Major funds add Amazon as AI cloud growth draws value investors

Several high-profile investment firms have increased their Amazon holdings, signaling that parts of Wall Street see the company as an underappreciated way to bet on artificial intelligence. Recent regulatory filings cited by Fortune show larger positions from firms including Appaloosa Management, Baupost Group, Generation Investment Management, Sanders Capital and Pershing Square.

Amazon, valued at about $2.5 trillion, has lagged some other AI-linked stocks even as its cloud business accelerates. Fortune reported that investors buying the stock are pointing to Amazon Web Services, advertising and retail as businesses whose combined value may not be reflected in the share price.

Pershing Square, led by Bill Ackman, began building an Amazon position roughly a year ago, according to Fortune. The firm’s latest filing lists Amazon as its second-largest holding, worth about $2.4 billion.

Sanders Capital doubled its Amazon stake in the first quarter of 2026 to 29.8 million shares valued at roughly $6.2 billion, according to the firm’s filing cited by Fortune. That made Amazon its third-largest holding, behind Taiwan Semiconductor and Alphabet.

Fortune reported that Amazon has become the largest position for David Tepper’s Appaloosa Management and Seth Klarman’s Baupost Group. Al Gore’s Generation Investment Management also increased its stake, according to the report.

The buying comes after a wide gap opened between Amazon’s recent stock performance and the gains of several other AI-related companies. Fortune reported that Amazon shares were up 3.4% for the year and 10.1% over the past 12 months, compared with 35% for Nvidia, 496% for Intel and 719% for Micron Technology over the same one-year period.

Amazon’s latest results gave bulls more evidence for their case. In its most recent earnings release, Amazon said AWS revenue rose 28% in the first quarter of 2026 to $37.6 billion, and CEO Andy Jassy described the cloud unit’s performance as its fastest growth in 15 quarters.

Amazon also reported total sales of $181.5 billion, up 17%, and operating income of $23.9 billion. The company said contracted revenue that had not yet been recognized totaled $364 billion as of March 31, a figure Fortune said did not include Anthropic’s agreement to spend more than $100 billion on AWS technology over the next decade.

Charles Lemonides, founder of ValueWorks, told Fortune he owns Amazon and believes the company’s parts are worth more than its current market valuation. He said AWS may account for about half of Amazon’s value, with retail making up much of the remainder, leaving advertising, media and other businesses less fully recognized by the market.

Amazon does not look cheap on a standard earnings multiple. Fortune reported that the stock traded at about 27 times forward earnings, above Microsoft and Nvidia at about 18 to 20 times and Meta Platforms at 17 times.

Supporters of the stock argue that Amazon’s heavy spending clouds that comparison. Fortune reported that Amazon has told investors it expects about $200 billion in capital expenditures in 2026, mostly for AWS, as it expands AI and cloud capacity.

Bank of America rates Amazon a buy with a price target near $310, according to Fortune, using a valuation approach that assigns much of the company’s worth to AWS. Morgan Stanley has said Amazon trades at a discount to peers after adjusting for expected profit growth, Fortune reported.

Institutional demand has broadened beyond the best-known hedge funds. Quiver Quantitative CEO James Kardatzke told Fortune that institutions filing quarterly reports with the SEC reported owning 253 million more Amazon shares in the latest quarter than in prior quarters, with buyers including UBS Asset Management, Norges Bank, Victory Capital Management and Pershing Square.

Some major investors have moved the other way. Berkshire Hathaway cut a 10 million-share Amazon stake to 2.3 million shares by the end of 2025 and listed no Amazon holdings in its most recent filing, according to Fortune. Stanley Druckenmiller’s Duquesne Family Office cut its common-stock position by about 94% to fewer than 46,000 shares, while doubling Amazon call options from 100,000 to 200,000 shares.

Kardatzke told Fortune that sales in quarterly filings do not necessarily show a negative view because portfolio changes can reflect rebalancing or other needs. He also noted that 13F filings are delayed snapshots, since firms have up to 45 days after a quarter ends to report holdings to regulators.

This story draws on original reporting from Fortune.