TipRanks
5 min read
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Bill Ackman is making waves again—his Pershing Square Capital Management just made a bold bet on Amazon (AMZN), snapping up nearly $1 billion in stock during Q1 2025. The blockbuster move comes at a time when Amazon is under pressure from tariffs, slowing AWS growth, and fierce AI competition—issues that have dragged the stock down year-to-date. Ackman’s aggressive play has reignited debate on whether now is the moment to buy into Big Tech’s most embattled giant.
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Despite macroeconomic headwinds and competition, Ackman sees a resilient AWS, underestimated retail strength gains, and temporary market overreactions as compelling reasons to “stock up” on AMZN, and I happen to agree.
Amazon Web Services (AWS) saw its growth accelerate in the first quarter of 2025, posting $25 billion in revenue, a 17% year-over-year increase. Profitability surged as well, with operating income nearly doubling from $5.1 billion in Q1 2024 to $9.4 billion. As AWS scales, it continues to benefit from powerful tailwinds in the cloud computing industry, which is projected to grow at a 20.4% CAGR and surpass $1 trillion in the coming years.
Competing with giants like Microsoft Azure and Google Cloud Platform (GCP), AWS is doubling down on AI to fuel further demand. Amazon’s heavy investment in generative AI, through initiatives like its Bedrock platform and custom-built chips such as Trainium, is positioning AWS as a leader in this next phase of cloud innovation.
Now accounting for roughly 17% of Amazon’s total net sales, AWS has become a growth engine so significant that it could stand alone as a major tech company.
Amazon’s core retail segment continues to demonstrate strong momentum, with domestic revenue rising 12% year-over-year to $86.3 billion. International markets also contributed positively to the segment’s growth. Importantly, Amazon has transformed this historically lower-margin business into a significantly more profitable one, reporting $5 billion in operating income for the quarter—a notable achievement given the inherent challenges of retail operations.
This profitability reflects years of strategic investment in its fulfillment infrastructure, which has been refined to deliver faster shipping and reduce transportation costs. Despite persistent macroeconomic pressures and evolving consumer behavior, Amazon’s first-quarter retail performance underscores the resilience of both its business model and customer demand.
