Nearly 40% of Billionaire Bill Ackman's Hedge Fund Is Invested in 3 Monster AI Stocks
Key Points
Pershing Square Capital Management bought shares in these three dominant tech titans when their valuations became too attractive to ignore.
With products and services that register robust demand and usage, these businesses stand to benefit tremendously from improving artificial intelligence (AI) capabilities.
Shareholders should trust these management teams when it comes to capital allocation, according to Ackman.
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Bill Ackman founded Pershing Square Capital Management in 2004. His investment philosophy is influenced by Warren Buffett, with the strategy centering on finding high-quality companies that can be purchased at compelling valuations. Pershing Square currently holds 11 positions, so concentration is also a key part of the approach.
The closely watched billionaire hedge fund manager had more than 39% of his firm's portfolio assets in three monster artificial intelligence (AI) stocks at the end of 2025, which might come as a surprise. These are all relatively new holdings, with the earliest investment being about three years old.
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Continue reading to learn more about these businesses and why a successful professional investor likes them.
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Buying at attractive valuations
As of Dec. 31, 2025, Pershing Square owned $2.2 billion worth of Amazon (NASDAQ: AMZN), $1.9 billion combined worth of both share classes of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG), and $1.8 billion worth of Meta Platforms (NASDAQ: META). At the end of last year, these companies made up nearly 40% of the hedge fund's portfolio.
Since Bill Ackman cares about valuation, it's worth highlighting the points at which his firm could initiate these positions. Alphabet is the oldest holding of the three businesses, with the first move made in the first quarter of 2023 at a forward price-to-earnings (P/E) ratio of 16. Then it was Amazon in April 2025 at a forward P/E multiple of 25. And finally, in the fourth quarter of 2025, Pershing Square purchased Meta Platforms at a P/E ratio of 20.
The common theme is that Ackman got in when market sentiment was weak. With Alphabet, investors were worried it was falling behind OpenAI's ChatGPT in the AI race. Amazon took a hit when there was a lot of trade and tariff uncertainty. And Meta's shares got crushed after the business said it would spend much more in 2026.
This is what great investors do. They're able to ignore what the herd is doing, focus intensely on the fundamentals, and make a move with conviction.
Leading the AI boom
There has been no shortage of attention to the massive amounts of money these large tech companies have spent on AI-related investments. In 2026, Alphabet is planning for $175 billion to $185 billion of capital expenditures, while Amazon ($200 billion) and Meta ($115 billion to $135 billion) also have huge outlays coming. The biggest concern investors have is whether the potential returns will be adequate.
Pershing Square believes these are the right moves. In the latest shareholder letter, Bill Ackman discussed that if shareholders in these companies trust their management teams to correctly allocate capital in ways that can grow earnings power, then there should be no reason to be critical, especially when there continues to be robust demand for the products and services that they offer.
What's more, these three businesses have the financial resources to invest aggressively. As of Dec. 31, they had a combined $331 billion in cash, cash equivalents, and marketable securities on their balance sheets. This was significantly greater than the amount of their combined long-term debt. Most companies don't have anything close to these cash hoards.
As far as AI progress, Ackman praised these businesses. Alphabet's AI Overviews, for instance, has more than 2 billion users. "AI Overviews is the world's most widely used AI product by a significant margin," he wrote.
For Amazon, Ackman called out how Amazon Web Services is thriving thanks to strong demand for AI capabilities. He also said AI can improve the customer experience within the company's retail segment.
Meta's ability to leverage AI to boost its recommendation engine, enhance user engagement, and help advertisers was also mentioned.
Since Ackman is a Buffett-like investor focused on high-quality businesses, this is a vote of confidence for average investors interested in the stocks of Amazon, Alphabet, and Meta Platforms.
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Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, and Meta Platforms. The Motley Fool has a disclosure policy.
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