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Hedge Funds Increase Amazon Stakes on AWS-Led AI Opportunity

Faster AWS growth with a $364 billion contracted backlog underpins investors' view that Amazon is undervalued by the market.

Overview

  • Major value-oriented managers have been adding to Amazon positions, with reports on June 25, 2026 naming Appaloosa, Baupost, Pershing Square, Generation Investment Management and Sanders Capital among the buyers.
  • Amazon’s cloud unit AWS accelerated to 28% year‑over‑year growth in Q1 2026, generating $37.6 billion in revenue and a $364 billion contracted but not yet recognized backlog that investors see as recurring future revenue.
  • Company guidance for roughly $200 billion of 2026 capital expenditures, largely for AWS and AI infrastructure, is weighing on near‑term earnings metrics even as investors treat the spending as capacity build for future profit.
  • Holdings filings show mixed positioning: some institutions materially trimmed plain equity stakes or shifted into call options, which analysts say reflects portfolio rebalancing and the lagged nature of quarterly 13F disclosures.
  • AWS’s May 2026 launch of Bedrock AgentCore Payments with Coinbase and Stripe highlights Amazon’s move to productize AI for payments, a step that could create new revenue streams and broaden demand for cloud compute and transaction services.