We recently published a list of Jim Cramer Latest Lightning Round: Top 10 Stocks to Watch. Since Amazon.com, Inc. (NASDAQ:AMZN) ranks 1st on the list, it deserves a deeper look.
Jim Cramer in a latest program on CNBC talked about the latest rebound in the market.
Cramer said that the key reason the market roared to highs was strong earnings from top banks. He said since the Fed's interest rate cuts have just started, investors believe maybe the "best is yet to come."
Jim Cramer wondered whether this strong performance trend would be a "pattern" in this earnings season.
Cramer recommended investors to "listen to the calls" this earning season and "ponder a moment, and only then should you pull the trigger."
For this article, we watched the latest episodes of Jim Cramer's 'Lightning Round' segment on CNBC and picked 10 stocks he was talking about. With each company, we have mentioned its hedge fund sentiment. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Talking about an analyst downgrade on Amazon.com Inc (NASDAQ:AMZN), Cramer questioned the logic of naysayers and said the company always makes a comeback.
Cramer thinks it's just a matter of time before the stock comes back.
AWS's revenue growth accelerated from 17.2% in Q1 to 18.8% in Q2, driven by a shift from on-premises infrastructure to cloud solutions and increasing demand for AI capabilities. Amazon.com Inc (NASDAQ:AMZN) advertising segment added over $2 billion in revenue year-over-year, indicating significant potential in video advertising and opportunities within Prime Video offerings.
Like other tech companies, fears stemming from high CapEX are keeping investors on the sidelines. Amazon.com Inc (NASDAQ:AMZN) spending is expected to rise amid broadband project Project Kuiper and AI growth. Investors are still figuring out whether AI monetization and ROI will come anytime soon. Amazon.com Inc (NASDAQ:AMZN) is also facing a slowdown in consumer spending, especially for higher-ticket items like electronics and computers.
Based on Amazon.com Inc (NASDAQ:AMZN) Q3 guidance, its revenue growth would be 11%. The stock is trading 35x its fiscal 2025 earnings estimates set by Wall Street. This shows the stock is fairly priced and investors looking for strong growth could look elsewhere.
Alphyn Capital Management stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2024 investor letter:
Overall, Amazon.com, Inc. (NASDAQ:AMZN) ranks 1st on Insider Monkey's list titled Jim Cramer Latest Lightning Round: Top 10 Stocks to Watch. While we acknowledge the potential of Amazon.com, Inc. (NASDAQ:AMZN), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: Analyst Sees a New $25 Billion "Opportunity" for NVIDIA and Jim Cramer is Recommending These Stocks.
Disclosure: None. This article is originally published at Insider Monkey.