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Pershing Square Holdings (LSE: PSH) is a top-performing investment trust in the FTSE 100. Over the past five years, the share price has doubled while a few dividend payments have added to the total return.
The trust typically mirrors the core holdings of Pershing Square’s private hedge fund, which is managed by star stock-picker Bill Ackman.
He has a tremendous track record of beating the market over the past two decades. This is why a lot of investors track the moves made by Ackman and his team.
A new addition
During a recent Q1 earnings call, Pershing Square’s management revealed that it had opened a position in Amazon (NASDAQ: AMZN).
It did so when President Trump’s early-April tariffs announcement sent the stock market into a tailspin. Amazon didn’t escape the chaos, with its shares dropping 31% between February and April.
Pershing Square’s chief investment officer Ryan Israel said: “We started buying our [Amazon] shares at about 24.5 times earnings, which was the lowest multiple that we’ve seen ever since we followed the company in its history. And so we thought this was a uniquely attractive time.”
This was something that struck me at the time too. On 14 April, I wrote: “Based on 2026 forecasts, [Amazon] stock is trading at 23.8 times forward earnings. It has rarely been so cheap. I think the rewards far outweigh the risks for long-term investors.”
The stock is a classic Ackman buy. He has long admired Amazon, but hasn’t seen what he and his team considered an attractive enough valuation to invest. Then the opportunity came along in April when the stock lost nearly a third of its value in two months due to tariff fears.
Israel added: “We did not judge that tariffs would have a material impact on the retail business.”
Margin expansion play
Of course, most readers will be very familiar with the retail business. Millions of people in the UK are Amazon Prime members, allowing them to get lightning-speed deliveries.
However, the company also has its cloud business AWS (Amazon Web Services). This platform provides on-demand access to computing power, storage and a wide range of internet/AI services.
To give one of many examples, Netflix relies heavily on AWS to deliver high-quality content, despite being a direct rival to Prime Video.
AWS commands around 30% of the global cloud infrastructure services market. Consequently, Pershing Square called it “the 800-pound gorilla” in this space.
Looking ahead, the trust thinks that Amazon CEO Andy Jassy will continue making the business more efficient. This “will allow for more profit margin expansion at a high rate of revenue growth.”
My takeaway
To me, the biggest risk here remains tariffs. If they cause a spike in inflation and/or a recession, then growth could slow in both Amazon’s retail and cloud businesses. In turn, this could negatively impact the value of Pershing Square’s highly-concentrated portfolio.
Over a longer time frame though, I’m very bullish on the stock. Less than 20% of global IT workloads today are estimated to be in the cloud. That may eventually rise to as much as 80%, creating a massive growth opportunity for Amazon.
I think the stock’s worth a look at $200. Alternatively, investors might want to consider Pershing Square shares at 3,842p.
