How Ackman's Strategic Shift From Hilton to Meta Reflects a New AI Investment Thesis

Bill Ackman has been methodically building his artificial intelligence portfolio at Pershing Square Capital, making calculated bets on companies positioned to benefit from the AI revolution. In 2023, he acquired Alphabet when skeptics worried about AI chatbots threatening its business model. Last year, he added Amazon to his holdings, recognizing its cloud infrastructure advantages in the AI era. These positions have delivered strong returns, outpacing the broader S&P 500. Now, his latest major move—completely exiting Hilton Worldwide after holding it since 2018—signals a fundamental reallocation toward what he sees as even more compelling opportunities. The exit coincided with his new position in Meta Platforms, a stock that has surged 1,650% since its IPO and continues climbing in Ackman’s view.

Why Ackman Liquidated His Hilton Position

Ackman’s original Hilton investment made sense when he initiated it in 2018 and later added to it during the COVID-19 pandemic downturn. The company’s diverse brand portfolio and proven customer loyalty created a compelling long-term thesis. Hilton’s loyalty membership program grew from 85 million to 243 million members over the past seven years. The company also significantly expanded its footprint: from 913,000 rooms in 2018 to over 1.3 million rooms today, while streamlining corporate overhead.

The financial results reflect this operational execution. Adjusted EBITDA more than doubled from $2.1 billion to $3.7 billion over seven years, and management expects EBITDA to surpass $4 billion this year. Management also projects 1% to 2% revenue-per-available-room growth, with a pipeline of over 520,000 additional rooms.

However, the stock’s valuation has raced ahead of fundamentals. The share price has climbed over 350% since 2018, with enterprise value tripling in that span. This has pushed the EV-to-EBITDA multiple to approximately 21.5x—quite elevated. The forward P/E ratio now sits around 36x, suggesting that future returns may struggle to match the exceptional gains of recent years. For a value-conscious investor like Ackman, this stretched valuation created an opportune moment to harvest substantial gains and reallocate capital toward higher-potential opportunities. Pershing Square completed its full exit during its annual shareholder presentation earlier this year.

Meta: Ackman’s Latest AI Integration Play

At the same shareholder meeting, Ackman revealed Pershing Square’s newest investment: Meta Platforms. He specifically noted that “Meta’s business model stands as one of the clearest beneficiaries of AI integration.” The market had recently punished Meta shares due to investor anxiety over its substantial spending on AI infrastructure and talent—a concern Ackman views as misplaced for long-term investors.

The current valuation presents what Ackman considers an exceptional entry point. Meta’s forward P/E of approximately 22x appears reasonable, and when Reality Labs (its augmented reality division) is excluded, the core advertising business trades at just 18x earnings—a compelling multiple for a growth engine of this caliber.

Ackman’s confidence rests on Meta’s AI capabilities driving medium-term earnings-per-share growth at roughly 20% annually. AI now powers Meta’s recommendation algorithms, which have measurably strengthened engagement across Facebook and Instagram. In the fourth quarter, ad impressions climbed 18%, while the company achieved a 6% increase in average ad pricing—both reflecting AI’s growing effectiveness. These algorithms not only recommend content but also help target advertising with greater precision, substantially improving return on ad spend.

The potential applications extend beyond current capabilities. Generative AI could lower the barrier to entry for advertisers on Facebook and Instagram, opening entirely new revenue channels. Messenger and WhatsApp chatbots could become advertising platforms themselves. Meta’s own AI chatbot, available across its app ecosystem, represents another frontier for monetization—positioning the company against ChatGPT-style competitors while maintaining first-mover advantage in native integration.

The Infrastructure Gamble

Admittedly, pursuing this AI roadmap demands significant capital. Meta guided for $115 billion to $135 billion in capital expenditures this year—a 73% increase from 2025. This aggressive buildout naturally raises questions about whether Meta is overbuilding.

Ackman counters that the company’s core advertising businesses are growing fast enough to eventually absorb the excess capacity. Beyond operational flexibility, Meta’s robust balance sheet can comfortably support this infrastructure expansion without financial strain. At a 22x forward earnings multiple, even after this capex guidance, the stock remains attractively priced for investors believing in its AI potential.

Is Meta a Buy at Today’s Valuation?

The Motley Fool’s Stock Advisor research team has identified what they believe are the 10 best stocks for current market conditions—and Meta did not make that list. That said, history offers instructive examples. Investors who bought Netflix on December 17, 2004, following a Stock Advisor recommendation, turned $1,000 into $414,554. Similarly, Nvidia investors who acted on an April 15, 2005, recommendation saw their $1,000 grow to $1,120,663. Stock Advisor’s overall track record shows a 884% average return, substantially outpacing the S&P 500’s 193% gain.

For those considering Meta as a long-term AI play, Ackman’s willingness to build a concentrated position—and his parallel decision to exit Hilton at elevated valuations—demonstrates a clear investment thesis worth examining. Whether Meta becomes a multi-bagger depends on execution, but the fundamentals and AI catalysts appear to support the near-term opportunity.

Disclosures: Adam Levy holds positions in Alphabet, Amazon, and Meta Platforms. The Motley Fool holds positions in and recommends Alphabet, Amazon, and Meta Platforms. Past performance as of February 16, 2026.