Key Takeaways
- • Bill Ackman's Pershing Square Capital Management completely exited its Alphabet position in Q2 2026, selling approximately 106 million shares worth ~$37.8 billion, marking a significant departure from a major tech holding.
- • Pershing Square increased its stake in Meta Platforms during Q2, despite the company's Q2 revenue growth of 28% year-over-year to $60.8 billion being offset by a 13% year-over-year EPS decline to $6.18, reflecting investor concerns over heavy AI infrastructure investments weighing on profitability.
- • Ackman initiated a new position in Netflix (NFLX) during Q2, joining Meta as a "beaten-down stock" bet against broader market momentum, signaling a contrarian positioning strategy during the quarter.
- • The portfolio rebalancing reflects Ackman's pivot away from large-cap mega-cap tech (Alphabet) toward companies facing near-term margin pressure but potential AI-driven upside, while also trimming Amazon by 25% and maintaining Microsoft as a top holding.
- • Meta's free cash flow declined sharply to $784 million in Q2 from $8.5 billion year-ago, driven by elevated AI-related capital expenditures, while the company simultaneously faces litigation over social media harm—factors contributing to relative underperformance versus broader equities.
Summary
Bill Ackman's Pershing Square Capital Management executed a substantial portfolio rebalancing during the second quarter of 2026, marked by the complete liquidation of its Alphabet holding and a strategic reallocation toward underperforming media and technology names. The hedge fund sold its entire Alphabet position of approximately 106 million shares, valued at roughly $37.8 billion, exiting what had been considered a core mega-cap technology exposure despite Google's perceived operational strength.
Concurrently, Pershing Square increased its position in Meta Platforms and initiated a new stake in Netflix, both of which have significantly lagged broader equity indices over the trailing 12-month period. This contrarian positioning suggests Ackman's team believes these companies represent attractive valuations following sustained market underperformance driven by concerns over near-term profitability pressures.
Meta's Q2 2026 financial results underscore the rationale behind investor caution. While the company achieved robust revenue growth of 28% year-over-year to $60.8 billion, driven by improvements in its advertising business, earnings per share declined 13% year-over-year to $6.18. More significantly, free cash flow contracted sharply to $784 million from $8.5 billion in the year-ago period, reflecting substantial capital investments in artificial intelligence infrastructure. These elevated AI expenditures are intended to enhance the company's competitive positioning and ad-targeting capabilities, but they are currently compressing margins and deterring investors focused on near-term profitability. Meta's exposure to ongoing litigation related to social media harm has further contributed to relative stock underperformance.
The portfolio adjustments also included a 25% reduction in Amazon holdings and the maintenance of Microsoft as a significant position, indicating a nuanced approach to large-cap technology exposure. Ackman's decision to exit Alphabet entirely while building positions in Meta and Netflix during a period of apparent relative weakness reflects a high-conviction bet that these companies' AI investments will eventually drive earnings expansion, potentially rewarding patient capital that other market participants are currently avoiding.
Concurrently, Pershing Square increased its position in Meta Platforms and initiated a new stake in Netflix, both of which have significantly lagged broader equity indices over the trailing 12-month period. This contrarian positioning suggests Ackman's team believes these companies represent attractive valuations following sustained market underperformance driven by concerns over near-term profitability pressures.
Meta's Q2 2026 financial results underscore the rationale behind investor caution. While the company achieved robust revenue growth of 28% year-over-year to $60.8 billion, driven by improvements in its advertising business, earnings per share declined 13% year-over-year to $6.18. More significantly, free cash flow contracted sharply to $784 million from $8.5 billion in the year-ago period, reflecting substantial capital investments in artificial intelligence infrastructure. These elevated AI expenditures are intended to enhance the company's competitive positioning and ad-targeting capabilities, but they are currently compressing margins and deterring investors focused on near-term profitability. Meta's exposure to ongoing litigation related to social media harm has further contributed to relative stock underperformance.
The portfolio adjustments also included a 25% reduction in Amazon holdings and the maintenance of Microsoft as a significant position, indicating a nuanced approach to large-cap technology exposure. Ackman's decision to exit Alphabet entirely while building positions in Meta and Netflix during a period of apparent relative weakness reflects a high-conviction bet that these companies' AI investments will eventually drive earnings expansion, potentially rewarding patient capital that other market participants are currently avoiding.
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