Billionaire investor Bill Ackman made a bold move in the fourth quarter, placing a massive bet on Meta Platforms (META) at a time when market sentiment toward the social media giant has turned decidedly cautious.
According to the latest 13F filings, Ackman’s Pershing Square purchased 2.67 million shares of Meta during the quarter, a position valued at nearly $2 billion. The stake now represents more than 11% of Pershing Square’s entire portfolio—a concentrated bet by any measure. Just three months earlier, Ackman owned zero shares of the company.
For a hedge fund veteran with Ackman’s track record, the decision to build such a significant position comes down to two factors: a rock-solid business and a stock price that has become too cheap to ignore.
Meta’s valuation has compressed to levels not seen in years. While the stock trades at roughly 27 times trailing earnings, the forward picture looks far more compelling. Based on 2026 earnings estimates, Meta now commands a forward price-to-earnings ratio of just 21.3. That’s not only below the S&P 500’s 21.9 multiple but also ranks as the cheapest among the so-called “Magnificent Seven” tech giants.
The valuation gap tells a clear story: market fears over Meta’s spending have created an attractive entry point for value-oriented investors.
What’s particularly striking about Meta’s current situation is the disconnect between its business performance and stock price. While shares have fallen approximately 20% from all-time highs, the company’s underlying operations remain exceptionally healthy.
Fourth-quarter results told the story of a business firing on all cylinders. Revenue surged 24% year over year to $59.9 billion. Operating margins held steady at a robust 41%, and diluted earnings per share climbed 11%—growth that would be the envy of most mature companies.
So why the market skepticism? The answer lies in Meta’s ambitious AI infrastructure spending. The company has guided for 2026 capital expenditures between $115 billion and $135 billion, with the vast majority directed toward AI data centers. Investors worry these investments will weigh on profitability for years before delivering meaningful returns—and that they could even threaten Meta’s legendary cash-generating abilities.
Ackman’s purchase suggests he sees things differently. The position reflects confidence in two key outcomes: first, that Meta’s AI spending spree will ultimately prove temporary and generate substantial future cash flows; and second, that even if the AI thesis stumbles, Meta retains the flexibility to pull back on spending and revert to its core identity as a cash-generating machine.
The math is simple: Facebook and Instagram remain two of the most profitable platforms ever created. Their earning power doesn’t disappear just because Meta is placing bets on the next computing wave. For a long-term investor like Ackman, the market’s current anxiety looks like an overreaction—and overreactions create opportunities.
When a dominant, highly profitable technology company trades at a discount to the broad market, capital tends to take notice. Bill Ackman’s $2 billion stake in Meta represents a vote of confidence in both the company’s current valuation and its long-term trajectory. Whether Meta’s AI investments pay off remains to be seen. But at 21 times forward earnings, the market has already priced in considerable skepticism. For patient investors willing to look beyond short-term spending concerns, following Ackman’s lead may prove to be a rewarding strategy.
