Apple, boasting a colossal market cap exceeding $3.3 trillion, stands as the globe’s biggest publicly traded company.
However, for investors, it’s time to shift focus away from the tech behemoth, not literally, but symbolically.
While titans like Warren Buffett are shedding Apple shares, a cohort of distinguished billionaires are flocking to an alternative treasure trove: Amazon (NASDAQ: AMZN).
Let’s delve into this unfolding narrative and dissect its significance for investors.
Image source: Getty Images.
Eminent Figures Embrace Amazon
Every quarter, major investment managers, hedge funds, and corporate insiders must submit 13F forms to the SEC. These disclosures unveil their stock portfolios, offering a sneak peek into which companies prominent billionaires are wagering on.
The recent 13F filings from the quarter ending on June 30, 2024, uncovered a trend where several renowned billionaires are amping up their stakes in Amazon.
For instance, Ray Dalio’s hedge fund, Bridgewater Associates, acquired over 1.6 million Amazon shares, more than doubling its total stake to about 2.65 million shares valued at approximately $500 million.
Likewise, Ken Griffin’s Citadel Advisors beefed up its Amazon holding by roughly 1.1 million shares, tallying up to approximately 7.7 million shares valued at close to $1.5 billion.
Unraveling the Billionaire Attraction to Amazon
The surge in Amazon investments poses the question: “What’s driving billionaires to swarm Amazon stocks?”
Initially, it’s essential to acknowledge that 13F filings provide an incomplete glimpse into billionaires’ investment psyche. They capture a moment in time, devoid of post-release stock maneuvers.
Moreover, these filings only unveil long positions, concealing potential short positions and leaving a murky trail regarding fund managers’ actual intentions behind their bulging holdings.
But assuming these Amazon bets are indeed bullish, what impels confidence in Amazon’s prospects?
Several factors come into play. Let’s zoom in on the company’s remarkable growth trajectory.
Despite already raking in over $500 billion in yearly revenue, Amazon’s sales surge unabatedly. In the last quarter (ending June 30, 2024), Amazon reported a 10% revenue spike.
At this pace, Amazon could tack on nearly $50 billion within the next year, a figure matching the annual sales of Nike, an industry titan and American stalwart for over four decades. In essence, Amazon’s revenue behemoth grows so prodigiously that its expansion annually equates to assimilating a company akin to Nike — every year.
Is Amazon Still a Lucrative Choice?
Amazon upholds its esteemed standing with the world’s largest e-commerce enterprise and the premier cloud services entity (Amazon Web Services). Furthermore, its pursuit of novel frontiers in robotics and artificial intelligence (AI) serves as a testament to its enduring innovation.
In essence, deciphering billionaires’ investment rationale (beyond 13F disclosures) may be a puzzle, yet Amazon’s stock continues to sparkle with investment potential due to its sound fundamentals and promising future trajectory.
Should You Invest $1,000 in Amazon Today?
Before diving into Amazon stock, contemplate this:
The Motley Fool Stock Advisor expert team has pinpointed what they deem the 10 premier stocks primed for investment… and Amazon wasn’t one of them. The selected 10 stocks harbor the potential to yield substantial returns in the forthcoming years.
Reflect on Nvidia’s inclusion on this list back on April 15, 2005… had you invested $1,000 following our counsel, you’d now be sitting on $662,392.%
Stock Advisor equips investors with a foolproof roadmap to prosperity, furnishing insights on portfolio construction, analyst updates, and two fresh stock picks monthly. Since 2002, the Stock Advisor service has surpassed the S&P 500 returns four-fold*.
Explore the chosen 10 stocks »
*Stock Advisor returns as of September 9, 2024
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, sits on The Motley Fool’s board of directors. Jake Lerch holds positions in Amazon. The Motley Fool holds positions in and endorses Amazon, Apple, and Nike. The Motley Fool adheres to a disclosure policy.
Opinions expressed herein are solely those of the author and do not represent the views of Nasdaq, Inc.
