Recent regulatory filings have revealed a stark divergence in strategy between two legendary investors regarding Amazon. As the e-commerce and cloud giant signals an unprecedented surge in capital expenditure, Warren Buffett’s Berkshire Hathaway has dramatically scaled back its stake, while Bill Ackman’s Pershing Square has made a substantial new commitment. The core debate centers on the short-term financial pain of the company’s aggressive artificial intelligence push.
A Clash of Investment Philosophies
Documents detailing portfolio activity for the fourth quarter of 2025 show that Berkshire Hathaway liquidated approximately 75% of its position in Amazon. The holding was reduced from 10 million shares to roughly 2.3 million, generating proceeds in excess of $1.5 billion. This move represents a significant retreat from a long-held investment for Buffett’s conglomerate.
In direct contrast, Pershing Square executed a major purchase during the same period, boosting its Amazon stake by 65%. The acquisition solidifies Amazon as one of the fund’s more substantial holdings. This opposing actions by two of the market’s most watched investors highlight the deep uncertainty over Amazon’s current capital allocation strategy.
The $200 Billion Question
The source of market anxiety emerged in early February when CEO Andy Jassy outlined capital expenditure (capex) plans for the 2026 fiscal year. The company is targeting investments of approximately $200 billion, a jump of more than 50% from the prior year. According to reports, this figure exceeded analyst expectations by about $50 billion.
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Management indicated that the majority of this historic budget is earmarked for AI infrastructure, including data center expansion and the development of proprietary semiconductor chips. While leadership projected attractive long-term returns, the sheer scale of the planned spending has ignited concerns over near-term free cash flow. The market’s reaction following the earnings and capex update was severe: Amazon’s market capitalization reportedly plummeted by around $450 billion on fears that profitability would be pressured.
Charting Uncharted Territory
The negative sentiment manifested clearly in the stock’s price action. The equity recently endured a nine-day losing streak—its longest sequence of daily declines since 2006. From a 52-week high near $258, shares fell to test key support levels around the $200 mark. The closing price on February 16 was recorded at $201.25.
Despite the sell-off, the majority of analysts covering the company maintain “Buy” ratings, with median price targets sitting well above current trading levels. This presents the central dilemma for investors: To what extent is the market willing to tolerate short-term cash flow pressure as Amazon seeks to secure a long-term leadership position in AI infrastructure? The contradictory moves by Buffett and Ackman provide a clear answer: consensus has yet to be reached.
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