Dan Loeb Increases Microsoft Stake by 175% to 1.1 Million Shares, AI Drives Growth
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
0mins
Should l Buy AMZN?
Source: Benzinga
- Microsoft Investment Surge: As of September 30, 2025, Dan Loeb's Third Point LLC increased its stake in Microsoft by 175% to 1.1 million shares, benefiting from strong growth in cloud and AI, leading the company to exceed market expectations in both FY25 Q4 and FY26 Q1.
- Meta Expansion Plans: As of September 30, 2025, Third Point boosted its stake in Meta by 47% to 220,000 shares, with Meta planning to invest over $600 billion in the U.S. by 2028 to expand AI technology and data centers, aiming to enhance user engagement and potential monetization.
- Nvidia Demand Surge: As of September 30, 2025, Third Point raised its stake in Nvidia to 2.85 million shares, with Nvidia exceeding earnings expectations in Q3 and projecting that demand for its AI chips will drive total revenue past $500 billion, solidifying its dominance in the AI server market.
- Amazon AWS Strong Performance: As of September 30, 2025, Third Point increased its stake in Amazon to 2.81 million shares, with Amazon surpassing earnings estimates in Q3 and AWS sales rising 20% year-over-year, indicating robust momentum in cloud services demand.
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Analyst Views on AMZN
Wall Street analysts forecast AMZN stock price to rise
44 Analyst Rating
41 Buy
3 Hold
0 Sell
Strong Buy
Current: 201.150
Low
175.00
Averages
280.01
High
325.00
Current: 201.150
Low
175.00
Averages
280.01
High
325.00
About AMZN
Amazon.com, Inc. provides a range of products and services to customers. The products offered through its stores include merchandise and content it has purchased for resale and products offered by third-party sellers. The Company’s segments include North America, International and Amazon Web Services (AWS). It serves consumers through its online and physical stores and focuses on selection, price, and convenience. Customers access its offerings through its websites, mobile apps, Alexa, devices, streaming, and physically visiting its stores. It also manufactures and sells electronic devices, including Kindle, Fire tablet, Fire TV, Echo, Ring, Blink, and eero, and develops and produces media content. It serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions, through AWS, which offers a set of on-demand technology services, including compute, storage, database, analytics, and machine learning, and other services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Amazon Shares Drop 13% in 2026 Despite Strong Q4 Revenue
- Capital Expenditure Plan: Amazon plans to invest $200 billion in capital expenditures in 2026, and despite management's expectation of strong long-term returns, investor caution regarding this massive spending has led to a 13% decline in stock price year-to-date.
- Cloud Computing Growth: Amazon Web Services (AWS) reported a 24% year-over-year revenue increase in Q4, reaching an annualized revenue run rate of over $140 billion, indicating strong market demand, particularly for AI workloads, further solidifying its leadership in the cloud computing sector.
- AI Chip Business: Amazon's Trainium2 AI chip has become its fastest-growing chip product, achieving an annualized revenue exceeding $10 billion, showcasing the company's strong momentum in the AI chip market and enhancing its competitiveness in the AI space.
- Profitability Risks and Opportunities: While Amazon's heavy reliance on AWS poses risks, if capital expenditures drive growth in this segment, it could enhance overall profitability, potentially leading to an inflection point in earnings growth in the long term.
See More
Amazon's Core Fundamentals Strengthen Amid Stock Reset
- Technical Pullback: Amazon's stock has stabilized near the long-term support zone of $195 to $200 after a sharp technical reset, indicating that the recent market sentiment fatigue does not reflect a deterioration in its core fundamentals, presenting a buying opportunity for long-term investors.
- Oversold Conditions: The Relative Strength Index has fallen into oversold territory, historically associated with intermediate-term rebounds, and combined with significant deviations from key moving averages, this increases the likelihood of a technical rebound toward the $220 to $230 range.
- Profitability Metrics: Amazon's forward P/E ratio stands at approximately 25x, with expected EPS growth of 25% and net margins of 10.8%, all surpassing industry averages, highlighting its robust profitability in the AI infrastructure sector.
- Strategic Investment Opportunity: By selling the March 20, 2026 $200 put option, investors can potentially acquire Amazon shares at a net price of $192.97 if the stock closes below $200, offering a 3.64% discount and a maximum reward of $703 per contract, showcasing a risk-managed investment strategy.
See More
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- Market Concern on AI Spending: The market is worried about artificial intelligence (AI) spending, as major investments from companies like Amazon, Google, and Microsoft have yet to yield significant returns, leading to investor skepticism regarding short-term capital returns.
- Cloud Business Growth: Amazon Web Services (AWS) achieved a 24% year-over-year growth in Q4, driven by triple-digit revenue growth from its in-house designed chips, and if this growth can be sustained, Amazon will benefit significantly overall.
