Billionaire Seth Klarman Buys $500M of Amazon (AMZN) Stock After Trimming Alphabet (GOOGL)

TLDR

• Amazon reported $716.9B in annual revenue, overtaking Walmart’s $713.2B to become America’s largest company by revenue.
• Amazon’s revenue grew 12.4% in 2025 vs. Walmart’s 4.7%, with AWS up 20% year over year.
• Billionaire investor Seth Klarman invested nearly $500M in Amazon stock in Q4 2025, making it Baupost’s second-largest position.
• Klarman trimmed his Alphabet position by 41% after the stock surged ~65% in 2025, citing valuation concerns.
• Amazon is guiding for 11–15% revenue growth next quarter and plans $200B in capital expenditures for 2026.

Amazon (AMZN) just knocked Walmart off a throne it held for nearly 25 years — and one of the world’s sharpest value investors is betting big on what comes next.

Amazon.com, Inc., AMZN

Amazon reported $716.9 billion in annual revenue for 2025, edging past Walmart’s $713.2 billion. The margin is tight, but the gap has been closing for years. Walmart first claimed the top spot in 2001 when it surpassed Exxon Mobil, holding it every year since — until now.

The revenue growth numbers say a lot. Amazon grew 12.4% last year. Walmart grew 4.7%. At those rates, the gap is likely to widen.

A big reason for the difference comes down to business mix. About 90% of Walmart’s revenue comes from its stores and website. Amazon draws from a much broader pool — third-party seller fees, fulfillment services, advertising, and cloud computing all feed into the total.

AWS alone grew 20% year over year and now accounts for roughly 18% of Amazon’s total revenue. That kind of high-margin, fast-growing segment gives Amazon a structural edge when it comes to top-line growth.

Amazon is also pushing hard into physical delivery. The company is investing $4 billion to build same-day delivery hubs in rural America. Last year it expanded same-day grocery delivery to more than 2,300 towns, with 100 million customers ordering same-day items in 2025.

Amazon’s U.S. retail market share now sits at around 9%, up from roughly 6% before the pandemic. Walmart’s share is approximately 7.6%, roughly flat over the same period.

Seth Klarman’s Big Bet on Amazon

While the revenue milestone grabbed headlines, it’s worth noting who was quietly loading up on AMZN stock in the background.

Seth Klarman, who runs the private investment partnership Baupost Group, invested nearly $500 million in Amazon in Q4 2025. That made it Baupost’s second-largest position, at 9.3% of the total portfolio.

Klarman funded part of that move by cutting his Alphabet position by 41%. Alphabet’s stock had surged roughly 65% through 2025, pushing its forward P/E from around 20 in August to around 30 by December. For a value investor, that kind of run tends to reduce the appeal.

Meanwhile, Amazon’s stock was up just 5% over the same period. That underperformance, relative to the broader market, appears to be exactly what attracted Klarman’s attention.

Amazon’s Path Forward

AWS revenue grew 24% year over year in Q4. Analysts expect earnings per share to accelerate strongly in 2027 as the cloud business scales up. Amazon is guiding for 11–15% revenue growth next quarter, compared to Walmart’s guidance of 3.5–4.5%.

Amazon is planning $200 billion in capital expenditures for 2026 to meet surging demand for AI services. The company said demand for AWS has been outpacing supply.

Amazon stock currently trades below the price at which Klarman established his position in Q4. Analysts are pricing the stock at roughly 22 times their 2027 earnings estimates, with projected earnings growth of around 20%.

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