:INTC) has suspended its dividend and announced massive layoffs, its inventory problem won't be resolved anytime soon. Intel has a 137-day supply of more than $11.2 billion. This is well above the industry average of 90 days. Intel Corp (NASDAQ:INTC) has about $52 billion in long-term debt, and analysts believe its cost-cutting efforts coupled with artificial intelligence initiatives will prevent it from addressing the problem any time soon. S&P Global recently put the stock's credit rating on watch, saying:
"While these cost-cutting measures, including significant reductions in capital expenditure, may ease some near-term cash flow generation challenges, it is unclear whether these steps will be sufficient to maintain the business's competitiveness and ensure healthy growth."
In a post-earnings report, Raymond James said Intel's margin problems are expected to continue through 2025. The rise of AI PCs has become a major drag on margins as higher front-end wafer costs offset modest average selling price premiums.
Given these factors, investors would be better off looking at other AI stocks and avoiding Intel for now until it becomes clear how Intel Corp (NASDAQ:INTC) will address its underlying issues.
In its Q2 2024 investor letter, ClearBridge Large Cap Value Strategy stated the following regarding Intel Corporation (NASDAQ:INTC):
“The significant growth in AI spending has crowded out spending in other technology verticals such as software and traditional enterprise infrastructure. This also led to a market where "AI winners" received strong multiple expansion, while perceived "losers" were severely punished. One example of a perceived artificial intelligence underdog being temporarily sidelined was Strategy's chief critic for the quarter, Intel Corp. (NASDAQ:INTC), whose shares fell as it set 2027 financial goals that fell below Wall Street expectations and also noted that Demand for its core PC and server chips remained weak. We take a contrarian view of Intel and don't think it will be an underdog in AI, but rather see undervalued opportunities as AI PCs gain traction over the next few quarters in enterprises where Intel has a stronghold. We also believe that the company's technology roadmap remains unchanged, which we believe will lead to stabilization of market share in its core PC and server markets. Both markets remain depressed, but we believe aging infrastructure and continued growth in IT workloads will lead to a cyclical recovery in both markets, which should benefit equities.”
9. ServiceNow Inc (NYSE:NOW)
Number of hedge fund investors: 90
Bank of America's Savita Subramanian recently said in her latest note that "the days of AI hype are over," pointing to large AI technology companies that are spending huge amounts of money. The analyst said that AI has moved from “tell me” to “show me” and from now on, companies that monetize AI will lead the way. The analyst named ServiceNow Inc (NYSE:NOW) as one of the companies that has already begun to monetize artificial intelligence.
ServiceNow Inc (NYSE:NOW) impressed the market with strong second-quarter results that highlighted the company's potential in artificial intelligence. Morgan Stanley's Keith Weiss maintained his Overweight rating on the stock and $900 price target, saying the AI momentum is real and growing. ServiceNow Inc (NYSE:NOW) said incremental annual revenue from new Pro Plus contracts, which include generative artificial intelligence capabilities, doubled from the previous quarter. The company entered into 11 new contracts worth more than $1 million each. Analysts say ServiceNow Inc's (NYSE:NOW) strength is its NOW platform as it makes it easier for companies to integrate all the tools and software in one place, including Salesforce, Microsoft and SAP. The company's portfolio includes 168 digital workflow solutions with a 98% update rate.
In a challenging environment for SaaS companies, ServiceNow Inc (NYSE:NOW) managed to raise its full-year guidance. The company also increased operating income by 50 basis points.
NOW shares trade at 40 times projected 2025 earnings, which isn't high compared to ServiceNow Inc (NYSE:NOW)'s projected revenue growth of more than 20% and a growing number of growth catalysts.
Lakehouse Global Growth Fund stated the following regarding ServiceNow, Inc. in its April 2024 investor letter. (NYSE:NOW) :
"American software development company ServiceNow, Inc. (NYSE:NOW) delivered another strong performance, continuing its long and consistent history of revenue growth of over 20% coupled with healthy profitability. Subscription revenues grew 25% year over year to $2.5 billion, and free cash flow grew 47% year over year to $1.2 billion. The company's underlying operating performance was also impressive, with remaining performance obligations growing 26% year over year to $17.7 billion (i.e., approximately 2x 2023 revenue) and renewal rates remaining stable at 98% . Effectiveness was evenly distributed across segments, products and regions, with notable strength in the US federal government. The company now boasts 1,933 customers generating over $1 million in annual contract value (ACV), which is great to see as it means multiple solutions are involved and the company's platform model is increasingly resonating with customers. In our view, ServiceNow is one of the highest quality software businesses in the world, as its combination of continued growth in scale, reliable free cash flow generation and large addressable market makes it a compelling opportunity.”