- Rapid Growth of Google Cloud: Google Cloud posted an astonishing 48% growth in Q4, adding $5.71 billion in revenue year-over-year, and while AWS added $6.79 billion in new business, Google Cloud's rapid expansion highlights its market potential, especially with its leading generative AI model, Gemini.
- Strong Performance of Microsoft Azure: Although Microsoft does not disclose Azure's profitability separately, its impressive 39% year-over-year growth indicates that Azure remains a key reason to own Microsoft stock, particularly with a massive $625 billion backlog for its services, reflecting a huge demand for AI computing power.
See More
Hedge Funds Favor Amazon Amid Market Volatility
- Hedge Fund Holdings Increase: According to CNBC's analysis, major hedge funds bought a net 40.9 million shares of Amazon in Q4, making it the most owned stock among the Magnificent Seven, now representing 2.5% of total shares outstanding.
- Investor Position Changes: Klarman at Baupost Group took a new position worth $490 million, making Amazon its second-largest holding, while Ackman raised his stake by 65% to $2.2 billion, positioning it as his third-largest holding.
- Market Reaction Poor: Despite the increased investments from hedge funds, Amazon's stock has fallen over 20% from its November high and dropped 5.6% following its latest earnings report, indicating market concerns.
- Analysts Remain Bullish: Despite high valuations and capital expenditure pressures, 92% of analysts maintain a buy rating on Amazon, with Morgan Stanley projecting continued strong growth in its cloud business and setting a price target of $300, implying a 50% upside.
See More
Hidden Risks in AI Capital Expenditure Boom
- AI Debt Risks: Vanguard's senior economist Shaan Raithathaw warns that hyperscalers are set to borrow over $400 billion this year for AI buildouts, more than double the $165 billion raised in 2025, indicating potential hidden debt risks in the AI sector.
- Shift in Fund Manager Sentiment: A Bank of America survey of 190 managers overseeing $512 billion in assets reveals that only 20% now want firms to continue increasing capital spending, a sharp decline from 34% last month, reflecting growing concerns over AI hyperscaler capital expenditures.
- Market Downturn Expectations: Traders on Polymarket are pricing a 20% probability of an AI industry downturn by the end of 2026, with over $1.5 million in volume, indicating a cautious outlook among investors regarding the industry's future.
- CDS Market Warning: Net notional CDS outstanding across Alphabet, Amazon, Meta, Microsoft, Nvidia, and Oracle surged from near zero in January 2025 to nearly $10 billion by February 2026, suggesting investors are rushing to hedge AI debt exposure, reflecting concerns over potential defaults.
See More
Market Analysis: Software vs. Value Stocks
- Market Situation: As of February 13, 2026, software and AI stocks are facing sell-offs, while value stocks are trading at a high price-to-earnings ratio of 50, indicating a divergence in market sentiment towards different stock types.
- Investor Sentiment: The decline in software and AI stocks reflects investor concerns over high-valuation tech stocks, potentially leading to a shift in capital towards more value-oriented investments, thereby impacting overall market dynamics.
- Value Stock Performance: Despite economic uncertainties, value stocks continue to perform strongly with a P/E ratio of 50, indicating sustained market confidence and demand for these equities.
- Future Outlook: As the market adopts a cautious stance towards tech stocks, investors may reassess their portfolios, shifting towards more stable value stocks to mitigate potential market volatility.
See More
Amazon Shares Drop 13% in 2026 Despite Strong Q4 Revenue
- Capital Expenditure Plan: Amazon plans to invest $200 billion in capital expenditures in 2026, and despite management's expectation of strong long-term returns, investor caution regarding this massive spending has led to a 13% decline in stock price year-to-date.
- Cloud Computing Growth: Amazon Web Services (AWS) reported a 24% year-over-year revenue increase in Q4, reaching an annualized revenue run rate of over $140 billion, indicating strong market demand, particularly for AI workloads, further solidifying its leadership in the cloud computing sector.
- AI Chip Business: Amazon's Trainium2 AI chip has become its fastest-growing chip product, achieving an annualized revenue exceeding $10 billion, showcasing the company's strong momentum in the AI chip market and enhancing its competitiveness in the AI space.
- Profitability Risks and Opportunities: While Amazon's heavy reliance on AWS poses risks, if capital expenditures drive growth in this segment, it could enhance overall profitability, potentially leading to an inflection point in earnings growth in the long term.
See More
Amazon's Core Fundamentals Strengthen Amid Stock Reset
- Technical Pullback: Amazon's stock has stabilized near the long-term support zone of $195 to $200 after a sharp technical reset, indicating that the recent market sentiment fatigue does not reflect a deterioration in its core fundamentals, presenting a buying opportunity for long-term investors.
