{"id":14607,"date":"2026-08-05T10:40:38","date_gmt":"2026-08-05T10:40:38","guid":{"rendered":"https:\/\/nile1.com\/en\/?p=14607"},"modified":"2026-08-05T10:40:46","modified_gmt":"2026-08-05T10:40:46","slug":"hedge-funds-build-multi-billion-dollar-amazon-stakes-in-bet-on-undervalued-ai-infrastructure","status":"publish","type":"post","link":"https:\/\/nile1.com\/en\/2026\/08\/05\/hedge-funds-build-multi-billion-dollar-amazon-stakes-in-bet-on-undervalued-ai-infrastructure\/","title":{"rendered":"Hedge Funds Build Multi-Billion Dollar Amazon Stakes in Bet on Undervalued AI Infrastructure"},"content":{"rendered":"

Prominent hedge fund managers are quietly accumulating multi-billion-dollar positions in Amazon<\/a>.com Inc., placing a concerted value bet that the market is severely underpricing the cloud giant\u2019s position in the Artificial Intelligence<\/a> trade.<\/p>\n

Quarterly regulatory disclosures show that David Tepper\u2019s Appaloosa Management and Seth Klarman\u2019s Baupost Group have elevated Amazon to their single largest equity holding. Bill Ackman\u2019s Pershing Square, which began building its stake a year ago, now holds Amazon as its second-largest position at approximately $2.4 billion. Meanwhile, Sanders Capital doubled its stake in the first quarter of 2026 to 29.8 million shares valued at $6.2 billion, making it the firm’s third-largest position behind Taiwan Semiconductor Manufacturing Co. and Alphabet.<\/p>\n

Institutional investors added a net 253 million Amazon shares in the most recent quarter, according to data from Quiver Quantitative, with major allocations coming from UBS Asset Management, Norges Bank, and Victory Capital Management.<\/p>\n

The heavy buying comes despite sluggish share performance relative to other major beneficiaries of the artificial intelligence boom. Amazon shares are up 3.4% year-to-date and 10.1% over the past 12 months. Over the same 12-month period, Nvidia has gained 35%, Intel has advanced 496%, and Micron Technology has surged 719%.<\/p>\n

That performance lag persists even as Amazon Web Services (AWS) accelerates. AWS generated $37.6 billion in revenue in the first quarter of 2026, up 28% year-over-year\u2014what Chief Executive Officer Andy Jassy cited as its “fastest growth in 15 quarters.” Amazon reported total sales of $181.5 billion, up 17%, and operating income of $23.9 billion. The cloud unit entered the second quarter with a $364 billion contracted backlog as of March 31, a figure that excludes a deal for Anthropic to spend more than $100 billion on AWS technologies over the next decade. Amazon previously committed an $8 billion investment to Anthropic and agreed to deploy up to $25 billion more.<\/p>\n

At roughly 27 times forward earnings, Amazon carries a premium multiple relative to Microsoft and Nvidia\u2014both trading around 18 to 20 times forward earnings\u2014and Meta Platforms at 17 times. The Nasdaq 100 trades at approximately 24 times. However, money managers note that the valuation is distorted by massive capital expenditures. Amazon plans to spend roughly $200 billion on capital expenditures in 2026, focused heavily on expanding AWS data center compute capacity for AI workloads.<\/p>\n

“Their businesses are worth more than the share price, and they\u2019re in the catbird seat on just about everything,” said Charles Lemonides, founder of hedge fund ValueWorks, who holds a stake in Amazon and plans to fund further purchases by trimming positions in Micron and Intel. “Why wouldn\u2019t one want to own Amazon today?”<\/p>\n

Lemonides noted that AWS alone accounts for approximately half of Amazon\u2019s $2.5 trillion market capitalization, with the core retail operations representing the remainder. Under a sum-of-the-parts analysis, investors effectively acquire Amazon\u2019s fast-growing advertising segment, streaming services, and media infrastructure at no additional cost. Bank of America holds a buy rating on the stock with a $310 price target based on a sum-of-the-parts model, while Morgan Stanley has highlighted that Amazon trades at a steep discount when adjusted for projected profit growth.<\/p>\n

“They\u2019re as good a beneficiary of the growth in AI as anybody, because they own so much computing power,” Lemonides added. “You can make an easy sum-of-the-parts argument for its being worth more than where it is today.”<\/p>\n

Not all institutional titans share the bullish stance. Berkshire Hathaway systematically reduced its 10-million-share position to 2.3 million shares by late 2025 before entirely liquidating its holding in its latest SEC filing. Stanley Druckenmiller\u2019s Duquesne Family Office reduced its common stock holding by 94% to under 46,000 shares, though Druckenmiller simultaneously doubled his call options from 100,000 to 200,000 shares.<\/p>\n

Addressing portfolio adjustments reflected in quarterly 13F filings, which cover transactions up to 45 days prior, Quiver Quantitative CEO James Kardatzke cautioned that institutional selling “isn\u2019t always clear-cut” and often reflects broader portfolio rebalancing rather than fundamental deterioration.<\/p>\n

“We\u2019re in a momentum-driven market, and investors that pile on to the momentum stocks have been doing the best,” Lemonides said. “There are those of us, like Tepper and this little guy, who think that excitement could come to Amazon tomorrow. And I would rather skate to where the puck is going than where the puck is today.”<\/p>\n

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