Investors often look to experts for promising investment ideas, and billionaire hedge fund manager Bill Ackman is a prime example. As head of Pershing Square Capital Management, Ackman employs a strategy of bold bets on a select few companies, reminiscent of Warren Buffett’s approach.
One position stands out: it comprises 18.5% of his fund, valued at $2.2 billion as of March 31. This stock is Ackman’s largest holding.
As of June 12, this growth stock has jumped 44% in 2025, significantly outperforming major indexes. It may be time for investors to examine this opportunity more closely.
Strong Fundamentals
The stock driving Pershing Square’s investment is Uber (UBER). When Ackman first acquired shares in January, Uber had just come off a disappointing 2024, with a 2% dip in share price. Despite this setback, Ackman saw potential in Uber’s strong fundamentals.
Key highlights include a 14% revenue increase in Q1 (ending March 31), thanks to double-digit gross booking growth in both mobility and delivery sectors. This is particularly encouraging given the current economic climate.
Uber’s profitability has also improved, generating over $1.2 billion in operating income in the last three months—a significant change from a $1 billion operating loss in Q1 2019. The management team is optimistic, projecting adjusted EBITDA growth at a “high 30s% to 40%” compound annual rate from 2024 to 2027.
Competitive Positioning
Uber’s defining strength lies in its powerful network effect. As more riders use the app, drivers are incentivized to join, creating a valuable feedback loop. This dynamic enhances Uber’s appeal to both riders and drivers.
The rise of autonomous vehicle (AV) technology further underscores Uber’s competitive edge. Its direct relationship with riders positions Uber as an attractive partner for AV companies, providing a low-risk, capital-light entry into this emerging market.
Uber has become synonymous with its service, much like how “Google” has become a verb. This speaks to the brand’s strong resonance with consumers, similar to other dominant companies like Airbnb and Netflix.
Reasonable Valuation
While following Bill Ackman’s lead and purchasing Uber shares may seem appealing, investors should thoroughly understand the underlying investment case.
After evaluating the situation, consider the stock’s valuation. Uber’s shares have surged 109% since June 2023, bolstered by strong financial performance. Despite this growth, the stock maintains a reasonable forward price-to-earnings ratio of 23.5.
