In a significant portfolio shift revealed through recent regulatory filings, value investing legend Seth Klarman has initiated a substantial new position in Amazon.com Inc. (AMZN), acquiring over 2.1 million shares to make it the second-largest holding at Baupost Group. This move comes as Klarman reduced exposure to Alphabet Inc. (GOOG), a key player in digital advertising and cloud computing that competes intensely with Amazon in multiple arenas, by 41% through the sale of more than 770,000 shares. The adjustments highlight Klarman’s evolving view on valuation opportunities within the tech sector amid shifting market dynamics.
Klarman’s Strategic Reallocation in Tech Giants
Seth Klarman, the founder and managing partner of The Baupost Group, has long been recognized for his disciplined, value-oriented approach that prioritizes margin of safety and long-term capital preservation. In the fourth quarter of 2025, Baupost’s 13F filing disclosed a portfolio valued at approximately $5.28 billion across 22 positions, reflecting a concentrated yet diversified strategy.
The standout transaction was the establishment of a new stake in Amazon, with the purchase of 2,121,391 shares valued at roughly $489.7 million based on quarter-end pricing. This acquisition immediately positioned Amazon as the fund’s second-largest holding, representing about 9.28% of the overall portfolio. Amazon’s dominance spans e-commerce, where it commands a leading share of U.S. online retail sales, and cloud computing via Amazon Web Services (AWS), which continues to generate robust profitability and growth in an expanding market for enterprise infrastructure and AI-related services.
This move marks a return to Amazon for Klarman, who had previously held and exited the stock in earlier periods. The timing suggests a reassessment of Amazon’s valuation relative to its fundamentals. Despite broader market volatility in tech, Amazon has demonstrated resilience through diversified revenue streams, improving operating margins, and continued investment in high-growth areas like logistics optimization and generative AI capabilities integrated across its platforms.
Simultaneously, Baupost trimmed its position in Alphabet, selling 770,957 shares—a 41.49% reduction—leaving the remaining stake valued lower within the portfolio. Alphabet operates Google Search, YouTube, and Google Cloud, areas that directly overlap with Amazon in digital advertising revenue and cloud services. Google Cloud has been accelerating its market share gains, but it trails AWS in scale and profitability. The reduction in Alphabet may indicate Klarman’s preference for Amazon’s broader moat in consumer-facing e-commerce combined with its cloud leadership, particularly as economic conditions favor companies with strong pricing power and recurring revenue models.
Broader Portfolio Context and Other Adjustments
Baupost’s overall activity in the quarter included additions and increases in several names, underscoring a selective deployment of capital. Restaurant Brands International (QSR) remains the top holding at around 10.44% of the portfolio, reflecting Klarman’s affinity for consumer staples with franchise models. Other notable increases included Willis Towers Watson (WTW), which saw a 24.66% share count rise, and further builds in Union Pacific (UNP), emphasizing infrastructure and defensive sectors.
The fund also initiated or expanded positions in healthcare-related names like Molina Healthcare (MOH) and maintained exposure to financial services plays such as Fiserv (FI). These moves align with Klarman’s historical preference for businesses with predictable cash flows and reasonable valuations amid uncertainty in interest rates and consumer spending trends.
Key Portfolio Snapshot (Q4 2025)
| Rank | Stock | % of Portfolio | Shares Held | Value (approx.) | Change in Quarter |
|---|---|---|---|---|---|
| 1 | Restaurant Brands Intl (QSR) | 10.44% | 8.08M | $551M | Slight reduction |
| 2 | Amazon.com (AMZN) | 9.28% | 2.12M | $490M | New position (+2.12M) |
| 3 | Willis Towers Watson (WTW) | 8.45% | 1.36M | $446M | Increased |
| 4 | Elevance Health (ELV) | ~8.4% | N/A | N/A | Maintained/Adjusted |
| 5 | Union Pacific (UNP) | 7.13% | 1.63M | $376M | Increased |
(Note: Values and percentages are approximate based on end-of-quarter data and reflect Baupost’s equity holdings disclosed in filings.)
Alphabet’s reduced weighting follows a pattern where Klarman has adjusted exposure to certain “Magnificent Seven” constituents, previously holding only limited positions in the group before this Amazon addition. The shift toward Amazon over Alphabet may stem from perceived better risk-reward in Amazon’s integrated ecosystem versus Alphabet’s heavier reliance on advertising cyclicality.
Implications for Investors
Klarman’s decisions often serve as a barometer for value-minded investors navigating a market dominated by growth narratives. By building a meaningful stake in Amazon while dialing back on a direct competitor, the move signals confidence in the company’s ability to sustain leadership across retail and cloud despite macroeconomic headwinds. Amazon’s forward-looking investments in AI infrastructure and efficiency gains position it well for long-term compounding, even as near-term sentiment fluctuates.
This reallocation also illustrates Baupost’s opportunistic style—entering or expanding when valuations appear attractive relative to intrinsic value. With Amazon trading at levels that some view as more reasonable compared to historical multiples, Klarman’s vote of confidence could resonate with those seeking exposure to durable tech leaders without overpaying for momentum.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, recommendations, or solicitation to buy or sell any securities. Investors should conduct their own research and consult with qualified financial professionals before making decisions. Past performance is not indicative of future results.