The AI Stock That Could Eclipse Nvidia and Palantir: Amazon

In a recent analysis by The Motley Fool, an AI stock that recently dropped 10% is being hailed as a potential titan that could be worth more than Nvidia and Palantir combined by 2030. That stock is Amazon (AMZN).

According to the article, the recent 10% dip in Amazon's stock price represents a buying opportunity, with three key factors driving its long-term growth potential in the AI space.

Two Massive Growth Engines: Unlike its competitors, Amazon has a diversified business model with two major AI-driven growth engines: its dominant cloud computing division, Amazon Web Services (AWS), and its massive e-commerce and retail business. This combination gives Amazon a significantly larger addressable market for its AI offerings.

A Move to In-House Chips: The article highlights Amazon's development of its own Trainium chip as a strategic move to reduce its reliance on Nvidia. This initiative is seen not just as a cost-saving measure, but as an aggressive step to take market share directly from Nvidia by providing its own AI hardware to AWS customers.

More Favorable Valuation: The analysis also points to Amazon's valuation as a key advantage. With a lower forward price-to-earnings ratio compared to Nvidia and Palantir, the article suggests that Amazon's stock is a more attractive investment and less susceptible to the valuation pressures that could limit the growth of its rivals.

By leveraging its cloud and retail businesses, developing its own hardware, and maintaining a more favorable valuation, Amazon is positioned as a significant long-term player in the AI market, with the potential to outpace two of the industry's biggest names.