Ackman says the market's AI obsession created bargain stocks.
Bill Ackman, CEO of Pershing Square Capital Management, pictured May 2026, has got some new investment ideas.
Pershing Square CEO Bill Ackman, who stormed out of his Netflix investment a few years ago, has rekindled that old flame.
In the first half of 2026, the hedge fund manager put money in five other names, saying that a stock market overly focused on artificial-intelligence picks and shovels, opened up some opportunities, Ackman and Ryan Israel, chief investment officer, wrote in a second-quarter letter to investors on Wednesday.
That "highly attractive environment" allowed it to deploy nearly $5 billion of Pershing Square $(PSUS)$ capital since its initial public offering earlier this year, they noted.
One fresh buy was Netflix $(NFLX)$, which Ackman dumped in 2022 at a loss of around $400 million just months after buying it owing to a "loss of confidence" in its future.
"When we first invested in early 2022, investors feared an escalating content arms race among a crowded field of streaming entrants," he wrote.
"Netflix has since effectively won the streaming wars. Its subscriber base now exceeds any competitor's by a wide margin, and that scale is self-reinforcing," he said, adding that it can "outspend rivals on content." That's due to a massive user base and its ability to convert 90% of its earnings into free cash flow, as advertising also scales up.
Ackman said their moment to pounce came as Netflix fell 50% from a June 2025 high of $134 - the shares dropped to $67 in mid-June. He said worries about competition from short-form video have proven unfounded, and Netflix has deep pockets to pay for higher compute costs that could come from long-form high-quality video. "Moreover, AI should meaningfully enhance the company's content recommendation engine and ad targeting capabilities," he said.
Ackman also discussed new stakes in Visa (V) and Mastercard $(MA)$, brief investments for him in 2008, calling them "the highest-quality businesses in the world. Both are capital-light 'toll-takers' that earn a nominal fee on each transaction without taking any material risk and are natural beneficiaries of higher inflation."
Those stocks recently derated to 22 times forward earnings, despite networks connecting billions of consumers and value-added services that drive 30% to 40% of revenues. He brushed aside worries around a stablecoin threat, saying that crypto is growing in places where cards aren't incumbent. Stablecoins can't offer fraud protection or access to credit and rewards of credit cards, and Mastercard and Visa are now offering stablecoin-linked programs.
S&P Global $(SPGI)$, which Pershing previously owned in 2017, was also picked up earlier this year after AI disruption worries caused a 25% drop for the stock in February. The financial information and analytics group saw its valuation sink to 19 times earnings per share from 25, "a bargain level," he said.
"Each of SPGI's benchmark franchises is a high-margin, IP licensing business with a formidable competitive moat inside an oligopolistic market structure," Ackman said.
Intercontinental Exchange $(ICE)$ was a more recent investment for Pershing Square, as Ackman flagged its "highly moated," exchange-operator business that generates nearly 70% of earnings, "anchored by a crown-jewel energy franchise with revenues more than two-and-a-half times those of its next-largest competitor."
ICE is a "classic, simple, predictable, free-cash-flow-generative business that has sold off on concerns we view as unwarranted." Those include worries about competition from cryptocurrency perpetual futures or "perps," which he thinks holds little appeal for ICE's big institutional investor customers.
Pershing also picked up ophthalmology group Alcon $(ALC)$, "the premier franchise in this industry," with a huge global base, strong brand and unrivaled commercial capabilities. Ackman flagged its dominant position in surgical vision and sees more growth in its contact lens business. He also expects approval for its AURN0001 therapy to treat corneal edema, and thinks investors aren't seeing the future potential from that.
The markets
U.S. stock futures (ES00) (YM00) (NQ00) are inching higher, but technology is lagging. Gold (GC00) is down after four-straight wins and crude (CL.1) (BRN00) is dropping.
Key asset performance Last 5d 1m YTD 1y S&P 500 7748.5 0.32% 2.33% 13.19% 19.82% Nasdaq Composite 26,588.49 0.85% 1.22% 14.40% 22.45% 10-year Treasury 4.673 -0.80 11.40 50.10 38.30 Gold 4437.1 3.22% 11.49% 2.42% 31.19% Oil 81.69 4.42% 2.65% 42.29% 27.78% Data: MarketWatch. Treasury yields change expressed in basis points
The buzz
Cisco stock $(CSCO)$ is down, despite an AI-driven revenue surge and strong forecast.
Applied Materials $(AMAT)$ and Sandisk $(SNDK)$ will report after the close.
Weekly jobless claims and producer prices for July are due at 8:30 a.m., Eastern. Cleveland Federal Reserve President Beth Hammack will speak at 8:15 a.m., followed by Richmond Fed Pres. Tom Barkin at 8:40 a.m..
Taxpayers funded a $533 million artillery plant that made nothing.
The chart
The chart from RBC Capital Markets shows how gold has been climbing as approval ratings for President Donald Trump have been falling. RBC commodity strategist Chris Looney has discussed how the recent stabilization in gold flows could be "a function of post- consolidation dip-buying and the market pricing in Iran-related uncertainty." RBC points out out the negative correlation between approval ratings for Trump and gold prices (GC00).
Top tickers
These were the top-searched tickers on MarketWatch as of 6 a.m.:
Ticker Security name SPCX SpaceX NVDA Nvidia TSLA Tesla MU Micron AMZN Amazon TSM Taiwan Semiconductor Manufacturing SMCI Super Micro Computer CSCO Cisco AMD Advanced Micro Devices GME GameStop
Happy or sad face? Your dog knows.
-Barbara Kollmeyer
Comments