Pershing Square, under the guidance of prominent investor Bill Ackman, maintains a considerable holding in Amazon, representing a significant portion of its overall portfolio. Even after a recent reduction in its stake due to portfolio adjustments, Pershing retains nearly 8.6 million shares of the e-commerce giant. This substantial investment, valued at over $2 billion and comprising 10.5% of the portfolio as of June's end, highlights Ackman's strong belief in Amazon's long-term prospects.
Bill Ackman, known for his selective approach to investments and his articulate explanations, outlined his continued conviction in Amazon in Pershing's second-quarter letter to shareholders. A key aspect of his thesis revolves around Amazon's extensive capital expenditures, particularly in artificial intelligence (AI) infrastructure. The company plans to increase its annual capital spending significantly, reaching approximately $220 billion this year, a substantial jump from the previous year's $132 billion. A large portion of these funds is being allocated to expanding data centers.
This strategic investment is primarily aimed at bolstering Amazon Web Services (AWS), the company's powerful cloud computing arm, which is experiencing considerable growth due to the widespread adoption of AI technologies. Ackman noted that AWS revenue growth has accelerated, rising from 20% in 2024 and 2025 to over 30% in the current year (2026). Beyond its cloud services, Amazon's well-established retail division also demonstrates robust performance, capturing increased market share with a 15% unit volume growth in the first quarter—a level not seen since 2021.
Ackman and his team at Pershing Square are optimistic about Amazon's potential for sustained growth. They project that the company can achieve an average annual earnings growth rate of at least 20%. While this figure might appear ambitious for a company of Amazon's scale, it reflects the belief that the world is in the early stages of a prolonged growth cycle fueled by AI. Even if this projection proves slightly optimistic, AWS is expected to reap significant benefits from the increased adoption of AI, especially with Amazon's considerable capital investments in this area. Concurrently, the retail sector is also positioned for continued strong performance.
Ackman's endorsement underscores the strategic importance of Amazon's investments in AI and its cloud infrastructure. The ongoing expansion of AWS, driven by the burgeoning AI market, combined with the resilient growth of its retail segment, paints a compelling picture for the company's future. The current market environment, characterized by rapid technological advancements, offers fertile ground for companies like Amazon that are aggressively investing in innovation and expanding their core competencies. This forward-looking strategy positions Amazon favorably for sustained profitability and market leadership in the coming years.
