Amazon Stock In Focus: Warren Buffett Cuts Stake, Bill Ackman Loads Up In Divergent Bets

AMZN stock underperformed benchmark indices last year and faced a sharp selloff in recent weeks.

• Berkshire Hathaway trimmed its holding by 75% in Q4, while Pershing Square increased it by 65%.
• Amazon is coming off a nine-day losing streak during which shares dropped about 18%.
• Lone Pine Capital and Tiger Global Management also trimmed their positions in Amazon.

Berkshire Hathaway trimmed its stake in Amazon.com, Inc. by about 75% to $351.7 million in the December quarter, while Pershing Square Holdings increased its stake by 65% to $2.2 billion, latest regulatory filings show.

The sharply contrasting moves by Warren Buffett and Bill Ackman, two of Wall Street’s most closely watched heavyweight investors, have left markets puzzled. To be sure, Amazon posted steady business growth last year, but the gains failed to drive a meaningful rally in the stock, frustrating some investors.

They gained a mere 5.2% last year, underperforming the benchmark indices, before a sharp decline hit in recent weeks.

Lone Pine Capital and Tiger Global Management also trimmed their positions in Amazon by the year-end.

Sharp Selloff

Amazon ended Tuesday's session more than 1% higher, breaking a nine-day losing run that had wiped out billions of dollars in market value. The stock fell about 18% between Feb. 2 and last Friday, its steepest slump since 2006.

Investors were already taking money out of tech and growth stocks when Amazon reported quarterly earnings. The e-commerce and cloud giant missed sales and profit targets for the fourth quarter and said it would spend a mammoth $200 billion on capital expenditures this year, mainly on AI-related capacity expansion.

The capex – the highest among Big Tech peers and a 52% rise from what Amazon spent last year – triggered a wider selloff. 

Retail Reaction

On Stocktwits, retail sentiment for AMZN remained ‘bullish,’ unchanged since last Friday, although users sounded unsure of what to make of the divergent trades of top investors amid the sharp price drop lately.

“$AMZN very high chances that bottoms in here,” a user said.

Another user, meanwhile, expressed confidence in the underlying business: “Amazon for this year at least I think we will do really well. Their margins are expanding. AWS is growing and they have a crazy portfolio of companies that their own minority shares of just like Google. Example: Anthropic and Rivian.”

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