Struggling e-commerce company Opendoor Technologies (NASDAQ: OPEN) saw its stock surge over 500% in less than a month after a hedge fund manager set an $82 price target, sparking investor interest despite previous losses in a slow housing market. Should investors chase the momentum or stick with proven winner Amazon (NASDAQ: AMZN)?

Opendoor aimed to be the Amazon of the housing market with iBuying but faced challenges due to high inflation and rising mortgage rates, resulting in significant losses. Hedge fund manager Eric Jackson sees potential for a turnaround, comparing it to Carvana’s success. Amazon, with a $2.4 trillion market cap, offers more stability but less upside potential than Opendoor.

Despite Opendoor’s potential for a 100-bagger, the iBuying model’s low margins and capital-intensive nature pose risks, affecting the company’s book value. Amazon, on the other hand, has room for growth in e-commerce and cloud services, with analysts predicting a doubling of stock price over the next few years. Opendoor’s uncertain future makes Amazon the safer bet.

Investors considering Opendoor should note that it wasn’t among the Motley Fool’s 10 best stock picks, which have historically outperformed the S&P 500 significantly. While Opendoor may have potential, the risks associated with its iBuying model and slow housing market could make Amazon a more appealing investment option for now.

Read more at Nasdaq: Best Stock to Buy Right Now: Amazon vs. Opendoor Technologies