Peter Thiel Bets Big on Amazon AI Ambitions
Billionaire investor Peter Thiel has added Amazon to his portfolio, buying into the tech giant's artificial intelligence efforts. The investment comes as part of Thiel Macro's second-quarter purchases, with Amazon being its largest position.
Amazon is investing heavily in AI infrastructure to unlock new revenue streams and improve efficiency in retail. In the cloud computing segment, AWS revenue increased 37% in the second quarter, beating estimates and providing concrete proof that investments are paying off.
The company's financial results have been impressive, with operating income rising 43% to $28 billion in the second quarter. While some investors are concerned about Amazon's projected $220 billion in capital expenditure spending this year, strong results in the AWS segment should alleviate those concerns.
Morgan Stanley estimates that AWS could generate $1 trillion in revenue by 2035, implying 21% annual growth over the next nine-plus years. With a median 12-month target price of $330 per share among 70 analysts, Amazon stock is seen as undervalued today, offering a potential upside of 32% from its current share price of $255.