Bill Ackman's Pershing Square Made Amazon Its Fourth-Largest Holding by Dumping Alphabet. Here's the Thesis Behind the Switch.

Bill Ackman's Pershing Square Capital Management started selling Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) in the fourth quarter of 2025 while continuing to hold a large stake in Amazon (NASDAQ: AMZN) and other tech stocks. Ackman also bought a new position in Microsoft. In a post on X dated May 16, 2026, Ackman explained that he sold the Alphabet position to free up cash for Microsoft.

But he also apparently sees better prospects in Amazon. Pershing Square's mid-year update to investors reiterated its expectation that Amazon will grow its earnings at more than 20% annually, driven by opportunities in artificial intelligence (AI) and continued e-commerce growth. This Rare Signal Is Flashing Again.

In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » While Pershing Square trimmed its Amazon position in Q2, the position still accounts for about 10% of the firm's reported assets on its SEC Form 13F, making it the fourth-largest holding.

Bill Ackman's thesis behind the investment continues to play out almost exactly as he predicted when he originally bought the stock in April 2025. Pershing Square's investment case for Amazon is centered on the company's two growth engines: Amazon Web Services (AWS) and e-commerce. At the time of the initial investment, Ackman expected rising demand for artificial intelligence (AI) tools on AWS to potentially reaccelerate growth.

And that's exactly what happened. AWS reported 17% year-over-year revenue growth in Q2 2025 when Ackman initially bought the stock. In the most recent quarter, growth accelerated to 37% -- its fastest pace in more than four years.

Amazon's total revenue rose 20% year over year in the second quarter, while operating income jumped 43% to $27 billion. That also supports Ackman's view that the retail business has room for margin expansion. Amazon has been investing in robotics and tightening inventory management to lift retail profitability -- and those improvements are showing up in operating income growth.