Key Takeaways
- • Bill Ackman's Pershing Square Capital Management built a $2.4 billion Amazon position beginning approximately one year ago, making it the fund's second-largest holding as of September 2026.
- • Ackman purchased Amazon shares in April 2026 at 25 times forward earnings; the stock has since risen to trade at approximately 29 times forward earnings, reflecting market reassessment of valuation.
- • A consortium of elite hedge fund managers—including David Tepper (Appaloosa Management), Seth Klarman (Baupost Group), Al Gore (Generation Investment Management), and Sanders Capital—have simultaneously enlarged their Amazon positions, with the stock becoming the single largest holding for both Klarman and Tepper.
- • Amazon Web Services reported its fastest growth in 15 quarters during the most recent earnings cycle, driven by artificial intelligence demand, yet the broader Amazon stock has gained only 3.4% year-to-date and 10.1% over the past 12 months—a significant disconnect from business momentum that institutional investors view as a valuation opportunity.
- • Sanders Capital doubled its Amazon stake in Q1 2026 to 29.8 million shares worth approximately $6.2 billion, making it the fund's third-largest position behind TSMC and Alphabet, signaling institutional confidence in AWS's AI-driven growth trajectory.
Summary
Bill Ackman and a select group of prominent hedge fund managers have orchestrated a coordinated bet on Amazon, viewing the $2.5 trillion technology and retail conglomerate as undervalued relative to its artificial intelligence exposure and business momentum. Ackman's Pershing Square Capital Management initiated its Amazon position approximately one year prior to September 2026 and has built it into a $2.4 billion stake—the fund's second-largest holding. Ackman disclosed the position to clients in April 2026, at which point the shares traded at 25 times forward earnings expectations; the stock has since appreciated to approximately 29 times forward earnings, validating the initial thesis.
The institutional accumulation extends well beyond Pershing Square. David Tepper's Appaloosa Management, Seth Klarman's Baupost Group, Al Gore's Generation Investment Management, and Sanders Capital have all enlarged their Amazon positions during recent quarters. For both Klarman and Tepper, Amazon has become their single largest holding, underscoring the conviction behind the thesis. Sanders Capital doubled its Amazon stake in the first quarter of 2026 to 29.8 million shares worth approximately $6.2 billion, positioning Amazon as the fund's third-largest position behind Taiwan Semiconductor Manufacturing Co. and Alphabet.
The investment rationale centers on a perceived valuation disconnect between Amazon's business performance and its stock price trajectory. Amazon Web Services, the company's cloud division and primary beneficiary of accelerating artificial intelligence adoption, posted what CEO Andy Jassy characterized as its fastest growth in 15 quarters during the most recent earnings cycle. Yet Amazon's stock has gained only 3.4% year-to-date and 10.1% over the past 12 months—substantially lagging the AI sector's broader momentum, where Nvidia has risen 35%, Intel 496%, and Micron Technology 719%. For value-oriented institutional investors, this divergence between robust business fundamentals and tepid share price appreciation represents a compelling entry point with significant upside potential as the market reprices Amazon's AI exposure and AWS growth prospects.
The institutional accumulation extends well beyond Pershing Square. David Tepper's Appaloosa Management, Seth Klarman's Baupost Group, Al Gore's Generation Investment Management, and Sanders Capital have all enlarged their Amazon positions during recent quarters. For both Klarman and Tepper, Amazon has become their single largest holding, underscoring the conviction behind the thesis. Sanders Capital doubled its Amazon stake in the first quarter of 2026 to 29.8 million shares worth approximately $6.2 billion, positioning Amazon as the fund's third-largest position behind Taiwan Semiconductor Manufacturing Co. and Alphabet.
The investment rationale centers on a perceived valuation disconnect between Amazon's business performance and its stock price trajectory. Amazon Web Services, the company's cloud division and primary beneficiary of accelerating artificial intelligence adoption, posted what CEO Andy Jassy characterized as its fastest growth in 15 quarters during the most recent earnings cycle. Yet Amazon's stock has gained only 3.4% year-to-date and 10.1% over the past 12 months—substantially lagging the AI sector's broader momentum, where Nvidia has risen 35%, Intel 496%, and Micron Technology 719%. For value-oriented institutional investors, this divergence between robust business fundamentals and tepid share price appreciation represents a compelling entry point with significant upside potential as the market reprices Amazon's AI exposure and AWS growth prospects.
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