On the heels of a historic recession in 2022, investors finally have a reason to celebrate.of S&P500 has risen more than 20% since last year’s bear market lows and is now gaining momentum for another rally. The index is just 13% below its all-time high (as of this writing). If it eventually breaks above that level, it’s only a matter of time, but it will be evidence of the beginning of the next bull market.
The still-fluid economic landscape poses challenges, especially for consumer-facing companies. One example is online retail. Shoppers are looking forward to clarity about the future. E-commerce pioneer Amazon (AMZN 6.83%) The stock is still feeling the effects, as it’s down 35% from its high and 24% over the past three years.
This is an attractive opportunity for smart investors. A rebound in consumer spending, the huge opportunities presented by AI, and extremely low stock prices suggest that investors should buy stocks before the upcoming bull market begins.
![Digital AI brain icon placed on top of semiconductors exchanging information.](https://g.foolcdn.com/image/?url=https%3A%2F%2Fg.foolcdn.com%2Feditorial%2Fimages%2F752328%2Fa-digital-ai-brain-icon-positioned-over-a-semiconductor-exchanging-information.jpg&op=resize&w=700)
Image source: Getty Images.
Is Amazon late to the AI race?
The emergence of generative AI this year surprised many. These next-generation algorithms have the ability to improve your productivity by drafting and summarizing emails, searching and summarizing content, mining data, and even writing code. many Other usage examples. With this vast potential, businesses are scrambling to determine how to get the most benefit from this next-generation technology.
microsoft invested $13 billion in OpenAI, the creator of ChatGPT, and was one of the first companies to publicly stake a claim in the space. The company was quick to integrate AI tools into its most popular products and services, and that strategy appears to be paying off. alphabet We also moved quickly to develop our own large-scale language models that form the basis of generative AI.
While its cloud rivals hogged the spotlight, Amazon was quietly working behind the scenes and was considered to be in some way “behind” in the AI race. A quick look inside reveals that the perception is wrong.
Be at the forefront of AI implementation
A quick look at Amazon’s history shows that the company has been developing and integrating AI into its e-commerce operations over the years. Examples include autonomous robots that help make purchase recommendations to shoppers, manage inventory at distribution centers and warehouses, fulfill packaging and shipping orders, and even automated systems that plan routes for delivery drivers.
The star of the room, of course, is Amazon Web Services (AWS). AWS has long provided cloud infrastructure customers with access to AI tools and services.
Another example hiding in plain sight is Amazon’s voice-controlled virtual assistant, Alexa, found in Echo smart speakers, viewers, and other devices. Despite the emergence of numerous rivals over the past decade, the company still dominates the areas it has pioneered, with 28% of the market. The company recently revealed that Alexa is integrated into “more than 100 million devices,” including Amazon’s namesake products and products from third-party manufacturers.
Additionally, the same algorithms that recommend products on our website also surface options for Amazon Music listeners and Amazon Prime viewers.
So the idea that Amazon is somehow “laggard in AI” is preposterous on its face.
What Amazon is doing now
Just because Amazon isn’t in the spotlight doesn’t mean it doesn’t have plans for generative AI.
The company is reportedly planning a major overhaul of its e-commerce site’s search functionality, with generated AI to show more relevant answers and support product comparisons and recommendations from “experts.” Incorporates components.
Amazon leverages generative AI capabilities that allow sellers to generate product descriptions and summarize and collate product reviews. The company is also developing tools to root out fake customer reviews while surfacing and promoting genuine customer reviews.
Finally, the company recently announced the general availability of Amazon Bedrock. This is a service that helps AWS customers choose between building their own generative AI applications or using existing AI models, integrating their own data while protecting the privacy and security of that data. It has functions. .
screaming purchase
In addition to the continued recovery and growing profitability of online retail, Amazon has established itself as a leader in cloud infrastructure services, providing an attractive audience for generative AI services.
Amazon is already up 44% so far this year (as of this writing), but the aforementioned catalysts could push the stock even higher. But despite the abundance of opportunities, it’s still shockingly cheap, selling for just twice the retail price. This is an outrageously low price for a company that is an industry leader in not one, but two of his industries: e-commerce. and Cloud infrastructure services.
Given the improving economic environment, the opportunities presented by AI, and the extremely cheap stock price, investors should flip and buy Amazon stock before another bull market leaves them behind.
Alphabet executive Suzanne Frye is 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. Danny Vena has held positions at Alphabet, Amazon, and Microsoft. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.