NEW YORK, May 22 (Reuters) - Billionaire investor Bill

Ackman told clients on Thursday that his hedge fund bought

Amazon ( AMZN ) shares last month, betting earnings will continue to grow

at the online retailer as President Donald Trump's tariffs bite

less than consumers initially feared.

Ackman and his investment team updated clients on

additions to the portfolio at his hedge fund, Pershing Square

Capital Management. "The most substantial move is Amazon ( AMZN )," chief

investment officer, Ryan Israel, said on a conference call.

With a value of over $2 trillion, Amazon ( AMZN ) is one of the

world's most valuable companies and has long featured on

Ackman's list of most admired businesses.

As one of the world's most voluble activist investors

who often pushes companies to perform better, Ackman's stock

picks are closely watched for investment trends.

But Amazon ( AMZN ) stock had been too costly until early April

when the market was battered by news of Trump's heavy

tariffs for imported goods and its price cratered.

"We felt that the company would be able to work through

any slowdown in the cloud computing division Amazon Web Services

and we did not judge that tariffs would have a material impact

on the earnings in the retail business," Israel said.

Ackman and his team also expressed confidence in Amazon ( AMZN )

CEO Andrew Jassy, saying his ability to run the business more

efficiently will allow for "more profit margin expansion at a

high rate of revenue growth."

Pershing Square had also added stakes in car rental

company Hertz and transport company Uber ( UBER ) into

the portfolio.

At the same time, the firm sold out of railroad Canadian

Pacific, Ackman said, noting that it is a position the

firm sold "with regret". Ackman in 2022 built a new stake in

Canadian Pacific, returning to one of his most profitable

investments as rail firms eye a boost from the drive to cut

carbon emissions and as manufacturing is brought back to the

United States and Mexico from abroad.

But in order to buy the Amazon ( AMZN ) stake, Ackman needed to

make adjustments and came to liquidate Canadian Pacific. He

stressed that he thinks "extremely highly of the Canadian

Pacific team" and has "a very strong belief in the long-term

future of the business."

The team also trimmed investments in Chipotle Mexican

Grill ( CMG ), Hilton Worldwide Holdings ( HLT ), Universal

Music Group and swapped the firm's Nike ( NKE ) stock

into call options, calling it a "deep-in-the-money strategy."