Legendary Value Investor Seth Klarman’s Surprising AI Stock Pick

Legendary Value Investor Seth Klarman’s Surprising AI Stock Pick Fahad Saleem Sat, June 13, 2026 at 8:42 PM GMT+7 3 min read AMZN We just covered the Top 10 Stock Picks of 10 Famous Billionaires. Amazon.com (NASDAQ:AMZN) ranks #1 (see Top 5 Stock Picks of 5 Famous Billionaires). Top Pick Of: Seth Klarman — Baupost Group Billionaire Klarman is usually a fan of value stocks trading at cheap multiples. But his biggest holding is AMZN and that says a lot about the billionaire s outlook on the AI revolution. Amazon (NASDAQ:AMZN) remains one of the strongest beneficiaries of the AI cycle, primarily through AWS. The shift toward AI applications, especially large-scale inference and AI agents, is structurally increasing demand for cloud infrastructure, where AWS holds a leading global market share. AWS has built a massive backlog of approximately $464 billion, including about $138 billion from OpenAI and $100 billion from Anthropic, highlighting multi-year contracted demand and reinforcing AWS’s role as core infrastructure for the AI ecosystem. This level of backlog signals not just near-term growth, but a long-duration demand cycle tied to enterprise AI adoption. AWS currently represents only about 20% of Amazon’s (NASDAQ:AMZN) total revenue, yet contributes roughly 60% of operating income, showing a sharp profitability concentration in the cloud segment versus the lower-margin retail business. AWS revenue has also reached an annualized run rate of roughly $150–$155 billion, with recent growth of about 28% year-over-year, indicating re-acceleration rather than maturity slowdown. According to a recent report by Semianalysis, AWS is seeing margin expansion versus competitors due in part to increased demand from Anthropic’s Claude workloads running on AWS Bedrock. The report says AWS is the only major cloud provider showing a consistent rising margin trend, even as the broader industry struggles with profitability pressure. Beyond cloud, Amazon.com’s (NASDAQ:AMZN) AI opportunity is expanding into chips and custom silicon. Amazon’s AI-related revenue run-rate is now over $15 billion annually, while its broader custom silicon business exceeds a $20 billion annual run-rate, reflecting strong growth in Graviton and other in-house chip programs. Artisan Value Fund stated the following regarding Amazon.com, Inc. (NASDAQ:AMZN) in its Q1 2026 investor letter: “We initiated four new positions in Q1, an above-average pace of activity. Typically, we add 1–2 new positions per quarter, averaging 1.7 per quarter over the past 5 years. Increased market volatility and greater dispersion in US equities created more opportunities to invest in companies that meet our three margin of safety criteria: attractive business economics, sound financial condition and compelling valuation. We also used the increased volatility to upgrade overall portfolio quality. Our three largest new positions were Amazon.com, Universal Music Group (UMG) and IQVIA Holdings. Amazon.com, Inc. (NASDAQ:AMZN) represents .....(Click Here to Read the Letter in Detail).” Copyright: prykhodov / 123RF Stock Photo While we acknowledge the potential of AMZN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 33 Stocks That Should Double in 3 Years and Cathie Wood 2026 Portfolio: 10 Best Stocks to Buy. Disclosure: None. Follow Insider Monkey on Google News.

Legendary Value Investor Seth Klarman’s Surprising AI Stock Pick

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Legendary Value Investor Seth Klarman’s Surprising AI Stock Pick

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