Two investors who rarely agree, one chasing emerging technologies and one long devoted to steadier companies, have each quietly kept a small piece of Amazon for years. A Motley Fool column carried by Yahoo Finance in late January 2024 reads that shared holding as a signal, arguing that a company which slowed during a sluggish economy may be priced as though its part in the artificial intelligence era has been overlooked. The argument turns on valuation: Amazon trades at a price-to-sales ratio near its own decade-long average, and the question is whether its partnership with Anthropic and its B
Cathie Wood and Warren Buffett Both Hold Amazon, and the Stock Trades at a Discount to Peers
For both famous holders, Amazon is a very small position
Mark
Why does it matter that Wood and Buffett both own Amazon?
Mimi
It's the hook. They invest in very different ways, so a shared holding makes a tidy headline. Buffett leans toward steady growth and dividends, while Wood chases emerging fields like AI and genomics.
Luke
But the article itself undercuts the hook. Amazon is 0.06% of Wood's portfolio and 0.40% of Berkshire. Those are tiny positions, so they say very little about conviction.
Mark
So what is the actual argument for buying?
Mimi
Valuation and AI. Amazon trades at a price-to-sales ratio of 2.9, the lowest of the Magnificent Seven and near its 10-year average of 3.1.
Luke
Worth noting that cheapest on one metric isn't the same as cheap. Near its own average also suggests it's priced normally, not unusually low. The 'discount' is relative to peers on a single ratio.
Mark
What about Anthropic and Bedrock?
Mimi
Anthropic will use Amazon as its primary cloud provider, and Bedrock is a managed service the column says is gaining momentum. Both could help AWS, which slowed in a weak economy.
Luke
'Could' is doing the work. The column offers no figures on Bedrock's growth or what Anthropic will bring in. And the author says investors are miscalculating Amazon's potential. That's his opinion, not a finding.
Mark
Anything else a reader should know?
Mimi
The publisher's own Stock Advisor team left Amazon off its top-ten list, and the author owns the stock.
Luke
Which doesn't invalidate the argument, but it's context. Treat it as one analyst's view.
El Pulso
- Two of America's most watched investors own Amazon, yet each position is a sliver of their holdings.
- Amazon's cloud growth slowed during a sluggish economy while rivals like Nvidia and Microsoft captured the AI spotlight.
- Amazon's price-to-sales ratio of 2.9 sits at the bottom of the Magnificent Seven, pressing the case that the stock is undervalued.
- A multibillion-dollar Anthropic partnership and the new Bedrock service are being positioned as the route back to faster growth.
- The outcome now hinges on whether rising corporate AI spending actually re-accelerates AWS.
Two investors who rarely agree, one chasing emerging technologies and one long devoted to steadier companies, have each quietly kept a small piece of Amazon for years. A Motley Fool column carried by Yahoo Finance in late January 2024 reads that shared holding as a signal, arguing that a company which slowed during a sluggish economy may be priced as though its part in the artificial intelligence era has been overlooked. The argument turns on valuation: Amazon trades at a price-to-sales ratio near its own decade-long average, and the question is whether its partnership with Anthropic and its Bedrock service will bring back faster cloud growth as businesses pour money into AI. It is one author's opinion, not a verdict, and the answer will arrive in future quarters.
Cathie Wood's funds and Warren Buffett's Berkshire Hathaway both own Amazon, and a Motley Fool column carried by Yahoo Finance in January 2024 uses that shared stake as its starting point. The two investors are unlikely partners. Buffett has favored steady, dividend-paying businesses and avoided technology until his 2016 bet on Apple, which now makes up nearly half of Berkshire's portfolio. Wood has pursued emerging fields like artificial intelligence and genomics. Both have held Amazon for years, long before the AI boom that lifted markets last year.
The column argues that Amazon's role in AI has been quieter than that of Nvidia, AMD, or Microsoft-backed ChatGPT. Its case rests on two developments: a large investment in the start-up Anthropic, which will make Amazon its primary cloud provider, and Bedrock, a managed service that the author says is already gaining traction as AI applications enter corporate IT budgets. Both could help revive cloud growth that a weak economy had dampened.
The heart of the piece is valuation. At a price-to-sales ratio of 2.9, Amazon is the cheapest of the Magnificent Seven and close to its ten-year average. The author believes investors are underestimating its position in AI and suggests dollar-cost averaging as a way to build a long-term stake. He also reminds readers that the stakes of Wood and Buffett are small and that following famous investors is no guarantee. The piece is opinion, and its own publisher left Amazon off a recent list of top picks. The question left open is whether the Anthropic partnership and Bedrock will lift AWS growth as corporate AI spending rises.
Two of the best-known investors in America, working from opposite ends of the market, own the same stock. Cathie Wood's exchange-traded funds hold Amazon, and so does Warren Buffett's Berkshire Hathaway. A Motley Fool column, carried by Yahoo Finance on January 30, 2024, uses that overlap to argue that Amazon is undervalued.
The two investors are not natural companions. Buffett has traditionally sought steady growth and often looked for dividend-paying companies. Wood has taken bullish positions in emerging fields such as artificial intelligence and genomics. Buffett long stayed away from technology, then surprised the investing world in 2016 by taking a sizable stake in Apple. That bet has paid off: Apple now makes up nearly 50% of Berkshire's portfolio.
The column's author is careful to say that Wood and Buffett have each held Amazon for several years, well before the AI boom. Interest in artificial intelligence lifted tech stocks last year and contributed to significant gains in the S&P 500 and the Nasdaq Composite. Most of the attention went to Microsoft-backed ChatGPT, and to Nvidia and Advanced Micro Devices, whose chips are used to train generative AI models. Amazon's role, the author argues, has been quieter.
The case for Amazon rests on two pieces. The first is a multibillion-dollar investment in the AI start-up Anthropic, which will use Amazon as its primary cloud provider. That matters because a sluggish economy over the past year weighed on Amazon's cloud growth, and the partnership could help restore faster expansion. The second is Bedrock, a new managed service from Amazon that the column says is already gaining momentum as applications built on large language models become a regular part of corporate IT budgets.
The column also offers a caution. For both famous holders, Amazon is a very small position: 0.06% of Wood's total portfolio and 0.40% of Berkshire Hathaway. The author notes that following large, prominent funds guarantees nothing, and that institutional backing is not a reason, on its own, to buy a stock.
The valuation argument is the center of the piece. On a price-to-sales basis, Amazon trades at 2.9, the lowest among the so-called Magnificent Seven megacap tech stocks. That is close to its own 10-year average of 3.1. The author points to what the company accomplished over that decade: it leads cloud providers despite competition from Microsoft, Alphabet and Oracle, and it has moved into streaming and advertising. With AI now central to the next phase of Amazon Web Services, he sees a return to faster revenue and free cash flow growth as within reach.
His conclusion is that investors are underestimating Amazon's place in AI and so pricing it at a discount to its peers. He suggests dollar-cost averaging, buying in steady installments, to build a long-term position. This is opinion rather than reporting. The column's own publisher notes that its Stock Advisor team left Amazon off its latest list of ten best stocks to buy, even though the Motley Fool holds and recommends the shares. The author also discloses owning Amazon.
What to watch is whether the Anthropic partnership and Bedrock lift AWS growth as corporate spending on AI rises.
Citas Notables
Investors should not take a position in a stock just because a notable money manager did so.— Adam Spatacco, Motley Fool column (paraphrased)
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