Hedge Funds Are Buying Up Amazon Stock. Should You Join In, Too?

What bash hedge funds spot successful Amazon (NASDAQ: AMZN) close now? The reply is apt "value." Large funds, including Bill Ackman's Pershing Square and Appaloosa Management, person reportedly accrued their positions successful Amazon. Their underlying thesis is that Amazon is undervalued comparative to different artificial quality and unreality computing companies.

More pure-play oregon autochthonal AI and unreality computing businesses, specified arsenic Nvidia (NASDAQ: NVDA) and Intel (NASDAQ: INTC), person seen their valuations go truthful inflated that it tin beryllium hard to warrant their prices. Nvidia trades astatine 18 times trailing income and Intel commands a 12x price-to-sales ratio nowadays.

Missed Nvidia successful 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" awesome flashed for a little-known chipmaker called Nvidia. For the archetypal clip successful years, that aforesaid "Total Conviction" awesome is flashing for a institution 1/100th the size of Nvidia. Continue »

Amazon is an e-commerce level that besides owns Amazon Web Services, and that hybrid operation is what has the institution trading astatine much tenable multiples. Amazon's P/S ratio? A humble 3.4x.

Amazon's banal is comparatively level successful 2026 and up conscionable implicit 7% successful the past 12 months arsenic of this writing. Its guardant and trailing P/E ratios are hovering astir 30. The banal is presently trading astatine little than 4 times sales.

As is the inclination with AI-related companies, Amazon's biggest hazard is its dense AI capex. Amazon anticipates spending astir $200 cardinal connected AI infrastructure this twelvemonth alone. Competition successful the abstraction is fierce, but Amazon has a strong, diversified concern that genuinely gives it a limb up. It's understandable wherefore hedge funds would beryllium loading up connected shares. If you tin tummy the dense spending connected AI, past Amazon is 1 of the better-priced stocks successful the space.

Missed Nvidia successful 2009? This Rare Signal Is Flashing Again

In 2009, a "Double Down" awesome flashed for a little-known chipmaker called Nvidia. If you'd invested $5,000 then, you'd beryllium sitting on $2,499,895 today.*

Now, for the archetypal clip successful years, that same "Total Conviction" signal is flashing for a institution 1/100th the size of Nvidia. It's a cardinal subordinate successful the $1.8 trillion abstraction race, and with the banal precocious sitting 20% disconnected its highs, the model to get successful aboriginal is closing fast.

Continue »

*Stock Advisor returns arsenic of June 22, 2026

Catie Hogan has nary presumption successful immoderate of the stocks mentioned. The Motley Fool has positions successful and recommends Amazon, Intel, and Nvidia. The Motley Fool has a disclosure policy.

Hedge Funds Are Buying Up Amazon Stock. Should You Join In, Too? was primitively published by The Motley Fool