AI has the potential to be as transformative as electricity and the internet. This company has decades of experience in this field.
Artificial intelligence (AI) has come to the fore in a big way over the past year or so. The pioneers of modern AI have been around since the 1950s, but recent algorithms have taken the technology to the next level. What sets Generative AI apart from previous AI is that it not only allows you to create completely new and unique content, but it also streamlines and automates processes, significantly increasing productivity. The potential to save time and money is huge and there is a rush to adopt this breakthrough technology.
blunt words JP Morgan Chase CEO Jamie Dimon has never shied away from making bold statements. In a recent letter to shareholders, the enigmatic chief executive said that generative AI “has the potential to be as transformative as some of the major technological inventions of the past few hundred years: the printing press, the steam engine, etc.” , think electricity, computing, the Internet, and others.”
That may seem like a bit of a stretch, but tech enthusiasts are increasingly saying the same thing.Even the most conservative estimates suggest that generative AI will have a trillion-dollar impact on the economy that's all Over the next 10 years. Companies best positioned to take advantage of these long-term tailwinds will also enjoy the resulting windfall, ultimately benefiting investors.
There are many stocks that will ultimately benefit from AI, but here are the ones I'm particularly excited about. Amazon (AMZN 1.67%).
Image source: Getty Images.
An industry leader in many ways
It's important to consider Amazon's AI opportunity in the context of your overall business. This is quite large.
The company first rose to prominence thanks to its industry-leading e-commerce business. Amazon has long dominated the industry, accounting for about 38% of U.S. online retail sales in 2023, more than the next 15 rivals. Combined, according to data compiled by eMarketer. The company is expected to maintain its dominance in 2024.
Amazon has long leveraged AI to maintain an advantage over its competitors. These use cases include recommending products to customers, predicting and maintaining the correct inventory levels in warehouses and distribution centers, leveraging AI to shelve inventory and products on robots, and even providing the most efficient delivery routes. This includes decisions such as:
There's also Amazon Web Services (AWS), the company's industry-leading cloud computing division. Although its dominance has faded in recent years in the face of intense competition, AWS remains the top provider of cloud infrastructure services, accounting for 31% of the market by ending 2023. microsoft With 2nd place Azul alphabetGoogle Cloud is in third place, with 26% and 10% of the market, respectively, according to research firm Canalys. AI is at the heart of Amazon's AWS cloud strategy (more on this later).
Finally, there's Amazon's digital advertising business, where ads appear on the company's e-commerce website, Prime Video and Freevee streaming services, game streaming platform Twitch, Amazon Music, and more. The company uses AI to better match ads with target markets. This strategy was a huge success, as advertising services was Amazon's fastest growing major business segment in 2023.
big kahuna
To be clear, Amazon's biggest opportunity in the AI space is AWS.
The fully managed Bedrock service is the foundation of our AI services. Like its cloud rivals, Amazon has developed AI21 Labs, Cohere, Mistral AI, meta platformStability AI, Anthropic, and more.
Amazon has the highest hopes for Anthropic. Just last month, the company increased its stake in the AI startup by $2.75 billion, bringing its total investment to $4 billion. Anthropic and its Claude 3 suite of AI models are considered a major competitor to his ChatGPT in OpenAI, which attracted his $13 billion investment from Microsoft and arguably sparked the AI gold rush.
In addition to the AI models offered by Bedrock, Amazon also offers Titan, a proprietary suite of prebuilt large-scale language models (LLMs) that can be tailored to meet a variety of AI-centric business needs. It can be adjusted.
Late last year, Amazon announced the latest versions of its custom AI processors, Trainium2 and Graviton4. These were designed for training and running AI models, respectively. The company also Nvidia, is bringing its state-of-the-art GB200 Grace Blackwell superchip and B100 Tensor Core GPU to AWS. This combination provides a wide range of AI capabilities at a price point that appeals to a wide range of cloud customers.
The company also launched Amazon Q, an AI-powered generative assistant that can be customized for each business to automate and streamline processes, saving time and money.
Given its wide range of products and multifaceted approach to AI, there is little doubt that Amazon will become one of the leading companies in this space.
All the possibilities at a bargain price
Despite its recent performance, Amazon offers all that potential at an affordable price. The company's stock currently sells for about 2.7 times forward sales, a discount compared to its average price of 3.5 times sales over the past seven years.
This gives smart investors the opportunity to invest at a discount on a once-in-a-generation opportunity.
Alphabet executive Suzanne Frye is a member of The Motley Fool's board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool's board of directors. JPMorgan Chase is an advertising partner of The Motley Fool's Ascent. Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool's board of directors. Danny Vena has held positions at Alphabet, Amazon, Meta Platforms, Microsoft, and he has Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, JPMorgan Chase, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends the following options: His January 2026 $395 long call on Microsoft and his January 2026 $405 short call on Microsoft. The Motley Fool has a disclosure policy.
