Bill Ackman Bets $2 Billion on Meta, Defying Wall Street AI Skeptics

Bill Ackman, the billionaire hedge fund manager known for bold contrarian bets, has revealed a massive stake in Meta Platforms that amounts to roughly 10% of his Pershing Square fund's capital — a position worth over $2 billion based on the fund's assets under management.

In Pershing Square's annual investor presentation released Wednesday, Ackman made his case for the investment, describing Meta as representing "a deeply discounted valuation for one of the world's greatest businesses." The position, acquired during the fourth quarter of 2025, signals a dramatic vote of confidence in Mark Zuckerberg's vision for artificial intelligence despite widespread Wall Street skepticism.

"We believe Meta's current share price underappreciates the company's long-term upside potential from AI," the presentation stated, directly addressing concerns that have dogged the social media giant over the past year.

Wall Street's AI Spending Anxiety

Meta shares have declined 16% over the past 12 months as investors grew increasingly nervous about the company's aggressive AI spending. In its January earnings report, Meta projected AI-related capital expenditures would reach between $115 billion and $135 billion in 2026 — a figure that sent shockwaves through the investment community.

The spending commitment represents one of the largest corporate AI investments in history, surpassing what many analysts consider prudent for a company already facing regulatory scrutiny and competitive pressure from TikTok. Critics have questioned whether Meta can generate sufficient returns on such massive infrastructure investments, particularly as the company builds out data centers and develops its own AI chips.

Ackman, however, sees the concerns as short-sighted. "We believe concerns around META's AI-related spending initiatives are underestimating the company's long-term upside potential from AI," Pershing Square noted in its presentation.

The Valuation Case

Ackman's investment thesis centers on Meta's current valuation relative to its tech peers. The company currently trades at approximately 22 times projected earnings over the next 12 months — a multiple that Ackman considers cheap given the company's market position and AI growth prospects.

For context, Alphabet, Apple, and Nvidia all trade at higher forward price-to-earnings ratios despite lacking Meta's direct consumer engagement and advertising platform dominance. Meta's family of apps — including Facebook, Instagram, and WhatsApp — collectively reach over 3.5 billion monthly active users, providing what Ackman describes as an unmatched distribution platform for AI-powered features.

2025: A Year of Outperformance

The Meta bet follows a successful 2025 for Pershing Square, which outperformed the S&P 500 with its net asset value increasing 20.9% compared to the index's 17% return. The fund also established positions in Amazon and Hertz during the year, though the Meta stake represents its most significant new holding.

Ackman has historically favored concentrated positions in companies he believes are misunderstood by the market. His previous high-profile investments include stakes in Chipotle Mexican Grill, Hilton Worldwide, and Canadian Pacific Railway — all of which delivered substantial returns following his involvement.

The Meta investment also represents something of a return to form for Ackman, who made his reputation with activist campaigns targeting companies like Herbalife and Allied Capital. Unlike those contentious battles, Meta represents a more traditional value investment predicated on the company's underlying business quality rather than operational changes.

The AI Arms Race Continues

Meta's massive AI spending comes as technology giants race to establish dominance in what many consider the next frontier of computing. The company is building out what Zuckerberg has described as the infrastructure needed to power the "next generation of AI services," including large language models, recommendation algorithms, and immersive experiences for the metaverse.

Whether Ackman's contrarian bet pays off will depend largely on whether Meta can convert its infrastructure investments into measurable business improvements. The company has already begun integrating AI into its advertising systems, reporting improved targeting efficiency and advertiser returns in recent quarters.

For now, Wall Street remains divided. While some analysts have upgraded Meta shares following recent product demonstrations, others maintain that the AI spending trajectory remains unsustainable. Ackman's $2 billion vote of confidence suggests at least one prominent investor believes the skeptics have it wrong.