This Bill Ackman Bet is a Terrific Year-end Breakout Candidate

Bill Ackman, the legendary investor running things over at Pershing Square Holdings Capital, has made some remarkable moves this year. And one of them, in particular, should have the attention of big-tech investors who are not only seeking a reasonable value, but also timely potential for a year-end breakout.

Undoubtedly, the latest round of 13-F filings was released, and in the third quarter, there were no new buys, only very slight trims in a few names. For the most part, the third quarter might be viewed as unremarkable, especially when you consider how small the recent trims were. Given the recent tech rally, I’d argue that Ackman and company were wise to ring the register a bit without making drastic moves to the portfolio.

And given how far valuations across the board have risen, the lack of buying activity for Q3 might actually be an optimal move, especially as the tech waters get choppier as we pass the midpoint of the fourth and final quarter of 2025.

Bill Ackman’s second-quarter Amazon bet is starting to look pretty smart

In any case, let’s zoom back a quarter further and look at one of the most remarkable new bets of the year made over at Pershing Square, at least in my opinion. Back in the second quarter, Ackman’s fund started a new position in Amazon (NASDAQ:AMZN), a Magnificent Seven name that I think might be a table pounder, especially now that it’s fresh off some outstanding quarterly earnings.

While not all Mag Seven companies have reported yet, I do think that the odds are Amazon “won” this season of earnings against its six magnificent peers. And moving into year’s end, I think Amazon stock might have what it takes to eke out more of a gain, even as the tech trade looks rough at the time of this writing.

Amazon stock’s post-earnings gains are getting wiped out—time to get in?

Amazon’s magnificent quarter deserved to be rewarded with such a pop. And while shares have since given back much of the post-earnings gains, with shares now down just over 7%, I do think investors might have an opportunity to get that last quarter at a discount, so to speak. Amazon Web Services (AWS), in particular, saw an impressive 20% year-over-year surge, thanks in part to AI demand.

Indeed, AWS is the much larger leader in the public cloud, with more modest growth, so it’s quite encouraging to witness such impressive growth numbers in the third quarter. Beyond cloud, there was strength right across the board, enough to fuel a beat even in a market that’s not so rewarding to the companies that clock in a “beat and raise” anymore. With growing concerns about AI spending and falling odds of a December rate cut, Amazon looks like a stellar value as we head into the holiday season.

Also, if we’re in for some big tariff relief, Amazon might get a big shot in the arm. On the AI front, warehouse robots and work with Anthropic are potential growth drivers going into the new year.

Amazon stock looks incredibly cheap given its profound AI strengths

At 33.1 times trailing price-to-earnings (P/E) or 29.9 times forward P/E, shares of Amazon look way too cheap, given the company’s potential to drive growth further with AI. In my view, Amazon is a top robotics play as well as a public cloud play that might be about to get its momentum back despite being the number-one player in the space.

Who knows? Maybe in a couple of years down the road, Amazon will be in the robots-as-a-service business? Time will tell. Either way, you’re getting a lot of innovation for a low price after Amazon shares trailed the market (up just 6.5%) on a year-to-date basis.