Amazon has the next internet share of purchase scores than every other inventory in the S&P 500.
Amongst Wall Street analysts that comply with Amazon (AMZN 2.50%), 95% presently charge the inventory a purchase, and the remaining 5% charge the inventory a maintain. Not a single analyst recommends promoting Amazon inventory at the current time, in accordance to FactSet Analysis.
Microsoft is the solely different firm in the S&P 500 (^GSPC 0.90%) with the identical share of purchase scores, however 2% of analysts suggest promoting the inventory, which lowers its internet rating by two factors. Nvidia can also be close to the prime, with 94% of analysts ranking the inventory a purchase and the remaining 6% ranking the inventory a maintain.
In brief, whereas Microsoft and Nvidia are shut contenders, Amazon is the finest synthetic intelligence (AI) inventory in the S&P 500 to purchase now, if “finest” is outlined as the inventory with the highest internet share of purchase scores. Here is what buyers ought to know.
Amazon is placing AI to work throughout its three enterprise segments
Amazon has a robust aggressive place in three huge markets: e-commerce, digital promoting, and cloud computing. And the firm is utilizing artificial intelligence (AI) to enhance income and enhance effectivity throughout all three enterprise segments.
Amazon runs the largest e-commerce market in North America and Western Europe in phrases of gross sales, and Morgan Stanley analysts anticipate it to be the largest in the world by 2028. Sooner supply occasions ought to contribute to market share positive aspects, whereas the broader shift towards on-line purchasing ought to afford the firm extra pricing energy over time, in accordance to analysts.
One corollary of its dominance in retail is a extremely engaged shopper base and wealthy information. That mixture has helped Amazon turn out to be the largest retail advertiser and the third-largest adtech company in the world. Its market share is predicted to attain 9.4% in 2025, up nearly two factors from 2023, in accordance to eMarketer.
Lastly, Amazon Internet Providers (AWS) is the largest public cloud, as measured by its market share of 40%. In that context, AWS is uniquely positioned to profit as demand for AI infrastructure and platform companies spurs better cloud spending. AWS has leaned into the alternative by designing customized chips for AI coaching and inference, and introducing a generative AI growth platform known as Bedrock.
Amazon can also be monetizing AI in extra refined methods. As an example, consumers spend $443,000 per minute on the market. Transactions generate information that not solely informs the machine learning fashions that energy its adtech software program, but in addition its generative AI purchasing assistant Rufus. Past that, Morgan Stanley says AI-driven supply chain optimization might enhance its operating margin by 4 share factors.
Amazon regarded robust in the second quarter
Amazon reported stable monetary outcomes in the second quarter. Income elevated 10% to $148 billion on robust momentum in promoting and cloud computing, and usually accepted accounting rules (GAAP) internet earnings soared 94% to $1.26 per diluted share. However Amazon missed income estimates and administration gave conservative steerage, so the inventory fell about 10% following the report.
On the vivid facet, CFO Brian Olsavsky informed analysts Amazon achieved its quickest supply speeds for Prime members this 12 months, which has strengthened its place in on a regular basis necessities. In flip, Prime members are purchasing extra ceaselessly and spending more cash, which means Amazon is additional entrenching itself as an e-commerce chief.
Moreover, CEO Andy Jassy mentioned, “Our AI enterprise continues to develop dramatically with a multibillion-dollar income run charge regardless of it being such early days.” He additionally informed analysts Bedrock has the largest collection of fashions and the finest generative AI capabilities in areas like mannequin analysis, data retrieval, and AI agent growth.
Amazon’s share value is truthful, nevertheless it’s not the solely AI inventory price shopping for
Amazon inventory has principally recovered from its post-earnings dip, however shares nonetheless commerce at a pretty value in context. Wall Street expects Amazon’s incomes to develop at 22% yearly over the subsequent three years. That makes the present valuation of 43.5 occasions earnings look cheap. Traders ought to really feel assured in shopping for a small place in this AI inventory as we speak.
As a caveat, whereas Wall Street analysts are exceedingly bullish on Amazon — extra so than every other inventory in the S&P 500, based mostly on the internet share of purchase scores — the most prudent approach to profit from AI is to construct a basket of high quality shares. Amazon is only one element of that basket. Traders ought to by no means restrict themselves to a single AI stock.
John Mackey, former CEO of Entire Meals Market, an Amazon subsidiary, is a member of The Motley Idiot’s board of administrators. Trevor Jennewine has positions in Amazon and Nvidia. The Motley Idiot has positions in and recommends Amazon, FactSet Analysis Methods, Microsoft, and Nvidia. The Motley Idiot recommends the following choices: lengthy January 2026 $395 calls on Microsoft and brief January 2026 $405 calls on Microsoft. The Motley Idiot has a disclosure policy.