Tech mogul Cathie Wood jumps into tech titans' stocks inventory; Warren Buffett follows suit.
Investment gurus Cathie Wood and Warren Buffett, known for their contrasting strategies, have both expressed optimism about a tech titan's stock – Amazon. Cathie Wood has recently increased her stake in the company, which reported impressive Q4 results last week.
The e-commerce giant's revenue grew by 10% year-on-year in Q4 2024, surpassing analyst expectations, while earnings per share came in at $1.86 – significantly higher than the predicted $1.49. Amazon Web Services (AWS), the cloud division, contributed to the growth with a revenue increase of 19%. However, the company adopted a cautious outlook for Q1 2025, leading to a temporary 4% stock drop.
The Amazon stock remains undervalued, with a current price-to-earnings (P/E) ratio of 41 – cheaper than in recent years, when it often exceeded 50. Moreover, the company's Q4 results seem to respond positively to increased investments in AI infrastructure expected to exceed $100 billion this year.
Analysts recommend buying Amazon stock, with an average price target of $267, suggesting a potential upside of 17%. Even more optimistic analysts at Scotia Bank propose a price target of $306, indicating a possible price hike of 34%. In light of these prospects, investors might want to consider Amazon as a long-term profitable buy.
Interestingly, the conservative value investor Warren Buffett, who typically avoids the tech sector, also owns Amazon shares. Buffett initially invested in the company in 2019 and admitted regretting not investing earlier, as around 10 million Amazon shares currently reside in Berkshire Hathaway's portfolio.
Amazon's solid fundamentals, lucrative growth potential, and the support of influential investors like Wood and Buffett make the stock a tempting choice for long-term investors. However, as with any investment, risk tolerance and financial goals should be considered before making a decision.
Business analysts, inspired by Amazon's robust Q4 financial performance and promising technology investments, recommend long-term investment in the company's stock. These recommendations come as both technology-focused investing guru Cathie Wood and conservative value investor Warren Buffett have expressed optimism about Amazon, with Buffett even admitting to regretful omissions in the past.
