Bill Ackman, the activist investor who has built a career on bold, concentrated bets, has made perhaps his most consequential move yet — pouring roughly $2 billion into Meta Platforms Inc. at a moment when the tech giant’s artificial intelligence ambitions are consuming capital at a breathtaking pace and its stock has been battered by broader market turbulence. The investment, disclosed in a regulatory filing on February 11, 2026, signals that Pershing Square Capital Management sees Mark Zuckerberg’s AI pivot not as a reckless spending spree but as a generational opportunity hiding in plain sight.

The filing revealed that Pershing Square acquired approximately 6.79 million shares of Meta during the fourth quarter of 2025, according to Fox Business. The stake, valued at around $2 billion, makes Meta one of the largest positions in Ackman’s concentrated portfolio. To fund the purchase, Pershing Square exited its longstanding position in Hilton Worldwide Holdings, a stock that had been a signature winner for the fund over the past decade, as reported by Reuters.

Exiting Hilton to Go All-In on Silicon Valley’s AI Arms Race

The decision to sell Hilton — a company Ackman first invested in during 2018 and which had delivered substantial returns — underscores the magnitude of his conviction in Meta. Pershing Square’s portfolio has historically been concentrated in roughly a dozen names, and the rotation out of a proven hospitality winner into a technology company undergoing a massive strategic transformation is the kind of high-conviction, high-stakes repositioning that has defined Ackman’s career. The move also reflects a broader trend among elite hedge fund managers who are reallocating capital away from traditional sectors and toward companies positioned at the center of the artificial intelligence revolution.

Ackman has long been drawn to companies with durable competitive advantages, strong free cash flow generation, and management teams capable of executing ambitious strategies. In Meta, he appears to see all three. The company’s family of apps — Facebook, Instagram, WhatsApp, and Messenger — collectively reach more than 3.2 billion daily active users, a distribution network that is virtually impossible to replicate. As IndexBox noted, Ackman views Meta’s AI investments as a way to monetize that massive user base more effectively through improved content recommendations, advertising targeting, and entirely new product categories.

The AI Spending Machine: Why Wall Street Is Nervous

Meta’s AI spending has been a source of deep anxiety on Wall Street. The company has committed tens of billions of dollars annually to AI infrastructure, including data centers, custom chips, and the development of its open-source Llama large language model. Capital expenditures surged dramatically in 2025, and Zuckerberg has signaled that spending will continue to accelerate. During the company’s most recent earnings call, Meta projected capital expenditures of $60 billion to $65 billion for 2026, a figure that stunned even some of the company’s most ardent supporters.

The stock has reflected that unease. Meta shares experienced significant volatility throughout late 2025 and into early 2026, as investors struggled to reconcile the company’s robust advertising revenue growth with the sheer scale of its AI investment program. According to CNBC, Ackman believes the market is fundamentally mispricing Meta by focusing too heavily on near-term capital expenditure figures and not enough on the long-term revenue and earnings potential that AI-driven improvements will unlock. He has argued that Meta’s current valuation does not adequately account for the compounding effects of AI on the company’s advertising business, which remains the primary revenue engine.

Ackman’s Thesis: AI as Meta’s Second Act

At the core of Ackman’s thesis is a belief that Meta’s AI investments will produce returns that dwarf the initial outlay. The company’s AI-powered recommendation algorithms have already transformed the user experience on Instagram and Facebook, driving significant increases in engagement by surfacing content from accounts that users do not follow. This shift, which Meta internally calls “discovery engine” optimization, has been credited with reversing the decline in time spent on Facebook and accelerating Instagram’s growth trajectory, particularly among younger demographics who had been migrating to TikTok.

Meta’s AI capabilities also extend to its advertising platform, where machine learning models have dramatically improved ad targeting and measurement following Apple’s iOS privacy changes in 2021. The company’s Advantage+ suite of AI-powered advertising tools has been widely adopted by advertisers, and Meta has reported that campaigns using these tools consistently outperform those relying on manual targeting. As the New York Post reported, Ackman sees the advertising improvements as just the beginning, with AI-generated creative tools, virtual shopping assistants, and business messaging bots representing massive untapped revenue streams.

The Llama Factor: Open-Source as Competitive Moat

One of the more contrarian elements of Ackman’s bet is his apparent endorsement of Meta’s open-source AI strategy. While competitors like OpenAI, Google, and Anthropic have pursued closed-model approaches, Zuckerberg has released successive versions of Meta’s Llama model to the public, allowing developers, researchers, and businesses to build on top of Meta’s technology. Critics have questioned whether giving away AI models makes strategic sense, but proponents argue that open-sourcing creates a massive ecosystem of developers who optimize and extend the models, effectively crowdsourcing research and development while establishing Llama as an industry standard.

The strategy has drawn comparisons to Google’s release of Android, which sacrificed direct licensing revenue but ultimately gave Google dominant control over the mobile ecosystem. If Llama becomes the default foundation model for enterprise AI applications, Meta would be positioned to capture value through cloud services, API access, and integration with its advertising and messaging platforms. Bloomberg reported that Pershing Square’s investment reflects a belief that Meta’s open-source approach will prove to be a durable competitive advantage rather than a giveaway.

