Billionaires Are Loading Up on This Genius Stock That's Up by More Than 212,600% Since Its IPO

Billionaire investors were active in the past quarter, buying shares of a stock that's up an incredible amount since it went public. This stock has returned more than 200,000% since its initial public offering, turning every $10,000 invested into a jaw-dropping $21.3 million. However, this mystery stock has been doing this for a long time, so you would have had to buy early and hold on for 29 years to get this return.

The stock? Amazon (NASDAQ: AMZN). Although the tech giant has had an incredible run, billionaire investors seem to think it has more room to run, which is why investors like Bill Ackman (Pershing Square Capital Management) and Stanley Druckenmiller (Duquesne Capital Management) loaded up on shares in the fourth quarter.

But should retail investors follow their lead?

Image source: Getty Images.

Amazon's stock looks primed to soar

We know what these billionaires were doing because any fund with more than $100 million in assets must report its end-of-quarter holdings to the Securities and Exchange Commission (SEC) 45 days after that quarter ends on a Form 13F. So, the information we're dealing with now is fairly old, as the purchases could have occurred as early as Oct. 1 -- more than six months ago. However, Amazon's stock is cheaper now than it was at any time in Q4. So, if these billionaires loved the investment opportunity then, they are likely even more bullish on it now.

Unless you've lived under a rock for the past two decades, you're likely familiar with the empire that Amazon has built. While nearly everyone has interacted with its e-commerce site at some point in time, fewer have direct experience with Amazon Web Services (AWS), its cloud computing platform. And that part of the business is the real reason to invest in the stock, in my opinion, as it has the highest growth rate of any segment and produces more than half of Amazon's operating profits.

It's also Amazon's gateway into the artificial intelligence (AI) sector. AWS is becoming a more popular option to run AI applications on, and interest in its custom AI chips is booming. This segment of AWS is growing at a triple-digit percentage pace, likely due to the fact that it is cheaper to train and run AI models on its Trainium processors than on the more widely used graphics processing units (GPUs). Regardless, AWS gives Amazon exposure to one of the greatest growth trends we will ever see, making the stock a strong stock pick for the AI era.

Despite that, Amazon trades at a fair price compared to its valuations in recent history.

AMZN PE Ratio (Forward) data by YCharts.

While 27 times forward earnings isn't necessarily a cheap valuation, I think it's a fair price to pay for one of the best-performing companies on the market. Amazon is a stalwart that's here to stay, and it makes for a pretty safe stock pick in the AI investment realm.

Keithen Drury has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.