Billionaires Are Selling Amazon Stock and Buying This TSX Stock Instead

Tech stocks can be quite volatile, and this one looks particularly expensive. So, what can you buy instead?

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published February 10, 2025 4:20 pm EST

| More on: AMZNBAM

Billionaire investors have been shifting their portfolios, and one surprising move has caught the market’s attention. Many are selling Amazon (NASDAQ:AMZN) shares and buying Brookfield Asset Management (TSX:BAM) instead. While Amazon has been a tech titan for decades, some of the world’s wealthiest investors are recognizing that its high valuation and slowing growth could mean it’s time to look elsewhere. And where are they putting their money? They’re putting it into a Canadian asset manager with a proven track record of stability, cash flow, and long-term growth.

stock research, analyze data — Image source: Getty Images

What’s happening?

Amazon’s most recent earnings report showed impressive growth, with revenue hitting US$620.13 billion in the trailing 12 months, an 11% increase year over year. The e-commerce and cloud computing giant also saw a net income jump to US$49.87 billion, marking an impressive 55.2% gain from last year. These numbers suggest Amazon remains a strong business, but its valuation is a different story. With a trailing price-to-earnings (P/E) ratio of 50.46 and a forward P/E of 37.88, the stock is priced for perfection. Billionaires, however, seem to be signalling that the easy money has already been made.

One of the most notable sellers is Citadel Advisors, led by billionaire investor Kenneth Griffin. Griffin’s fund recently sold more than 90% of its Amazon stake, a move that suggests institutional investors are locking in gains. Instead of doubling down on the e-commerce giant, many are shifting their attention to more defensive, value-oriented plays. That’s where Brookfield Asset Management comes in.

Why Brookfield

Brookfield is one of the largest alternative asset managers in the world, with over $850 billion in assets under management. Unlike Amazon, which depends on consumer spending and digital services, Brookfield focuses on hard assets, like infrastructure, real estate, and renewable energy. These industries provide stable cash flows and long-term growth.

Brookfield’s most recent earnings report shows why investors are taking notice. The TSX stock posted record fee-related earnings of $644 million in the third quarter (Q3) of 2024, a 14% increase from the same period last year. Distributable earnings also grew to $619 million, marking a 9% gain. The company’s revenue model is built on managing assets with predictable returns, making it less susceptible to short-term market swings than a tech stock like Amazon.

Why billionaires are buying

Billionaire investor Bill Ackman has been one of the biggest buyers of Brookfield stock, increasing his stake fivefold since June to hold over 22 million shares. Ackman is known for making bold bets on undervalued businesses with strong fundamentals, and his interest in Brookfield is a testament to its long-term potential.

One key reason billionaires are favouring Brookfield is its focus on infrastructure and renewable energy. Governments around the world are pouring money into green energy projects, and Brookfield is at the forefront of this shift. With major investments in wind, solar, and hydroelectric power, the TSX stock is well-positioned to benefit from the global transition to cleaner energy sources.

Another reason for the move? Brookfield offers something Amazon doesn’t: a strong dividend. Brookfield’s forward annual dividend yield sits at 2.64%. This may not sound like much, but it’s a compelling feature in a world where steady income is hard to find. Amazon, however, doesn’t pay a dividend at all, relying entirely on capital appreciation for investor returns.

Foolish takeaway

Looking ahead, Brookfield has ambitious growth plans. The TSX stock aims to double its assets under management to $2 trillion within the next four years, which, if successful, would drive significant earnings growth. Its real estate and private equity divisions are also expanding, further diversifying its revenue streams.

So, Amazon remains a dominant force in tech. Yet the smart money is recognizing that its best days of hypergrowth might be behind it. With valuations stretched and regulatory scrutiny mounting, billionaire investors are pivoting toward more stable, income-generating assets. Brookfield Asset Management, with its focus on hard assets, infrastructure, and dividends, is shaping up to be the kind of TSX stock that can weather a market downturn and provide steady returns for years to come.