Billionaires are making huge bets on this S&P 500 tech stock. Should you consider buying it?

There are a lot of tech stocks in the S&P 500 index that could be worth considering for an ISA or Self-Invested Personal Pension (SIPP) today. From Big Tech giants to small, under-the-radar chip businesses, there are plenty of names that have significant potential.

There’s one tech stock in particular though, I think could be worth a closer look right now. Recently, this name has seen heavy buying from a number of big-name, mega-wealthy investors.

13F filings show us where the big money’s investing

One thing I do every quarter is go through 13F filings. These are US regulatory filings that large investment firms owning US stocks are required to file with the US Securities and Exchange Commission (SEC).

These filings show the firms’ buying and selling activity in the previous quarter. They also show their US stock holdings at the end of the quarter.

Billionaires have been buying this stock

Now, going through the latest bunch of 13 filings, one thing jumped out at me: very wealthy investors have been buying Amazon (NASDAQ: AMZN). Some names here include:

• Peter Thiel purchased 495,000 Amazon shares in Q2. At the end of the period, it was his largest holding at 28% of his US portfolio.

While these may not be household names, I can tell you that all three are very successful investors. Tepper is widely regarded as one of the greatest distress-debt and macro investors of his generation. He built his reputation on high-conviction, concentrated bets, famously buying heavily-discounted bank shares during the 2008/2009 financial crisis.

Druckenmiller managed George Soros’s Quantum Fund in the 1990s, where he famously helped ‘break the Bank of England’ by shorting the British pound. He later ran Duquesne Capital for three decades, generating annualised returns of over 30% without a single negative year.

As for Thiel, who co-founded PayPal and Palantir, he was the first outside investor in Facebook. Today, he primarily invests in disruptive technologies and market-dominating monopolies.

Notably, all three are billionaires. And billionaires often tend to make high-conviction bets where they see very favourable risk/reward propositions.

Should investors follow these big hitters?

So is Amazon stock worth a look? I believe so. Today, Amazon’s one of the most dominant tech companies in the world, with operations across a range of high-growth industries including e-commerce, cloud computing, AI, chips, self-driving cars, and space. This year, it’s expected to generate around $830bn in revenue.

Yet it isn’t that expensive. Looking at earnings forecasts for this year, the company’s price-to-earnings (P/E) ratio is only 21. At that earnings multiple, I believe the stock’s capable of providing attractive returns in the years ahead. In my view, there’s a strong chance it will beat the market in the medium-to-long term.

Of course, it may not. Risks include a downturn in consumer spending and a drop in enterprise AI spending.

I think these billionaires are on to something with this Big Tech stock though. In my view, it’s very much worth considering for a portfolio today.

Should you invest £5,000 in Amazon right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Amazon made the list?

 See The Six Stocks

Edward Sheldon owns shares in Amazon and Palantir.

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