- Oversold Conditions: The Relative Strength Index has fallen into oversold territory, historically associated with intermediate-term rebounds, and combined with significant deviations from key moving averages, this increases the likelihood of a technical rebound toward the $220 to $230 range.
- Profitability Metrics: Amazon's forward P/E ratio stands at approximately 25x, with expected EPS growth of 25% and net margins of 10.8%, all surpassing industry averages, highlighting its robust profitability in the AI infrastructure sector.
- Strategic Investment Opportunity: By selling the March 20, 2026 $200 put option, investors can potentially acquire Amazon shares at a net price of $192.97 if the stock closes below $200, offering a 3.64% discount and a maximum reward of $703 per contract, showcasing a risk-managed investment strategy.
See More
Cloud Computing Drives Growth in AI Investment
- Market Concern on AI Spending: The market is worried about artificial intelligence (AI) spending, as major investments from companies like Amazon, Google, and Microsoft have yet to yield significant returns, leading to investor skepticism regarding short-term capital returns.
- Cloud Business Growth: Amazon Web Services (AWS) achieved a 24% year-over-year growth in Q4, driven by triple-digit revenue growth from its in-house designed chips, and if this growth can be sustained, Amazon will benefit significantly overall.
- Rapid Growth of Google Cloud: Google Cloud posted an astonishing 48% growth in Q4, adding $5.71 billion in revenue year-over-year, and while AWS added $6.79 billion in new business, Google Cloud's rapid expansion highlights its market potential, especially with its leading generative AI model, Gemini.
- Strong Performance of Microsoft Azure: Although Microsoft does not disclose Azure's profitability separately, its impressive 39% year-over-year growth indicates that Azure remains a key reason to own Microsoft stock, particularly with a massive $625 billion backlog for its services, reflecting a huge demand for AI computing power.
See More
Hedge Funds Favor Amazon Amid Market Volatility
- Hedge Fund Holdings Increase: According to CNBC's analysis, major hedge funds bought a net 40.9 million shares of Amazon in Q4, making it the most owned stock among the Magnificent Seven, now representing 2.5% of total shares outstanding.
- Investor Position Changes: Klarman at Baupost Group took a new position worth $490 million, making Amazon its second-largest holding, while Ackman raised his stake by 65% to $2.2 billion, positioning it as his third-largest holding.
- Market Reaction Poor: Despite the increased investments from hedge funds, Amazon's stock has fallen over 20% from its November high and dropped 5.6% following its latest earnings report, indicating market concerns.
- Analysts Remain Bullish: Despite high valuations and capital expenditure pressures, 92% of analysts maintain a buy rating on Amazon, with Morgan Stanley projecting continued strong growth in its cloud business and setting a price target of $300, implying a 50% upside.
See More
Hidden Risks in AI Capital Expenditure Boom
- AI Debt Risks: Vanguard's senior economist Shaan Raithathaw warns that hyperscalers are set to borrow over $400 billion this year for AI buildouts, more than double the $165 billion raised in 2025, indicating potential hidden debt risks in the AI sector.
- Shift in Fund Manager Sentiment: A Bank of America survey of 190 managers overseeing $512 billion in assets reveals that only 20% now want firms to continue increasing capital spending, a sharp decline from 34% last month, reflecting growing concerns over AI hyperscaler capital expenditures.
- Market Downturn Expectations: Traders on Polymarket are pricing a 20% probability of an AI industry downturn by the end of 2026, with over $1.5 million in volume, indicating a cautious outlook among investors regarding the industry's future.
- CDS Market Warning: Net notional CDS outstanding across Alphabet, Amazon, Meta, Microsoft, Nvidia, and Oracle surged from near zero in January 2025 to nearly $10 billion by February 2026, suggesting investors are rushing to hedge AI debt exposure, reflecting concerns over potential defaults.
See More
Market Analysis: Software vs. Value Stocks
- Market Situation: As of February 13, 2026, software and AI stocks are facing sell-offs, while value stocks are trading at a high price-to-earnings ratio of 50, indicating a divergence in market sentiment towards different stock types.
- Investor Sentiment: The decline in software and AI stocks reflects investor concerns over high-valuation tech stocks, potentially leading to a shift in capital towards more value-oriented investments, thereby impacting overall market dynamics.
- Value Stock Performance: Despite economic uncertainties, value stocks continue to perform strongly with a P/E ratio of 50, indicating sustained market confidence and demand for these equities.
- Future Outlook: As the market adopts a cautious stance towards tech stocks, investors may reassess their portfolios, shifting towards more stable value stocks to mitigate potential market volatility.
See More
