Hedge funds are buying these two big tech stocks while selling two rivals
Investing.com - Needham has reiterated its Buy rating on Amazon.com (NASDAQ:AMZN) stock, maintaining its price target of $265.00. This aligns with the broader Wall Street sentiment, as InvestingPro data shows 34 analysts have recently revised their earnings expectations upward, with a highly bullish consensus recommendation of 1.3.
The research firm believes Amazon is leveraging generative AI to introduce new products that could drive revenue growth from both consumer and enterprise segments. The tech giant, now valued at $2.49 trillion, has already demonstrated strong revenue growth of 11.48% over the last twelve months, with total revenue reaching $691.33 billion.
Needham notes that Amazon possesses several businesses providing "best in class eCommerce data on consumers" that feed its large language models (LLMs), with potential to generate additional revenue from other LLMs through its unique data sets.
The firm points to Amazon’s track record of efficiently managing large construction projects, suggesting this experience should reassure investors about the company’s ability to maximize returns on investment capital for physical infrastructure investments.
Needham also highlights Amazon’s business model shift toward enterprise through advertising, Cloud and LLM revenues, which the firm believes carries lower regulatory risks compared to consumer-focused operations.
In other recent news, Amazon has been downgraded by Rothschild Redburn from Buy to Neutral, with a price target set at $250. This change reflects the firm’s cautious outlook on Amazon Web Services (AWS), despite earlier optimism about its role in the generative AI space. Additionally, Amazon has received a ’AA-’ rating from Fitch Ratings for its proposed unsecured notes offering, intended for general corporate purposes, including working capital and capital expenditures. This rating underscores Amazon’s strong position in global e-commerce and cloud computing services, with a stable outlook. Meanwhile, the European Commission has launched three market investigations under the Digital Markets Act, targeting Amazon Web Services and Microsoft Azure. These investigations aim to determine whether Amazon and Microsoft should be designated as gatekeepers in the cloud computing sector. Furthermore, Saba Capital Management has been selling credit derivatives to banks hedging against potential losses on tech companies involved in AI projects. This development highlights ongoing concerns over debt-financed AI investments in the tech sector.
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