TLDR
- Bill Ackman’s Pershing Square sold its entire Chipotle stake and bought Meta Platforms, rotating from consumer discretionary into AI infrastructure plays
- Chipotle Q4 2025 showed transactions down 3.2% with management guiding flat comparable sales growth for 2026, signaling continued traffic problems
- Meta reported Q4 revenue of $59.89 billion (up 24% year-over-year) and EPS of $8.88, beating estimates while spending $115-135 billion on AI infrastructure
- Meta’s ad business remains strong with impressions up 18% and prices up 6%, funding the company’s AI buildout while maintaining 41% operating margins
- Ackman also added Amazon to his portfolio, betting on leading AI companies trading at their lowest forward P/E ratios in recent years
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Bill Ackman just made a portfolio move that’s turning heads on Wall Street. His Pershing Square Capital dumped Chipotle completely and bought Meta Platforms instead. The billionaire investor is clearly betting on AI infrastructure over struggling restaurant chains.
Meta Platforms, Inc., META
The timing tells you everything. Chipotle’s stock has dropped 37% over the past year. The burrito chain’s fundamentals look rough.
Q4 2025 results showed comparable restaurant sales down 2.5%. Transactions fell 3.2%. When customers stop showing up, you’ve got a traffic problem that menu price hikes can’t fix.
Operating margins compressed to 14.1% from 14.6% the year before. Management’s guidance for 2026? Flat comparable sales growth. CEO Scott Boatwright called 2025 “a year of progress and resilience,” but the numbers tell a different story.
The stock trades at 33x trailing earnings. Wall Street expects earnings to drop from $1.17 in 2025 to $1.14 in 2026. Estimates show a rebound to $1.37 in 2027, but there’s no guarantee consumers will return to fast casual dining.
For Ackman, the choice was clear. Exit a mature restaurant chain facing headwinds. Move into technology companies building the future.
Meta’s AI Spending Spree
Meta just crushed Q4 2025 earnings. Revenue hit $59.89 billion, up 24% year-over-year. EPS came in at $8.88, beating the $8.39 estimate.
The real story is what Meta’s building. The company plans to spend $115 billion to $135 billion in capex this year on AI infrastructure. Mark Zuckerberg laid out his vision: advancing “personal superintelligence for people around the world in 2026.”
Operating margins declined to 41% from 48%, but that’s investment, not deterioration. The core advertising business is printing cash to fund the AI buildout.
Ad impressions grew 18%. Average ad prices climbed 6%. Meta’s guidance pointed to 33% revenue growth next quarter at the high end.
The company will reinvest almost all its cash flow back into AI infrastructure in 2026. But it’s also showing how AI investments are accelerating its core business.
Meta trades at 28x trailing earnings with 24% revenue growth that could accelerate past 30%. Analysts have a target price of $860, implying 32% upside from current levels around $650.
Ackman’s Broader Strategy
Ackman didn’t just buy Meta. He also added Amazon to his portfolio. The e-commerce giant now trades for half the forward P/E of Walmart.
The pattern is clear. Ackman’s betting on leading AI companies that sold off after announcing massive capex plans for 2026. There’s risk these companies are overbuilding. But they’re also trading at the lowest forward P/E levels in recent years.
Amazon faces questions about its AI spending. But the company’s logistics network becomes more valuable in an AI world. Robotics could drive margin expansion. AWS growth is expected to accelerate into the high-20s by late 2026.
Meta’s Zacks Rank sits at #3 (Hold). The consensus earnings estimate for the current fiscal year of $29.67 indicates 26.3% year-over-year growth. For the next fiscal year, the consensus estimate of $33.79 shows 13.9% growth.
Over the last 30 days, the Zacks Consensus Estimate for current quarter earnings changed 3.5% higher to $6.67 per share. The consensus sales estimate for the current quarter of $55.34 billion indicates a 30.8% year-over-year change.
Meta beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period. Shares have returned 4.7% over the past month while the S&P 500 fell 2%.
