Thiel Macro Places Big Bet on Amazon's AI-Focused Cloud Computing Business
Peter Thiel's hedge fund, Thiel Macro, has made its largest stock purchase in the second quarter, and it's a big bet on Amazon. The company is the world's No. 1 provider of cloud computing services, and Thiel believes this will drive growth in the artificial intelligence (AI) realm.
The AI market needs more computing power, and Amazon's AWS unit is accelerating its revenue growth rate to 37%, up from 28% in Q1. As new data centers come online, this growth rate will continue to accelerate, which is a big deal for Amazon. AWS now produces 60% of Amazon's operating profits, so as long as AWS is growing faster than the company's commerce business, Amazon's profits will continue to grow at an outsize pace.
Thiel Macro's investment in Amazon was a smart move, according to some analysts. The fund's portfolio is valued at $118 million, with Amazon accounting for 28% of that amount. However, not everyone agrees with this assessment. A recent article from The Motley Fool notes that their Stock Advisor team did not include Amazon on their list of top 10 stocks to buy now.