Billionaire Seth Klarman Invests $500M in Amazon (AMZN) After Trimming Alphabet (GOOGL)

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TLDR

  • Amazon’s annual revenue hit $716.9B, surpassing Walmart’s $713.2B to become the largest U.S. company by revenue.
  • In 2025, Amazon’s revenue rose 12.4% versus Walmart’s 4.7%, while AWS increased 20% year-over-year.
  • Billionaire Seth Klarman invested nearly $500M in Amazon shares in Q4 2025, making it Baupost’s second-biggest holding.
  • Klarman reduced his Alphabet stake by 41% after the stock jumped ~65% in 2025 due to valuation concerns.
  • Amazon forecasts 11-15% revenue growth for next quarter and plans $200B in capital spending for 2026.

Amazon (AMZN) has dethroned Walmart after nearly 25 years — and a top value investor is making a major bet on its future.

AMZN Stock Card

Amazon posted $716.9 billion in yearly revenue for 2025, narrowly surpassing Walmart’s $713.2 billion. Though the margin is slim, the gap has been narrowing for years. Walmart originally seized the lead in 2001 after overtaking Exxon Mobil and maintained it annually — until now.

The revenue growth figures speak volumes. Amazon expanded 12.4% last year while Walmart grew 4.7%. At these rates, the gap is poised to widen.

A key reason for this difference lies in business composition. Roughly 90% of Walmart’s revenue comes from its stores and website. Amazon taps into a much wider range — third-party seller fees, fulfillment services, advertising, and cloud computing all contribute to the total.

AWS alone increased 20% year-over-year and now comprises about 18% of Amazon’s total revenue. This type of high-margin, rapidly growing segment provides Amazon with a structural advantage in top-line growth.

Amazon is also aggressively expanding its physical delivery network. The company is investing $4 billion to construct same-day delivery hubs in rural America. Last year, it broadened same-day grocery delivery to over 2,300 towns, with 100 million customers ordering same-day items in 2025.

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

Seth Klarman’s Big Bet on Amazon

While this revenue milestone captured headlines, it’s worth noting who was quietly accumulating shares behind the scenes.

Seth Klarman, who manages the private investment firm Baupost Group, allocated nearly $500 million to Amazon in Q4 2025. This made Amazon Baupost’s second-largest position, representing 9.3% of the total portfolio.

Klarman financed this purchase by trimming his Alphabet stake by 41%. Alphabet shares had surged roughly 65% through 2025, driving its forward P/E ratio from around 20 in August to about 30 by December. For a value investor, such a rally typically reduces attractiveness.

Meanwhile, Amazon’s stock rose just 5% over the same period. This underperformance relative to the broader market appears to be precisely what drew Klarman’s interest.

Amazon’s Path Forward

AWS revenue climbed 24% year-over-year in Q4. Analysts anticipate strong acceleration in earnings per share by 2027 as the cloud business continues scaling. Amazon projects 11-15% revenue growth for next quarter, versus Walmart’s forecast of 3.5-4.5%.

Amazon is preparing $200 billion in capital expenditures for 2026 to address soaring demand for AI services. The company stated that AWS demand has outstripped supply.

Amazon shares currently trade below the level where Klarman established his Q4 position. Analysts value the stock at roughly 22 times their 2027 earnings projections, with estimated earnings growth around 20%.