He Citadel founder and CEO Ken Griffin increased his investment in more than 200% amazon in Q4 2023 to leverage its exposure to high-growth industries according to Adria Cimino on Yahoo Finance: E-commerce, cloud computing and artificial intelligence or AI.
First, before getting to the much talked about area of AI, we will talk about the amazon history. The company has gone progressively expanding its e-commerce and cloud computing services, and this has resulted in sales and profits of billions of dollars. The firm has even demonstrated its ability to manage a difficult high interest rate environment. As higher tariffs and general economic pressure weighed on demand for discretionary items and cloud services, the company revamped its cost structure, focused on efficiency and went from a rare annual loss to a profit last year.
These efforts should help Amazon continue to control costs and increase revenue. For example, him The move to a regional fulfillment model from a national one (bringing inventory closer to the customer) has decreased Amazon’s cost of service.
Now, Amazon’s focus on AI across its businesses can boost this already strong growth story. The company represents a unique bet on AI because the company uses technology to improve its operations and therefore, reduce costs and serve customers betterAnd through Amazon Web Services (AWS), sells AI products and services to customers. So, it is benefiting from AI in two ways.
In it e-commerceFor example, Amazon uses artificial intelligence to determine the best delivery routes, a key step in making deliveries cheaper and faster. This pleases the company and its customers. AND uses AI in many other ways throughout the fulfillment process.
From chips to Amazon Bedrock
But AWS may be where Amazon will have its biggest AI victory. AWS generated $25 billion in sales last quarter, for an annualized run rate of $100 billionand this is due to the cloud provider strengths in artificial intelligence. The company, through AWS, offers customers AI solutions to meet all your needs, from a wide range of chips to a fully managed service called Amazon Bedrock that allows customers to customize major large language models for their own purposes.
And Amazon offers a range of AI-powered applications across your e-commerce and cloud businesses to help customers with everything from shopping to coding.
One reason I think AWS could be among the top players in AI over time is that is by far the world’s leading cloud providerand this means that the Potential customers are already there, ready to turn to AWS for their AI needs too. Since Amazon has created a wide selection of AI products and services that correspond to the needs of both cost-conscious customers and those with significant budgets, it is ready to deliver.
Should you follow Ken Griffin’s move?
Given Ken Griffin’s increased investment in Amazon and his presence in AI technology stocks, he clearly sees this potential. So Should You Follow This Billionaire Amazon Investor Right Now?
A look at Amazon’s valuation shows it is trading at 41 times forward earnings estimates. That is lower than levels near 60 late last year. At the same time, Sales are increasing at the company and AWS has seen customers emerge from a period of cost reductions and begin implementing new projects. Therefore, it is possible that a new wave of growth is just beginningand that makes the Stocks seem quite reasonable at current level.
And it is important to remember that the general AI growth story is also beginning: The market is expected to will grow at a double-digit compound annual growth rate to reach more than $1 trillion by the end of the decade.
All this means that, at this moment, Amazon looks like a once-in-a-generation investment opportunity, not just for billionaire Ken Griffin, but possibly for you too.
amazon Starts the week down at $186.22. The 70-period moving average remains below the latest candles, RSI is down at 55 points and the MACD lines are above the zero level.
Medium-term support is at $165.77. Meanwhile, Ei indicators are mixed.
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