I use November 2022. As an unofficial start of the artificial intelligence revolution (AI). This is the day Openii published Chatgpt to the general public.
Since Chatgpt has become part of the mainstream culture, S & P 500(Snpindex: ^GSPC)and Nasdaq composite(Nasdaqindex: ^ixix) indexes They ended up multiple highlights – largely thanks to Megacap Technology supplies testify to parabolic ups. Among the largest winners in the capital markets were “Magnificent seven“Supplies.
Within this group, Nvidia and Meta platform They were the best performers with miles – getting 601%or 409%, from this writing (March 17).
In the third place comes the e-commerce and a cloud computing leader Amazon(NASDAQ: AMZN)whose stock was rocketed 102% of Chatgpt. Although this refund is multiple more than the gains seen through the S&P 500 and Nasdaq, I think Amazon are even better days.
Let us research that Amazon makes waves in Arena Arena and analyze that the investment of the company in technology is already entering the fruit. In addition, I will review Amazon’s assessment and make the case why I think now is a great time to buy stock over the fist and prepare for long -term posture.
While companies like Nvidia, Microsoftand Tesla Getting a lot of attention on AI narrative, Amazon quietly made some big moves.
For starters, the company has invested a whopping $ 8 billion in the close top of Openai called Anthropic. As part of his alliance, Anthropics train its generative AI models on Amazon’s cloudy infrastructure. In addition, AI developer also uses Amazon’s custom tracium and Inferenthia chips – a move that I think could prove to be a competitive Nvidia and his graphic processing (GPU) Behemoth down the road.
Ever since Amazon united with Anthropic in September 2023, the company testified Significant acceleration in your cloudy business – Amazon Web Services (AWS). To add a little color here, the revenue to AWS has grown to 13% a year in the fourth quarter of 2023, and as long as it has grown operational revenue by 39% compared to the year.
However, from the Q4 2024 AWS increased to 19% of the year and increased operational revenue growth to 48%.
Although all this is encouraging, Amazon does not seem to rest on the laurel. According to various company press reports, Amazon plans to spend worse than $ 30 billion at data centers in Georgia, Ohi, Mississippi and Mexico in the next few years.
For me, an interesting cycle is that Amazon’s integration of AIs across AWS leads to a consistent growth of cash flow, which the company then re-invests in AI services.
Finally, outside Chip technology, cloudy infrastructure and data centers, Amazon also invests a large extent in AI robotics, specifically, a robotics that is implemented in the warehouses of the company in an effort to automate the fulfillment processes. I think this is the smart choice of Amazon, because the company could unlock significant efficiency in e-trade business, complementing the increasing margins that have already witnessed in the cloud segment.
Picture source: Getty Images.
Nvidia has been a dear AI revolution so far, and although I think the future of the company is bright, I doubt whether Nvidia’s shares can rise by several hundred percentage points in the next 10 years. At some point, the growth of NVIDIA will probably show signs of slowing down – especially as more competitive chips begin to break into the scene.
On the contrary, I think Amazon’s growth phase AI is still in early inserts. The company has several different projects, and the administration seems to be sharply focused on the lucrative combination of acceleration of revenue and improvement of profit margin in the main parts of the business-naima e-commerce and AWS.
Still, Amazon trades only 31 times estimates of earnings. As illustrates the chart below, Amazon’s current P/E MultiFrous is significantly rejected compared to the five -year average of the company and hovering around its lowest level in more than a year.
Considering the current pace of growth and potential gains in the store because AI becomes more fixing in the Amazon ecosystem, I consider the current trends of evaluation a huge when buying. Investors seeking a healthy combination of growth and consistent profitability might want to consider buying Amazon shares and preparing to firmly retention.
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John Mackey, former Whole Foods Market CEO, Amazon Branch, is a member of the Board of Directors Motley Fool. Randa Zuckerberg, former director of the development of the market and spokeswoman for Facebook and sister of Meta Platform Executive Director Mark Zuckerberg, is a member of the Board of Directors Motley Fool. Adam Spaccoco There are positions in Amazon, meta platforms, Microsoft, Nvidia and Tesla. Motley Fool has positions and recommends Amazon, Meta platforms, Microsoft, Nvidia and Tesla. Motley Fool recommends the following options: Long January 2026. $ 395 calls Microsoft and short January 2026. $ 405 calls to microsoft. Motley Fool has disclosure rules.
