Peter Thiel may be a controversial figure, but he is a legend in the business world who helped form several incredible tech companies, including Palantir (PLTR +2.91%). So when his hedge fund, Thiel Macro, makes a drastic move in the tech industry, investors should take note.
In particular, the fund's largest stock purchase in the second quarter may be another sign pointing toward the future of the artificial intelligence (AI) realm.
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A hedge fund that picks its moments
Thiel Macro isn't your run-of-the-mill hedge fund. It may load up on a handful of stocks in one quarter, then sell everything and be perfectly content with sitting 100% in cash the next. The hedge fund has been quiet for a few quarters, mostly sitting on cash. Before this quarter, it last held stocks in Q3 2025 -- those were Tesla, Microsoft, and Apple. However, the fund closed all of those positions sometime in Q4.
The fund owned no stocks at the end of Q4 2025 or Q1 2026, but it purchased a handful of stocks in Q2. While the fund held a total of eight stocks at the end of the quarter, the biggest holding by far was Amazon (AMZN -0.08%), which at $118 million accounted for 28% of the portfolio. That's a huge bet, and I think there's a clear reason why Thiel made it: cloud computing.
NASDAQ: AMZN
Key Data Points
We are currently in a compute-constrained environment, and the cloud computing providers control the pricing on a scarce resource. Furthermore, Amazon expects to spend $220 billion on capital expenditures this year, most of which will go toward building data centers. Once these facilities are up and running, they will produce an incredible amount of new revenue and cash flow, which could send its stock soaring.
We're already seeing the results of some earlier investments in Amazon Web Services (AWS). In Q2, revenue growth in the cloud unit accelerated to 37%, up from 28% in Q1. As more new data centers come online, this growth rate will continue to accelerate, which is a big deal for Amazon. AWS now produces 60% of Amazon's operating profits, so as long as AWS is growing faster than the company's commerce business, Amazon's profits will continue to grow at an outsize pace.
Thiel Macro's investment was a smart move, and I'm a big fan. I think Amazon will be a top AI stock pick over the next few years, and investors would be smart to load up on shares while they're still relatively cheap.
