Jim Cramer Says Buy 2 AI Stocks Up 190% and 230% Since Early 2023

Amazon (+190% since Jan 2023) is positioned to monetize AI through AWS — including custom AI accelerators, Bedrock, and large Anthropic relationships — while deploying >1,000 generative AI retail apps to improve inventory, forecasting and last‑mile delivery; Wall Street forecasts ~18% annual EPS growth over the next three years and the stock trades near ~35x earnings after beating consensus by ~25% on average the past eight quarters. Uber (+230% since Jan 2023) leverages the largest global ride‑share and food delivery platforms, strategic AV partnerships (Waymo, Avride, WeRide) and Nvidia Hyperion integrations to pursue 100,000 robotaxis; analysts project ~26% annual EPS growth and a ~10x valuation, with industry forecasts showing large TAM expansion for ride‑sharing and robotaxis — and Jim Cramer endorses buying both names.

Analysis

Market structure: AWS (AMZN) and Uber (UBER) are direct winners—AWS strengthens pricing power in cloud/AI infrastructure while Uber leverages two-sided network effects for robotaxi scale. Competitors with ad/cloud exposure (GOOGL, MSFT) face more competitive pricing pressure; Nvidia (NVDA) sees mixed effects as Amazon’s custom accelerators could cap some GPU demand while overall AI infrastructure spend grows ~20–30% annually. Short-run supply/demand points to tight AI-inference capacity and continued premium on low-latency cloud services; retail logistics efficiency lifts Amazon gross margins if deployment scales beyond pilot fleets.

Risk assessment: Tail risks include aggressive antitrust/advertising regulation for Amazon, liability/regulatory setbacks for AV rollouts affecting Uber, and a sharp GPU cycle reversal if Nvidia pricing collapses (>30% drop). Immediately (days) expect earnings/AI-product beats to drive >5–10% moves; over 3–12 months adoption and partnerships matter; over 3–5 years robotaxi TAM execution and unit economics determine multi-bagger vs value-trap outcomes. Hidden dependencies: AWS revenue concentration in large AI partners (e.g., Anthropic) and Uber’s reliance on partner AV tech and local regulatory approvals.

Trade implications: Direct plays—establish small core longs: AMZN 2–3% portfolio, UBER 2–3%—plus targeted options to leverage asymmetric upside. Pair trade—long UBER vs short GOOGL (smaller size) to express mobility/robotaxi vs ad/cloud exposure. Use options: buy 12–18 month LEAP calls (AMZN, UBER) or buy 9–12 month call spreads to cap premium; hedge macro risk with 2–3% portfolio allocation to short-duration Treasuries if rates spike.

Contrarian angles: Consensus underestimates execution risk—100k robotaxis target for Uber by “a few years” implies heavy capex and regulatory drag; Amazon’s 35x PE already prices strong AI returns (>18% EPS CAGR). The market may be underpricing a scenario where custom accelerators slow NVDA revenue growth by 10–20% over 2 years. Unintended consequence: faster automation could compress gig-driver supply economics and spur regulatory pushback, pressuring margins.

Key Decisions for Investors

• Establish a 2.5% portfolio long position in AMZN on any pullback <10% from today; hedge with a 1% position in AMZN Jan 2028 LEAP calls (choose ~10–15% OTM) to concentrate on AI/retail efficiency upside over 18–36 months.
• Establish a 2.5% portfolio long in UBER, add a 1% notional long UBER Jan 2027 LEAP or 12-month 1:1 call spread ~15% OTM to play robotaxi scale; take profits or re-evaluate if FY revenue guidance misses consensus by >10%.
• Implement a pair trade: long UBER (1.5% portfolio) / short GOOGL (1.0% portfolio) to express AV/mobility upside vs ad/cloud cyclicality; rebalance if relative move >20% in 3 months.
• If volatility rises >40% IV on AMZN or UBER before major catalysts, prefer vertical call spreads (buy 1 sell 1 higher strike) to cap premium; consider selling covered calls on existing AMZN holdings for 3–6 month exposures to generate 3–6% yield.
• Monitor three specific catalysts in next 90–180 days—AWS product launches (Bedrock/accelerator updates), quarterly EPS vs consensus (beats by >10% to be bullish), and first-profitability signals from AV pilots (city rollouts or volume milestones). Reduce exposure by half if any two catalysts fail within 180 days.