Bill Ackman's Pershing Square Capital Management started selling Alphabet (GOOG -0.29%) (GOOGL -0.20%) in the fourth quarter of 2025 while continuing to hold a large stake in Amazon (AMZN +0.05%) and other tech stocks. Ackman also bought a new position in Microsoft. In a post on X dated May 16, 2026, Ackman explained that he sold the Alphabet position to free up cash for Microsoft. But he also apparently sees better prospects in Amazon.
Pershing Square's mid-year update to investors reiterated its expectation that Amazon will grow its earnings at more than 20% annually, driven by opportunities in artificial intelligence (AI) and continued e-commerce growth.
While Pershing Square trimmed its Amazon position in Q2, the position still accounts for about 10% of the firm's reported assets on its SEC Form 13F, making it the fourth-largest holding. Bill Ackman's thesis behind the investment continues to play out almost exactly as he predicted when he originally bought the stock in April 2025.
Bill Ackman of Pershing Square Capital. Image source: Getty Images.
Amazon is performing as expected
Pershing Square's investment case for Amazon is centered on the company's two growth engines: Amazon Web Services (AWS) and e-commerce. At the time of the initial investment, Ackman expected rising demand for artificial intelligence (AI) tools on AWS to potentially reaccelerate growth. And that's exactly what happened.
AWS reported 17% year-over-year revenue growth in Q2 2025 when Ackman initially bought the stock. In the most recent quarter, growth accelerated to 37% -- its fastest pace in more than four years.
Amazon's total revenue rose 20% year over year in the second quarter, while operating income jumped 43% to $27 billion. That also supports Ackman's view that the retail business has room for margin expansion.
Amazon has been investing in robotics and tightening inventory management to lift retail profitability -- and those improvements are showing up in operating income growth. Over time, operating profits could continue to climb, aided by advertising momentum and ongoing warehouse automation.
NASDAQ: AMZN
Key Data Points
Ackman expects Amazon to deliver high double-digit earnings growth
Amazon stock has been weighed down by aggressive increases in capital spending to support the data center build-out. As a result of this spending, Amazon's free cash flow dipped to negative $8.8 billion in the second quarter.
Pershing Square sold about a quarter of its Amazon stake in Q2, but that doesn't appear to reflect a bearish view on the stock. Ackman's current view on Amazon was revealed in the firm's mid-year update released in August, in which it expressed belief that the market is underestimating Amazon's resilience and "significant growth runway." Ackman expects new data center capacity to be absorbed by AI inference workloads and earn attractive returns over time.
The firm likely sold some of its Amazon position to make room for other new positions in Visa, Mastercard, S&P Global, and Netflix. But this doesn't mean Ackman has turned bearish on the cloud computing leader.
Ackman still sees Amazon compounding earnings at over 20% annually, which is consistent with the Wall Street consensus. The stock trades around 22x forward earnings, which is not expensive for this level of earnings growth, and could support market-beating gains assuming Amazon delivers on those expectations.
