Artificial intelligence (AI) has caught investors’ attention — and for good reason. This hot technology could transform everything from your daily routine to the way just about every industry operates. Companies are investing in AI to improve efficiency, make game-changing discoveries, better serve customers, and more.
And the AI opportunity is enormous, offering room for many players to succeed. The AI market, at a compound annual growth rate of more than 36%, is set to reach more than $1.3 trillion in 2030, according to a Markets and Markets report.
As an investor, you can get in on AI in various ways, including buying shares in chipmakers that power AI, loading up on companies that sell AI services, or favoring companies that use AI to improve their operations. But what if I told you that you could get all of that and more by investing in just one company? Because, in fact, there is one company that’s tackling AI from every angle and could become one of the technology’s biggest winners down the road.
With just $500, or even less, you can buy shares of this innovator. Let’s find out more.
Image source: Getty Images.
Using AI to improve efficiency
What stock am I talking about? One that most of us recognize thanks to its dominance in e-commerce, none other than Amazon (AMZN -0.17%). The company is using AI across its e-commerce business to improve efficiency, speed up package delivery, and help guide you to products that may interest you the most. This should eventually help Amazon lower its costs and increase revenue.
For example, through AI, Amazon determines the best routes for package delivery, cutting its cost to serve. And when we receive packages more quickly or get great recommendations for what to buy on Amazon.com, we’re likely to come back more often — contributing to Amazon’s sales growth. These are just a few of the ways AI is helping Amazon’s e-commerce business excel, and rewards could be significant for the company over time.
Now, let’s move on to the business that traditionally has driven profit at Amazon, and that’s the cloud computing unit, Amazon Web Services (AWS). Today, AWS is going all in on AI, aiming to become a top player across the three “layers” of the technology.
Let’s start with the “bottom layer,” and this involves businesses that are building their own AI models and need chips to train them and boost their inference capabilities — or ability to make predictions. AWS offers not only market-leading Nvidia solutions, but AWS itself has developed lower-priced chips for training, inference, and general purposes.
Offering access to top LLMs
As for the middle layer, AWS may be the best friend of companies that don’t want to build a large language model (LLM) from the ground up and manage the system. Here, AWS offers Amazon Bedrock, a fully managed service that lets businesses tailor top LLMs — from Amazon’s own LLMs to Meta‘s Llama 2 and more — to their own needs.
Finally, AWS also is tackling the top layer of AI, or applications, and a good example of this is the recently launched Amazon Q, a generative AI-powered work assistant. Amazon Q can perform a variety of tasks such as generating content and helping employees streamline operations.
Amazon said in its recent earnings call that generative AI will continue to be a main focus and area of investment for the company — because it not only has the potential to transform processes and customer experiences, but it also could generate “tens of billions of dollars” in revenue in the years ahead.
So, for investors looking to bet on AI, with Amazon, you’re getting the complete package. On top of this, Amazon also brings in billions in earnings annually thanks to the e-commerce business and AWS, making it a solid and well-diversified growth company. That’s why, trading at 40x forward earnings estimates, it looks reasonably priced for all it has to offer over the long term — including a potentially huge win in the exciting field of AI.
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool’s board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adria Cimino has positions in Amazon. The Motley Fool has positions in and recommends Amazon, Meta Platforms, and Nvidia. The Motley Fool has a disclosure policy.
