Pershing Square Capital Management, under the leadership of Bill Ackman, has recently unveiled a significant new investment in Meta Platforms, underscoring the firm's robust belief in the social media giant's long-term growth prospects, particularly in the realm of artificial intelligence. This strategic addition places Meta alongside other tech titans, Amazon and Alphabet, as cornerstone holdings within Pershing Square's diversified portfolio. The move reflects a focused investment strategy centered on businesses with strong fundamentals, substantial market capitalization, and clear paths to future expansion. Concurrently, the firm has divested its stakes in Chipotle Mexican Grill, Nike, and Hilton Worldwide Holdings, streamlining its portfolio to align with its updated investment thesis.
The decision to invest heavily in Meta Platforms was communicated through Pershing Square's annual investor presentation. The firm views Meta as an exceptionally undervalued asset, citing its impressive base of 3.5 billion daily active users and its position as a frontrunner in the rapidly expanding digital advertising market. A key driver behind this optimism is Meta's potential to leverage artificial intelligence, an area where Ackman believes the market currently underappreciates the company's capabilities and future revenue generation. Pershing Square's analysis suggests that Meta's current stock valuation does not adequately reflect the transformative impact AI integration will have on its business model.
Pershing Square's investment philosophy is characterized by a set of rigorous criteria designed to identify companies with durable competitive advantages and predictable cash flows. These principles include a preference for businesses with formidable barriers to entry, limited exposure to uncontrollable external factors, strong financial health, and attractive valuations. Furthermore, the firm seeks companies with minimal capital market dependency, large market capitalizations, and exceptional management and governance. These guidelines collectively shape Pershing Square's concentrated investment approach, allowing them to focus on a select number of high-conviction opportunities.
Over the past two years, Pershing Square has significantly reconfigured its investment holdings, aligning its portfolio more closely with the “Magnificent Seven” technology stocks. The recent inclusion of Meta, representing approximately 10% of the portfolio, follows earlier investments in Amazon (13%) and a refreshed commitment to Alphabet, which constituted about 19% of assets at the end of the third quarter. Notably, Pershing Square's strategy has been to back some of the top-performing tech stocks, such as Alphabet, while also identifying potential in others like Amazon and Meta, which faced varying performance challenges. This selective approach contributed to a net asset value growth of 20.9% in 2025, surpassing the S&P 500's 16.6% return.
This rebalancing reflects a clear conviction in the continued dominance and growth potential of these technology behemoths. The firm’s strategic bets on Meta, Amazon, and Alphabet are indicative of a belief that these companies will not only sustain their robust gains but also continue to outperform broader market indices like the S&P 500. By focusing on firms with strong leadership, innovative capacities, and extensive user bases, Ackman aims to capitalize on long-term trends, particularly in digital advertising and artificial intelligence, positioning Pershing Square for sustained success in a dynamic global economy.