Investors should “stop booing” the tech giants’ gigantic artificial intelligence spending plans, the influential Wall Street asset manager Bill Ackman has said.
Ackman, investment manager of the London-listed FTSE 100 company Pershing Square Holdings, made the remarks in the wake of sharp falls recently in the share prices of tech companies who have announced billions of dollars of spending on AI.
In his annual letter to Pershing Square shareholders, Ackman said the tech giants should be applauded and that their ambitious plans would lead to increases in the valuations of Amazon, Meta and Alphabet, three of the so-called Magnificent Seven in which he has built stakes in the past two years.
“When a business you own, managed by a management team you trust, announces a large increase in capital spending due to increased demand for its products or services, you should be applauding rather than booing,” he wrote.
The sheer scale of the AI plans, including the building of a huge network of new data centres, has unnerved some investors in recent weeks, leading to a retreat in the tech companies’ share prices amid warnings of an “AI cash bonfire”.
Ackman was until recently more comfortable with investing in American consumer groups but has now built large holdings in what he calls “The Three”: groups which he argues have far larger growth potential than the substantial majority of S&P 500 corporations.
“We believe the market’s negative response to these large capex announcements is misguided,” he wrote. “The Three have a long-term track record of allocating capital intelligently and have been explicit in stating that their capex investments are in response to massive increases in demand and/or internal use cases that offer high rates of return. Importantly, The Three have the financial wherewithal to comfortably make these investments.”
Ackman was also bullish about the prospects for Wall Street, though he said the best returns were likely to be produced by the very biggest companies. He said 2026 was “going to be a very strong economic year” for the US, listing ten factors that were likely to boost growth.
These included the impact of $1.2 trillion of infrastructure projects backed by the Biden administration, where shovels were only now going into the ground; tax benefits from President Trump’s Big Beautiful Bill; Trump’s “pro-business posture” that was supportive of more mergers and acquisitions; and a “massive deregulation initiative” led by Scott Bessent, the Treasury secretary.
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The mid-term US elections that typically swing against the incumbent administration were also a factor, he said. “The Trump administration is extremely motivated to deliver on promises made and will likely take additional actions that will drive the economy.”
Ackman, a billionaire who once supported the Democrats, has been one of the most vocal supporters of Trump on Wall Street, though he has criticised the president over some of his tariff threats and his proposal to cap credit card interest rates.
Pershing Square Holdings posted a strong 2025 performance, lifting net asset value per share plus dividends by 20.9 per cent, outperforming its benchmark, the S&P 500, which produced a total return of 17.9 per cent.
However, PSH has had a tough start to the year, reporting a negative return of 5.2 per cent in the six weeks to February 10, while the S&P delivered a positive 1.5 per cent.
The shares closed down 66p, or 1.5 per cent, to £44.20 in London on Thursday, valuing the business at £7.8 billion.
Ackman is best known for his reading of macro markets, making a fortune with his bet in the derivatives markets that interest rates would stay higher for longer. His stockpicking record has been more mixed, having badly mistimed a $1 billion bet on, and later exit from, Netflix in 2022.