Millionaire investors usually choose stocks in highly profitable companies that can save and grow capital for a long time. This, of course, leads many top investors to invest in “magnificent 7”. This is a group of elite high -tech companies that have the history of returns to acquire the market in each market and have dominant competitiveness.
Amazon (Amzn -2.10 %) And meta platform (Meta 0.72 %) (Facebook earlier) is a billionaire investor chasing Coleman in Tiger Global Management, and Lone Purse Capital Steven Mandel is currently bullish. These investors have a major interest in both shares and have purchased more recent shares, as in the third quarter of 2024.
The reasons for these two shares are simple investment:
1. Amazon
Coleman’s company has a position in several magnificent seven shares, but only Amazon added more shares in the third quarter. Professionals and analysts on Wall Street are very bullish in Amazon’s outlook. It controls e -commerce and keeps its major status in the rapidly growing cloud computing market.
At the end of 2023, Amazon had a 586 million square -foot full -fillment center and data center, supporting the growth of online stores and cloud computing businesses. He has been spending billions of dollars over the years to build this huge amount of infrastructure, but has now gained rewards. In the last four quarters of the third quarter of 2024, Amazon has earned $ 50 billion in net income with $ 620 billion.
Stocks have rapidly increased to a new high price since the stock market was sold in 2022 from the bottom. The net sales increased only 11 % year -on -year in the third quarter of 2024, but the stocks are mainly compatible with the company’s profitability, and net income has increased by 55. From the same period of the previous year to $ 15 billion. Most of the company’s revenue can be obtained from non -retail sources, including cloud and advertising services. Cloud and advertising services are essentially high margins and point to attractive growth prospects.
Amazon is reinvesting in new services to strengthen competitiveness. It was provided to build its own application for corporate artificial intelligence (AI) services in the cloud, promoting the acceleration of the growth of cloud profits last year. The retailers continue to provide more than 200 million prime members for shopping, digital entertainment, and overall medical care, and are also working on the launch of new satellite Internet services.
The margin improvement is expected to exceed the average annual revenue growth to 20 % in the next few years. This explains why Coleman’s company continued to buy shares. Amazon has a dominant status in the core market, which has been a big revenue for many years.
2. Meta platform
Instagram owner meta platform is the only largest possession of pine capital. (Coincidentally, Meta is also the biggest holding of Chase Coleman’s Tiger Global.) Mandel’s company increased $ 1 billion in meta stocks by 35 % in the third quarter, and returned stocks. It suggests a bullish perspective on the outlook.
Like Amazon, Meta is a business covered in that market. The app family has more than 3.2 billion active users every day. The company is one of the major digital advertisers, as the company uses ads to monetize these users. By the third quarter of 2024, it made a 12 -month revenue of $ 156 billion.
Last year, Meta spent more than $ 30 billion in capital spending last year to support support technology, including AI, which functions as a backbone for the service. The adoption of AI tools is increasing, and more than 1 million advertisers are creating ads using the generated AI tools. Meta AI supports users to find content. This is increasing the time spent on browsing Facebook and Instagram. This indicates the possibility that AI can benefit advertising revenue and benefit shareholders.
META plans to significantly increase capital spending in 2025, but the company has earned more than 30 % of capital. Given these returns, increasing investment in technology should lead to an increase in profits. Wall Street consensus is growing with 18 % of the year in the next few years, which should lead to a solid return of meta investors.
Randi Zuckerberg, a former director of market development, Facebook spokeswoman, and sister of Mark Zuckerberg, the CEO of Meta Platform, is a member of the Motley Fool’s Board of Directors. John Mackey, a former CEO of Amazon subsidiary WHOLE FOODS MARKET, is a member of the Motley Fool’s Board of Directors. John Ballard has no position in any of the inventory he mentioned. Motley Fool has a position on Amazon and Meta platforms and is recommended. Motley fools have a disclosure policy.
