Amazon Stock Analysis: Why Billionaires (and Others) Are Buying

Is Amazon an Attractive Investment Opportunity?

If I asked you to name a famous billionaire, Chase Coleman III might not be the first name that springs to mind. However, within the hedge fund world, he's a prominent figure. Coleman is a 'tiger cub,' having honed his skills at Julian Robertson's Tiger Fund, a pioneering hedge fund, before launching his own venture.

Today, Coleman's Tiger Global Management oversees a substantial $34 billion portfolio. Recent disclosures reveal that the fund has significantly increased its holdings in e-commerce giant Amazon (AMZN), more than doubling its stake by acquiring over 4 million shares, making it the fund's fourth-largest holding.

A More Reasonable Price Point

Rewind three years, as the U.S. emerged from pandemic lockdowns, Amazon's shares were undeniably pricey. The company traded at a staggering 110 times its trailing earnings, a valuation exceeding even the consistently high-flying Tesla. Amazon had aggressively expanded its warehousing, delivery, and fulfillment network during the lockdown, leading to excess capacity and subsequent downsizing efforts (compounded by a $12.7 billion paper loss from its investment in electric truck manufacturer Rivian).

This inflated valuation proved unsustainable. Amazon's financial challenges caused the share price to plummet by nearly half in 2022. Since then, however, Amazon has demonstrated remarkable resilience, growing its net income by over 500% to $70.6 billion. Consequently, the share price has nearly doubled. The company's price-to-earnings ratio now sits at a more palatable 34x.

Double-Digit Growth Momentum

Considering its massive $2.4 trillion valuation, Amazon is exhibiting surprisingly robust growth. In the most recent quarter, the company's net sales surged by 13% year-over-year, including an impressive 11% growth in North American and international e-commerce (excluding the impact of foreign exchange rates) and a remarkable 17.5% increase in revenue from its cloud computing platform, Amazon Web Services (AWS).

Furthermore, overall operating income jumped by 30.6% year-over-year to reach $19.2 billion. The importance of AWS to Amazon cannot be overstated. While it accounts for just 18.4% of the company's total revenue, it contributes over half of the company's profits and remains its fastest-growing segment. Given that e-commerce still represents only about 15.5% of all U.S. retail sales, there is ample opportunity for continued expansion in that sector as well.

Continued Growth Trajectory

The robust growth of AWS shows no signs of slowing down. Each quarter, Amazon consistently announces new AWS agreements with major corporate partners. For example, in Q1 2025, agreements were signed with Adobe and Uber, followed by partnerships with PepsiCo and Airbnb in Q2.

Amazon also regularly introduces new AWS tools and features. Q2 witnessed a flurry of new deployments, including Kiro, a novel 'agentic integrated development environment,' and Strands Agents, an open-source tool designed to simplify the development of new agents, supporting popular open-source frameworks like A2A and MCP.

Amazon appears well-positioned to leverage its scale and resources to drive further innovation, optimize operations, and unlock new revenue streams. It's no surprise that Chase Coleman is accumulating shares aggressively. With a slight dip in the share price, now may be an opportune time for both billionaires and everyday investors to consider adding Amazon to their investment portfolios.