Hedge Funds Are Buying Up Amazon Stock. Should You Join In, Too?

What do hedge funds see in Amazon (NASDAQ: AMZN) right now? The answer is likely "value." Large funds, including Bill Ackman's Pershing Square and Appaloosa Management, have reportedly increased their positions in Amazon. Their underlying thesis is that Amazon is undervalued relative to other artificial intelligence and cloud computing companies. More pure-play or native AI and cloud computing businesses, such as Nvidia (NASDAQ: NVDA) and Intel (NASDAQ: INTC), have seen their valuations become so inflated that it can be hard to justify their prices. Nvidia trades at 18 times trailing sales and Intel commands a 12x price-to-sales ratio nowadays.Amazon is an e-commerce platform that also owns Amazon Web Services, and that hybrid structure is what has the company trading at more reasonable multiples. Amazon's P/S ratio? A modest 3.4x.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool