The tech and e-commerce giant Amazon (AMZN +1.63%) had quite the run since it was launched as an online book store in 1997 by the young and ambitious Jeff Bezos. Since then, the company grew tremendously, expanding into a number of different industries and selling pretty much anything you can imagine online, launching a video-streaming service, becoming one of the largest cloud-computing providers, and wading into the grocery and healthcare sectors as well.
Its success attracted capital from many ultrahigh-net-worth individuals and funds run by billionaires like Warren Buffett, David Tepper, and Stanley Druckenmiller. Let's see how much each has made off of their investment in Amazon, which is now in the $1 trillion market cap club.
Image source: Motley Fool.
A strong-performing stock
Given Amazon's success as a company, it should come as no surprise that the stock generated excellent returns for shareholders. Since the company went public in 1997, the stock is up more than 140,972%.
Buffett's company Berkshire Hathaway (BRK.A +0.05%)(BRK.B +0.01%) first purchased 9.67 million shares of Amazon in the first quarter of 2019 for an average price of roughly $83.22. In the second quarter, Berkshire purchased more than 1 million new shares at an average cost of $93.15 and has since sold about 2% of those shares. So, Berkshire's first purchase in Q1 2019 would have been worth roughly $804.7 million. Berkshire's second purchase would have been worth $93.2 million.
Currently, Berkshire's stake in Amazon amounts to roughly $1.34 billion, so Berkshire has made about $442 million since 2019, which amounts to a percent change of 49%.
NASDAQ: AMZN
Key Data Points
Tepper, the founder of the global hedge fund Appaloosa Management, is also a big believer in Amazon, and the stock currently makes up roughly 11.75% of Appaloosa's portfolio. As with Berkshire, Appaloosa's first purchases began in Q1 2019. He bought shares throughout the year for prices ranging from roughly $75 per share to $101 per share. Since then, Appaloosa has been an active buyer and seller of the stock. But the fund's total stake is worth about $201 million, and it's currently worth $254 million, equating to a percent change and gain of roughly 26%.
Druckenmiller, who has incredibly never had a down year while managing funds over the last four-plus decades, has been in and out of Amazon since 2013, having bought shares on 18 different occasions since then and sold shares of the company on 14 different occasions. The stock currently makes up roughly 3.7% of Druckenmiller's fund, the Duquesne Family Office. In total, Duquesne's acquired position amounts to $78 million and is currently worth $103 million, amounting to a 32% gain.
How does the investment compare
Looking at these three billionaires, Buffett and Berkshire seemed to have performed the best so far on their Amazon investment, being up close to 50%.
But if you compare it to the broader benchmark S&P 500, the index has actually outperformed Amazon with a total return of more than 90% since the very beginning of 2019, compared to Amazon's roughly 69% return. It can be tough to beat the broader market.
Still, I'm guessing that Buffett, Tepper, and Druckenmiller see Amazon as a good long-term play, given the potential of Amazon Web Services (AWS), its foray into other large industries, and its likely ability to take advantage of the artificial intelligence (AI) craze.
