According to this billionaire, Amazon.com, Inc. (AMZN) is one of the 10 best stocks to buy now

We recently compiled a list of the 10 Stocks That Dominate a Billionaire’s Investment Strategy Quant. In this article, we’ll take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands compared to the other stocks that dominate a billion-dollar quant’s investment strategy.

AQR Capital Management is a global investment management firm founded by Cliff Asness in 1998 and dedicated to achieving positive outcomes for its clients. AQR Capital Management has spent over two decades researching market forces and applying insights to effectively manage client portfolios, placing itself at the heart of economics, behavioral finance, data and technology.

Cliff Asness, a renowned financial figure, is the founder, managing director and chief investment officer of AQR Capital Management. He has received numerous awards for his extensive research and contributions to the financial literature, including multiple Bernstein Fabozzi/Jacobs Levy Awards, Graham and Dodd Awards, and the prestigious 2020 Fama/DFA Prize for Capital Markets and Asset Pricing. Asness’ career began at Goldman, Sachs & Co., where he served as managing director and director of quantitative research before founding AQR. He actively participates in professional organizations and is a board member such as The Journal of Portfolio Management, Courant Institute of Mathematical Finance at NYU, Q-Group and The National WWII Museum.

Starting with a $10 million investment from a small group of investors in 1995, Asness quickly grew the Goldman Sachs Global Alpha Fund using quantitative strategies, growing his assets to over $100 million within months. After Asness left Goldman Sachs in 1998 to start his own hedge fund, the Alpha Fund continued to grow, reaching total assets of $12 billion in 2007. Asness, a former graduate student under Nobel laureate Eugene Fama, witnessed changes in market efficiency throughout his career. through meme stocks and post-pandemic valuation differences. He believes value investing continues to offer potential, unlike less than three years ago when the opportunities were more apparent.

AQR, short for Applied Quantitative Research, operates as a hedge fund and manages $119.9 billion in discretionary assets as of August 2023, according to its Form ADV filing. Its most recent 13F filing for the second quarter of 2023 showed a portfolio value of 13F securities of $48.4 billion, with a top 10 holdings concentration of 14.42%. AQR manages approximately $8 billion of its total $99 billion in assets under management in an emerging market equity portfolio, adopting a collaborative approach comparable to its other funds. This strategy, which deviates from the dominance of US stocks, positions AQR alongside industry leaders such as Morgan Stanley Investment Management. AQR’s multi-strategy offerings returned 13.5% year-to-date through April 2024, following a 16% return in 2023. As global interest rates remain high, creating opportunities for hedge funds, futures AQR trading strategies well developed amid market volatility.

AQR Capital Management gradually integrates machine-driven strategies with the aim of increasing performance and adapting to market dynamics. Despite initial skepticism about machine learning in investing, AQR has expanded into trend-following strategies, including tracking fundamental signals and venturing into niche markets like Malaysian palm oil and milk. Speaking at the Bloomberg Invest conference in New York, Asness emphasized that recent improvements in company performance reflect not only market cycles but also strategic adjustments.

“We let the machine make more decisions”

Asness emphasized, citing his trust in machine-based decision-making over human intuition.

Our methodology

The stocks mentioned in this article were selected from AQR Capital Management’s investment portfolio at the end of the third quarter of 2024. To give readers a more comprehensive overview of the companies, analyst ratings for each company are also mentioned, among other details. A database of around 900 elite hedge funds collected by Insider Monkey in the third quarter of 2024 was used to quantify the popularity of each stock in the hedge fund universe.

A customer enters an internet retail store, illustrating the convenience of online shopping.

Position size: $928 million

Activity: -5%

Formerly known for its e-commerce dominance, Amazon.com, Inc. (NASDAQ:AMZN) has expanded far beyond online retail. Today it is a multinational technology company specializing in cloud computing, online advertising, artificial intelligence and streaming services.

Six months ago we discussed AQR’s AMZN position. At that time, AQR had invested $937 million in the stock. AMZN shares have returned 25% since then, but AQR’s position in AMZN shares has fallen slightly below the $930 million mark. Here’s what we said about AMZN back then:

“In the first quarter of 2024, Amazon’s financial results exceeded analyst expectations. Net sales increased 13% year-over-year to $143.3 billion, with Amazon Web Services (AWS) being the largest contributor, posting a 17% increase in sales to $25 billion, contributing significantly to an operating profit of $9.4 billion for AWS alone rose to $15.3 billion from $4.8 billion the previous year, while net income doubled to $10.4 billion US dollars ($0.98 per diluted share). Analyst sentiment remains bullish, with a consensus rating of Strong Buy and an average price target of $221.55, implying a potential upside of over 11% from current levels.

Analysts were right about AMZN as the stock is currently trading at $226. AQR isn’t overly bullish on the stock, as the company has sold its AMZN holdings to keep the position size constant as the share price rises.

Total AMZN takes 4th place on our list of stocks that dominate a billionaire quant’s investment strategy. While we recognize AMZN’s potential as an investment, we believe some AI stocks are more promising for generating higher returns, and within a shorter time frame. If you’re looking for an AI stock that has more promise than AMZN but trades at less than 5 times earnings, check out our report on it cheapest AI stock.

READ MORE: The 8 Best Wide Moat Stocks to Buy Now and the Top 30 AI Stocks According to BlackRock.

Disclosure: None. This article was originally published at Insider monkey.

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