Stephanie Link Doubles Down on Amazon: An AI-Fueled Long-Term Play
In a recent interview with Benzinga, Stephanie Link, Chief Investment Strategist & Portfolio Manager at Hightower Advisors, revealed her unwavering confidence in Amazon.com Inc (AMZN) stock, even amidst a recent dip. Link believes the temporary pullback presents a strategic opportunity to capitalize on a company poised for significant long-term growth, driven by innovative advancements in artificial intelligence (AI) and AWS’s dominant position in the cloud computing market.
Key Takeaways:
- Link sees Amazon’s recent dip as a buying opportunity, citing its strong fundamentals and continued tailwinds in its core businesses.
- Amazon’s aggressive expansion into AI, particularly with its generative AI-powered shopping assistant "Rufus" and AWS’s leading position in the field, are key drivers for Link’s optimism.
- Link is confident that Amazon can weather any economic slowdown, given its dominant positions in e-commerce and cloud computing, allowing it to maintain its innovative edge and market leadership.
Seizing the Dip: A Strategic Play on Amazon
Despite a recent drop in share price, Link remained bullish on Amazon’s prospects. She highlighted the company’s robust financial performance, stating, "We already had a position in Amazon that has done well. Between their latest earnings report and the dip last week, AMZN traded over -12% lower and there was not a material change in the business." Link noted that Amazon’s valuation metrics, including an EV/EBITDA of 12.9x and a P/E of 27.8x, signaled an attractive entry point to increase her position.
The driving force behind Link’s confidence in Amazon’s future lies in its continued operational optimization. She explained, “Amazon continues to have tailwinds behind them from their regional distribution change that is unlocking operating margin growth and cost-cutting." This, combined with AWS’s status as the undisputed leader in cloud computing, boasting a "multi-billion dollar run rate generative AI business," solidifies her belief in Amazon’s long-term trajectory.
AI – The Game-Changer for Amazon
Link sees AI as a game-changer for Amazon’s future growth. She highlighted AWS’s leading role in the field, stating, "We think that this is a tailwind for Amazon… AWS has launched more than twice as many machine learning and generative AI features than all of the other major cloud providers combined" in the last 18 months. This aggressive push into AI, coupled with Amazon’s innovative retail assistant "Rufus," positions the company as a frontrunner in leveraging this transformative technology to its advantage.
Why the Economic Slowdown Doesn’t Scare Link
Despite concerns about a potential economic slowdown, Link remains unfazed about Amazon’s resilience. She attributed the prevailing fear sentiment to "headlines… that promote fear,” emphasizing her reliance on data-driven insights. She stated, "We have faith in the data," highlighting that Amazon’s dominant positions in e-commerce and cloud computing provide it with a unique advantage to weather any economic downturn. Link emphasized that even in difficult economic conditions, Amazon’s innovative edge and market dominance will allow it to continue to outperform.
In conclusion, Stephanie Link’s bullish stance on Amazon reflects her deep understanding of the company’s core strengths and its strategic positioning in cutting-edge technologies. Her confidence in Amazon’s ability to navigate any economic challenges while leveraging AI for continued growth underscores its enduring appeal as a long-term investment. This strategic decision-making, coupled with the company’s unwavering commitment to innovation, suggests that Amazon remains a compelling investment opportunity for those seeking to capitalize on the ongoing digital revolution.
