This Stock Is One of the Largest Holdings in Billionaire Bill Ackman's Portfolio, and It Could Be a Huge Winner

Bill Ackman is the founder of Pershing Square Capital Management, an investment fund with almost $17 billion in assets under management as of Sept. 30. Ackman is an avid stock picker, and the 17 companies in the fund's portfolio represent some of his best ideas.

Pershing has $1.9 billion of its assets (or 14% of its portfolio) parked in Uber Technologies (NYSE:UBER), which operates the world's largest ride-hailing network. Its stock is down 29% from its peak as investors worry the company will fall victim to the autonomous driving revolution, but Ackman believes that view is mistaken. In fact, he predicts Uber could be one of the biggest beneficiaries of self-driving cars, and I happen to agree.

Here's why Uber stock could be a big long-term winner.

Bill Ackman. Image source: Getty Images.

Autonomous vehicles could transform Uber's business

Developing a safe and competent self-driving car isn't the hardest part of succeeding in the autonomous industry. Companies have to build a platform where customers can request a ride, and they also have to manage the fleet so an appropriate number of cars are deployed in each city. Uber has all of this infrastructure in place already, which is why several companies have chosen to deploy their autonomous vehicles in its ride-hailing network.

The arrangement is a win for all parties. Uber's autonomous partners get immediate access to its 215 million monthly active customers, so they don't have to build their own network from scratch. Uber, on the other hand, can maintain its asset-light business model by taking a cut of every ride facilitated by its platform, so it doesn't have to spend billions of dollars to develop its own self-driving cars.

Chief executive Dara Khosrowshahi says Uber's network is booking 30% more trips per vehicle, per day for its autonomous partners compared to their own first-party networks, resulting in more revenue for both sides of the relationship.

Autonomous vehicles could transform Uber's business over the long term. In the third quarter of 2026 (ended Sept. 30), its platform generated $59.8 billion in gross bookings, which represented the dollar amount customers spent on every ride, food order, and commercial delivery. A whopping $25 billion of that total was paid to the human drivers in Uber's network, which was the company's single largest cost.

After factoring in other costs, like the money paid forward to restaurants for food orders, Uber was left with $14.8 billion in revenue. Then, after accounting for operating expenses like marketing, the company was left with just $1.4 billion in operating profit. Simply put, Uber pockets a mere fraction of its gross bookings each quarter, but if it can reduce the substantial cost of its human drivers, it will immediately grow its revenue and operating profit even if it doesn't acquire a single new customer.

Uber says only around 700 autonomous vehicles from five partners will be operating in its network by the end of 2026, but it expects to have over 2,000 vehicles from at least 10 partners operational by the end of 2027, and they could be active in 20 cities around the world.

Uber stock could be a great buy right now

Based on Uber's $56.5 billion in trailing 12-month revenue and its market capitalization of $145.3 billion as of the market close on Nov. 9, its stock is trading at a price-to-sales (P/S) ratio of 2.6. That is a steep discount to its average of 4 since going public in 2019.

Moreover, it makes Uber much cheaper than the Nasdaq-100 index which has a P/S ratio of 6.1, so it looks heavily undervalued compared to a group of America's largest technology companies.

Bill Ackman also says Uber is much cheaper than one of its main rivals, DoorDash (NASDAQ:DASH), based on the price-to-earnings (P/E) valuation metric. Based on Uber's trailing 12-month generally accepted accounting principles (GAAP) earnings of $1.68 per share, its stock is trading at a P/E ratio of 42.2, whereas DoorDash has a P/E ratio of 75.1.

Based on the valuation disparity, Ackman argues that investors are ascribing minimal value to Uber's ride-hailing business, suggesting a high probability of disruption from autonomous vehicles. He believes that view is incorrect, and Uber's rapidly scaling autonomous business supports his argument.

If the market has this story wrong like Ackman suggests, then investors who buy Uber stock today could earn significant returns over the next few years.

Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends DoorDash. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy.