Tariffs, inflation, and oil prices seem to have receded into the distance for the market, even if they still present obstacles to the economy. The S&P 500 continues to rise, up 9% this year, as investors remain buoyant about opportunities in artificial intelligence (AI).
In a thriving bull market, growth stocks are always in demand. Amazon (NASDAQ: AMZN) and MercadoLibre (NASDAQ: MELI) are top growth stocks with many similarities. Let’s see how they compare and which one might be the better growth stock today.
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
The case for Amazon: AI and more
Amazon, as a brand, kind of speaks for itself. It’s a global e-commerce and cloud giant with many revenue streams and the ultimate growth segment today: artificial intelligence (AI).
E-commerce remains Amazon’s engine, and investors shouldn’t overlook its growth and opportunities. The company has made a huge push into grocery, and it’s now the second-largest grocer in the U.S. It serves 2,300 cities with same-day delivery and plans to keep expanding. It also leads to a positive cycle of growth, since grocery customers buy almost three times as many items and spend 80% more than non-grocery customers.
AI, however, is where the major opportunity is right now. “We have never seen a technology grow as rapidly as AI,” CEO Andy Jassy said in the first-quarter earnings report, and there were multiple signs of this rapid growth.
Its signature AI platform, Bedrock, is used by 80% of Fortune 100 companies, and customer spend on Bedrock increased 170% year over year in the first quarter. Amazon’s AI agent creation product, Strands Agents, has been downloaded 25 million times, including a 200% quarter-over-quarter increase in the first quarter. Its agent deployment product, AgentCore, deploys an agent as frequently as every 10 seconds. Developers using Amazon’s Kiro product doubled from last quarter, and enterprise usage rose nearly 10-fold. These are just examples of how the AI business is soaring.
Since AI happens through the cloud business, cloud revenue growth is accelerated. It increased 28% year over year in the first quarter, the highest growth in 15 quarters, and on a much larger base.
Amazon is well-positioned to keep up its growth, and the market is finally on board. The stock price had been stuck for a while when the market was disappointed with its massive capital expenditure, but investors are starting to realize how important the build-out is to capture market share in the soaring AI space. Amazon stock is up 15% this year, outpacing the market.