Prediction: This Unstoppable "Magnificent Seven" Member Will Be Wall Street's First $5 Trillion Stock, and Billionaire Bill Ackman Just Bought the Dip

• Amazon has witnessed a nearly threefold rise in valuation over the last few years, as AI has become more of a central part of the company.

• Amazon continues to invest in various areas of AI that can help accelerate revenue growth and profit margin expansion in the long run.

• While Amazon stock has recovered from a notable dip last month, it still looks like an attractive buy for long-term investors.

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While there isn't an official start date marking the artificial intelligence (AI) revolution, I personally like to use Nov. 30, 2022, as my timestamp. This is the day that OpenAI released ChatGPT to the public, virtually changing how businesses and consumers access information at the flip of a switch.

Back then, Amazon (NASDAQ: AMZN) sported a market capitalization of $835 billion. Today, the company's value is almost triple -- hovering at around $2.3 trillion.

While Amazon may not fetch as much attention as its "Magnificent Seven" peers Nvidia or Tesla, the company is quietly building a thriving AI ecosystem -- and Wall Street is finally starting to take notice. Last month, investors learned that billionaire hedge fund manager Bill Ackman initiated a stake in Amazon through his investment firm, Pershing Square Capital Management.

Let's explore how Amazon is integrating AI across its various businesses. More importantly, I'll analyze the recent price action in the stock to help make the case for why I think Amazon is positioned to become Wall Street's first $5 trillion stock.

The most obvious area of Amazon's ecosystem that has benefited from the AI boom so far is the company's cloud computing segment, Amazon Web Services (AWS). Over the last couple of years, AWS has invested billions into a start-up called Anthropic, which competes with OpenAI. Throughout this partnership, AWS has witnessed notable revenue acceleration combined with significant expansion in operating margins.

This is an important notion to understand, as AWS accounts for the majority of operating profits across the entire Amazon ecosystem. Thanks to a successful partnership with Anthropic so far, Amazon now has even more financial flexibility, which it can parlay into other AI-powered services.

For instance, Amazon is also testing various forms of AI robotics in its fulfillment centers, which could theoretically bring new levels of efficiency and automation to processes previously managed by human labor.

Lastly, Amazon is also developing its own custom chipsets -- dubbed Trainium and Inferentia. In the long run, these could be more opportunities for Amazon to complement its existing hardware business while entering new markets to compete more directly with existing semiconductor designers.