Billionaire Bill Ackman Has 14% of His $12 Billion Hedge Fund in 1 Top AI Stock
Bill Ackman, the outspoken billionaire and founder of Pershing Square Capital Management, has never shied away from bold, concentrated bets. Over the years, his hedge fund has backed companies like Chipotle, Lowe’s, and Canadian Pacific with conviction and patience. But his latest move into artificial intelligence (AI) signals something more profound: Ackman is wagering big on the future of technology.
As of the latest filings, Ackman has allocated 14% of his $12 billion hedge fund portfolio to a single AI powerhouse—Alphabet Inc. (NASDAQ: GOOGL), the parent company of Google. This commitment amounts to nearly $1.68 billion, positioning Alphabet as one of the largest holdings in Pershing Square’s portfolio. Ackman’s bullish stance on AI and Alphabet comes at a time when the tech sector is undergoing a seismic shift, fueled by innovation, cloud computing, and generative AI.
Why Alphabet? Ackman’s Strategic Vision
Ackman’s decision to back Alphabet isn’t just about chasing the AI trend. It reflects a deeper understanding of the company’s long-term growth potential.
1. AI Leadership and Innovation
Alphabet is among the pioneers of AI research. Through its subsidiaries like Google DeepMind, the company has been developing cutting-edge AI systems for years. In 2023 and 2024, Alphabet launched Gemini, a family of large language models designed to compete with OpenAI’s GPT models. These models are already being integrated across Google’s product suite—including Search, Ads, Google Cloud, Gmail, and Android—enhancing functionality and user experience.
2. Revenue and Cloud Growth
Alphabet’s Google Cloud division posted impressive growth, with a 29% year-over-year revenue increase, hitting $10.3 billion in Q2 2024. More notably, the segment achieved an operating income of $1.17 billion, nearly tripling compared to the previous year. This demonstrates Alphabet’s successful pivot from a loss-leading cloud provider to a profitable player in enterprise computing.
3. Attractive Valuation
At the time Ackman began accumulating Alphabet shares in early 2023, the stock was trading at what he considered a discount, owing to market concerns over competition from Microsoft and OpenAI. Ackman saw this as a market overreaction, using the temporary dip to secure a strategic position in a high-quality business with durable competitive advantages.
The Numbers: Alphabet’s AI Dominance by the Data
| Key Metric | Q2 2024 |
|---|---|
| Total Revenue | $81.9 Billion |
| Google Cloud Revenue | $10.3 Billion |
| Cloud Operating Income | $1.17 Billion |
| EPS (Earnings Per Share) | $2.15 |
| YOY Revenue Growth | 13% |
| Market Capitalization | $1.88 Trillion |
| Share Price (as of May 2025) | $171.74 |
This growth isn’t driven by hype—it’s backed by robust fundamentals, strategic reinvestment, and innovation pipelines.
Ackman’s Hedge Fund Philosophy: High-Conviction, Long-Term
Bill Ackman is known for concentrating capital in a few high-quality businesses. At any given time, Pershing Square holds no more than 8 to 10 positions, focusing only on companies that Ackman believes offer long-term shareholder value.
Unlike other hedge fund managers who chase trends or diversify widely, Ackman prefers to dig deep into a company’s fundamentals, management, and long-term prospects.
Recent Top Holdings (as of 2025)
| Company | Portfolio Weight |
|---|---|
| Alphabet Inc. | 14% |
| Chipotle Mexican Grill | 13% |
| Restaurant Brands Intl | 11% |
| Hilton Worldwide | 10% |
| Canadian Pacific | 9% |
Ackman’s AI bet through Alphabet aligns with his style of investing: find a dominant company at an attractive price and hold it through cycles.
Alphabet’s Broader AI Ecosystem
What makes Alphabet’s AI strategy even more compelling is its diversified implementation:
- Search AI: Generative responses through Search Generative Experience (SGE) are already reshaping how users interact with Google’s search engine.