8. Adobe Inc (NASDAQ:ADBE)
Number of hedge fund investors: 108
Bank of America's Savita Subramanian said in a note that tech companies monetizing AI will "lead" the AI cycle from now on, as he believes the "hype days" of AI are over. The analyst named Adobe Inc (NASDAQ:ADBE) as one of the companies monetizing AI.
Deutsche Bank also recently added Adobe Inc (NASDAQ:ADBE) to its Fresh Money list and made bullish comments on the stock amid artificial intelligence catalysts.
Deutsche Bank believes the company's creative cloud division is expected to grow as generative AI products enter the market.
"We believe this creates an opportunity for positive estimate revisions along with multiple expansion as the narrative shifts back to Adobe Inc (NASDAQ:ADBE) as the beneficiary of the AI generation."
The firm raised its price target on the stock to $650.
Mizuho analyst Gregg Moskowitz also said in a new note that the market is "undervaluing" the "breadth" of Adobe Inc's (NASDAQ:ADBE) artificial intelligence monetization.
Adobe shares rose after the company posted strong second-quarter results, ending skeptical rhetoric that claimed the company's editing tools were under threat from the generative AI revolution. JPMorgan upgraded the stock to Overweight from Neutral following its second-quarter results and raised its price target to $580 from $570.
In its Q2 2024 investor letter, Polen Global Growth Strategy stated the following regarding Adobe Inc. (NASDAQ:ADBE) :
“In relation to Adobe Inc. (NASDAQ:ADBE) we see in some ways as a microcosm of the market's "shoot first, ask questions later" approach to classifying AI winners and losers . Adobe came under pressure early last year due to the perception that generative AI (GenAI) would pose a significant headwind to its suite of creative offerings. The company soon introduced its GenAI offering, Firefly, which changed the narrative to Adobe as the beneficiary with a real opportunity to monetize GenAI in the near term. Earlier this year, that narrative was called into question again as the company reported a slight slowdown in revenue growth. Results in the most recent quarter were strong as the company raised its full-year guidance on a number of key metrics and delivered results above expectations."
7. Advanced Micro Devices, Inc (NASDAQ:AMD)
Number of hedge fund investors: 124
Advanced Micro Devices, Inc (NASDAQ:AMD) impressed Wall Street with solid second-quarter results on the back of strong data center revenue. Data center revenue grew 49% year over year during the period.
But can Advanced Micro Devices, Inc (NASDAQ:AMD) continue to grow in the coming months? Analysts are hopeful as the Instinct™ MI300 series accelerators launch for AI and HPC workloads. The new chip competes with Nvidia's H100 AI chip. Advanced Micro Devices, Inc (NASDAQ:AMD) now plans to release new AI chips annually, including the MI325X in the fourth quarter of this year, the MI350 in 2025, and the MI400 in 2026. Advanced Micro Devices, Inc (NASDAQ:AMD) said the MI350 will compete with Nvidia's Blackwell.
Advanced Micro Devices, Inc.'s (NASDAQ:AMD) data center business doubled its revenue, but the growth didn't come at the expense of profits. The segment's operating income increased 405% compared to the same period a year earlier. However, Advanced Micro Devices, Inc.'s (NASDAQ:AMD) data center business is still very small compared to NVDA. It brought in about $2.8 billion in revenue versus NVDA's $22.6 billion in quarterly revenue. However, Advanced Micro Devices, Inc.'s (NASDAQ:AMD) CPU and GPU business is also thriving. Ryzen CPU sales were up 49% year over year and up slightly from the previous quarter. While gaming revenue was down 59% due to lower PlayStation and Xbox sales, sales of Advanced Micro Devices, Inc.'s (NASDAQ:AMD) Radeon 6000 graphics processors were up year-over-year.
