Is it Still Worthy to Own Amazon (AMZN) Shares?

IP Capital Partners, an investment management firm, published its second quarter 2022 investor letter – a copy of the Spanish document can be downloaded here. Following its philosophy and rationality as always, the fund consciously kept away from these niche markets. As the fear has spread, however, even the stocks of good companies have suffered – albeit to a lesser extent. Go over the fund’s top 5 positions to have a glimpse of its finest picks for 2022.

In its Q2 2022 investor letter, IP Capital Partners mentioned Amazon.com, Inc. (NASDAQ:AMZN) and explained its insights for the company. Founded in 1994, Amazon.com, Inc. (NASDAQ:AMZN) is a Seattle, Washington-based multinational technology company with a $1.2 trillion market capitalization. Amazon.com, Inc. (NASDAQ:AMZN) delivered a -27.45% return since the beginning of the year, while its 12-month returns are down by -25.84%. The stock closed at $120.95 per share on October 05, 2022.

Here is what IP Capital Partners has to say about Amazon.com, Inc. (NASDAQ:AMZN) in its Q2 2022 investor letter:

Although it seems like a baseless question, the teasing in a joking tone makes sense. What Amazon has been doing since its inception is building two big infrastructure rails. One from the world of atoms and the other from bits. In the first, it has been building one of the largest logistics systems in the world, with almost 1,200 distribution centers , responsible for delivering, in less than 2 days, millions of products to the final consumer. In the second, it has a leading cloud computing service, allowing companies of all sizes to scale computing and data storage, without having to build and maintain their own in-house IT equipment.

Despite showing strong revenue growth since the beginning of the pandemic, these two infrastructures have had different realities in terms of operating results. The e-commerce operation has been going through a period of low profitability, despite the enormous advantage of scale and competitive dominance, with more than 40% of market share in the US. In turn, the cloud business – AWS – continues to grow at high rates and is already at a cruising pace in terms of operating margin and return on invested capital (both around 30%)…” (Click here to see the full text)

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Our calculations show that Amazon.com, Inc. (NASDAQ:AMZN) ranks 2nd on our list of the 30 Most Popular Stocks Among Hedge Funds. Amazon.com, Inc. (NASDAQ:AMZN) was in 252 hedge fund portfolios at the end of the second quarter of 2022, compared to 271 funds in the previous quarter. Amazon.com, Inc. (NASDAQ:AMZN) delivered a 5.79% return in the past 3 months.

In October 2022, we also shared another hedge fund’s views on Amazon.com, Inc. (NASDAQ:AMZN) in another article. You can find other investor letters from hedge funds and prominent investors on our hedge fund investor letters 2022 Q2 page.

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

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