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AI Investment Landscape
Amazon’s annual revenue reached $638 billion, with its cloud services, Amazon Web Services (AWS), hitting a $132 billion revenue run rate. This positions Amazon as a key player in the artificial intelligence (AI) sector, despite not being a chip stock like Nvidia, which has also benefited significantly from the AI boom.
Chip stocks, including Nvidia, have shown remarkable gains but come with risks tied to fluctuations in AI investments. Investors wary of such risks may consider Amazon as a safer alternative due to its diversified revenue streams, offering exposure to AI without heavy reliance on AI-specific customer spending.
As of now, Amazon trades at 32 times its forward earnings estimates, providing a relatively attractive valuation compared to other high-flying AI stocks, which may be overvalued after rapid gains.
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