The Metaverse Overhang and Reality Labs Losses

Any discussion of Meta’s investment case must grapple with Reality Labs, the company’s virtual and augmented reality division, which has accumulated operating losses exceeding $50 billion since its inception. The division, which produces the Quest line of VR headsets and is developing AR glasses, has been a persistent drag on earnings and a source of frustration for shareholders who view the metaverse vision as speculative at best. Zuckerberg has repeatedly defended the investment, arguing that spatial computing represents the next major computing platform and that Meta must be the company that builds it.

Ackman’s willingness to invest despite the Reality Labs losses suggests he views the division either as a manageable cost relative to Meta’s overall profitability or as a potential source of asymmetric upside. Meta’s core advertising business generates operating margins north of 40%, producing more than enough cash flow to fund both AI infrastructure and Reality Labs simultaneously. The company also maintains a fortress balance sheet with tens of billions in cash and minimal debt. Social media commentary on X captured the market’s reaction, with accounts like @CeoWatchlist highlighting the significance of Ackman’s entry into Meta as a validation of Zuckerberg’s long-term strategy.

A Track Record of Bold Bets — and Spectacular Misses

Ackman’s track record is a study in extremes. His short position against Herbalife became one of the most public and costly hedge fund battles in history, ultimately resulting in significant losses. His investment in Valeant Pharmaceuticals similarly ended in disaster. But his successes have been equally dramatic: a $2.6 billion profit from credit default swaps at the onset of the COVID-19 pandemic, executed in a matter of weeks, remains one of the most celebrated trades in modern finance. His long-term investments in companies like Chipotle Mexican Grill and Restaurant Brands International have generated billions in returns for Pershing Square’s investors.

The Meta bet shares characteristics with Ackman’s best investments: a high-quality business with a dominant market position, a management team executing a clear strategic vision, and a stock price that he believes has been temporarily depressed by market misunderstanding. As noted by market commentators on X, the timing of the investment — during a period of heightened volatility and skepticism about AI spending — is classic Ackman, who has historically been willing to buy into controversy when he believes the fundamentals support his thesis.

The Broader AI Investment Frenzy and What It Means for Meta

Ackman’s Meta investment arrives amid an unprecedented wave of capital flowing into AI infrastructure. Microsoft, Google, Amazon, and Meta are collectively expected to spend more than $250 billion on capital expenditures in 2026, with the vast majority directed toward AI-related infrastructure including data centers, networking equipment, and custom silicon. The spending boom has raised legitimate questions about whether the AI industry is building ahead of demand, echoing concerns from the fiber-optic buildout of the late 1990s that preceded the dot-com bust.

Yet there are critical differences between the current AI investment cycle and previous technology bubbles. The companies leading AI spending are among the most profitable in the world, funding their investments primarily through operating cash flow rather than debt or speculative equity issuance. Meta, in particular, generated more than $50 billion in free cash flow in 2025, giving it ample capacity to invest aggressively without jeopardizing its financial stability. The demand signals are also more tangible: AI-driven improvements to Meta’s advertising platform have already produced measurable revenue gains, and enterprise adoption of AI tools is accelerating across virtually every industry.

Zuckerberg’s Credibility Problem — and How AI Is Fixing It

For years, Mark Zuckerberg faced a credibility crisis with investors. The 2022 rebrand from Facebook to Meta, accompanied by grandiose pronouncements about the metaverse, coincided with the company’s first-ever revenue decline and a stock price collapse that wiped out more than $700 billion in market capitalization. Zuckerberg’s “year of efficiency” in 2023, which involved laying off more than 20,000 employees and dramatically cutting costs, was widely viewed as a belated acknowledgment that the company had lost financial discipline.

But the subsequent recovery has been remarkable. Meta’s stock price more than tripled from its 2022 lows through mid-2025, driven by the cost cuts, a rebound in digital advertising, and growing investor appreciation for the company’s AI capabilities. Ackman’s $2 billion investment can be read as a vote of confidence that Zuckerberg has learned from the metaverse misstep and is executing the AI strategy with greater discipline and clearer commercial intent. As Fox Business emphasized, Ackman is essentially betting that the same CEO who stumbled with the metaverse will succeed with AI — a wager that requires faith in Zuckerberg’s ability to adapt and execute.

What Ackman’s Bet Signals for the Rest of Wall Street

When a high-profile investor like Ackman takes a position of this magnitude, it inevitably influences market sentiment. Pershing Square’s 13F filing will be scrutinized by institutional investors, hedge funds, and retail traders alike, many of whom use such disclosures as a signal for their own positioning. The investment could help stabilize Meta’s stock at a time when AI spending fears have weighed on the shares, providing a floor of institutional demand and a narrative counterweight to the bears who argue that Zuckerberg is spending recklessly.

More broadly, Ackman’s move reflects a growing consensus among sophisticated investors that the AI revolution is not a bubble but a structural transformation of the global economy, and that the companies best positioned to benefit are those with massive distribution networks, proprietary data, and the financial resources to invest at scale. Meta checks every one of those boxes. Whether Ackman’s $2 billion bet will ultimately rank among his greatest triumphs or his most painful mistakes will depend on whether Zuckerberg can convert tens of billions in AI spending into sustainable competitive advantages and revenue growth. For now, one of Wall Street’s most famous risk-takers has placed his chips squarely on the side of ambition — and on the man in the gray T-shirt who controls one of the most powerful technology companies on earth.