Advanced Micro Devices, Inc (NASDAQ:AMD) is trading 17% below its 3-year average P/E ratio. The company is estimated to grow its EPS by 43% over the long term, compared to Nvidia's 33%. In the third quarter, revenue is expected to grow 15% quarter-on-quarter. Amid growth forecasts based on new chips and expected increases in AI spending by other companies, Advanced Micro Devices, Inc.'s (NASDAQ:AMD) forward P/E ratio of 38 makes the stock undervalued at current levels.
6. Apple Inc (NASDAQ:AAPL)
Number of hedge fund investors: 150
Apple Inc (NASDAQ:AAPL) was in the spotlight after the company posted decent quarterly results in which declining iPhone sales were more than offset by services revenue and growth in Mac sales. Wedbush's Dan Ives reiterated an "outperform" rating on the stock and raised his price target to $285 from $275.
“Apple Inc (NASDAQ:AAPL) Intelligence has already begun deployment with developers that will significantly improve the app's capabilities as the company delays the launch of its new AI feature along with the OpenAI partnership that Apple Inc (NASDAQ:AAPL) expects ChatGPT and all other features will be integrated into iPhone and other devices by the end of the year. We believe AI technology being introduced into the Apple ecosystem will bring monetization opportunities on both the service level and the iPhone/hardware front and add $30 to $40 per share,” Ives said.
Bank of America analyst Vamsi Mohan said he sees more room for Apple Inc (NASDAQ:AAPL) to grow in the December quarter and next year on the back of Apple Intelligence. The analyst reiterated a Buy rating and $256 price target for Apple.
He said Apple Inc (NASDAQ:AAPL) estimates could be revised higher due to the "multi-year iPhone upgrade cycle, gross margin tailwinds and strong cash flows."
Morgan Stanley expects Apple Inc (NASDAQ:AAPL) to ship about 500 million iPhones over the next two years, up 6% from the fiscal 2021-2022 cycle. Morgan Stanley said this growth could lift iPhone average selling price (ASP) by 5% annually, leading to nearly $485 billion in revenue and $8.70 earnings per share by fiscal 2026, beating consensus estimates by 7- 9%.
Wall Street is anticipating a new round of AI-powered iPhone upgrades as it's been years since millions of users upgraded their iPhones. Wedbush recently stated that 270 million of the 1.5 billion iPhones have not been updated in 4+ years
Apple Inc (NASDAQ:AAPL) also trains Siri using its own language models. These smaller models run on devices to handle a variety of daily tasks, and Apple reveals that its on-device model has 3 billion parameters. For more complex problems, the large language model runs on Apple Inc's (NASDAQ:AAPL) private servers, although its size has not been disclosed and is likely smaller than current large language models such as OpenAI's GPT-4, which has about 1.8 trillion parameters.
In its Q2 2024 investor letter, Polen Focus Growth Strategy stated the following regarding Apple Inc. (NASDAQ:AAPL) :
“The biggest relative detractors in the quarter were NVIDIA, Apple Inc. (NASDAQ:AAPL) and Salesforce. Contrary to some of the concerns that sent shares tumbling in the first quarter, Apple re-emerged as a leader in the second quarter. The company reported better-than-expected results in its iPhone segment, allaying concerns about weakness in China. The company also predicted a return to sales growth and announced a $110 billion share buyback plan, the largest in U.S. history. Later in the period, at its Worldwide Developers Conference, Apple unveiled long-awaited new AI features that sparked some optimism about the iPhone refresh cycle and, more generally, the important role Apple could play in the emerging AI landscape. "We continue to closely examine Apple, which we have owned for many years during its growth phase, to determine whether it is poised for another significant period of revenue and earnings growth."
5. Alphabet Inc Class C (NASDAQ:GOOG)
Number of hedge fund investors: 165
Wedbush analyst Scott DeWitt said in a new note that OpenAI's SearchGPT will likely remain a "overhang" for Google as investors learn about the tool's potential impact on Google's search business. However, the analyst said Google's search business is "very protected" and Alphabet Inc Class C's (NASDAQ:GOOG) search prowess is undervalued by the market.
“We believe the benefits of this existing infrastructure are undervalued and overlooked, and we continue to believe that Alphabet Inc Class C (NASDAQ:GOOG) is in the best position to optimize generative AI search results from a usability, monetization and cost."
