Keith Speights, The Motley Fool
5 min read
In This Article:
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Ackman has made a big AI bet on Google's parent company, Alphabet.
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Wall Street analysts are overwhelmingly bullish about Alphabet, too.
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Alphabet faces some challenges, but it could still be a solid winner for long-term investors.
Billionaire Bill Ackman subscribes to the theory of having only a few eggs in his basket and watching that basket closely. His Pershing Square Capital Management hedge fund currently owns the stocks of only 11 companies.
Most of those holdings aren't tech stocks. However, the billionaire hedge fund manager has one significant bet on an artificial intelligence (AI) leader. Ackman has 14% of his $11.9 billion portfolio invested in one AI stock -- and Wall Street thinks it's poised to soar.
Pershing Square has invested heavily in Alphabet Class A shares (NASDAQ: GOOGL) and Class C shares (NASDAQ: GOOG). Together, these two stocks were valued at more than $1.67 billion as of the end of the first quarter of 2025.
Ackman initiated a position in the Google parent in the first quarter of 2023. His move came soon after Google stumbled with the launch of its first generative AI product. OpenAI's ChatGPT was taking the world by storm, and some thought Google was being left in the dust in the AI race. Ackman disagreed.
He told CNBC in an interview later that year, "[Google] will be a dominant player in AI for the very, very long term." The hedge fund manager listed several reasons for his optimism, including Google's access to a massive amount of data to train AI models, its internally designed AI chips, and its cloud business.
For a while, Alphabet ranked as Ackman's largest holding. It's been a very profitable investment, with shares soaring more than 60% since the end of the first quarter of 2023. However, Ackman has taken some profits off the table, selling 1.83 million shares in the second quarter of 2024 and 1.22 million Class C shares in the first quarter of 2025. He partially offset the latest sale, though, by buying more than 451,000 shares of Alphabet's Class A shares.
If Wall Street is right, Ackman will want to hold on to his remaining Alphabet shares. Of the 68 analysts surveyed by LSEG in June, 16 recommended the stock as a strong buy. Another 41 analysts rated the stock as a buy. The remaining 11 analysts recommended holding Alphabet shares.
The average 12-month price target for Alphabet represents an upside potential of roughly 17%. The most optimistic Wall Street analyst thinks the AI stock could skyrocket 45% higher over the next 12 months.
