Amazon.com, Inc. (AMZN) Could Be Entering Its Next Growth Phase: Here’s What Investors Should Know

Pershing Square Inc. recently released its Q3 2026 investor letter. A copy of the letter can be downloaded here . The letter reported 13% year-over-year growth in third-quarter fee-related earnings (FRE) to $63.7 million, while distributable earnings (DE) before taxes increased 8% to $61.0 million. After taxes, DE totaled $49.5 million, or $0.12 per share, down 12% year over year, primarily due to corporate income taxes following its IPO. Fee-paying assets under management reached approximately $23.0 billion as of September 30, 2026, up 3% sequentially and 4% year over year, with permanent capital representing 98% of the total. The firm said its portfolio companies recorded average quarterly EPS growth of approximately 5% and generated a combined investment return of just over 8%, excluding Howard Hughes Holdings and Fannie Mae and Freddie Mac. Pershing Square expects its portfolio companies to deliver approximately 20% annual EPS growth over the next three to five years. A major focus of the letter was the AI infrastructure buildout. AWS revenue growth accelerated to 39% in Q3, while Meta's AI-driven advertising improvements and Microsoft's Azure growth and Copilot adoption strengthened their investment cases. Pershing Square also invested $110 million across seven private companies as part of its planned launch of Pershing Square Ventures. Overall, the firm believes market volatility is creating opportunities to acquire high-quality businesses at attractive valuations. In addition, please check the Fund's top five holdings to know its best picks in 2026.

In its third-quarter 2026 investor letter, Pershing Square highlighted stocks like Amazon.com, Inc. (NASDAQ: AMZN ). Amazon.com, Inc. (NASDAQ:AMZN) is a technology and e-commerce company that operates online retail marketplaces, subscription services, advertising businesses, and Amazon Web Services (AWS), its cloud computing division. The one-month return of Amazon.com, Inc. (NASDAQ:AMZN) was approximately -1.39%, while its shares traded between $196.00 and $287.20 over the last 52 weeks. On November 2nd, 2026, Amazon.com, Inc. (NASDAQ:AMZN) stock closed at approximately $245.63 per share, with a market capitalization of about $2.66 trillion.

Pershing Square stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q3 2026 investor letter:

"Amazon.com, Inc. (NASDAQ:AMZN)'s share price increased 5% during the third quarter and 8% year-to-date. Business momentum remains strong across the company. AWS revenue growth accelerated to 39% in the third quarter, its fastest rate in nearly five years. The segment's backlog reached nearly $600 billion, growing at a triple-digit rate, while operating margins remained near their highest levels in history despite the ongoing buildout. The company's retail business continues to take share, with paid units growing 12%, aided by the secular tailwind of rising e-commerce penetration and the early adoption of agentic shopping.

Despite these results, Amazon remains undervalued in our view, as investors are focused on the magnitude of capital spending, with 2026 capital expenditures of approximately $220 billion and management indicating it expects to spend meaningfully more in 2027. Notably, the demand supporting this investment has become increasingly visible as management now expects AWS to grow more than 40% in each of 2027 and 2028, with a stated goal of reaching $1 trillion of annual revenue within the next five to ten years. We find the company's framework for the returns on this investment compelling, particularly as management has indicated that its payback period on AWS capital continues to shorten, and we believe the resulting growth in free cash flow is underappreciated. We believe Amazon can compound earnings at a 20%-plus rate over the long term ( Click Here To Read The Letter In Detail )."