Amazon (AMZN) Rises after Bill Ackman’s Pershing Square Reveals New Stake

Shares of (AMZN) closed higher after billionaire Bill Ackman’s investment firm, Pershing Square, revealed a new stake in the tech company, although the investment size was not disclosed. The news came during Pershing’s first-quarter investor call, where CIO Ryan Israel praised Amazon’s strong two-part business model: its massive e-commerce platform and leading cloud business, Amazon Web Services (AWS). Israel pointed out that AWS controls over 40% of the cloud market and has a lot of room to grow, since only 20% of IT workloads are currently in the cloud, but that number could eventually rise to 80%.

While AWS is more profitable, Amazon’s retail business was also highlighted for its large customer base and strong focus on convenience. Unsurprisingly, Pershing Square decided to invest after Amazon’s stock dropped earlier this year, which Israel said was mostly due to fears about a slowdown in AWS growth and concerns about tariffs. However, Pershing believes that these issues are temporary and saw a buying opportunity when Amazon was trading at around 24.5 times earnings, its lowest price-to-earnings ratio ever.

The investor call also made it clear that Pershing Square expects Amazon to keep growing its earnings by more than 20% each year. This makes sense because on top of its cloud business, the firm also has its hands on other emerging technologies like AI through Anthropic, which recently launched two new AI models. As a result of Pershing’s strong reputation for smart investments, other investors gained more confidence, which helped drive up Amazon’s stock price following the announcement.

Is Amazon Stock Expected to Rise?

Turning to Wall Street, analysts have a Strong Buy consensus rating on AMZN stock based on 47 Buys and one Hold assigned in the past three months, as indicated by the graphic below. Furthermore, the average AMZN price target of $240.37 per share implies 18.4% upside potential.

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