Amazon.com (AMZN): AI Demand Triggers AWS Revenue Acceleration

Pershing Square Holdings, an investment firm, revealed its Q2 2026 investment outlook in a detailed letter. The company, known for managing significant capital in publicly traded assets, emphasizes long-term investments in high-quality companies. In the letter, Pershing Square highlighted Amazon.com Inc. (AMZN) as a standout performer.

As of August 17, 2026, Amazon's stock closed at $261.31, with a market capitalization of $2.82 trillion. The company showed a 5.56% return over the past month and a 14.60% gain over 52 weeks. Pershing Square attributed Amazon's recent stock price increase to robust operating momentum, despite concerns about capital expenditures in AWS datacenter buildouts.

The firm believes AI adoption has significantly boosted AWS's revenue growth, which expanded from 20% to over 30% in 2024 and 2025, respectively. Additionally, Amazon's retail segment continued to gain market share, with unit volumes increasing by 15% in Q1 2026, the highest pace since 2021. Pershing Square sees potential for Amazon to compound earnings at a rate of 20-16% over time, driven by AI and e-commerce trends, alongside substantial retail margin expansion.

The company currently ranks among the top 40 most popular stocks among hedge funds, with 353 hedge fund portfolios holding AMZN shares as of the first quarter, up from 381 in the previous quarter. While Pershing Square acknowledges Amazon's potential, the firm believes other AI stocks might offer greater upside with less downside risk.

The letter concludes with a suggestion to explore alternative AI stocks, particularly those benefiting from Trump-era tariffs and the onshoring trend.