Billionaire investor Bill Ackman revealed to clients that his hedge fund, Pershing Square Capital Management, purchased Amazon shares last month. The investment was made after Amazon’s stock price dropped significantly in early April due to concerns over President Donald Trump’s tariffs on imported goods.
Ackman’s chief investment officer, Ryan Israel, explained during a conference call that the team believed Amazon could navigate any potential slowdown in its cloud computing division, Amazon Web Services. They also didn’t anticipate the tariffs would significantly impact the retail business’s earnings.
The investment team expressed confidence in Amazon CEO Andrew Jassy’s ability to run the business efficiently, predicting “more profit margin expansion at a high rate of revenue growth.” This move into Amazon comes as Pershing Square made adjustments to its portfolio, selling its stake in Canadian Pacific railroad and adding positions in car rental company Hertz and transport company Uber.
Ackman stressed that the decision to sell Canadian Pacific was made to fund the Amazon investment, despite having “a very strong belief in the long-term future of the business.” The firm also made other portfolio adjustments, including trimming investments in Chipotle Mexican Grill, Hilton Worldwide Holdings, and Universal Music Group, while swapping Nike stock into call options.
