Wedgewood Partners released its Q4 2025 investor letter, noting lower market enthusiasm and poor stock performance. The Wedgewood Composite returned -1.8% in Q4, compared to the S&P 500’s 2.7%. YTD, the Composite gained 4.3%, underperforming major indexes. The letter highlighted challenges with stock selection and overvaluation in AI stocks for 2025.

In the same letter, Wedgewood Partners discussed Amazon.com, Inc. (NASDAQ:AMZN) as a historically lagging stock with improving cash flow returns. Amazon.com, Inc. (NASDAQ:AMZN) closed at $239.12 per share on January 16, 2026, with a one-month return of 4.68%. The stock has a market capitalization of $2.556 trillion and is a top holding in many hedge fund portfolios.

Wedgewood Partners emphasized Amazon.com, Inc. (NASDAQ:AMZN) as a stock with rebounding cash flow returns and lower valuation multiples in its Q4 2025 investor letter. The stock, trading around 13X EV/EBITDA, is expected to grow double digits with increased e-commerce penetration. Hedge funds continue to hold Amazon.com, Inc. (NASDAQ:AMZN) in significant numbers, but some prefer AI stocks for greater upside potential and lower risk.

For more insights on AI stocks and hedge fund letters, readers can check out additional articles on Insider Monkey’s website. The potential of Amazon.com, Inc. (NASDAQ:AMZN) as an investment is acknowledged, but some experts believe other AI stocks offer more promising returns. The market remains focused on emerging trends and undervalued opportunities for investment.

Read more at Yahoo Finance: What Makes Amazon (AMZN) an Attractive Long-Term Investment Opportunity?