Hedge Funds Are Buying Up Amazon Stock. Should You Join In, Too?
Key Points
Shares of Amazon are down about 1% in 2026, underperforming the broader market.
Amazon is currently trading at much more reasonable multiples than many other AI companies.
This diversified business makes Amazon an attractive, lower-risk investment in AI.
- These 10 stocks could mint the next wave of millionaires ›
What do hedge funds see in Amazon (NASDAQ: AMZN) right now? The answer is likely "value." Large funds, including Bill Ackman's Pershing Square and Appaloosa Management, have reportedly increased their positions in Amazon. Their underlying thesis is that Amazon is undervalued relative to other artificial intelligence and cloud computing companies.
More pure-play or native AI and cloud computing businesses, such as Nvidia (NASDAQ: NVDA) and Intel (NASDAQ: INTC), have seen their valuations become so inflated that it can be hard to justify their prices. Nvidia trades at 18 times trailing sales and Intel commands a 12x price-to-sales ratio nowadays.
Missed Nvidia in 2009? 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 »
Amazon is an e-commerce platform that also owns Amazon Web Services, and that hybrid structure is what has the company trading at more reasonable multiples. Amazon's P/S ratio? A modest 3.4x.
Image source: The Motley Fool.
Amazon's stock is relatively flat in 2026 and up just over 7% in the past 12 months as of this writing. Its forward and trailing P/E ratios are hovering around 30. The stock is currently trading at less than 4 times sales.
As is the trend with AI-related companies, Amazon's biggest risk is its heavy AI capex. Amazon anticipates spending around $200 billion on AI infrastructure this year alone. Competition in the space is fierce, but Amazon has a strong, diversified business that truly gives it a leg up. It's understandable why hedge funds would be loading up on shares. If you can stomach the heavy spending on AI, then Amazon is one of the better-priced stocks in the space.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $499,979!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $54,086!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $398,052!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, available when you join Stock Advisor, and there may not be another chance like this anytime soon.
See the 3 stocks »
*Stock Advisor returns as of June 27, 2026.
Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon, Intel, and Nvidia. The Motley Fool has a disclosure policy.
Recommended Articles
