Bill Ackman Has 45% of His New Hedge Fund's Portfolio Invested in Just 3 Incredible Growth Stocks
Bill Ackman is known for managing a highly concentrated portfolio with just a handful of high-conviction stock picks. So, when he launched a new closed-end fund earlier this year, it was a safe bet to think he would buy stocks that mostly match the portfolio held by Pershing Square 's (NYSE: PS) other fund, Pershing Square Holdings .
Investors got their first glimpse at Ackman's purchases for Pershing Square USA (NYSE: PSUS) last month in his first letter to shareholders since launching the fund. Ackman says the timing of the launch worked out well, as the market provided an opportunity to buy into some of the most promising businesses right now. He quickly deployed nearly all of the capital raised in the fund's IPO, and three of the purchases now account for roughly 45% of the portfolio based on last month's update.
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Microsoft (NASDAQ: MSFT) is both a leading enterprise software company and a cloud platform-as-a-service provider. Both businesses have benefited from the increased capabilities of artificial intelligence over the last few years.
Microsoft's Azure cloud computing segment gets all the attention these days, though. The company is spending heavily to expand capacity for AI training and inference. Management expects to spend $175 billion during calendar 2026, plus additional expenses for operating leases. With remaining performance obligations totaling $678 billion (and growing) across its software suite and its cloud computing business, it can easily support that level of spending.
Microsoft stock has pushed higher in recent months, but the shares remain attractive at 25 times forward earnings. Ackman expects the company to grow earnings per share at a compound rate of about 19% over the next three to five years, which should allow for significantly more price appreciation.
Meta's advancements in AI help improve its recommendation algorithms, which drive both engagement and ad efficacy. That shows up as an increase in both ad impressions and average price per ad, leading to very strong results.
Ackman expects Meta's earnings per share to grow at a compound rate of 22% over the next three to five years, making its forward P/E of less than 22 look cheap.
Ackman says Uber 's (NYSE: UBER) valuation has become disconnected from its fundamentals. The stock has been beaten down due to fears that autonomous vehicles will displace the leading ride-sharing platform. But that discounts the value of Uber as a demand aggregator, which will prove extremely valuable for autonomous vehicle producers.
In the meantime, Uber is strengthening its network. Monthly active users climbed 16% last quarter, and monthly trips per user increased 2%. Overall, gross bookings improved 24%. It continues to exhibit operating leverage, resulting in 40% year-over-year operating income growth.
Uber's strong user growth and profitability are evidence of the network effect working to its advantage. It's that same competitive advantage that will serve it well as autonomous vehicles come to market. Users don't want to check multiple apps to find the best way to get from point A to point B. As the incumbent, Uber is well-positioned to stave off the threat of self-driving cars and instead become their key partner.
Autonomous vehicles also have the potential to significantly expand the ride-sharing market. That means Uber can continue to exhibit high growth for the foreseeable future. Ackman believes the company can grow earnings per share at a 25% rate over the next three to five years. With the stock trading for close to 20 times forward earnings, it could see tremendous growth if Ackman's thesis proves out.
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Adam Levy has positions in Meta Platforms, Microsoft, and Uber Technologies. The Motley Fool has positions in and recommends Meta Platforms and Microsoft. The Motley Fool recommends Uber Technologies. The Motley Fool has a disclosure policy .
