Bill Ackman’s Pershing Square has significantly outperformed the S&P 500 since 2004 with a 15.9% annualized return, driven by a strategy focused on high-quality businesses. Recently, Ackman shifted his portfolio, divesting Alphabet to invest heavily in megacap tech giants like Meta, Amazon, and Microsoft, alongside an existing stake in Uber.
These new tech positions, exhibiting strong growth and reasonable valuations, are expected to fuel future market-beating returns, though the success of AI infrastructure spending and broader economic health for non-tech holdings will be crucial for sustained outperformance.
Bill Ackman's Pershing Square Capital Management has consistently delivered impressive returns, compounding at an annualized rate of 15.9% since 2004 through the end of 2025. This comfortably surpasses the S&P 500's comparable gain of 10.7% over the same period. Ackman's investment philosophy is clear: focus on high-quality businesses with reliable cash flows and a low risk of permanent capital loss.
In a notable shift, Ackman has recently leaned into the megacap technology sector. Over the past year, Pershing Square has almost entirely divested its stake in Alphabet (Google) to establish new positions in three other prominent "Magnificent Seven" companies: Meta Platforms (NASDAQ: META), Amazon (NASDAQ: AMZN), and Microsoft (NASDAQ: MSFT). The firm also maintains a core holding in Uber Technologies (NYSE: UBER).
These four technology giants constituted the majority of Pershing Square's substantial $13.7 billion portfolio as revealed in its first-quarter 13F filing. Given their robust growth prospects, the portfolio appears well-positioned for continued market-beating returns in the coming years, though potential challenges remain.
Bill Ackman. Image source: Getty Images.
These new technology investments are expected to be key drivers for Pershing Square's future performance. Meta Platforms, for instance, experienced 28% year-over-year revenue growth over the trailing 12 months, fueled by AI-driven advertising and content improvements. Despite its recent surge, the stock trades at an attractive forward price-to-earnings (P/E) ratio of approximately 19.
Amazon has seen its trailing revenue growth accelerate to 16%, benefiting from strong demand for AI-related cloud services and consistent growth in its e-commerce segment. Amazon Web Services (AWS) remains its primary profit engine, and Ackman appears to believe the market still undervalues AWS's significant earnings potential. Meanwhile, Microsoft concluded fiscal 2026 with 18% revenue growth, sustained by robust demand for its productivity software and Azure cloud services as enterprises modernize their IT infrastructure and adopt AI capabilities. Its shares, while having rebounded, trade at a reasonable 26 times forward earnings.
Uber continues to dominate the ride-hailing and delivery sectors, reporting 24% year-over-year gross bookings growth and a 35% rise in adjusted earnings last quarter. With an eye on autonomous transportation, Uber is strategically positioning itself as a distribution platform. Ackman seemingly views Uber as undervalued, trading at just 23 times forward earnings, even amid competition from rivals like Alphabet's Waymo and Tesla.
Collectively, these core tech holdings present compelling value given their growth trajectories. Analysts project annual earnings growth ranging from about 16% for Microsoft to 32% for Uber. Should valuations remain stable, these stocks could largely mirror their earnings growth over time.
The remainder of Ackman's portfolio, which includes holdings like Hertz, Howard Hughes, and Restaurant Brands, is more sensitive to consumer spending and broader economic health. While these positions introduce greater volatility, a strengthening economy in the coming years would provide a significant boost. The primary concern for the tech segment is whether the substantial investment in AI infrastructure will consistently translate into sustainable profit growth. However, given their control over vast computational resources, it's challenging to envision how these tech giants won't thrive in an AI-driven economy. With strong operational momentum, sensible valuations, and optimistic earnings forecasts, Pershing Square is well-positioned to extend its impressive track record in the years ahead.
