From Nasdaq: 2024-11-15 03:01:00

Cathie Wood of Ark Investment Management predicts AI software companies could generate $8 in revenue for every $1 spent on chips. Wood has invested in AI start-ups like OpenAI and Anthropic through Ark’s Venture Fund, with ETFs holding popular AI stocks like Tesla and Alphabet. Amazon’s AWS leads in AI infrastructure and software, with services like Trainium and Inferentia saving developers money on training costs.

AWS generated a record $27.4 billion in revenue in Q3, growing at a triple-digit rate thanks to AI. AI is also transforming Amazon’s e-commerce and advertising segments, with initiatives like Project Private Investigator and virtual assistants improving efficiency and driving sales. Amazon’s advertising revenue hit $14.3 billion in Q3, with potential for significant growth in the future.

Amazon’s focus on efficiency in e-commerce and growth in AWS have led to a 143% increase in earnings per share. The stock currently trades at a P/E ratio of 44.7, but with a forecasted earnings per share of $6.15 for next year, the forward P/E ratio is expected to drop to 34. With a potential return of 31%, Amazon could see significant long-term upside.

The Motley Fool recommends investing in Amazon for potential growth, noting that the company’s capital expenditures in AI infrastructure and chips could lead to significant long-term returns. With a history of successful stock picks, The Motley Fool’s Stock Advisor service provides guidance on building a successful portfolio, with two new stock picks each month.



Read more at Nasdaq: Cathie Wood Says Software Is the Next Big AI Opportunity — 1 Unstoppable $2 Trillion Stock You’ll Wish You’d Bought if She’s Right