Thiel and Tepper Bet Big on Amazon's Cloud Computing Boom

Notable billionaire-run hedge funds, including those of Peter Thiel and David Tepper, purchased Amazon (AMZN) stock in the second quarter. Their moves to buy shares before Amazon's impressive second-quarter results were notable, as the company delivered a 37% year-over-year revenue growth for its cloud computing segment, Amazon Web Services (AWS). AWS' operating income soared 64%, showing that this growth is also massively profitable.

The $220 billion investment in data center construction for 2026 is expected to drive substantial growth over the next few years. CEO Andy Jassy noted that despite the massive investment, it still won't have enough cloud computing capacity to meet demand for this year. Demand is already exceeding what the company could meet with its planned additional capacity deployments in 2027.

The stock's 10% increase so far in Q3 may be inconsequential as there appears to be plenty more growth ahead, primarily driven by expansions to AWS. As a result, the smart money that piled into Amazon during Q2, including Thiel and Tepper, was wise to make their moves.