Devitt reiterated an "outperform" rating on the stock and a $205 price target.
Deepwater's Gene Munster believes Alphabet Inc Class C (NASDAQ:GOOG) will win the "AI arms race." Speaking to CNBC, the analyst said Google's search business is "intact, nothing to worry about." Munster's thesis is based on his in-depth testing of several large language models and chatbots, including Google's Gemini. Munster also believes that other chatbots don't yet offer a strong imperative for users to opt out of Google searches.
Wedbush's Dan Ives named Alphabet Inc (NASDAQ:GOOG) as one of the stocks that could benefit from the AI boom in a recent note.
According to the latest UBS report, Alphabet Inc (NASDAQ:GOOG) falls into all three layers of the AI value chain - utility, intelligence and application. Alphabet Inc (NASDAQ:GOOG) is an AI-enabled player with its Tensor Processing Units (TPUs) and Google Cloud Platform, while Gemini makes it a key intelligence player. At the application level, UBS believes Alphabet Inc (NASDAQ:GOOG) has an advantage with its Duet AI assistant and advertising. All of these catalysts position Alphabet Inc (NASDAQ:GOOG) as a company positioned to benefit from AI opportunities worth $1.2 trillion by 2027, UBS said.
Bulls Alphabet Inc. (NASDAQ:GOOG) believe that the company is just starting to release AI-based products. Alphabet Inc. (NASDAQ:GOOG) is truly in a strong position to develop an AI ecosystem around its products. For example, demos have shown that the Gemini app will help people perform daily personal tasks such as taking notes, scheduling appointments, writing, etc. These features can be easily integrated with other Google apps. Alphabet Inc. app (NASDAQ:GOOG) encourages users to sign up for the Google One AI Premium plan, which costs $19.99.
Conventum – Alluvium Global Fund stated the following regarding Alphabet Inc. in its Q2 2024 investor letter. (NASDAQ:GOOG) :
Alphabet Inc. (NASDAQ:GOOG), i.e. Google/YouTube, returned 20.8%. While management reported good news - solid quarterly results, expectations of margin expansion throughout 2024, and first dividends (in addition to share buybacks) - we suspect the share price surge was as much due to AI euphoria as it was to these positives news. From our perspective, the numbers were largely in line with expectations and we had no reason to change our assumptions or estimates. It's clear that Alphabet is now trading at a larger premium to our valuation, but given the conservative nature of that valuation, we believe the premium is still not large enough to justify a sale. It represents 5.3% of the Fund.”
4. NVIDIA Corp (NASDAQ:NVDA)
Number of hedge fund investors: 186
NVIDIA Corp (NASDAQ:NVDA) shares are falling amid valuation concerns. However, Morgan Stanley has re-added the stock to its top performers list. Analyst Joseph Moore said:
“Visibility will actually increase as demand moves from Hopper to Blackwell as the constraint shifts back toward silicon; The H100 lead times are short, but the H200 lead times are already long, and at Blackwell they should be even longer,” the company said.
However, recent big tech earnings have raised some concerns about the future growth trajectory of NVIDIA Corp (NASDAQ:NVDA). The company's major customers, including Meta Platforms and Alphabet, have indicated that they may be overloading and overusing AI chips. NVIDIA Corp (NASDAQ:NVDA) sells about 2 million of its GPUs per year based on 2023 data. As demand declines and competitors increase production, the company will not be able to maintain its current growth trajectory.
Raymond James analyst Javed Mirza recently said in a report that NVDA "triggered a mechanical sell signal" based on the moving average convergence/divergence indicator. In a technical analysis report, he said the stock is trading below its 50-day moving average and showing early signs of selling pressure. According to Mirza, this shows that a corrective phase of 1-3 months is coming. He added that a sustained break below the 50-day moving average could lead to a decline to 94.94, which would represent a further 16.9% fall from current levels.
NVIDIA Corp's (NASDAQ:NVDA) rapid growth and skyrocketing valuation have begun to cause concern among some people on Wall Street. New Street Research recently downgraded the stock to Neutral from Buy and set its price target for the stock at $135.
