Billionaire Bill Ackman Wants to Be the Next Warren Buffett -- He Has 45% of His Hedge Fund's $14 Billion Portfolio Invested in Just 3 Brilliant Stocks

There's a strong argument that legendary Berkshire Hathaway CEO Warren Buffett has no equal. The so-called "Oracle of Omaha" employed a novel strategy that fueled his success. He focused on acquiring successful insurance businesses and investing their generous cash flow in undervalued stocks and entire companies. Since taking the reins at Berkshire in 1965, Buffett's stock picks have generated compounded annual gains of roughly 20% and have collectively soared 5,502,284%.

Billionaire Bill Ackman's investing success is already well established, and now he's taking a page from Buffett's playbook. His Pershing Square Capital hedge fund invested $900 million in newly minted shares of Howard Hughes Holdings, giving it a 47% stake in the company, with plans to turn it into a "modern-day Berkshire Hathaway," according to Ackman. He also plans to acquire a "diversified property casualty insurance company" to generate cash flow. Sound familiar?

Like Buffett, Ackman is a value investor at heart. However, the billionaire doesn't shy away from cutting-edge technology, including artificial intelligence (AI). To that end, Ackman has 45% of Pershing Square's $14 billion portfolio invested in three leading technology stocks.

Image source: Amazon.

1. Uber: 21%

Ackman kicked off 2025 with a bang, taking a massive stake in Uber Technologies (NYSE: UBER). Pershing Capital owned more than 30 million shares to close out the second quarter, worth roughly $2.8 billion, and representing nearly 21% of its equity portfolio.

Uber dominates the rideshare space in the U.S. with 76% of the market, according to Bloomberg. It also operates the second-largest food delivery platform in the country. Uber's ability to cross-sell mobility and food delivery services to its users acts as a powerful network effect, fueling its further expansion.

In a post on social media platform X to discuss the move, Ackman praised CEO Dara Khosrowshahi, saying he "has done a superb job in transforming the company into a highly profitable and cash-generative growth machine." He went on to say, "We believe that Uber is one of the best-managed and highest quality businesses in the world."

The results support his opinion. In the second quarter, Uber's revenue of $12.7 billion grew 18% year over year, fueling diluted earnings per share (EPS) that rose 34% to $0.63. The robust financial results were driven by a strong operational performance. Trips of 3.3 billion grew 18% while monthly active platform consumers (MAPCs) grew 15%. This helped fuel gross bookings growth of 17%.

Despite the spike in Uber's stock price, it still trades for 16 times earnings -- a compelling valuation for a market leader.

2. Alphabet: 15%

Pershing has had a significant stake in Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) since 2023 and Ackman added to that position in the second quarter, citing its "attractive valuation." The hedge fund holds 6.3 million Class C shares (no voting rights) and 5.4 million Class A shares (with voting rights). The combined position is worth more than $2 billion, or 15% of Pershing Square's portfolio. It's important to note that despite the different share classes, the investing thesis is the same.

Ackman notes Alphabet's core search, broad consumer app portfolio, and cloud superiority are all helping the company, as it is "successfully executing on its vast AI potential."

The numbers are compelling. In the second quarter, Alphabet's revenue of $96.4 billion grew 14% year over year, generating diluted EPS that jumped 22% to $2.31. Google Cloud revenue jumped 32% to $13.6 billion, putting its run rate at more than $54 billion. Ackman notes that Alphabet signed as many $1 billion deals during the first half of the year as it did in all of 2024, fueling its growth rate.

Finally, Ackman says, "Despite tremendous business momentum, Alphabet still trades at a discounted valuation for a business of its quality and growth prospects."

He's not wrong. Alphabet is selling for an attractive 26 times earnings.

3. Amazon: 9%

Pershing Square took advantage of an "attractive valuation" to initiate a position in Amazon (NASDAQ: AMZN) in the second quarter. Ackman scooped up more than 5.8 million shares worth nearly $1.3 billion, and making up 9% of Pershing Square's equity holdings.

Ackman called Amazon "a company we have long studied and admired." He sang the company's praises, saying, "Amazon operates two of the world's great, category-defining franchises: its Amazon Web Services (AWS) cloud business and its e-commerce retail operations. Both AWS and the company's retail operations are supported by decades-long secular growth trends, occupy dominant positions in their respective markets, and have significant long-term opportunities for margin expansion." I couldn't have said it better myself.

The company's recent results were robust. In the second quarter, Amazon's net sales of $167.7 billion climbed 13% year over year, fueling EPS of $1.68, up 33%. CEO Andy Jassy cited Amazon's full-court press into AI as a competitive edge. Millions of customers are turning to Alexa+, its generative AI-powered voice assistant, as well as its e-commerce shopping agent. Amazon is also optimizing the productivity of its fleet of more than 1 million robots, and has made it easier for cloud users to build AI agents within AWS.

Amazon stock has "appreciated meaningfully" since Pershing established its position, but take heart. Ackman says, "We believe substantial upside remains given its ability to drive a high level of earnings growth for a very long time."

The stock is still attractively valued, with a price/earnings-to-growth (PEG) ratio of 0.58, when any number less than 1 is the standard for an undervalued stock.

Danny Vena has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, Berkshire Hathaway, Howard Hughes, and Uber Technologies. The Motley Fool has a disclosure policy.