What happened
Monday's trading session wasn't a particularly memorable one for Amazon(NASDAQ: AMZN) stockholders. Nevertheless, their company's share price inched up marginally on muted optimism for large-cap titles. Helping the stock defy gravity was its inclusion on a list of star stocks from a storied researcher.
So what
That researcher was Mizuho, which on Monday introduced its Top Picks List. As the name implies, this is a lineup of the most promising equity investments, as chosen by the company's U.S. analysts.
Amazon made the 21-title list, which included seven stocks. Besides the online retailer, this sub-group consisted of both traditionally popular names (like Microsoft) and somewhat offbeat choices such as Trip.com.
Mizuho is clearly enthusiastic about Amazon's prospects, particularly regarding its dominant Amazon Web Services (AWS) business, which is well positioned to capitalize on the strong push into generative artificial intelligence (Gen AI).
"We believe AWS' strong ecosystem and marketplace approach for Gen AI are not fully appreciated by investors," the bank wrote. "We expect Gen AI to drive the next super cycle of cloud migration as the adoption could accelerate from 20% of workloads currently on cloud to 70% in five years versus prior estimate of ten years."
Now what
Amazon is known to most consumers and not a few investors as mostly a digital retail business. But AWS has been a key contributor to both revenue growth and the bottom line, so its future success is crucial to the company's efforts. Investors would be wise to keep a sharp eye on the unit's development.
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John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon.com and Microsoft. The Motley Fool has a disclosure policy.
