As talk of an "artificial intelligence (AI) bubble" has been rising recently on Wall Street, Pershing Square, the hedge fund led by billionaire investor Bill Ackman, made a sizable equity investment in Meta, the operator of Facebook.
According to U.S. business network CNBC on the 11th (local time), Pershing Square bought Meta equity during the fourth quarter of last year, and it accounts for about 10% of the fund's total capital. Meta's share price is down about 16% recently (as of the Feb. 10 close) compared with the high in August last year.
In materials for an investor presentation that day, Pershing Square said, "We believe Meta's current share price undervalues the company's long-term upside potential related to artificial intelligence (AI), and that one of the companies with the best businesses in the world is trading at a significant discount."
It added, "We judge that concerns about Meta's AI-related expenditure underestimate the long-term upside potential expected from AI." Meta's shares are currently trading at about 22 times 12-month forward revenue, which Pershing Square views as an undervalued valuation considering the potential profit growth AI could deliver.
In a recently released earnings report, Meta projected that AI-related capital expenditure in 2026 could reach as much as $135 billion (about 194 trillion won).