(New York, Feb 12) — Pershing Square Capital Management, led by prominent hedge fund manager Bill Ackman, disclosed that it has built a sizable stake in Meta, arguing the market is undervaluing the company’s long-term growth potential in artificial intelligence (AI). Pershing Square believes Meta’s shares are currently significantly undervalued.
In its annual investor letter released on Wednesday (local time, Feb 10), Pershing Square said Meta made up about 10% of its portfolio as of the end of last year. The position was initiated in late November.
Meta’s stock fell 16% over the past year amid concerns that the company is spending too aggressively on AI. In its fourth-quarter earnings report released in January, Meta projected total AI-related capital expenditures this year of roughly $115 billion to $135 billion.
Pershing Square noted that Meta trades at a forward price-to-earnings (P/E) ratio of about 22x, which it views as inexpensive given AI’s potential to drive strong future earnings growth. It added that Alphabet, Apple, and Nvidia all trade at higher forward P/E multiples than Meta.
