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Billionaire Hedge Fund Manager Loads Up on Amazon Stock. Should You?

Following the trades of highly respected investors can be not only fun but also profitable. In the case of Amazon (NASDAQ:AMZN) stock, a living legend in the world of finance reportedly took a stake in the e-commerce giant. I’d say this was a smart move, and there are reasons to consider starting your own share position in Amazon today.

Amazon is among a small handful of publicly listed companies with a $1 trillion market capitalization. Yet, Amazon continues to expand its scope and venture into different fields, even including artificial intelligence (AI). With that in mind, let’s find out which renowned investor loaded up on Amazon stock this year.

Who Bought Over 800,000 Shares of AMZN Stock?

To quote InvestorPlace contributor Dana Blankenhorn, “Stanley Druckenmiller is one of the brightest guys on Wall Street.” Druckenmiller runs his Duquesne Fund as a family office now, but he’s been followed by legions of financial traders for years.

So, it’s a big deal when Druckenmiller (or more precisely, his fund) takes a stake in a company. And reportedly, Druckenmiller added 807,000 shares of Amazon stock this year, valued at approximately $83.4 million.

Unfortunately, there’s no way to know exactly why Druckenmiller chose to invest in AMZN stock. Yet, it’s reasonable to conclude that Druckenmiller was bullish on Amazon’s pervasive e-commerce business, as well as the company’s cloud business, known as Amazon Web Services (AWS).

Perhaps Druckenmiller appreciates Amazon’s bold ventures into a variety of niche technology markets. For instance, Amazon just announced the “general availability” of a data-security product called Amazon Security Lake. Surely, the company isn’t trying to morph into a security-tech specialist. Yet, Amazon Security Lake can help businesses add layers of threat detection and response to the cloud.

Amazon Offers a Suite of Tools for AI Developers

You just never know what field Amazon might delve into next. There are even reports circulating that Amazon might facilitate “nationwide mobile phone service to Prime subscribers.”

What today’s investors really want to know, however, is whether there’s an AI angle with Amazon. After all, machine learning is the top-of-mind trend among today’s financial traders.

To that end, AWS now provides a digital toolkit of “pre-trained AI Services” that seem to be mainly aimed at web developers. It’s perfectly fine if a particular user doesn’t have machine-learning experience, as Amazon assures that AI Services “don’t require” that type of expertise.

Thus, instead of trying to compete directly with OpenAI’s popular ChatGPT chatbot, Amazon is taking a different approach. AI Services enables developers to build and fine-tune their own chatbots and virtual agents. Furthermore, with the help of AI Services, developers can use machine learning “customize applications and websites to each individual user.”

Give Amazon Stock a Try With a Small Stake

Just because Druckenmiller’s fund took a gigantic position in Amazon stock doesn’t mean you have to. It’s understandable if you want to get exposure to Amazon’s e-commerce, cloud and AI businesses. However, you can achieve this through an appropriately sized share allocation.

In other words, it’s fine to start small and build your position AMZN stock slowly. That way, you can swim in the same direction as an investing whale like Druckenmiller even if you have a minnow-sized portfolio.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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