The Motley Foolยท2025-08-31 23:30Core Viewpoint - Steve Mandel, a billionaire and hedge fund manager, has increased his stake in Amazon, indicating a positive outlook on the company's future performance, particularly in the AI sector [1][2]. Group 1: Investment Moves - Mandel sold approximately 5% of his Microsoft shares during Q2 and redirected those funds into Amazon, which has seen a nearly 800% increase in value over the past decade [2]. - The decision to transition from Microsoft to Amazon is based on the belief that Amazon's profits will grow at a significantly faster rate than Microsoft's in the long term [11]. Group 2: Amazon's Business Performance - Amazon Web Services (AWS) is a key driver of Amazon's profitability, contributing about 18% of total revenue and 53% of operating profit in Q2, with sales rising 17% to $30.9 billion [6]. - AWS is benefiting from the increasing demand for AI workloads, as companies prefer renting computing power rather than investing in dedicated data centers [5]. Group 3: Competitive Positioning - While AWS's growth rate is slower compared to Microsoft Azure and Google Cloud, it remains the largest cloud computing unit, which justifies its slower growth [6]. - Amazon's margins are steadily improving due to the growth of AWS and its advertising services, contrasting with Microsoft's performance [9].