We recently compiled a list of 19 Hot AI Stocks According to Latest Analyst Ratings and NewsIn this article, we’ll take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands compared to other AI stocks.
Exciting new developments in artificial intelligence have continued to pour in over the past few days as the stock market recovers from a major drop in tech stocks. Some of the hottest developments include electronics giant Apple, Microsoft-backed AI startup OpenAI, and software company Adobe. Apple doubled down on its AI efforts with the release of macOS Sequoia, which incorporates AI features designed to improve device performance and user experience. These AI enhancements include real-time content generation and AI-driven privacy tools. As iPhone sales slow, Apple is counting on AI to revive interest in its devices, standing out in an increasingly competitive tech market.
To learn more about these developments, visit 30 BlackRock’s Top AI Stocks And AI News You Can’t Miss.
On September 13, OpenAI released the highly anticipated Strawberry model, which aims to address complex challenges in AI development, including more nuanced decision making and language processing. This model is expected to advance OpenAI’s capabilities in both consumer-facing tools and enterprise applications. Similarly, Adobe is also making major progress with its Firefly AI video tools, which are expected to launch by the end of 2024. These tools allow users to generate videos from text and images, offering features 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.
Wall Street analysts are predicting significant revenue and profit growth for major players in the AI space, particularly the semiconductor companies that power AI applications. NVIDIA, for example, is expected to achieve impressive annual growth of 27%, outpacing both the semiconductor industry and the U.S. market as a whole. The chipmaker’s total revenue in 2025 is expected to reach approximately $123 billion, with profits expected to increase by more than 24%. The upcoming Blackwell GPU architecture, which offers a 3.7x performance improvement over its predecessor, is seen as a key driver of AI growth for NVIDIA in the coming months.
To learn more about these developments, visit The 33 Most Important AI Companies You Should Pay Attention To And 20 industrial stocks that are already riding the AI wave.
Our methodology
For this article, we selected AI stocks based on recent news and analyst ratings. These stocks are also popular with hedge funds. Why are we interested in stocks that hedge funds heavily invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the best stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks each 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) is a technology conglomerate with its primary interests in the e-commerce sector. The company recently announced that it will invest £8 billion in the United Kingdom over the next five years as part of a broad effort to expand data center infrastructure across the country. Other tech giants, such as Google and Microsoft, have also previously announced plans to bolster data center infrastructure in the United Kingdom. The former plans to invest $1 billion in the United Kingdom while the latter has confirmed approximately £2.5 billion to increase AI growth. The cloud divisions of these tech giants are leading these investments.
Wells Fargo recently lowered its price target on Amazon.com, Inc. (NASDAQ:AMZN) from $232 to $225 and maintained an overweight rating. In a note to investors, the advisor noted that significant upfront costs related to satellite launches, starting in the second half of 2024, lower Amazon’s operating profit forecast for 2025 to 2027. The note also noted that Kuiper presents an attractive long-term opportunity for Amazon, but also uncertain synergies with core businesses.
Overall, AMZN ranks 3rd on our list of the 19 hottest AI stocks based on the latest analyst ratings and news. While we recognize the potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment, we believe that some AI stocks have more promise to deliver higher returns, and in a shorter time frame. If you are looking for an AI stock that is more promising than Amazon.com, Inc. (NASDAQ:AMZN) but is trading at less than 5 times earnings, check out our stock report the cheapest AI stock.
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Disclosure: None. This article was originally published on Insider Monkey.