Exploring Amazon.com Inc (NASDAQ:AMZN) as the Best AI Value Stock According to NYU’s Aswath Damodaran
Are you looking to invest in AI value stocks that are considered “money machines” by NYU’s Aswath Damodaran? If so, you may want to take a closer look at Amazon.com Inc (NASDAQ:AMZN), which ranks 1st on the list of the 7 best AI value stocks. As a blog writer, I recently delved into the details of why Amazon.com Inc is considered a top pick in the AI value stock category.
Aswath Damodaran, a renowned Professor of Finance at NYU, has highlighted the significance of the Magnificent Seven stocks, including Amazon.com Inc, as key players in the market. These stocks have collectively added $8.8 trillion in market cap over the last year and a half, surpassing the market cap of entire countries like Germany and France. Despite concerns about overvaluation in the tech sector, Damodaran emphasizes that these stocks are the “money machines” driving the market.
Amazon.com Inc stands out as a powerhouse in the AI space, with a strong focus on AI-related growth catalysts. The company’s Amazon Web Services (AWS) business is a major contributor to its success, with operating margins exceeding 30% for five consecutive quarters. Additionally, Amazon.com Inc’s revenue and adjusted EPS have shown significant growth, supported by strong performance in North America, International segments, and digital ads.
Investment firm UBS has identified Trainium and Inferentia as key strengths for Amazon.com Inc in the AI Enabling layer, positioning the company to capitalize on the $1.16 trillion AI opportunity. While Amazon.com Inc excels in the Enabling layer, UBS notes that the company lacks offerings in the Intelligence layer of the AI value chain. However, Amazon.com Inc’s chatbot recommendations are highlighted as a strength in the application layer of AI.
With 302 hedge fund investors backing Amazon.com Inc, the stock has garnered significant interest from investors seeking to capitalize on the AI revolution. Alphyn Capital Management’s Q2 2024 investor letter also underscores the potential of Amazon.com Inc as a top AI momentum stock.
While Amazon.com Inc holds promise as a top AI value stock, there are other AI stocks with even greater potential for higher returns within a shorter timeframe. If you’re interested in exploring AI stocks that offer substantial upside at a lower valuation, consider checking out our report on the cheapest AI stock.
In conclusion, Amazon.com Inc’s position as a leading AI value stock underscores its potential for growth and profitability in the evolving market landscape. As investors navigate the dynamic AI sector, staying informed about the latest trends and opportunities can help identify promising investment prospects.