To The Moon

$Uber(UBER)$

Bill Ackman is no stranger to bold moves. As the founder and CEO of Pershing Square Capital Management, he’s spent the last two decades building a reputation as one of the most daring and polarizing figures in finance. But even for someone known for placing outsized bets on a handful of high-conviction plays, his latest investment might be one of his boldest yet.

In early 2025, Ackman disclosed a staggering $2.3 billion position in a company that many investors had long written off as a money-burning punchline: Uber Technologies. This wasn’t a position he tiptoed into—it shot straight to the top of Pershing Square’s portfolio, becoming his largest single holding almost overnight. It also marked the first time Uber had ever appeared in Ackman’s portfolio.

So what does one of Wall Street’s most well-known activists see in a company that, until just a few years ago, seemed perpetually incapable of turning a profit? In Ackman’s own words, he believes Uber is one of the best-managed and highest-quality businesses in the world, and more importantly, he believes it’s trading at a massive discount to its intrinsic value.

Let’s break down why Ackman is going all in on Uber, what he sees in the business that others might be missing, and what risks could turn this into another one of his career-defining losses.

From Tech Punchline to Global Platform

Uber’s early years were marked by enormous losses, legal drama, and the perception that it was a deeply flawed business model. The company grew rapidly, expanded internationally, and spent billions acquiring users and drivers—but profits remained elusive.

For many value-oriented investors, Uber was the type of company you’d use as an example of what not to own. But under CEO Dara Khosrowshahi, Uber has undergone a fundamental transformation—one that Bill Ackman believes the broader market is still underestimating.

Today, Uber is no longer just a ride-hailing app. It’s a global logistics and delivery platform operating three major business lines:

• Mobility (Rides): The original core business, now operating in over 70 countries and 10,000 cities, with dominant market share in many regions.

• Delivery (Uber Eats): What began as a COVID-era experiment is now one of the largest food and item delivery services in the world, expanding into groceries, alcohol, and convenience items.

• Freight: A digital logistics marketplace connecting shippers and truckers—less profitable now, but full of long-term optionality.

Crucially, Uber has begun achieving economies of scale, cross-utilizing its massive driver network across all business segments to maximize platform efficiency. That’s the type of asset-light, network-driven operational model that value investors love—particularly when it begins throwing off meaningful cash.

A Turnaround Years in the Making

For years, Uber was derided for being structurally unprofitable. But in 2024, the company flipped the narrative:

• Record revenue

• Nearly $10 billion in net income

• Over $5.7 billion in free cash flow

That last number matters. Uber has quietly become sustainably profitable. Khosrowshahi’s emphasis on cost control, capital discipline, and profitable growth has reshaped the financial profile of the business. This isn’t the same Uber of five years ago.

Ackman appears to be betting that the market hasn’t caught up with this shift.

Why Ackman is Bullish on Uber

Ackman’s investment style is famously focused and high conviction. He doesn’t diversify for the sake of safety. He looks for businesses that have durable moats, scale advantages, and pricing power—and are trading below their intrinsic value.

In Uber, he sees all three:

• A high-quality, founder-led company that’s scaled globally

• Multiple synergistic revenue streams

• Massive operating leverage and optionality

• And critically—a valuation that doesn’t reflect any of this

With a P/E ratio of just 15, Uber looks cheap compared to other tech-driven logistics and transportation firms. At current free cash flow levels, if the business grows earnings at roughly 16% annually for the next decade, shareholders could be looking at a 15%+ return—the kind of opportunity Ackman targets.

To him, this isn’t just a ride-sharing company. It’s a capital-light, data-driven logistics platform that sits in the middle of supply and demand across multiple verticals.

But What Could Go Wrong?

As with all of Ackman’s biggest bets, the Uber investment comes with risk—and plenty of it.

1. Regulatory Threats

The long-running legal battle over whether Uber’s drivers should be classified as employees or independent contractors could dramatically impact the company’s cost structure. In California alone, Uber has fought legislative and judicial challenges to maintain its current model. While Proposition 22 was upheld in 2024, the issue is far from resolved—especially at the federal level or in other states and countries.

2. Intensifying Competition

Uber has a global footprint, but it’s not unchallenged. Lyft, DoorDash, and international players like Grab, Ola, and Didi all threaten pieces of Uber’s market. While Uber’s network effects are strong, a misstep could open the door to rivals gaining ground.

3. Macroeconomic Sensitivity

Ride-sharing and food delivery are tied to consumer discretionary spending. In a recessionary environment, both segments could come under pressure as consumers cut back on non-essential expenses. That could hurt growth and profitability—especially if cost structures remain high.

4. Autonomous Vehicles

Uber sold its autonomous driving unit in 2020, instead opting to partner with companies like Waymo. Meanwhile, Tesla is preparing to launch its robo-taxi service and directly challenge Uber. If self-driving adoption accelerates faster than expected, Uber could be left on the outside of a major technological shift.

Ackman’s Signature Style: Concentration and Conviction

Ackman’s investment strategy is unlike most hedge funds. He avoids diversification, preferring to hold a handful of high-quality names where he sees asymmetric upside. This strategy has led to iconic wins, like:

• Turning around Chipotle after its food safety scandal

• Unlocking massive value at Canadian Pacific Railway

• Backing Universal Music Group before its IPO

But it has also produced notorious blowups, most famously:

• A $4 billion loss on Valeant Pharmaceuticals

• A failed multi-year short of Herbalife

Uber could go either way. But Ackman’s decision to put $2.3 billion behind a single name signals that this isn’t a hunch—it’s a thesis backed by deep conviction.

Final Thoughts: Uber as a Mispriced Compounder

At its core, this is a story about vision and timing.

Ackman sees Uber not as the money-burning app of old, but as a newly disciplined, cash-generating platform business with the kind of global reach and structural efficiency that compound wealth over decades.

In his eyes, Uber is no longer a speculative tech play, but a mispriced blue-chip in disguise—one that’s now delivering earnings, free cash flow, and a clear strategic path forward.

But for all its promise, Uber still faces real-world headwinds: legal battles, economic sensitivity, rising competition, and long-term disruption from autonomous driving.

If Ackman is right, he’ll have bought into a generational compounder just as it turned the corner. If he’s wrong, Uber could go down as another cautionary tale in his high-stakes career.

Either way, the move demands attention. Not necessarily because you should copy him, but because it forces investors to ask the question that drives all great value investing:

What is the market still missing?

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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