“We're downgrading the stock to neutral today because upside would only be possible in a bullish scenario where prospects rise substantially beyond 2025, and we don't yet have confidence that this scenario will materialize,” New Street analyst Pierre Ferrague said.
NYU professor and valuation guru Aswath Damodoran has also been skeptical of NVDA over the past few months, repeatedly saying the stock looks overvalued. In March, when asked about his previous predictions (which turned out to be wrong) about NVDA's valuation, the professor said either he "has no idea what he's talking about" or the market simply doesn't understand.
Aswath Damodoran said at the time that while Nvidia is at the helm of the AI movement, its path to profit won't be as easy as the market suggests.
In its Q2 2024 investor letter, Patient Capital Opportunity Equity Strategy stated the following regarding NVIDIA Corporation (NASDAQ:NVDA):
“ NVIDIA Corporation (NASDAQ:NVDA) continued to lead both the market and the portfolio, remaining the leader in the reporting period, up 36.7%. Nvidia is a market leader in developing and selling graphics processing units (GPUs), which has recently benefited from insatiable demand for artificial intelligence (AI) models. The company currently holds 92% of the data center GPU market share and has grown revenue, earnings, and free cash flow (“FCF”) by an astounding 126%, 392%, and 610%, respectively, over the past year. While we expect increased competition, we believe NVDA can continue to maintain its leading market share. While many are concerned about the reduction in latency, we believe that the release of the B100, which promises 2.5 times better performance for just 25% more cost, will lead to greater shortages later this year. With cutting-edge technology, a growing innovation cycle and strong cash generation, the company is well positioned for increased adoption of artificial intelligence (AI).”
3. Meta Platforms Inc (NASDAQ: META)
Number of hedge fund investors: 246
Meta Platforms Inc (NASDAQ:META) crushed previous analyst estimates with its latest quarterly results, giving signs that the huge AI spending it is making will yield more results in the future. Following the results, Citi said it remains "consistently positive" on Meta Platforms Inc (NASDAQ:META) shares due to increased engagement and monetization, as well as margin expansion. The firm raised its price target for META to $580 from $550.
JPMorgan said it sees AI benefiting Meta Platforms Inc (NASDAQ:META) on three levels: core Family of Apps (FoA) improvements, new capabilities and experiences, and scaling Metaverse. He also raised his META price target to $610 from $480.
Morgan Stanley also liked how Meta Platforms Inc (NASDAQ:META) is improving its recommendation systems and quality using AI.
The market has been reluctant to embrace Meta Platforms Inc's (NASDAQ:META) massive AI spending. What does Meta want to achieve with its AI spending? The company wants to use AI to improve engagement and language models like Llama 3 to improve user experience, increase engagement and better monetize its 3.2 billion daily active users.
But can Meta Platforms Inc (NASDAQ:META) sustain these high costs? The company's free cash flow margin is about 30% and is well on track to report free cash flow of $50 billion this year. Based on that target, the stock trades at about 26 times this year's free cash flow. Given its current trajectory, Meta Platforms Inc (NASDAQ:META) could report free cash flow of $58 billion by next year, meaning the stock is trading at 21 times next year's free cash flow. With a whopping $35 billion in net cash, a strong user base, and a key position in the consumer side of the AI industry, Meta Platforms Inc (NASDAQ:META) could be a solid long-term investment.
In its Q2 2024 investor letter, Polen Focus Growth Strategy stated the following regarding Meta Platforms, Inc. (NASDAQ:META) :
“In the second quarter, the largest relative contributions to portfolio performance were all names that we do not own: Home Depot, Meta Platforms, Inc. (NASDAQ:META) and AbbVie. Meta Platforms delivered strong results during the period, with revenue growth accelerating in the first quarter. However, revenue comparisons will become more difficult for Meta from here on out, and its Q2 revenue guidance came in below market expectations. After the company's "year of performance" in which it cut costs in its core business, management is now pointing to renewed spending growth at GenAI and metaverse, raising concerns about future earnings. Metaverse's costs, we now estimate, are over $20 billion annually, with little or no expected return over the foreseeable horizon."
