Bill Ackman: A 10x that can happen with a tweet from the president | Invest 2026

I feel like markets are heading back to a little more sanity in a way. There's more focus on cash flows and business quality and less on what stock's going to go up the most in the next week. So I would say a little bit more of a slightly longer-term orientation, I would say.

And I think that's the same. So I guess what I'm saying is our bias is to own sort of these dominant long-term compounder businesses that we think have a very low probability of disruption in a highly disruptive world because of AI. And I think a lot of the market's attention has been sort of on the shiny object. And I think neoclouds have been a bit of a shiny object, the AI trade generally, the picks and shovels of AI. And the stuff that's been discarded are sort of what I think of as the higher-quality dominant companies that we'd like to own. So we've made like seven new investments in the last six months, and that's a lot for us. It means that a bunch of companies got really cheap we've wanted to own for years.

Yeah, I'm not going to give you a short-term prediction. I wouldn't, you know, but 50% chance of being right on that, I would say, and 50% chance of being wrong. Look, I don't think the stock market overall is expensive. To my point, I think there are a lot of stocks, you know, that have been obliterated and are at attractive valuations, and also the overall earnings growth in the market's been very high. And so, you know, the overall multiple of the market's, you know, within range of where it's been historically, but I would say the quality of the businesses, the pace of growth, you know, the kind of these longer-term secular trends. Big believer that, you know, compute's sort of an asset that you want to own over time. I don't think you want to own it in a levered, you know, highly levered format, but I think AI is going to be a transformative technology. I think it's going to drive growth. I think it's going to help improve margins of good businesses. That's kind of the key factor. It's got to be a high-quality business that is defensible.

So I personally haven't done the work. A couple of guys on my team have done the work on Anthropic and actually came away positively inclined that there's a real business there, that, you know, they've got a strong balance sheet, a real clear path to, you know, cash flow generation, you know, interesting market position. But, you know, anytime you have a business that requires a massive investment in order to continue to accelerate its growth, if you're wrong on how quickly the revenues are going to accelerate or how much capital is going to be required to meet the demand for the product or service you offer, it's a higher-risk proposition. We think of ourselves as very low-risk investors. We want to invest in businesses that we can predict with a very high degree of confidence. I think Anthropic is perhaps the most amazing business story of this century in terms of, you know, from zero to, you know, where it is today is an absolutely remarkable story, an incredibly impressive story. I think it's just a much more complicated question as to what that business is worth. It's very hard to nail that with any degree of precision. Could be worth a lot more, a lot less, depending upon a few variables that are difficult to predict, and that's why it doesn't fit into our portfolio.

Well, actually, I think Anthropic is on the cusp, or might even be at a place in terms of its operating profitability where it's, you know, real operating profitability, and that their investments, I think they can make the argument their investments in compute are about... Well, I think the issue is if Anthropic doesn't stay in the lead position, then the real question is about the business model. So the capex they have to spend is really real. I think it's just, it's also a cash flow model. It's just a much more complicated one to build than a widget company that sells 5% more widgets next year than the year before. So it's, I would just say, a much more complicated question and there's a much wider range of outcomes. And, you know, it's a more speculative bet than buying, for example, Visa, a company we own.

So, in terms of risk-reward, our favorite, my favorite position is two stocks. It's Fannie Mae and Freddie Mac. These are stocks that have been completely discarded this year. The history goes back a while, but in fact we've owned these stocks for 13 years on the bet that they would eventually be released from conservatorship and be privatized again. The story, you know, that process began during Trump's original first term with Steve Mnuchin stopping the sweep of cash flows from the two companies, but Mnuchin ran out of time. The president in 2021 wrote a letter to Rand Paul saying, hey, this theft of Obama should never have happened, this thing called a net worth sweep, and he sort of committed to, you know, that if he were president, this never would have happened. Well, he became president again. And these stocks went from two or three dollars a share beginning right when he was elected to peaking at $17 a share last year, one of the better performers in the market. And then, you know, the president tweeted a series of memes about taking them public, ringing the bell at the New York Stock Exchange. And the companies have done extremely well, rebuilt their capital, and in our view are ready to be released from conservatorship. And the president was suggesting it could happen, and even, you know, Howard Lutnick in September last year said, look, it could happen before the end of the year. Well, the end of the year was, you know, 11 months ago. The president's really done nothing, said nothing about them this calendar year, and so those stocks have retraced. They're down 60-plus percent in this calendar year. So they're our worst-performing position, that cost us probably 800, 900 basis points of performance. But the facts remain, what's interesting now with the midterms, you know, the blue wave, so to speak, really handcuffs the president in terms of the things he can do in terms of economic policy, with one really big exception, which is Fannie Mae and Freddie Mac. And if the president follows through on what he said he would do, which he has a pretty good track record of doing, you know, these are, we think, $40, $50 stocks, and today they're $4 stocks, you know. So this is a 10x that could happen with a tweet from the president, an opportunity for him to ring the bell, an opportunity for him to create a half a trillion dollars of value for the American people, of which 20% would go to the shareholders, of which we're one. But there are millions of small shareholders who own the stock. So that's the most... and they're trading at a level where basically the market's saying the probability of this happening is very close to zero, and we think the probability of it happening is actually quite high. In fact, I've had the opportunity to meet and speak to the president about these companies. And the Treasury Secretary recently, two weeks ago, said, look, we're going to deal with it in the back half of the president's term, but not before midterms. That's the most interesting risk-reward in the portfolio today.

Yes, yes. Microsoft's down the last couple days on a Claude release. But we think their market position, you know, they're, you know, the entry point, even for AI, for 450 million business seats, where, you know, companies like us, you know, like Microsoft 365, but beyond the package of, you know, there are free versions of Excel and Word, Google and others have them, but what you want as an enterprise is, you know, control, cybersecurity protections. You want to be able to monitor what your teams are doing, and you want to control their use, of course, of AI so that you don't burn, you know, a fortune doing so. And that platform that Microsoft has built over time is, we think they're doing a very good job staying current in terms of enabling a new AI generation of workers. And in fact, Anthropic, meaning I think it's something approaching 50% of their revenues coming through the hyperscaler, whether it's Amazon or Microsoft, kind of being the gateway to access to AI and models for corporate users. So we think Microsoft's position is really, really strong. And, you know, people can come out with, you know, really good products that, you know, even if they're free, I don't think the major user... I think Microsoft's position really remains a powerful one, and we like it. You know, Netflix, stock's down since we bought it, was down about 50% since we bought it. Now it's probably down 60% or so from the high on kind of reduced, you know, as they call it, engagement. People spending, on average, less time with their Netflix subscription. That's a global statistic. You know, the different habits in different countries in terms of how people use Netflix. They also have been investing more in kind of sports and other content differently from binge-watching your favorite series. But in terms of subscription growth and renewals, they've remained strong. You know, they haven't had their next Squid Game. They made some changes in the suite in terms of oversight of content creation and acquisition to address maybe some perceived shortcomings, but, you know, that's a super cheap stock. And this was a company trading at mid-30s or 30-plus times earnings, today at 16, 17 times earnings, and the business remains quite strong.