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Bill Ackman’s Pershing Square Capital Management revealed a significant new investment in Meta during the fund’s annual investor presentation, signaling strong confidence in the social media and AI giant despite recent stock volatility.

The stake represents roughly 10% of Pershing Square’s capital as of the end of 2025, making it the third major addition to the fund’s portfolio this year alongside previously disclosed positions in Amazon and Hertz.

Ackman highlighted that Meta’s shares are currently undervalued relative to their long-term growth potential. “We believe Meta’s current share price underappreciates the company’s long-term upside from AI and represents a deeply discounted valuation for one of the world’s greatest businesses,” the presentation stated.

Meta’s stock has fallen 16% over the past 12 months amid investor concerns about the company’s ambitious artificial intelligence spending. In its fourth-quarter earnings report in January, Meta projected AI-related capital expenditures between $115 billion and $135 billion for 2026. Despite these high costs, Ackman and Pershing Square view the spending as a strategic investment that could drive substantial future revenue and earnings growth.

Valuation and comparative metrics

Pershing Square noted that Meta currently trades at a forward price-to-earnings ratio of 22 times projected earnings for the next 12 months, which it considers inexpensive given the expected impact of AI initiatives. By comparison, major tech peers including Alphabet, Apple, and Nvidia are trading at higher forward P/E ratios, reflecting market expectations for rapid growth.

Strategic portfolio moves

The Meta position was added in the fourth quarter of 2025, alongside stakes in Amazon and Hertz, rounding out Pershing Square’s strategic focus on high-quality companies with long-term growth potential. The fund has emphasized AI and digital innovation as core drivers for its investment thesis in 2025.

Pershing Square has delivered strong performance relative to the broader market. Last year, the fund’s net asset value increased by 20.9%, outperforming the S&P 500, which returned 17%. Ackman’s move into Meta highlights continued confidence in the company’s ability to leverage AI investments into sustainable growth, even as the market remains cautious.

With Meta facing significant investor skepticism over short-term spending, Pershing Square’s bold allocation underscores a belief that the stock’s current discount presents an opportunity for outsized long-term returns, particularly as AI adoption accelerates across the social media and technology landscape.