Bill Ackman, David Tepper, and other billionaire fund managers are quietly piling into Amazon | Fortune

During the most recent quarters, a roster of money managers including David Tepper‘s Appaloosa Management, Seth Klarman’s Baupost Group, Al Gore’s Generation Investment Management, and Sanders Capital have been enlarging their stakes in the $2.5 trillion tech-and-retail giant. In Klarman and Tepper’s cases, the stock has become their single largest holding.

Bill Ackman-led Pershing Square began amassing an Amazon stake from scratch about a year ago, and Pershing Square now counts Amazon as its second-largest position at about $2.4 billion. Global investment manager Sanders Capital, founded by former AllianceBernstein CEO Lewis Sanders, doubled its Amazon stake in the first quarter of 2026 to 29.8 million shares worth about $6.2 billion, making the stock its third-largest holding behind Taiwan Semiconductor and Alphabet.

The reason for the season? They smell value. While stock in nearly every other company with a claim on the AI boom has soared during the past 12 months—with Nvidia up 35%, Intel up 496%, and Micron Technology up 719%—Amazon’s stock gains have been relatively meager and haven’t yet caught up to the business results. Year-to-date, Amazon’s stock is up 3.4% and 10.1% for the past 12 months. Yet, during its last earnings call Amazon’s cloud division—a starring player in the AI boom—just posted what CEO Andy Jassy called its “fastest growth in 15 quarters.” For value investors, the gap between a business on a tear and tepid share price growth presents a massive opportunity for upside.

“Their businesses are worth more than the share price and they’re in the catbird seat on just about everything.” said Charles Lemonides, founder of hedge fund ValueWorks who also holds a stake in the tech juggernaut. “Why wouldn’t one want to own Amazon today?”

Everyone wants compute right now, and Amazon is “the best” at compute, said Lemonides, referring to Amazon Web Services (AWS), its cloud division that owns a fleet of data centers and rents computing capacity and storage crucial to the AI industry. Lemonides believes the pieces of Amazon are worth more than the way the market is valuing the whole company. By his rough figures, AWS alone is worth about half of Amazon’s roughly $2.5 trillion market value, and the retail operation is worth the other half. That means an investor effectively gets the rest of the company—the swiftly growing advertising arm, the media and streaming businesses, and everything else—as a free sweetener on top.

“You can make an easy sum-of-the-parts argument for its being worth more than where it is today,” Lemonides said, adding that the case is stronger now than when he first made it a year ago, because Amazon has kept executing across its businesses while the stock has increased modestly. Plus, the leadership team, led by Jassy, has navigated through turbulent times and remained intact and firing on all cylinders.

“They’re as good a beneficiary of the growth in AI as anybody, because they own so much computing power,” added Lemonides.

Amazon’s most recent results showed that the cloud division picked up acceleration just as some naysayers were starting to question it. AWS grew 28% in the first quarter of 2026 to $37.6 billion in revenue. The company’s backlog of contracted but not-yet-recognized revenue was $364 billion as of March 31, which doesn’t include the company’s deal for Anthropic to spend more than $100 billion on AWS technologies over the next decade. (Amazon previously invested $8 billion in Anthropic and agreed to invest up to $25 billion more.) Overall, sales grew 17% to $181.5 billion, with operating income hitting $23.9 billion.

In other words, for some value-minded stock pickers, these are cheap eats—even though they might not seem so at first.The stock trades at roughly 27 times forward earnings, which is a higher multiple than Microsoft or Nvidia, both around 18-20 times, and above Meta Platforms’ 17. Even the Nasdaq 100, at about 24 times, looks better. On a price-to-earnings basis, Amazon looks pricey.

However, on closer inspection, Amazon is also on a major spending binge and has told investors it expects to spend about $200 billion on capital expenditures in 2026, mostly for AWS, as it adds AI and cloud capacity. The AI buildout holds down earnings in the near term, which is another reason the stock can look expensive on a forward-earnings basis even to investors who believe the spending will pay off.

Bank of America has rated Amazon a buy with a price target around $310, based on a similar sum-of-the-parts analysis that pins most of the company’s worth on AWS. Morgan Stanley has noted in the past that Amazon trades at a steep discount to its peers once you account for how fast its profits are expected to grow.

Zooming out from individual money managers, the appetite has been even more broad. Institutional investors that file quarterly holdings reports with the SEC reported owning 253 million more shares of Amazon in the most recent quarter than they did in previous quarters, according to Quiver Quantitative data provided to Fortune. Some of the biggest buyers were among the world’s largest money managers, including UBS Asset Management, Norway’s Norges Bank, Victory Capital Management, and Pershing Square, which built up its position from scratch, noted James Kardatzke, CEO at Quiver Quantitative.

But not everyone is convinced. Berkshire Hathaway massively trimmed its 10 million-share Amazon stake to 2.3 million shares by the end of 2025, while its most-recent filing lists no Amazon holdings. Famed investor Stanley Druckenmiller’s Duquesne Family Office came down near the middle. Druckenmiller nearly eliminated his common-stock position in Amazon, cutting it about 94% to fewer than 46,000 shares. However, Druckenmiller also doubled his call options on Amazon—a leveraged wager the stock will increase—from 100,000 to 200,000 shares.

Kardatzke warned against reading into sales as a thumbs-down on Amazon, noting that the motivation behind big moves by institutions “isn’t always clearcut.”

“A sell doesn’t always indicate a bearish outlook, as there could be other factors that lead to a portfolio being rebalanced,” he said. Kardatzke also noted that the 13F documents in which funds report their holdings are filed quarterly and firms have up to 45 days after the end of the quarter to file with regulators. He said the filings are a snapshot, but can indicate long-term trends.

Lemonides said the split between the buyers and sellers is more about substance.

“We’re in a momentum-driven market, and investors that pile on to the momentum stocks have been doing the best,” he said. Amazon isn’t rising explosively, so some investors might be a little tired of it, he said. However, in a market where excitement begets excitement, Lemonides is “thrilled” to build his position at the moment, he said. He’s planning to fund it by trimming stakes in winners like Micron Tech and Intel.

“There are those of us, like Tepper and this little guy, who think that excitement could come to Amazon tomorrow,” he said. “And I would rather skate to where the puck is going than where the puck is today.”