Understanding Bill Ackman's Strategic Stock Selections

Who is Bill Ackman, and why should individual investors pay attention to his investment decisions? Ackman is the founder and CEO of Pershing Square Capital Management, one of the prominent hedge funds that has consistently delivered strong performance relative to broader market indices. His track record of generating superior long-term returns has made him one of the most closely watched capital allocators in the investment world. Understanding his investment philosophy and current holdings can provide valuable insights for retail investors seeking to build wealth through equity markets.

Who Is Bill Ackman and Why His Portfolio Matters

Before diving into specific holdings, it’s worth understanding what makes an investor like Bill Ackman worth emulating. Ackman’s hedge fund has demonstrated a keen ability to identify undervalued opportunities and companies with sustainable competitive advantages. His approach focuses on long-term wealth creation rather than short-term trading gains. By examining which companies he allocates significant capital to, investors can gain perspective on what institutional investors view as the most compelling long-term opportunities. The three stocks discussed below represent approximately 39.5% of Pershing Square’s portfolio, indicating a significant conviction bet on their future prospects.

Amazon: Dominance Across Multiple Growth Engines

Amazon commands roughly 8.73% of the fund’s capital allocation, reflecting confidence in the company’s diversified business model. The e-commerce giant operates across several substantial industries simultaneously—retail, cloud infrastructure, advertising, and artificial intelligence.

The company’s approach to operational efficiency through automation and robotics suggests meaningful margin expansion potential in its core retail division. As fulfillment costs decline due to technological improvements, Amazon can reinvest savings into competitive pricing, driving increased consumer traffic and engagement. This creates a positive feedback loop: lower prices attract more customers, higher volumes generate increased advertising revenue from sellers using Amazon’s platform.

Yet Amazon’s true growth engine remains its cloud computing division. With Andy Jassy leading operations, the company has emphasized that approximately 85% of IT spending still occurs through on-premises infrastructure—indicating an enormous runway for cloud adoption and market share gains. Beyond immediate revenue opportunities, Amazon’s relentless customer obsession has helped it accumulate over 200 million Prime members, creating valuable switching costs and network effects. This combination of scale, operational excellence, and strategic reinvestment positions the company to deliver compounding returns over multi-year periods.

Alphabet: Search Resilience and Cloud Acceleration

Accounting for 10.52% of the portfolio, Alphabet represents another significant position reflecting conviction in the company’s long-term potential. The Google parent company maintains an entrenched position as the dominant search engine globally. Rather than being disrupted by the emergence of AI chatbots, Alphabet has responded proactively by integrating AI-powered features directly into its search platform through AI Overviews and AI mode functionality.

Early signals suggest these features are proving effective—Alphabet reported that AI-enhanced search is driving increased query activity rather than cannibalizing it. Users benefit from conversational, synthesized answers that save time compared to traditional search result scanning. This adaptation demonstrates the company’s ability to evolve its core business while capturing value from emerging technologies.

Notably, Alphabet’s advertising empire spanning Google and YouTube continues to thrive and generate substantial cash flows. However, this division may soon become secondary to the company’s cloud services business, which is experiencing faster growth rates. As of the end of Q3, Alphabet’s cloud backlog reached $155 billion, representing a 46% sequential increase. This acceleration reflects growing enterprise appetite for cloud infrastructure alongside AI-enabled services. Through its Waymo subsidiary, Alphabet is also exploring autonomous vehicle opportunities, representing another long-term growth vector. These multiple expanding opportunities explain why Bill Ackman maintains such a substantial stake in the company.

Uber Technologies: Capturing Structural Growth Trends

The largest position in the portfolio at 20.25% of allocated capital, Uber Technologies represents Ackman’s most significant conviction bet on the ride-sharing industry’s future trajectory. This outsized allocation requires scrutiny—is it justified by underlying fundamentals?

Several factors support this positioning. First, Uber has delivered impressive financial results with rapidly accelerating revenue and profitability metrics. User growth remains strong, with both the number of trips and monthly active users expanding meaningfully in recent quarters. The company is clearly capturing growing demand for its services.

Second, Uber possesses a durable competitive moat built on powerful network effects. As the platform attracts more drivers and passengers, it becomes increasingly difficult for competitors to offer comparable value. The company’s market penetration data—approximately 10% of adults in its top 10 countries use the platform monthly—suggests significant headroom for expansion even in mature markets.

Third, demographic trends in developed markets work favorably for Uber’s long-term prospects. Younger generations are obtaining driver’s licenses later and driving less than their predecessors at comparable ages. This generational shift suggests that as these younger cohorts age, many will never obtain traditional driving licenses. Instead, they’ll rely on ride-sharing services, micro-mobility, and other transportation-as-a-service models. This structural trend creates a growing addressable market of non-drivers requiring transportation solutions—a tailwind that will persist for decades.

Combined with global markets that remain substantially underpenetrated relative to potential demand, Uber presents a compelling long-term investment opportunity with strong competitive positioning and multi-decade growth visibility.

What Individual Investors Can Learn From Bill Ackman’s Approach

The concentration of Ackman’s portfolio in these three names—Amazon, Alphabet, and Uber Technologies—reveals an important investment lesson: quality and growth can justify significant capital concentration when conviction is high. Rather than diversifying across dozens of mediocre positions, this approach focuses resources on companies with durable competitive advantages, expanding addressable markets, and management teams capable of executing long-term strategies.

These companies share common characteristics: they operate within industries experiencing structural transformation, they possess network effects or other defensible moats, and they have demonstrated the ability to adapt to changing competitive landscapes. Whether you choose to follow Ackman’s specific stock selections or not, the underlying investment philosophy—focusing on businesses capable of delivering superior returns over extended periods—remains timeless. The Motley Fool’s Stock Advisor team has identified comparable opportunities (with historical examples including Netflix and Nvidia), demonstrating that identifying high-quality businesses is possible through rigorous analysis. By studying how sophisticated investors allocate capital, individual investors can refine their own decision-making processes and improve long-term portfolio performance.