Forget Nvidia: Billionaires are buying this artificial intelligence (AI) stock instead.

After an astronomical rise, investors are not sure what to do Nvidia stock. There are reasons why it might continue to grow, but also reasons why it might take a break.

However, there is one different stock that most investors agree to buy right now: Amazon (AMZN 1.19%). This artificial intelligence (AI) power continues to improve, and billionaires are seeking it.

Be like the billionaires

Some of the top billionaires have bought Amazon stock. Bridgewater Associates’ Ray Dalio increased its position by nearly 1.6 million shares, or 153%, in the second quarter. Ken Griffin of Citadel Advisors bought over a million shares for a total of nearly 7.7 million. That’s a 17% increase.

I often remind investors that, unfortunately, unless you’re also a billionaire hedge fund manager, your portfolio structure and decisions will look different from those of the ultra-rich. But Amazon is a stock that could appeal to almost any type of investor.

Amazon is for everyone

Amazon has a little bit of everything. It’s a tech stock, but it’s focused on retail. It offers the novelty of AI, but the value of an established industry giant. It’s growing, but it’s also very profitable. That’s why it could belong in all kinds of portfolios and even made it into value investor Warren Buffett. Berkshire Hathaway portfolio.

Amazon has a commanding lead in two fast-growing categories: e-commerce and cloud computing. It accounts for more than a third of all US e-commerce sales. This is an amazing market share, almost unmatched in any industry.

It continues to invest in the e-commerce business with upgrades and offers. One of its newest and fastest-growing areas is Shop with Prime, a service for third-party vendors that offer Amazon-enabled Prime purchases on their websites directly to consumers. Buy with Prime sales are up 45% so far this year, and sellers have seen their average revenue per shopper increase by 16% when they offer Buy with Prime. They continue to onboard new merchants who see the benefits. The number of merchants offering it on their websites in 2024 has increased by 25% year over year.

One retailer pointed out that seeing the Buy with Prime button creates a higher level of trust when shoppers encounter a small business, and using Amazon’s unmatched US logistics network creates more opportunities for those businesses. Amazon’s trusted brand means a lot to both merchants and customers, and Amazon leverages that trust and brand to drive more sales.

It also combines this effort with its advertising business, which is the fastest growing segment. Merchants using the Shop with Prime service have the ability to advertise in third-party spaces through the Amazon platform, leveraging its identified data to drive customers searching for their products on their sites directly to consumers. Amazon gets a cut of both advertising and sales revenue, and more than 80 percent of merchants using the service said they met or exceeded their ROI goals.

Last week, Amazon announced a new deal with PayPal Holdings to offer it as a payment option for Buy with Prime. The impact was felt as a jump in PayPal stock, but it could also boost Amazon sales.

Amazon shares also rose last week, but that was more likely in reaction to lower federal interest rates. This should generate increased economic activity, and Amazon is well positioned, perhaps more than any other retailer, to benefit from it.

AI is for cloud developers

AI really is for everyone, but the generative AI solutions that have captured the attention of investors are aimed at Amazon’s cloud customers through its Amazon Web Services (AWS) cloud computing business. Amazon is doing its best to stay in the AI ​​race and stay ahead of its competitors. It has launched a range of products, services, features and upgrades to target every customer demographic, from micro-businesses to enterprise giants, at every price point and need. In the last two weeks, it announced a new round of deals with NXP Semiconductors, Oracleand Intel in addition to new customers and launches.

AWS was reliable for high growth, usually exceeding 30%, before the recent hyperinflation crisis. The division’s growth rate dipped to very low double digits, but accelerated again in Q2 2024 to nearly 18%. Regardless, it’s still largely responsible for Amazon’s operating income, increasing its share to 63% of that figure in the second quarter.

Although the AI ​​business is already large and robust, it is still in its infancy. The technology is only going to get hotter and better, and Amazon should stay on top.

Amazon stock is rising

Amazon’s stock was trading at a 4-figure price before it split in 2021, but now trades at a less intimidating 3-figure price. It also trades near its lowest price-to-earnings (P/E) ratio in years, making it even more accessible to any type of investor.

It’s up 26% this year, and investors should feel comfortable following the billionaires into a position in Amazon stock.