We recently published a list of 15 trending AI stocks according to the latest analyst ratings and news. In this article, we take a look at how Amazon.com, Inc. (NASDAQ:AMZN) compares to other trending AI stocks.
The AI industry is experiencing explosive growth, making it a highly attractive sector for potential investors. According to a report by Bloomberg Intelligence, the global generative AI market was valued at approximately $40 billion in 2022, just before the launch of ChatGPT, and is now expected to grow at a compound annual growth rate of more than 40% to reach a size of over $1.3 trillion within the next decade. This growth is being driven by the rapid adoption of AI technologies across various industries, including healthcare, finance, retail, and manufacturing, where AI is being used to increase efficiency, reduce costs, and create new revenue streams. In healthcare, for example, AI-driven diagnostics and personalized medicine are revolutionizing patient care, leading to more accurate and timely treatments. The financial sector is also reaping the benefits of AI through advanced algorithms for fraud detection, risk management, and personalized banking services.
For more information on these developments, see Top 33 AI companies to watch out for And 20 industrial stocks that are already riding the AI wave.
The AI market is growing not only in terms of applications, but also geographically. North America is a dominant force in AI development, with companies like Google, Microsoft, and Amazon leading the way. However, Asia Pacific, particularly China, is catching up quickly, driven by significant investment and a strong government push to adopt AI. The Chinese government has an ambitious AI plan that aims to make the country a global leader in AI by 2030. Forecasts suggest that China’s AI industry could reach a size of $150 billion by then. This geographic diversification is crucial for investors looking to tap into different markets and reduce their risk.
Investors should also consider the significant investment in AI startups, which are key drivers of innovation. According to CB Insights, AI startups raised over $66 billion in funding in 2022, marking a record year despite general economic uncertainty. This trend is expected to continue as more venture capital firms and corporate investors recognize the potential of AI to revolutionize traditional industries. In addition, the integration of AI with other emerging technologies such as the Internet of Things (IoT), 5G, and quantum computing is likely to create new opportunities and markets, further driving growth.
Our methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular with hedge funds. Why do we care about the stocks hedge funds invest in? The reason is simple: Our research has shown that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (read more details here).
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Amazon.com, Inc. (NASDAQ:Amazon)
Number of hedge fund owners: 308
Amazon.com, Inc. (NASDAQ:AMZN) is a technology conglomerate with core interests in the e-commerce business. According to recent reports, the company has signed a deal to buy Perceive Corporation from California-based technology company Xperi. Perceive is the developer of Ergo, an AI processor focused on providing edge inference solutions. The move is part of a broader plan by Amazon to invest in AI chips, like rivals Google and Apple. The deal is worth around $80 million and includes special clauses that restrict Xperi and Perceive from engaging in certain business activities for three years after the purchase. Under the terms of the deal, employees of the newly acquired company would move to the e-commerce giant after the sale is completed.
Amazon.com, Inc. (NASDAQ:AMZN) may be lagging behind other tech giants when it comes to integrating AI into products, but Wall Street still thinks it’s a top idea in the growth sector, with investment advisory Seaport Research recommending the stock as a Buy with a $200 price target. In a recent note to investors, the advisory emphasized that while the company’s second-quarter results and guidance were mixed, steady e-commerce growth, cloud leadership and advertising momentum fueled optimism about the stock.
Total AMZN 3rd place on our list of trending AI stocks with the latest analyst ratings and news. While we recognize AMZN’s potential as an investment, we believe some AI stocks promise higher returns and do so in a shorter time frame. If you’re looking for an AI stock that’s more promising than AMZN but trades at less than 5x its earnings, read our report on the cheapest AI stock.
READ MORE: Michael Burry is selling these shares And Jim Cramer recommends these stocks.
Disclosure: None. This article was originally published on Insider Monkey.
