Billionaire Bill Ackman Has 14% of His $11.9 Billion Portfolio Invested in This AI Stock -- and Wall Street Thinks It's Poised to Soar

Billionaire Bill Ackman subscribes to the theory of having only a few eggs in his basket and watching that basket closely. His Pershing Square Capital Management hedge fund currently owns the stocks of only 11 companies.

Most of those holdings aren't tech stocks. However, the billionaire hedge fund manager has one significant bet on an artificial intelligence (AI) leader. Ackman has 14% of his $11.9 billion portfolio invested in one AI stock -- and Wall Street thinks it's poised to soar.

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Ackman's big AI bet

Pershing Square has invested heavily in Alphabet Class A shares (NASDAQ: GOOGL) and Class C shares (NASDAQ: GOOG). Together, these two stocks were valued at more than $1.67 billion as of the end of the first quarter of 2025.

Ackman initiated a position in the Google parent in the first quarter of 2023. His move came soon after Google stumbled with the launch of its first generative AI product. OpenAI's ChatGPT was taking the world by storm, and some thought Google was being left in the dust in the AI race. Ackman disagreed.

He told CNBC in an interview later that year, "[Google] will be a dominant player in AI for the very, very long term." The hedge fund manager listed several reasons for his optimism, including Google's access to a massive amount of data to train AI models, its internally designed AI chips, and its cloud business.

For a while, Alphabet ranked as Ackman's largest holding. It's been a very profitable investment, with shares soaring more than 60% since the end of the first quarter of 2023. However, Ackman has taken some profits off the table, selling 1.83 million shares in the second quarter of 2024 and 1.22 million Class C shares in the first quarter of 2025. He partially offset the latest sale, though, by buying more than 451,000 shares of Alphabet's Class A shares.

Alphabet bulls on Wall Street

If Wall Street is right, Ackman will want to hold on to his remaining Alphabet shares. Of the 68 analysts surveyed by LSEG in June, 16 recommended the stock as a strong buy. Another 41 analysts rated the stock as a buy. The remaining 11 analysts recommended holding Alphabet shares.

The average 12-month price target for Alphabet represents an upside potential of roughly 17%. The most optimistic Wall Street analyst thinks the AI stock could skyrocket 45% higher over the next 12 months.

To be sure, Alphabet isn't Wall Street's favorite AI stock right now. Some analysts remain concerned about the antitrust rulings against the company and the potential threat to Google Search from generative AI. However, the consensus Wall Street view on Alphabet is highly favorable.

Why? I suspect valuation has a lot to do with it. Alphabet's forward price-to-earnings ratio is 18.3, the lowest forward earnings multiple by far among the so-called "Magnificent Seven" stocks.

Alphabet's AI achievements can't be ignored by analysts, either. The company's incorporation of AI Overviews and AI Mode with its search engine appears to be going well. Google Gemini 2.5 Pro ranks as the No. 1 large language model (LLM) on several AI leaderboards. Google Cloud is the fastest-growing major cloud service provider, in large part due to its AI offerings.

Is Alphabet stock a buy now?

I don't think investors should overlook the real challenges that Alphabet faces. Regulators could force the company to divest some of its products and/or businesses. Competition from up-and-coming rivals, such as Perplexity, could eventually impact Google Search.

However, I suspect both Ackman and Wall Street are right to be bullish about this stock. I predict that Google will continue to benefit from a massive AI tailwind. I also view Alphabet's Waymo self-driving car unit as an underappreciated asset. If autonomous ride-hailing fulfills its potential, Waymo will be a huge growth driver for Alphabet in the not-too-distant future.

I wouldn't have 14% of my portfolio invested in Alphabet as Ackman does, though. While having only a few eggs in his basket has worked well for him, I'm still a big fan of diversification.

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Keith Speights has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.