Billionaire Bill Ackman's AI Play: Amazon's Quiet AI Empire and Its $3 Trillion Potential

Billionaire Bill Ackman's investment firm, Pershing Square Capital Management, has initiated a position in Amazon, complementing its existing stake in Alphabet. Amazon has quietly built an AI empire, setting the stage for long-term value creation. Ackman's high-conviction approach focuses on a select number of companies he believes are trading below their intrinsic value. Amazon's AI ambitions extend beyond cloud services, with a focus on large language models and AI-powered products.

Billionaire hedge fund manager Bill Ackman has recently disclosed that his firm, Pershing Square Capital Management, has initiated a position in Amazon (NASDAQ: AMZN). This move complements Ackman's existing stake in Alphabet (GOOGL), another prominent tech giant. The investment reflects Ackman's high-conviction approach, which focuses on a select number of companies believed to be trading below their intrinsic value.

Amazon has quietly built an AI empire, setting the stage for long-term value creation. The company's AI ambitions extend beyond its cloud computing platform, Amazon Web Services (AWS). Amazon has invested $8 billion in Anthropic and launched Claude, a competitor to ChatGPT, and is building its own AI training and inferencing chips. These innovations are aimed at augmenting its consumer electronics business and enterprise-grade hardware integration, all centered around broader AWS adoption.

Volkswagen, a major automaker, has extended its 'factory cloud' partnership with Amazon Web Services by another five years. This partnership is designed to improve production efficiency and reduce costs by optimizing complex processes in vehicle assembly. Volkswagen estimates group-wide savings in the tens of millions of euros as a result of these systems.

Ackman's investment in Amazon comes as the company is poised to join the likes of Nvidia, Microsoft, and Apple in the $3 trillion club by 2028. Wall Street's consensus estimates suggest that Amazon could achieve a market capitalization of $3.2 trillion within three years if it meets its revenue projections and maintains its current price-to-sales (P/S) ratio of 3.7.

While Amazon's transformative shift from a retail narrative to one encompassing a broad scope of AI infrastructure applications sets the stage for meaningful valuation expansion, it is essential to consider the potential risks. The Motley Fool's Stock Advisor team did not include Amazon in their list of the 10 best stocks for investors to buy now. However, the team's track record suggests that investing in the right companies can yield significant returns.

References:
[1] https://finance.yahoo.com/news/billionaire-bill-ackman-just-bought-124500507.html
[2] https://www.reuters.com/business/autos-transportation/volkswagen-extends-amazon-cloud-partnership-save-costs-with-ai-2025-08-28/
[3] https://www.benzinga.com/markets/emerging-markets/25/08/47298167/bill-ackman-invests-1-27-billion-in-amazon-adds-to-google-and-more