Warren Buffett took control of Berkshire Hathaway in 1965. He promptly turned the then-textile operation into an insurance-focused holding company. The premium payments created a steady inflow of investable cash that Buffett has used to fund acquisitions and stock purchases, creating tremendous value for shareholders. Berkshire stock has gained about 5,900,000% since he took control.
Billionaire Bill Ackman wants to recreate that success with Howard Hughes, a holding company focused on real estate development. Ackman, through his hedge fund Pershing Square Capital, added $900 million to an already substantial stake in Howard Hughes earlier this year, saying it was a "superb platform to build a faster-growing, high-returning holding company."
More recently, Ackman hosted Howard Hughes' annual shareholder meeting, where he explained his vision for turning the company into a "modern Berkshire Hathaway." He even suggested that Howard Hughes was at a more attractive starting point than Berkshire circa 1965 because its core real estate business is booming, while Berkshire's core textile business was in decline when Buffett took control.
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Bill Ackman has aggressively bought stock in Amazon and Uber this year
Whether Bill Ackman becomes the next Warren Buffett remains to be seen, but he certainly has a good track record. Pershing Square reported a total return of 128% during the last five years, 14 percentage points more the S&P 500 (SNPINDEX: ^GSPC). That makes Ackman a good source of inspiration.
Ackman during the first half of the year purchased substantial positions in two artificial intelligence (AI) stocks. He did not own either one before 2025, but they now account for 30% of his portfolio.
- Ackman added 5.8 million shares of Amazon (AMZN +1.49%). It is now the fourth largest holding at 9% of his portfolio.
- Ackman added 30.3 million shares of Uber Technologies (UBER 0.23%). It is now his largest holding at 21% of his portfolio.
Ackman clearly has a lot of confidence in Amazon and Uber. And because his hedge fund beat the market over the last five years, investors should seriously consider following his lead. Here's why these AI stocks are smart long-term investments.
1. Amazon
Amazon has a strong presence in three industries forecast to grow at a double-digit pace over the next five years. It operates the largest e-commerce marketplace in North America, Western Europe, and the Middle East. It is the third largest adtech company in the world. And Amazon Web Services (AWS) is the most popular public cloud platform as measured by spending on infrastructure and platform services.
Leadership in cloud computing is particularly important because it means AWS is ideally positioned to benefit as demand for AI infrastructure increases. The company has leaned into that opportunity by designing custom chips for training and inference. AWS is also the primary cloud provider for Anthropic, and it has introduced a range of AI cloud services, like the generative AI development platform Bedrock.
However, I think investors often overlook what AI means for Amazon's retail business. The company has designed 1,000+ generative AI applications to improve inventory placement, demand forecasting, last-mile delivery, and customer service. Amazon has also developed models that let its warehouse robots understand human workers and navigate fulfillment centers more quickly. Those innovations have already made its retail business more profitable.
Wall Street expects Amazon's earnings to increase at 17% annually over the next three years. That makes the current valuation of 33 times earnings look reasonable. Patient investors should feel comfortable buying a small position in the stock at its current price.
NYSE: UBER
Key Data Points
2. Uber Technologies
Uber not only operates the largest ride-sharing platform in the world, but also one of the largest food delivery platforms. By integrating those services into a common mobile application, Uber can efficiently acquire new customers by cross-promoting its mobility business to delivery users and its delivery business to mobility users.
While Uber is not a pure-play AI stock, the company uses machine learning to efficiently match and route drivers, provide customer support, and personalize advertising. More important, leadership in the ride-sharing market makes Uber an ideal partner for autonomous driving technology companies that want to scale their robotaxi businesses.
Uber already works with 20 autonomous vehicle (AV) companies. CEO Dara Khosrowshahi told analysts this year, "Uber can deliver the lowest operational costs for our AV partners because we are leaps and bounds ahead on every aspect of the go-to-market capabilities that are critical for commercialization." Some of the most consequential partnerships are listed below.
- Alphabet's Waymo offers robotaxi rides through Uber in Phoenix, Austin, and Atlanta. Also, autonomous food delivery is available through Uber Eats in Phoenix.
- May Mobility will offer robotaxi rides through Uber in Arlington, Texas, by the end of 2025. The companies will take their partnership to additional U.S. markets in 2026.
- Pony AI will offer robotaxi rides through Uber in a "key market in the Middle East" this year, with a goal of scaling to additional international markets in the future.
- Volkswagen will offer robotaxi rides through Uber in Los Angeles. Testing is scheduled to start later this year, and the commercial launch will follow in 2026.
- WeRide offers robotaxi rides through Uber in Abu Dhabi, with Dubai to follow later this year. The companies will expand the partnership to 15 additional cities in the next five years.
Wall Street expects Uber's earnings to increase at 26% annually over the next three years. That makes the current valuation of 16 times earnings look downright cheap. Those numbers give Uber a price/earnings-to-growth (PEG) ratio of 0.6, a material discount to the three-year average of 1.1. Long-term investors should feel comfortable buying this stock today.
