Bill Ackman didn't achieve a net worth of $9.2 billion by making glaring errors. He has to be especially careful, considering that his Pershing Square Capital Management hedge fund owns only 11 stocks.
The billionaire's cautious nature was in full view in the third quarter of 2025. Ackman didn't initiate positions in any new stocks, nor did he add to any of his hedge fund's existing holdings. Instead, he reduced Pershing Square's stakes in four stocks.
One of the stocks Ackman sold was a sizzling hot leader in artificial intelligence (AI). However, Wall Street thinks he made a big mistake.
Ackman's biggest AI move
Pershing Square's portfolio includes only four stocks with strong AI connections. He added Amazon (AMZN +1.64%) and Uber Technologies (UBER +0.61%) earlier this year. Ackman's hedge fund has owned stakes in both share classes of Google parent Alphabet (GOOG +3.33%) (GOOGL +3.53%) since 2023.
Ackman didn't buy or sell any shares of Amazon or Alphabet Class C in Q3. However, he trimmed Pershing Square's position in Uber by a tiny 0.1%. His biggest AI move in the quarter, though, was selling over 519,000 shares of Alphabet Class A. This reduced his hedge fund's position in the stock by roughly 9.7%.
Why did Ackman dump a relatively large chunk of his hedge fund's stake in Alphabet Class A? He hasn't commented publicly on the transaction so far. Pershing Square hasn't made any statements about it, either.
Perhaps the best guess is that Ackman decided to take some profits off the table. Alphabet Class A shares have soared since the end of the first quarter of 2023, when the billionaire initiated a position in the stock.
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Key Data Points
Wall Street's opposite take
In November, S&P Global (SPGI +0.54%) surveyed 66 analysts who cover Alphabet. Guess how many recommended selling the stock? Pat yourself on the back if your answer was zero. No analysts recommended selling Alphabet in the previous three months, either.
Instead, Wall Street is overwhelmingly bullish about Alphabet. Twelve analysts rated the Class A shares as a "strong buy" in November. Another 45 analysts assigned a "buy" rating to the stock. Only nine analysts dissented – and they recommended holding rather than selling.
Why does Wall Street like Alphabet so much? Probably because the company's business is booming. Alphabet reported revenue of $102.3 billion in Q3, up 16% year-over-year. Earnings skyrocketed 33% to roughly $35 billion.
Any concerns that Alphabet would be left behind in the AI race should have dissipated by now. Google Search is firing on all cylinders, buoyed by the introduction of generative AI features such as AI Overviews. Google's Gemini large language model (LLM) now has over 650 million monthly active users. Google Cloud's growth is accelerating, thanks largely to a major AI tailwind.
Image source: Getty Images.
Should you buy or sell Alphabet stock?
I think that Wall Street has it right about Alphabet. And there's no reason to believe that Ackman has soured on the stock. After all, Pershing Square still owns over 11 million Class A and Class B shares worth around $3.3 billion.
The recent launch of Google Gemini 3.0 should help Google Cloud, in my view. I also expect that increased adoption of agentic AI will attract more customers to the cloud platform. It could help boost Google Search revenue as AI agents serve as personal shoppers for users.
I'm also optimistic about the prospects for Alphabet's Waymo unit. Waymo already offers autonomous ride-hailing services in five U.S. cities. It plans to expand soon to 11 other U.S. cities and one international city (London).
In addition, Alphabet could have a lottery ticket of sorts with Google Quantum AI. This unit has achieved two important quantum computing milestones and hopes to deliver a large-scale quantum computer that can be used for a wide range of applications within the decade.
Ackman probably had good reasons for trimming Pershing Square's position in Alphabet in Q3. But I think long-term investors will be better off buying the stock.
