We recently published a list of Joe DiMenna’s Stock Portfolio: Top 10 Stocks to Buy. In this article, we are going to take a look at where Amazon.com, Inc. (NASDAQ:AMZN) stands against other top stocks to buy from Joe DiMenna’s portfolio.

Zweig-DiMenna Associates Inc. is a U.S.-based hedge fund with a legacy spanning four decades. Established in 1984 by Joseph A. DiMenna and Martin Zweig, the firm specializes in absolute return investing. Its strategies encompass fundamental long/short equities and global macro approaches, positioning it among the longest-running hedge funds in the industry. DiMenna serves as the Managing Director and Chief Investment Officer, overseeing the firm’s partnerships and investment funds.

DiMenna’s initiation into the financial world began as a college student in 1977 when he became a research assistant for renowned investor Martin Zweig. A keen student of stock markets since his early teens, DiMenna had been an avid reader of financial newsletters, particularly Zweig’s highly regarded The Zweig Forecast. He earned a B.S. in Finance from Fairfield University’s Dolan School of Business in 1980. Beyond his work in finance, he has contributed to various organizations, serving on the boards of the Harlem Children’s Zone, Orchestra of St. Luke’s, The Brearley School, The Gilder Lehrman Institute of American History, and the New York Historical Society.

Zweig, a Ph.D. in finance, was known for his data-driven market analysis and the development of key investor sentiment indicators, including the Put/Call ratio. His well-known investment maxims, such as “Don’t fight the Fed” and “Don’t fight the tape,” significantly influenced DiMenna’s approach. Their professional relationship began when DiMenna, impressed by Zweig’s insights, reached out to him with market ideas and a request for a college recommendation. This correspondence led to his recruitment as a research assistant, a role that involved extensive data analysis, often delving into market trends spanning over 50 years. Zweig remained a key figure in DiMenna’s career until his passing in 2013.

After graduating in 1980, DiMenna continued working with Zweig, refining market research techniques and stock selection strategies. He took on editorial responsibilities for a stock-focused newsletter and co-developed a mutual fund trading business based on market timing principles. By 1983, DiMenna proposed leveraging their expertise to launch a hedge fund, a relatively rare venture at the time, with fewer than ten such funds in existence. In 1984, they established the first Zweig-DiMenna partnership, followed by the launch of Zweig-DiMenna International Limited in 1987. Their approach combined long/short equity investing with macroeconomic risk management. DiMenna led the stock selection and investment process, while Zweig focused on broader market conditions, shaping strategies that DiMenna implemented.

The fund quickly gained prominence for its strong returns. In 1999, BusinessWeek recognized DiMenna as “one of the best stock-pickers no one has ever heard of,” highlighting the fund’s impressive 15-year annualized return of 25% after fees, significantly outperforming the broader market’s 18.6% annualized total return.

DiMenna’s achievements earned him several accolades. In 2002, the National Foundation for Teaching Entrepreneurship named him “Entrepreneur of the Year” for his contributions to financial education. The Zweig-DiMenna International hedge fund won Absolute Return Magazine’s “U.S. Equity Fund of the Year” award in 2007 after delivering an 82.25% annual return, far surpassing industry peers. In 2008, Alpha Magazine ranked DiMenna 13th on its list of top moneymakers, citing his $450 million earnings in 2007 and his fund’s consistent double-digit annual returns between 2002 and 2007.

Our Methodology

The stocks discussed below were picked from Zweig-DiMenna Associates’ Q4 2024 13F filings. They are compiled in the ascending order of the hedge fund’s stake in them as of December 31, 2024. To assist readers with more context, we have included the hedge fund sentiment regarding each stock using data from 1008 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

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Amazon.com, Inc. (NASDAQ:AMZN)

Number of Hedge Fund Holders as of Q4: 338

Zweig-DiMenna Associates’ Equity Stake: $62.09 Million 

In Q4 2024, Amazon.com, Inc. (NASDAQ:AMZN) reported $187.79 billion in revenue, a 10% year-over-year increase, while earnings per share (EPS) of $1.86 exceeded analyst expectations by 25%. As of Q4 2024, Zweig-DiMenna Associates held 283,009 shares of the company, valued at approximately $62.09 million. Hedge fund interest in Amazon.com, Inc. (NASDAQ:AMZN) also increased, with 338 funds tracked by Insider Monkey holding positions worth nearly $69.02 billion by the end of the quarter, up from 286 funds in Q3. This growing institutional investment reflects strong confidence in Amazon’s continued growth and market dominance.

Amazon.com, Inc. (NASDAQ:AMZN) has outperformed the broader market over the past year, with analysts projecting further upside driven by its strong position in e-commerce, cloud computing, and artificial intelligence. Jefferies analyst Brent Thill has set a target price of $275 per share, implying a 20% gain from its current level, while Wall Street’s median target price of $270 suggests a 17% increase. Despite reporting strong Q4 results— with revenue rising 10% to $188 billion and GAAP net income surging 86%—the stock declined due to lower-than-expected guidance. Amazon.com, Inc. (NASDAQ:AMZN) anticipates a 7% revenue increase in Q1, impacted by currency exchange headwinds and AI-related investments affecting margins. However, these expenses are expected to fuel long-term growth, solidifying the company’s dominance in cloud computing and logistics. While the stock’s valuation appears high at 41 times earnings, it has consistently surpassed earnings estimates, suggesting analysts may be underestimating its potential.

Amazon.com, Inc. (NASDAQ:AMZN)’s strong financial performance, expanding dominance in multiple high-growth sectors, and increasing hedge fund interest make it a top stock to buy. Its leadership in e-commerce, cloud computing, and artificial intelligence, coupled with strategic investments in logistics and AI infrastructure, positions it for sustained long-term growth, making it an attractive choice for investors seeking both stability and upside potential.

Overall, AMZN ranks 4th on our list of top stocks to buy from Joe DiMenna’s portfolio. While we acknowledge the potential for AMZN as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMZN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap

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