Appaloosa Management, a hedge fund owned by billionaire David Tepper, just made a big bet on Amazon (AMZN 2.16%). Tepper doubled the fund’s stake in the e-commerce and cloud computing giant in the first quarter, according to Securities and Exchange Commission filings. The billionaire boosted his stake by 7.9%, adding 2.14 million shares of Amazon to the Appaloosa portfolio.
Amazon is now the largest position in the Appaloosa hedge fund, representing about 15.2% of the portfolio. That’s up from 7.3% on Dec. 31, 2025. Appaloosa now owns 4.3 million shares of Amazon, valued at roughly $900 milion.
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Amazon is by far the largest holding in the fund, well ahead of Micron Technology at 9.6% and Alphabet at 8.4%.
Should you also bet on Amazon?
The big buy by Tepper comes after he trimmed his position in Amazon slightly in Q4, from about 7.4% to 7.2%. That was likely a case of profit-taking after Amazon stock surged to over $254 per share in November, up about 16% for the year at the time.
Tepper’s first-quarter buy likely came on the dip, as Amazon stock fell below $200 per share in February during the Q1 tech sell-off. Amazon’s valuation sank to near the lowest level in 15 years in February, likely prompting the big Tepper buy. Since then, Amazon’s share price has surged 35% to $268 per share.
Amazon is no longer as cheap as it was in February, trading at 32 times earnings, but it’s still in the buy zone. Amazon had a strong first quarter, crushing estimates, and the Q2 outlook calls for 16%-19% year-over-year sales growth and operating income growth of 15% at the midpoint. Its cloud computing revenue soared 28% in Q1, and the company has made big capex investments to capitalize on that demand.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Micron Technology. The Motley Fool has a disclosure policy.
