Hinde Group LLC on Amazon.com, Inc.
Thesis
Hinde Group materially increased its Amazon position after shares sold off on concerns about the scale and prospective returns of Amazon's AI infrastructure investments. The fund believes second-quarter results demonstrated that those concerns were misplaced, with AWS revenue growth accelerating to 37% and operating income growing substantially faster. AI demand is strong enough that AWS expects to remain capacity constrained through at least 2027 while already seeing exceptional demand for 2028. The fund expects the economics of AWS AI to improve as customer concentration declines, higher-margin services become a larger part of the mix and more workloads move to Amazon's lower-cost custom silicon. Management believes AWS could ultimately become vastly larger, while Hinde Group views Amazon shares as meaningfully undervalued even after their post-earnings rally.
“The shares still offer a prospective annualized return north of 20.0% over a long time horizon.”
Key risks
- Heavy AI infrastructure investment could generate weaker returns than expected
- AWS AI capacity constraints could limit near-term growth
- Current AI revenue has meaningful customer concentration in Anthropic and OpenAI