Pershing Square (PSH) fund manager Bill Ackman has revealed he bought a $2bn stake in Meta Platforms (META) last November, betting the Facebook and Instagram owner will benefit from its huge expenditure on artificial intelligence which is forecast to rise to $135bn from $72.2bn in 2025.
In an annual presentation to investors in the £8bn London-listed US hedge fund, Ackman said: “We believe concerns around Meta’s AI-related spending initiatives are underestimating the company’s long-term upside potential from AI.”
Ackman added: “We believe Meta’s current share price … represents a deeply discounted valuation for one of the world’s greatest businesses,” which he said was a dominant leader in the fast-growing digital advertising market with $200bn of revenues that had grown 22% last year.
Excluding its Reality Labs division that is developing Meta’s push into virtual reality, the group’s core advertising business was valued at less than 18 times forecast earnings, Ackman said.
The fund manager believed Meta was one of the clear beneficiaries from AI which would enable it to deliver more appropriate content to its 3.5bn daily users and offer a more tailored service to advertisers looking to exploit its global reach.
Since opening the position, Meta’s share price had increased 11% in 2025 and another 3% this year, his presentation said.
Meta sits alongside two other US tech titans in the concentrated portfolio, Amazon and Alphabet, which Ackman bought earlier last year. Google parent Alphabet had been the biggest contributor to PSH’s 20.9% underlying investment return last year which beat the S&P 500’s 17.9%. Shareholders did much better with a 33.9% total return as the shares narrowed their wide discount in the market rally after President Trump modified his initial tariff proposals in April. Nevertheless, the shares still trade 26% below net asset value.
Over five years, shareholders’ annualised returns of 14.6% are slightly ahead of the S&P’s 14.4%.
PSH also sold out of its investment in hotel chain Hilton Worldwide (HLT) last month after a good year for the shares left them “unlikely to meet our high return threshold”.
In December the Ackman confirmed plans for PSH to provide up to $1bn (£750m) of financing for an insurance company acquisition by portfolio holding Howard Hughes that is part of his ambition to build a “modern-day Berkshire Hathaway”.
Our view
James Carthew, head of investment company research at QuotedData, said: “It feels to me as though Pershing Square is a bit late to the party when it comes to the mega-cap AI stocks. That is showing up in its short-term performance numbers where it sits towards the bottom of the table.”
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