TLDR
- Bill Ackman’s Pershing Square invested $1.2 billion in Amazon stock during Q2 2025, buying 5.82 million shares
- Amazon stock trades at $228, just 6% below its all-time high of $242.52 reached in February 2025
- AWS cloud revenue hit $30.9 billion in Q2 with 17.5% growth and 37% operating margins
- Amazon’s advertising business grew 22% to $60 billion annualized, becoming a key profit driver
- Wall Street analysts see Amazon reaching $300 per share within two years through earnings growth
Billionaire hedge fund manager Bill Ackman made Amazon his largest new investment in the second quarter of 2025. His Pershing Square Capital Management fund deployed $1.2 billion to acquire 5.82 million Amazon shares, representing the fund’s only new stock purchase during the period.
Ackman funded this Amazon investment by liquidating his entire Canadian Pacific railway position. The Amazon stake now comprises 9.3% of his $13.7 billion portfolio, making it the fund’s second-largest holding behind Uber Technologies.
The investment came after Amazon shares dropped over 30% earlier in 2025. Concerns about artificial intelligence hype and potential tariffs under President Trump created the buying opportunity that Ackman had been waiting for.
Amazon stock has since rebounded strongly, currently trading at $228 per share. This puts the stock just 6% below its all-time high of $242.52 reached in February 2025.
Amazon Delivers Strong Q2 Financial Results
Amazon’s second-quarter earnings justified Ackman’s confidence in the e-commerce and cloud computing giant. Total revenue increased 13% year-over-year to $167.7 billion. Operating income surged 31% to $19.2 billion, demonstrating improved operational efficiency.
The company’s diverse revenue streams all showed healthy growth patterns. North American e-commerce sales reached $100.1 billion, up 11% from the previous year. Prime membership continues driving growth with 240 million global subscribers benefiting from expanded same-day delivery options.
Amazon Web Services remains the company’s profit engine with $30.9 billion in quarterly revenue. The cloud division posted 17.5% growth while maintaining operating margins around 37%. AWS generates approximately 53% of Amazon’s total operating profits despite representing only 18% of revenue.
Advertising Business Becomes Growth Driver
Amazon’s advertising segment emerged as a standout performer with 22% revenue growth to over $60 billion annualized. The advertising platform now represents more than 9% of total company sales, leveraging customer data across Prime Video, Twitch, and sponsored product listings.
AI enhancements are boosting advertiser return on investment while improving targeting capabilities. This creates higher profit margins that are less dependent on retail sales volumes compared to traditional e-commerce operations.
Management emphasized advertising as “an important contributor to profitability” in both North American and international segments. The business benefits from Amazon’s massive customer base and unique shopping intent data.
Wall Street Analysts Target $300 Price
Wall Street maintains bullish outlooks with a median price target of $264 per share, implying 15% upside from current levels. Some analysts project Amazon could reach $300 within two years through mid-teens earnings growth.
Current trailing twelve-month earnings per share stand at $6.55, up from $4.18 a year earlier. At a 15% compound annual growth rate, earnings could reach $8.70 within two years. Maintaining the current price-to-earnings ratio of 35 times would support a $300 stock price.
Amazon has allocated $100 billion for AI infrastructure investments in 2025. These capital expenditures support AWS growth in generative AI tools and custom processors, with analysts projecting AWS could generate $86 billion in operating profits by 2030.
Ackman’s investment focuses on Amazon’s dual advantages in e-commerce and cloud computing, both enhanced by artificial intelligence capabilities.
