Billionaire hedge fund manager Bill Ackman – whos known for his bold bets and contrarian approaches – has become a big name in the investment world in recent years. When he buys a stock today, people tend to take note.

Recently, Ackman, who runs Pershing Square Capital, invested in one of my favourite S&P 500 growth stocks. Should investors consider following him into this one?

A ‘fantastic franchise at an extremely attractive valuation’

The stock Ackman’s been buying is Amazon (NASDAQ: AMZN), one I have a large position in (it’s currently my second-largest individual stock holding).

He first started buying the stock in April when it experienced a major sell-off as a result of tariff uncertainty. At the time, it was trading significantly below its highs.

We don’t have a lot of information on the trade at present (we’ll be able to get more details when Q2 13F regulatory filings are posted in mid-July). However, it’s clear Ackman and his team believe they picked up a long-term winner at a great price.

On a call with analysts, Pershing Square’s chief investment officer Ryan Israel said the firm acquired a “fantastic franchise” at an “extremely attractive” valuation. It’s worth noting that Israel praised the company’s multi-pronged business model, saying the company should be able to navigate any tariff-induced slowdown and continue to deliver strong earnings growth.

Is Amazon worth a look today?

Is this growth stock worth considering today? I believe so. It has experienced quite a significant bounce since its April lows (Ackman’s purchase was very well timed). But I still think the valuation’s attractive at today’s share price.

At present, Wall Street expects Amazon to generate earnings per share of $6.17 for 2025. That puts the stock on a forward-looking price-to-earnings (P/E) ratio of about 33.

That’s high by UK standards but I don’t think it’s unreasonable given Amazon’s phenomenal track record (it’s delivered share price gains of about 25% a year over the last decade) and long-term growth potential. This is a company that’s well positioned to benefit from the growth of a range of industries including online shopping, cloud computing, artificial intelligence (AI), digital advertising, video streaming, digital healthcare, space satellite broadband, and even self-driving cars.

Other attractive features include its fortress balance sheet and huge cash flows. Last year, the company generated operating cash flow of a whopping $116bn (up about 36% year on year).

I’ll point out that while I’m bullish on Amazon, I don’t expect the stock to rise in a straight line from here. Historically, the stock’s been quite volatile and I expect to see continued ups and downs.

Looking ahead, there are plenty of factors that could lead to weaker results and share price volatility including Donald Trump’s tariffs, a consumer slowdown, less business spend on cloud computing/AI, and competition from Big Tech rivals.

Taking a five-to-10 year view however, I see huge potential here. I reckon this stock can outperform the market by a wide margin over the long term and is worth a closer look.