Bill Ackman is a well-known hedge fund manager who runs Pershing Square Capital Management, the firm he founded in 2004. His strategy emphasizes buying attractively priced shares in what he and his team believe are high-quality companies. The goal is to create a concentrated portfolio and to own these names for several years
The billionaire has almost 21% of his $13.7 billion hedge fund in just one stock (based on data from June 30). Continue reading to learn what this top position is and what makes it a special business.
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Ackman is betting big on this growth tech stock
On an X post in February, Ackman said that his firm had accumulated 30.3 million shares in Uber Technologies (UBER 0.35%). As of June 30, the hedge fund owned the same number of shares.
As mentioned, Ackman wants to identify great businesses. There are notable traits that help put Uber in this category.
Viewing Uber from a high level, investors realize that this is really a marketplace business that connects demand (riders and hungry consumers) with supply (drivers and restaurants). In general, these are fragmented stakeholder groups, which makes Uber tremendously valuable as the aggregator of supply and demand. The result is a powerful network effect, allowing the platform to get better over time.
The company's competitive position is so dominant that even popular restaurant chains with vast physical footprints and well-developed digital apps, like McDonald's and Yum! Brands' Taco Bell, still make themselves available on its app. This is a strikingly clear indication of the power Uber has in the minds of consumers. The brand is held in high regard.
Uber is now a profit-making machine
Ackman praised the "superb job" that CEO Dara Khosrowshahi has done so far, turning Uber into a profitable company that produces free cash flow. This is a result of the CEO running a more efficient organization.
The bottom-line performance can also be credited to the scalable nature of the business model. Every additional ride or delivery should produce high margins for the company.
This is showing up in the financials. Operating income totaled $1.5 billion in the second quarter (ended June 30), up 82% year over year and a big improvement from the loss in the same period of 2022.
The leadership's confidence in the future was evident in Uber's 2024 investor day presentation. Management forecast adjusted EBITDA compound annual growth in a percentage range from the high 30s to 40, between 2024 and 2027. Based on Pershing Square's Uber investment thesis, the hedge fund believes those percentages are a realistic outlook.
Profit gains depend on revenue growth, and Uber's revenue was up 16% in the first six months of 2025 versus the same period in 2024. The growth has come down dramatically from 2021 and 2022.
However, double-digit annual revenue gains can be achieved for the foreseeable future. This will be possible because of Uber's ability to keep bringing on new customers, which now total 180 million monthly active users.
Is the stock still cheap?
Uber shares have had a wonderful 2025, climbing 57% (as of Oct. 14) thanks to strong fundamental performance. When Ackman and Pershing Square started buying the stock in January, they obviously thought it was cheap. The same perspective might still be true.
Even after a superb return, Uber shares look reasonably priced. Investors who want to follow in the billionaire's footsteps will have to pay a forward price-to-earnings ratio of 23.2. That's barely more expensive than the S&P 500 index.
It can definitely be difficult to buy a stock after seeing the price rise so much and trade near all-time highs. When it comes to investing, though, what matters is the future. Buying Uber shares today still looks like a smart move.
