Ask pretty much any technology pundit which one company stands at the epicenter of artificial intelligence (AI). They'll probably respond that it's Nvidia (NVDA +2.29%). And they'd be right. Nvidia's GPUs literally make the AI world go around.
But what if you asked billionaire investors what their favorite AI stock is right now? I think there's a clear answer -- and it's not Nvidia.
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Billionaires' favorite AI stock
To be sure, Nvidia remains popular with many billionaire investors. It's the largest holding for Ken Griffin's Citadel hedge fund and the third-largest holding for Israel "Izzy" Englander's Millennium Management hedge fund. Both Chase Coleman and David Tepper added to their positions in Nvidia in the second quarter of 2025 (Tepper boosted his fund's stake by over 483%).
However, only one AI stock is owned by all four of those billionaires, plus Bill Ackman and Warren Buffett, too. That stock is Amazon (AMZN +1.35%).
Ackman initiated a major position in Amazon in Q2 for his Pershing Square Capital Management hedge fund. Buffett didn't make the original decision to buy the stock for Berkshire Hathaway's (NYSE: BRK.A) (NYSE: BRK.B) portfolio in 2019, but he admitted that he was "an idiot" for not investing in the company sooner.
Amazon ranks as the third-largest holding for Griffin and Tepper. It's the fourth-largest holding for Coleman and is in Englander's top five holdings. Griffin increased Citadel's stake in Amazon by roughly 158% in Q2. Coleman boosted Tiger Global's position in the stock by 62%.
Why Amazon?
Although Amazon has used AI for a long time, its Siri AI assistant is quite dated compared to generative AI models offered by OpenAI, Alphabet's (GOOG +2.13%) (GOOGL +2.06%) Google unit, and others. So why does Amazon appear to be the favorite AI stock for billionaires?
NASDAQ: AMZN
Key Data Points
Ackman and his team at Pershing Square provided the most detail about their decision-making process in the hedge fund's June 2025 interim report. They noted that Amazon "operates two of the world's great, category-defining franchises": top cloud services provider Amazon Web Services (AWS) and the biggest global e-commerce platform.
Only around 20% of IT workloads are currently hosted in the cloud. Ackman thinks this percentage will grow much larger over time and expects "AI to spur greater cloud adoption." AWS stands to profit tremendously from this trend.
Meanwhile, Amazon's e-commerce business continues to grow at a brisk pace. Despite this growth, though, e-commerce still makes up less than 20% of total U.S. retail sales. Amazon is also using AI to boost the efficiency of its e-commerce operations, including improving the accuracy of regional demand forecasting by 20%.
Should you buy Amazon stock, too?
Several of the billionaire investors mentioned earlier bought more shares of Amazon during a steep sell-off in the second quarter of this year. The stock has since rebounded significantly. Is it a buy for investors who aren't billionaires? I think so.
Sure, Amazon's shares trade at a relatively steep price-to-earnings (P/E) ratio of 34. However, this earnings multiple is actually quite reasonable for the company historically. Amazon's growth prospects also make its forward P/E ratio of roughly 28.6 somewhat less concerning.
It's hard to overstate just how big the opportunity for AWS could be over the next decade. The widespread adoption of agentic AI should provide a massive tailwind for Amazon's cloud unit. Advances in artificial general intelligence (AGI) might cause the cloud services market's momentum to further accelerate.
Don't rule out the possibility of breakthroughs in quantum computing that could speed the training of AI models, either. Amazon itself could be at the forefront of these efforts. The company's Ocelot prototype quantum computing chip, unveiled earlier this year, represents a step in the right direction toward making practical large-scale quantum computers a reality.
Amazon isn't a stock to buy because billionaires own it. It is a stock to buy, however, because its long-term prospects are compelling.