2. Microsoft Corporation (NASDAQ:MSFT)
Number of hedge fund investors: 293
Shares of Microsoft Corp (NASDAQ:MSFT) recently fell after its latest quarterly results showed growth in the company's cloud business was below expectations. For the current quarter, Microsoft Corp (NASDAQ:MSFT) expects revenue in the range of $63.8 billion to $64.8 billion, compared to an estimate of $65.07 billion. Microsoft Corp (NASDAQ:MSFT) Azure revenue is expected to increase by 28% and 29% annualized.
But what about AI? While Microsoft doesn't give specific AI numbers, analysts believe Copilot is already playing a key role in growth in several of the company's segments. Microsoft Corp's (NASDAQ:MSFT) Office sales to commercial customers soared to $48 billion, up significantly from last year's 10% growth, likely driven by Copilot Pro subscriptions. Office for Individual Users also saw growth, with sales reaching $6.2 billion, up 4% from last year's 2% growth, indicating accelerated growth from the Copilot integration. Sales of Dynamics ERP and CRM software reached $6.3 billion, up 19% from last year's 16% growth. This growth is likely due to customers migrating to Dynamics to integrate Copilot into the Dynamics Contact Center platform, which provides automated chatbots for customer service and significant cost savings. Bing sales jumped 3% year over year as more users switched to the search engine from Google Search thanks to its AI features.
While Microsoft Corp (NASDAQ:MSFT)'s expenses are expected to remain high, its investments are working and will bear fruit in the long term. The stock is down about 11% over the past month. They trade at 26 times next fiscal year's earnings. MSFT could be an attractive dip buy for long-term investors.
In its Q2 2024 investor letter, Polen Focus Growth Strategy stated the following regarding Microsoft Corporation (NASDAQ:MSFT):
“The top absolute contributors were Alphabet, Microsoft Corporation (NASDAQ:MSFT) and Amazon. Microsoft was the other largest absolute contributor in the quarter, signaling a growing understanding of all the ways the company has the opportunity to monetize GenAI, whether through its office suite or its Azure cloud business. In the latter case, it contributed 7% to Azure's revenue growth in the most recent quarter. We believe Microsoft remains a highly profitable business with many long-term tailwinds positioning it for sustainable growth for the foreseeable future, even at its enormous scale."
1. Amazon.com Inc (NASDAQ:AMZN)
Number of hedge fund investors: 302
Amazon.com Inc (NASDAQ:AMZN) shares fell after investors weighed in on the company's latest quarterly report, which showed revenue that missed expectations and weaker guidance despite AWS growth.
AWS revenue growth accelerated from 17.2% in the first quarter to 18.8% in the second quarter, driven by the shift from on-premises infrastructure to cloud solutions and increased demand for AI capabilities. Amazon.com Inc's (NASDAQ:AMZN) advertising segment grew revenue by more than $2 billion year over year, highlighting significant video advertising potential and opportunities within its Prime Video offerings.
As with other technology companies, concerns about high capital costs are keeping investors on the sidelines. Amazon.com Inc's (NASDAQ:AMZN) spending is expected to rise on the back of its Project Kuiper broadband project and the rise of AI. Investors are still figuring out whether AI will monetize and see a return on investment in the near future. Amazon.com Inc (NASDAQ:AMZN) is also facing a slowdown in consumer spending, especially on big-ticket items such as electronics and computers.
Amazon.com Inc (NASDAQ:AMZN) is forecasting 11% revenue growth for the third quarter. The stock trades at 35 times Wall Street's fiscal 2025 earnings estimates. This shows the stock is fairly priced, and investors looking for strong growth may want to look elsewhere.
Diamond Hill Select Strategy stated the following regarding Amazon.com, Inc. in its Q2 2024 investor letter. (NASDAQ:AMZN) :
“Our top individual contributors in the second quarter included Amazon.com, Inc. (NASDAQ:AMZN), Texas Instruments and Mr. Cooper Group. Online retailer and cloud infrastructure company Amazon is benefiting from strong profitability, particularly in its Amazon Web Services (AWS) business. The stock also received a boost from growing optimism about AWS demand as Amazon customer investment in generative AI projects continues to grow."
While we recognize the potential of Amazon.com Inc (NASDAQ:AMZN), our belief is that the closely watched AI stock has the best prospects for delivering superior returns and doing so in a shorter time frame. If you're looking for an AI stock that has more promise than AMZN but is trading at less than 5 times its earnings, check out our report on the cheapest AI stocks.