Wedgewood Partners, an investment management company, released its fourth-quarter 2025 investor letter. The firm anticipates stronger market volatility in the coming years and has moderated its enthusiasm. A copy of the letter can be downloaded here. The Wedgewood Composite returned -1.8% (net) in the fourth quarter compared to the S&P 500’s 2.7%, the Russell 1000 Growth Index’s 1.1%, and the Russell 1000 Value Index’s 3.8% returns. YTD, the Composite gained 4.3% compared to 17.9%, 18.6%, and 15.9% returns for the indexes, respectively. Wedgewood Partners’ focus on high-quality stocks has historically worked since 1992, but not in 2025. The letter highlighted poor stock selection, the portfolio’s strong past performers due for valuation correction, and being structurally underweight in AI stocks drove the underperformance. The letter noted that in 2026, crowded AI investments and stretched valuations create pressure on prudent investment decisions.  In addition, you can check the Fund’s top 5 holdings to determine its best picks for 2025.

In its fourth-quarter 2025 investor letter, Wedgewood Partners highlighted stocks such as Amazon.com, Inc. (NASDAQ:AMZN). Amazon.com, Inc. (NASDAQ:AMZN) provides consumer products, advertising, and subscription services through online and physical stores. On January 16, 2026, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at $239.12 per share. One-month return of Amazon.com, Inc. (NASDAQ:AMZN) was 4.68%, and its shares gained 5.83% of their value over the last 52 weeks. Amazon.com, Inc. (NASDAQ:AMZN) has a market capitalization of $2.556 trillion.

Wedgewood Partners stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its fourth quarter 2025 investor letter:

“We have followed Amazon.com, Inc. (NASDAQ:AMZN) for many years – and owned its stock in the past. The stock has lagged the broader indices for the past ive years, and valuation multiples have reverted lower despite cash low returns on investment rebounding to near-record levels. Current management is more focused on managing capacity and costs after prior management spent several years aggressively building out both the e-commerce and AWS footprints. For example, the Company’s EV/EBITDA multiple is trading around 13X for 2026, well below its pre-COVID-19 levels of 25X and the 10-year average of 17X. Meanwhile, cash low returns have rebounded to more than 20%, driven by record margins. The current management team has done well to grow the businesses into their current overcapacity and better match that capacity to demand. We expect Amazon should be able to grow at double-digit rates, driven by increasing penetration of e-commerce and infrastructure as a service (IaaS), while expanding margins as they better manage capacity to demand.