Ackman Sees Amazon as Top Pick Among AI Focused Holdings
Pershing Square Capital Management, led by billionaire investor Bill Ackman, owns shares in Amazon (AMZN), Microsoft (MSFT), and Meta Platforms (META). These three companies are all focused on artificial intelligence (AI) and compete in different areas. However, according to Pershing Square, Amazon stands out as the best buy among the three.
The company's cloud business, Amazon Web Services (AWS), saw a 37% increase in sales year over year, accelerating its growth rate. This is similar to what AWS experienced several years ago when it was less than half its current size. Pershing Square believes that Amazon's retail business can nearly double its profitability through higher-margin advertising revenue, network density, and automation initiatives.
AWS generated $4.6 billion in the first quarter alone, an 80% increase over its largest rate of growth previously. It also has a $496 billion backlog, a triple-digit increase over last year. Amazon's CEO Andy Jassy explained that there are two cycles for capex: data centers with a 30-year lifespan and infrastructure with a five- to six-year cycle.
Jassy maintained his positive long-term outlook on the company despite its increased spending on capex this year. He stated, 'We will still not have enough capacity to meet all the demand we have in 2026. And I believe this dynamic will also be true in 2027, too.'