Amazon has been a big winner for Griffin and his hedge fund for years.
Ken Griffin founded Citadel in 1990. Currently, Citadel is the most successful hedge fund in history. Through Citadel, Griffin built his $37 billion personal fortune.
Citadel’s portfolio has recently been loaded with artificial intelligence (AI) stocks, with more than six of them among its top 50 holdings. But there’s one thing Griffin seems particularly bullish on. The billionaire more than tripled his investment in this AI stock.
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Amazon (AMZN 2.82%) As of the end of 2023, Citadel will have the fourth largest holding. Hedge funds’ stake in the e-commerce and cloud services leader was much larger than it was at the end of September. Griffin bought 4.32 million Amazon shares in the fourth quarter, increasing his position by nearly 227%.
The billionaire hedge fund manager has a long history with Amazon. He initiated his stock position for the first time in the second quarter of 2013. Griffin sold nearly 97% of those shares in the next quarter. But then he increased Citadel’s stake in Amazon again. However, in the fourth quarter of 2016, Citadel completely dissolved its position in the stock.
Griffin wasn’t on the sidelines for long. In the first quarter of 2017, he again bought Amazon stock and then increased his position in Citadel throughout the rest of the year.
Amazon was a big winner for Griffin and Citadel. The company’s stock price soared more than 200% during its first period in the hedge fund’s portfolio. The stock is up more than 300% since the end of the first quarter of 2017.
Amazon’s AI weapons
Griffin probably didn’t think of Amazon as an AI stock when he first bought it in 2013. However, the company was already investing heavily in AI technology at that time. The company started incorporating machine learning (a type of AI) into product recommendations on its e-commerce platform decades ago. In late 2014, he introduced Alexa, an AI-powered virtual assistant.
But I suspect AI was pretty much on Griffin’s mind when he backed up his truck to load up more Amazon inventory in the fourth quarter of 2023. In particular, the generative AI boom should be a major long-term tailwind for Amazon Web Services (AWS).
Last year, AWS launched the Amazon Bedrock service to help organizations quickly build generative AI apps on the cloud. Bedrock provides clients with Anthropic, Cohere, meta platformStability AI, and Amazon’s own Titan large-scale language model.
Amazon is one of them Nvidia‘s major customers use the company’s graphics processing units (GPUs) extensively. The company has also developed its own AI chip that offers attractive price performance.
AI also remains key to Amazon’s e-commerce business. Earlier this year, we introduced Rufus, an AI shopping assistant that can talk to customers and help them find the best products to meet their needs.
Should I buy Amazon stock as well?
No one should buy a stock just because Griffin or other famous investors are buying it. Your risk tolerance and investment goals can (and probably will) be quite different from a billionaire hedge fund manager.
That being said, I think Amazon could be a great stock to buy right now for many investors. It’s not just about the AI ​​opportunity. Amazon’s profitability continues to increase. The company has discovered a great and fast-growing revenue stream: advertising. Even without the lure of AI, customers will continue to move more apps and data to the cloud. Over the next few years, Amazon will benefit many investors, including those of us who are far from billionaires.
Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Keith Speights He has positions at Amazon and Metaplatform. The Motley Fool has positions in and recommends Amazon, MetaPlatform, and his Nvidia. The Motley Fool has a disclosure policy.
