The latest 13F filings for the second quarter show that both Cathie Wood’s ARK Investment Management and Stanley Druckenmiller’s Duquesne Family Office hold Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOGL), and both were buying in the quarter.
Duquesne Family Office raised its stake by 1,083% in AMZN to 541,600 shares worth $129 million. Wood increased her ARK position by 18% to about 1.59 million shares worth $379 million, or 2.46% of her portfolio.
On Alphabet, Druckenmiller opened a new position of 336,300 shares worth $120 million, or 2.31% of his portfolio. Wood raised hers by 45% to about 1.04 million shares worth $369 million.
In this article, we will analyze Amazon in detail.
Analyzing Amazon in Detail
Bulls say AWS growth is accelerating and has visibility for years out. In the second quarter, AWS grew 37% year over year, up from 28% the prior quarter, the fifth straight quarter of accelerating growth. Backlog hit $496 billion, up $130 billion in a single quarter and growing triple digits year over year.
Bulls highlight that this growth is not coming at the cost of margins. The AWS operating margin rose to about 39.4%, up 6.5 percentage points year over year. Management said this was due to efficiency gains, better capacity management, and fixed-cost control.
Amazon is also ramping up its own silicon with Trainium and Graviton, which brings higher margins because the company keeps the margin it would otherwise pay Nvidia and can sell the same compute for less. Graviton is already used by 98% of the top 1,000 EC2 customers, and Anthropic has committed to spending more than $10 billion a year on Trainium.
Bear Case
However, bears point to free cash flow, which turned negative in the recent quarter to an outflow of $7.6 billion on a trailing-twelve-month basis. The company raised its capex guidance to $220 billion for 2026, up from $200 billion, on higher memory prices, and management said it still won’t have enough capacity to meet demand this year or next, so the spending won’t slow soon.
Another risk is that AWS growth is concentrated in names like OpenAI and Anthropic. If those labs fail to keep their lead as AI gets cheaper, or if the demand they are contracting for doesn’t show up, Amazon could be left with stranded assets after spending hundreds of billions to build capacity for them.
Valuation
Amazon (NASDAQ:AMZN) trades at a forward P/E of about 21, above the sector median of around 16, roughly 32% higher. EV/Sales is 3.62 versus 1.24, about 191% higher, and Price/Sales is 3.68 versus 0.96, about 282% higher.
However, against its own history, the stock looks cheap. The forward P/E of 21 is down about 87% from its five-year average near 160, and the trailing P/E is down about 57% from its five-year average of 50.
Amazon’s forward non-GAAP PEG is 1.03 versus a sector median of 1.40, meaning the high multiple is backed by fast earnings growth.
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