We recently compiled a list of the 30 AI News Investors Should Not Miss. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against the other AI stocks.

Artificial intelligence (AI) data centers are one of the hottest topics on Wall Street as companies across the industrial spectrum compete in a race to deploy AI technologies in their operations. The latest update comes from data center company Equinix, which recently announced that it would be forming a joint venture with GIC, a Singapore-based sovereign wealth fund, and Canada Pension Plan Investment Board, to raise more than $15 billion in capital. Per the data center company, the capital would be used to expand the US footprint of hyperscale data centers. Hyperscale data centers are the largest in the industry, typically developed by technology giants based in the US, and offer massive networking capacity and often consume as much power as a big city or even a small country.

Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and 20 Industrial Stocks Already Riding the AI Wave.

As technology stocks stage a comeback on the back of Fed rate cuts and AI optimism, the news coming from the commerce department in the US has buoyed investors further. The US government said earlier this week that it plans to award nearly $100 million to boost the use of artificial intelligence in developing new sustainable semiconductor materials. The funding is part of the more than $52 billion in US chip manufacturing and research grants promised by US President Joe Biden. The latest funding would go towards helping universities, national laboratories, and the private sector develop AI-powered autonomous experimentation for sustainable semiconductor manufacturing. The goal is to reduce time needed to develop new semiconductor materials that are less resource-intensive.

Read more about these developments by accessing 30 Most Important AI Stocks According to BlackRock and Beyond the Tech Giants: 35 Non-Tech AI Opportunities.

Our Methodology

For this article, we selected AI stocks by combing through news articles, stock analysis, and press releases. These stocks are also popular among hedge funds.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).

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Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders: 308   

Amazon.com, Inc. (NASDAQ:AMZN) operates as a technology conglomerate with core interests in the ecommerce business. Investment advisory Bernstein recently referenced the company in an investor note detailing that AI infrastructure spending by tech giants is expected to reach a combined total of $160 billion in 2024. The note was released as the advisory sought to clarify that training AI models required higher budget allocations as opposed to inferencing. According to an analysis by Bernstein, inference only accounted for 5% of AI infrastructure spending. Bernstein referenced ChatGPT by OpenAI as an example, noting that GPT-2 was trained on a cluster of chips costing about $3 million, while GPT-3 required about $30 million worth of hardware to train. GPT-4 was then trained on 25,000 A100s, which cost about $300 million.

Overall AMZN ranks 1st on our list of the AI stocks investors should not miss. While we acknowledge the potential of AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.