The Great Tech Rotation: Billionaires Reduce Amazon Holdings to Place Bets on Agentic AI and Quantum Computing
Amazon Quantum Computing
Some of the most successful billionaire investors in the world are rearranging their portfolios and shifting away from well-known behemoths like Amazon in favor of seeking greater growth in emerging frontiers, marking a dramatic change in the “Big Tech” landscape. High-profile hedge fund managers, such as Israel Englander, Ken Griffin, and Steven Schonfeld, all reduced their stakes in Amazon during the third quarter of 2025 to take positions in Rigetti Computing, a quantum computing company that has experienced a 3,050% increase since early 2023, according to recent regulatory filings.
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The Billionaire Exodus: Trimming the Amazon Giant
These institutional giants, who have routinely beaten the S&P 500 over the last three years, are carefully shifting their capital, even while Amazon continues to dominate cloud computing and international trade. Ken Griffin’s Citadel Advisors cut its stake by 35%, selling 1.6 million shares of Amazon, while Israel Englander’s Millennium Management sold 787,900 shares, a 17% decrease. Steven Schonfeld went even further, cutting his investment in Amazon by 72%.
Given that Amazon is still a top-10 holding for both Englanders and Griffin, this tendency does not necessarily indicate a lack of faith in the firm. Rather, capital efficiency seems to be the driving force behind the rotation. With capital expenditures expected to approach $125 billion this year to strengthen its artificial intelligence (AI) infrastructure, Amazon is presently in a “heavy spending” era. Despite ensuring long-term dominance, this enormous expenditure temporarily strains free cash flow, which makes some billionaires seek out more immediate “moonshot” prospects elsewhere.
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Amazon’s AI Engine: Efficiency vs. Stagnation
Amazon’s core business is still strong in spite of the sell-off. The business is actively incorporating AI to increase productivity in its cloud and e-commerce businesses. According to research, customers are 60% more likely to make a purchase after using Rufus, its AI shopping assistant, which is expected to bring in $10 billion this year. Furthermore, a quick series of capabilities has been added by Amazon Web Services (AWS), such as autonomous agents for software development and security updates.
The company’s third-quarter financial results were impressive, with operating income rising by 2521.7 billion and revenue up 13% to 180 billion. Its current price of 32 times profits seems reasonable given Wall Street analysts’ expectations that earnings will increase by 18% annually over the next three years. But in 2025, Amazon’s stock has lagged behind the larger Nasdaq-100, rising only roughly 7% while the S&P 500 has increased by 16%.
The Rise of Rigetti: A 3,050% Quantum Leap
This billionaire turnover has primarily benefited Rigetti Computing (NASDAQ: RGTI). Rigetti is an expert in superconducting quantum computing, which produces qubits, the basic building blocks of quantum information, by cooling tiny circuits to almost absolute zero.
There are two different competitive moats that Rigetti has:
- Vertical Integration: By owning its own chip fabrication plant, the business is able to manage its supply chain and cut costs.
- Multi-Chip Architecture: The first multi-chip quantum processor was created by Rigetti, which is thought to be crucial for scaling systems to the point where they can resolve challenging real-world issues.
Despite the enthusiasm, a few scientists caution that broadly used quantum computers that need between 10,000 and 1 million physical qubits are probably ten years or more away. A 1,000-qubit device is not even considered in Rigetti’s current roadmap until 2027.
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The “Absurd” Valuation of Emerging Tech
Analysts from publications such as The Motley Fool warn that Rigetti’s stock price has gone “beyond absurd” even as the billionaires are purchasing. The company’s fundamentals are drastically out of balance; year-to-date revenue is only $5 million, while losses have reached $198 million.
At the moment, Rigetti is trading at an astounding 860 times sales. To put this in context, Palantir is frequently mentioned as one of the S&P 500’s most costly stocks, trading at 115 times sales. In order to finance its operations, Rigetti has also diluted its stockholders by 71% during the last 12 months. Some experts believe the move is motivated more by short-term momentum than by long-term conviction because of the very small number of billionaire investments in Rigetti.
Diversification: The “Agentic AI” Rotation
The spinning goes beyond the realm of quantum computing. Since Alphabet (GOOGL) is the new leader in “Agentic AI” software that can reason and perform tasks on its own, other billionaires are investing in the company. Coatue Management’s Philippe Laffont reduced his other tech holdings while increasing his Alphabet position by 259% in a single quarter. This change implies that when the initial excitement surrounding the “Magnificent Seven” fades, the “smart money” is searching for businesses with more alluring valuation-to-growth ratios.
Strategic Outlook for 2026
These actions emphasize the significance of portfolio rebalancing for individual investors. The billionaire rotation suggests a preference for high-volatility, high-reward options, even if Amazon’s cloud and advertising divisions are still expanding at rates of 20% and 24%, respectively. Diversification within the IT industry seems to be the key to outperforming the market approach by 2026, striking a balance between the high-growth promise of quantum and specialized AI and steady “value” players like Amazon.
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