David Tepper’s Appaloosa Management nearly doubled its Amazon (NASDAQ:AMZN | AMZN Price Prediction) stake in the first quarter of 2026, adding roughly 2.14 million shares to bring the total to about 4.3 million, a position worth approximately $900 million and disclosed in a 13F filed May 15. That move makes Amazon Tepper’s single largest holding at roughly 15% of the $5.93 billion portfolio, up from third place at 7% in Q4 2025. The reflexive guess for a billionaire’s top artificial intelligence bet is NVIDIA (NASDAQ:NVDA). Tepper went a different direction.
What Tepper Bought, and Why It Matters
Tepper concentrated capital into Amazon during a quarter when sentiment around hyperscaler CapEx was deteriorating. Amazon traded at $208.27 on March 31, 2026, weighed down by investor anxiety about the scale of AI infrastructure spending. Tepper used that drawdown to build size. The position is now up more than 29% from the March 31 reference, with shares at $268.78 on Aug. 12. He is ahead, but modestly, and the recent pullback shows the thesis is still being contested.
The contrarian signal is sharper than the price gain suggests. While Tepper accumulated, Amazon insiders unloaded. Jeff Bezos disposed of 1,033,597 shares on May 1, then another 220,200 shares on May 4 at $275. CEO Andy Jassy, Stores chief Doug Herrington, and AWS chief Matt Garman all sold into the May rally. Berkshire Hathaway, under Greg Abel, fully exited Amazon the same quarter Tepper doubled down.
The Underlying Thesis
Tepper is buying the AI infrastructure cycle through the cloud market leader rather than the chip supplier. The numbers support the call. AWS grew 28% year over year in Q1 2026 to $37.59 billion, the fastest pace in 15 quarters, with a 38% operating margin. Amazon’s custom silicon business, Trainium and Graviton, crossed a $20 billion annual revenue run rate growing triple digits. OpenAI committed to roughly 2 GW of Trainium capacity starting in 2027, and Anthropic secured up to 5 GW.
CEO Andy Jassy framed the capital plan plainly: “We expect to invest about $200 billion in capital expenditures across Amazon in 2026, and anticipate strong long-term return on invested capital.”
Prediction markets corroborate the spending trajectory. Polymarket assigns an 88% probability that 2026 CapEx exceeds $200 billion and 95% that it tops $170 billion. That is the trade: AWS reaccelerating, custom chips vertically integrating Amazon away from NVIDIA dependency, advertising compounding at high margins, all at a trailing P/E of 32 and a forward multiple of 31.
Should Retirement Investors Follow?
The thesis is worth following with eyes open. Trailing free cash flow has collapsed to $1.2 billion as capex spending overwhelms operating cash. That pressure persists until AWS revenue catches up to the buildout. The setup rewards patience: analyst consensus sits at $312.71 with 62 buy ratings and zero sells. Tepper’s edge is duration. Retirement-focused investors with a multi-year horizon get paid for absorbing the capex digestion phase. Those who need clean quarterly cash flow optics will find better entry points after another pullback. Keep an eye on AWS growth and free cash flow recovery into 2027. That is when the thesis confirms or breaks.
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