- Android Integration: Gemini is being embedded directly into Android OS, enabling smarter voice recognition, predictive text, and in-device AI features.
- YouTube & Ads: AI is transforming content moderation, recommendation algorithms, and ad-targeting precision.
- AI Chips & Infrastructure: Alphabet’s custom TPUs (Tensor Processing Units) are optimizing training and deployment of large-scale AI models in Google Cloud.
- Workspace: AI-powered tools in Google Docs, Sheets, and Gmail are streamlining enterprise productivity.
This AI ecosystem is deeply embedded—not tacked on—which gives Alphabet a moat few others can replicate.
What This Means for Investors
Ackman’s bet on Alphabet is not just a validation of the stock’s potential—it’s a signal for retail and institutional investors alike. Here’s why this matters:
- Institutional Confidence: A billionaire with a long track record of outperforming the market is buying and holding Alphabet.
- Growth + Profitability: Alphabet is no longer just a growth play—it’s delivering profits in AI-related segments like Google Cloud.
- AI Infrastructure Play: Alphabet isn’t just using AI—it’s building the infrastructure (TPUs, Gemini, etc.) that others depend on.
For investors seeking exposure to AI but wary of high-risk startups or speculative companies, Alphabet offers a blue-chip AI investment with strong fundamentals.
Frequently Asked Questions (FAQ)
| Question | Answer |
|---|---|
| Who is Bill Ackman? | Bill Ackman is a billionaire investor and the founder of Pershing Square Capital Management, known for his concentrated bets and activist investing style. |
| Which AI stock does Ackman hold? | Ackman holds a significant stake in Alphabet Inc. (GOOGL), which accounts for 14% of his $12 billion hedge fund. |
| Why did Ackman choose Alphabet? | He believes Alphabet is undervalued and is well-positioned in the AI space with products like Gemini, Google Cloud, and custom AI chips. |
| How big is Ackman’s position in Alphabet? | Approximately $1.68 billion, based on a 14% allocation of his $12 billion portfolio. |
| What are Alphabet’s main AI products? | Gemini AI models, Search AI (SGE), Google Cloud, TPUs, and Workspace AI features. |
| Is Alphabet profitable in its AI ventures? | Yes, especially in Google Cloud, which reported over $1.17 billion in operating income in Q2 2024. |
| What is Alphabet’s current stock price? | As of May 2025, Alphabet is trading around $171.74. |
| Is Alphabet considered a good long-term investment? | According to many analysts and investors like Ackman, Alphabet is considered a strong long-term bet due to its innovation, scale, and profitability. |
Final Thoughts: A Long-Term AI Powerhouse Backed by a Billionaire
Bill Ackman’s substantial investment in Alphabet reinforces a growing consensus on Wall Street: AI is not just the future—it’s already here, and companies like Alphabet are leading the charge. With its powerful Gemini models, deep integration of AI across services, growing cloud profits, and a visionary roadmap, Alphabet is not merely riding the AI wave—it’s shaping it.
Ackman’s $1.68 billion bet serves as a clarion call to investors who seek a balanced approach to AI exposure—one that blends innovation with profitability, scale with agility, and future potential with current performance.
For those watching the AI race unfold, Alphabet stands tall not just as a tech titan—but as a foundational force in the intelligent economy of tomorrow.
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Conclusion
Bill Ackman’s bold move to allocate 14% of his $12 billion hedge fund to Alphabet Inc. underscores his conviction in the transformative power of artificial intelligence—and Alphabet’s pivotal role in shaping that future. This isn’t just a tech investment; it’s a strategic bet on a company that’s deeply woven into the digital infrastructure of modern life. With its unmatched data assets, AI leadership through innovations like Gemini, and strong cloud performance, Alphabet has evolved beyond a search engine giant into a true AI powerhouse.
For investors looking to gain AI exposure without the risks associated with early-stage or speculative startups, Alphabet offers a compelling blend of stability, growth, and innovation. Backed by the confidence of a seasoned investor like Ackman, Alphabet remains one of the smartest long-term plays in the AI revolution.