1 Billionaire Just Bought Nearly $2 Billion of This Brilliant AI Investment

Taking a look at which stocks billionaire investment managers are buying can be a great way for retail investors to generate investment ideas. Those wealthy operators have a lot more resources to bring to bear when they are analyzing potential purchases, after all, and some have great track records.

One billionaire whom I follow is Bill Ackman, who founded and leads Pershing Square Capital Management. During the fourth quarter, Pershing Square loaded up on one new stock in particular: Meta Platforms (NASDAQ: META). It owned zero shares of the social media giant at the start of the period, but by the end, its stake was worth $1.8 billion, constituting more than 11% of the hedge fund's portfolio.

That's clearly an indicator that Ackman is bullish on Meta Platforms, but is it still a good investment for you to make right now?

Image source: Getty Images.

Investors are looking at old information

We only get snapshots about the activities of those billionaire investors because any fund with $100 million or more under management is legally required to file a Form 13F four times a year. Those forms detail a fund's holdings as of the end of each quarter, and must be submitted no later than 45 days after that quarter ended.

With that in mind, recognize that the information we recently received is old. The trades that built Pershing Square's Meta stake happened months ago. Still, Meta's stock price is lower than it was during the first part of Q4, and essentially the same price as it was throughout the rest. So investors can pick up Meta stock now for around what Ackman paid.

But would that be a smart move?

Meta operates some of the world's most-used social media sites, including Facebook and Instagram. It's also investing heavily in its AI capabilities to ensure that it stays relevant in an AI-first world. While the company has launched a few iterations of its Meta Glasses, future versions in the works will make its current smart glasses product look like ancient technology. Only time will tell how they end up faring in the marketplace, but developing them is a significant expense for the company.

But on the spending front, Meta is laying out massive sums to build AI data centers, and this may be Wall Street's biggest issue with the company. In 2026, management expects capital expenditures of between $115 billion and $135 billion, most of which will go into its data center buildout. For reference, Meta generated $116 billion in cash from operations during 2025, so nearly all of its cash flow is being used to construct data centers.

This has many investors worried, which is why the stock has sunk by about 20% from its 2025 peak and now trades at just 21.4 times forward earnings -- a lower valuation than the average stock in the S&P 500 (SNPINDEX: ^GSPC). That looks like a screaming deal for a company that just grew its revenue at a 24% pace during Q4.

I think following Ackman's lead and investing in Meta Platforms could be a good idea now, because if the company gets AI right, its stock could rocket higher, as the market is only valuing the business now based on its current capabilities.

Keithen Drury has positions in Meta Platforms. The Motley Fool has positions in and recommends Meta Platforms. The Motley Fool has a disclosure policy.