Amazon (AMZN) stock is up just around 1.5% year-to-date, lagging the S&P 500 by a wide margin. That gap is exactly why some of the biggest names in hedge fund investing are moving in.
David Tepper’s Appaloosa Management and Seth Klarman’s Baupost Group have each made Amazon their single largest holding. Bill Ackman’s Pershing Square has built its Amazon position from scratch over the past year, now valued at around $2.4 billion, making it the fund’s second-largest holding.
Sanders Capital, founded by former AllianceBernstein CEO Lewis Sanders, doubled its Amazon stake in Q1 2026 to 29.8 million shares worth about $6.2 billion.
Meanwhile, on June 23, Cathie Wood’s ARK funds picked up 41,141 Amazon shares valued at roughly $9.6 million, based on a closing price of $234.27. The buy came during a broader tech sell-off that hit semiconductor and AI-related names hard.
The common thread among buyers is a sum-of-the-parts argument. ValueWorks founder Charles Lemonides puts AWS alone at roughly half of Amazon’s $2.5 trillion market cap, with the retail business accounting for the other half. That math means everything else — advertising, media, streaming — comes essentially free.
“Their businesses are worth more than the share price and they’re in the catbird seat on just about everything,” Lemonides said. “Why wouldn’t one want to own Amazon today?”
AWS grew 28% year-over-year in Q1 2026 to $37.6 billion, beating Wall Street’s $36.64 billion estimate and hitting its fastest growth rate in more than three years. CEO Andy Jassy called it the “fastest growth in 15 quarters.”
Amazon’s contracted revenue backlog stood at $364 billion as of March 31. That figure doesn’t include Anthropic’s commitment to spend more than $100 billion on AWS over the next decade.
Overall, Q1 2026 revenue came in at $181.5 billion, up 17% year-over-year, with operating income of $23.9 billion. Amazon beat Wall Street’s EPS estimate of $1.64, posting $2.78 per share.
Amazon has signaled it plans to spend roughly $200 billion on capital expenditures in 2026, mostly directed at AWS infrastructure. That spending holds down near-term earnings, which is part of why the stock can look pricey on a forward P/E basis despite the underlying growth.
The stock trades at around 27 times forward earnings, above Microsoft and Nvidia at 18-20 times and Meta at 17. Even the Nasdaq 100 at roughly 24 times looks cheaper on that metric.
But Morgan Stanley has previously pointed out that Amazon trades at a steep discount to peers once expected profit growth is factored in.
Bank of America rates Amazon a Buy with a $310 price target, built largely on a sum-of-the-parts valuation that anchors most of the company’s worth to AWS. The firm also estimates Amazon Prime Day will generate about $22 billion in sales and expects Q2 revenue to land at or above the high end of guidance.
Not everyone is on board. Berkshire Hathaway trimmed its Amazon position from 10 million shares down to effectively zero by its most recent filing. Stanley Druckenmiller’s Duquesne Family Office cut its common stock position by about 94%, though he simultaneously doubled his call options on the stock from 100,000 to 200,000 shares.
Institutional investors overall added 253 million Amazon shares in the most recent quarter, according to Quiver Quantitative data.
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