Whether due to his 1.5 million followers on X or success as an investor running Pershing Square Capital Management, the investment manager for Pershing Square Holdings, billionaire investor Bill Ackman has become one of the most watched investors on Wall Street. Pershing Square typically owns only 10 or 12 stocks at any given time, allowing Ackman and his team to conduct thorough bottom-up research on each of its holdings.
Naturally, when Ackman and his team take positions, the market pays attention. Here's one stock that Ackman says will be a long-term compounder.
A free cash flow machine with artificial intelligence upside
Earlier this year, Ackman on X disclosed that Pershing began accumulating shares of the ride-hailing giant Uber Technologies (UBER +2.50%) in January. At the end of the third quarter, Pershing's stake in Uber was valued at nearly $3 billion and consumed 20% of Pershing's portfolio.
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When Ackman first disclosed the position on X in February, Ackman praised Uber's CEO, Dara Khosrowshahi, who took the position in 2017, for transforming the company into "a highly profitable and cash-generative growth machine... We believe that Uber is one of the best-managed and highest-quality businesses in the world. Remarkably, it can still be purchased at a massive discount to its intrinsic value."
Uber has characteristics of other Ackman holdings, such as its capital-light nature and ability to generate excess cash flows. The company has generated close to $7 billion of free cash flow through the first three quarters of the year, up 34% from the same period last year.
Not only has the company cleaned up its core ride-hailing business, but Uber Eats has also made significant progress. In the third quarter of 2025, Uber grew gross bookings by 21% across the company, with 25% growth at Uber Eats.
Ackman and his team are also excited about the prospect of the company reducing its outstanding share count, which will boost earnings per share. In a presentation, Pershing said it expects Uber to repurchase 4% of its market cap this year and can eventually lower the outstanding share count permanently.
Going forward, investors are likely to focus on the company's progress in the autonomous driving space. While Uber isn't building self-driving cars, it has partnered with many autonomous companies that are leveraging Uber's sprawling network and platform, as well as the company's operational and regulatory expertise, to roll out their vehicles in select cities. Notably, autonomous companies such as Alphabet's Google's Waymo, WeRide, and Lucid Group have formed partnerships with Uber.
NYSE: UBER
Key Data Points
In late October, AI chip giant Nvidia announced a partnership with Uber to help the company scale its autonomous vehicle fleet to 100,000 vehicles, thereby accelerating progress in the new transportation space. This brings an artificial intelligence component to Uber, which has previously stated that the autonomous opportunity is valued at over $1 trillion.
Strong earnings growth can drive a higher multiple
Ackman and Pershing have said on numerous occasions that they think the company can generate 30%-plus earnings per share growth over the medium term. While down from highs earlier this year, Uber is still up 32% year to date. Wall Street analysts on average expect Uber to earn $3.60 earnings per share in 2026, meaning the stock trades at about 23 times forward earnings, which is somewhat on par with its usual multiple in recent years.
If Uber can hit 30% or more EPS growth over the medium term, it will likely be rewarded with a higher multiple. The autonomous opportunity could also add upside and make this stock a long-term compounder.
