Pershing Square Buys Amazon Stake After 31% Stock Drop

Billionaire Bill Ackman's Pershing Square Capital Management acquired a new stake in Amazon after the stock fell more than 30% earlier this year amid concerns about a slowdown in its cloud business, the generative AI race, and the impact of U.S. tariffs. Pershing Square praised Amazon's dual business model, highlighting Amazon Web Services' (AWS) dominant 40% cloud market share and its growth potential, alongside the e-commerce platform's large customer base and focus on convenience. The firm views the stock's recent price-to-earnings ratio of around 24.5 as an attractive entry point and expects Amazon to continue growing earnings by over 20% annually. Amazon's CEO Andy Jassy has downplayed tariff impacts so far, although economists warn tariffs could raise costs for retailers. Following Pershing Square's investment announcement, Amazon's shares rose around 1.6% to over 2%, and Wall Street analysts maintain a strong buy or outperform consensus with an average price target around $240, suggesting nearly 18% upside. Despite some downside risk projections, investor confidence appears bolstered by Pershing Square's endorsement and Amazon's strategic position in cloud computing and emerging AI technologies.