Billionaire investor Bill Ackman’s hedge fund, Pershing Square Capital Management, has recently acquired a significant stake in Amazon, signaling confidence in the company’s future earnings growth despite earlier concerns about tariffs.
Ackman informed clients on Thursday that the purchase was made last month after Amazon’s stock price dropped sharply due to worries over President Donald Trump’s tariffs and potential slowdowns in Amazon Web Services (AWS), the company’s cloud computing division.
Ryan Israel, Pershing Square’s Chief Investment Officer, said on a conference call that Amazon was the fund’s most substantial new investment.
He explained that the firm believes Amazon can navigate any challenges in its cloud business and that tariffs would not significantly impact the retailer’s earnings. Israel also praised Amazon CEO Andy Jassy’s leadership, noting his ability to run the business efficiently and drive profit margin expansion alongside strong revenue growth.
Amazon, valued at over $2 trillion, has long been admired by Ackman and his team. The stock’s price decline in early April, triggered by tariff announcements, created what Pershing Square called an “extremely attractive” buying opportunity.
Amazon’s shares had fallen more than 30% from their February peak, reaching lows around $167 before rebounding to over $200 following the announcement of Pershing Square’s investment.
To fund the Amazon purchase, Pershing Square sold its entire stake in Canadian Pacific Railway, a move Ackman described as made “with regret.” He emphasized his strong belief in Canadian Pacific’s long-term prospects and respect for its management team.
The fund also trimmed holdings in companies like Chipotle Mexican Grill, Hilton Worldwide, and Universal Music Group, and converted its Nike stock into call options as part of a strategic adjustment.
Additionally, Pershing Square increased investments in car rental company Hertz and ride-sharing firm Uber, reflecting a diversified approach to portfolio management amid changing market conditions.
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