Bill Ackman Bought Meta “at a Huge Discount.” He Says Analysts Are Missing Its Growth

Bill Ackman, chief executive of Pershing Square, said on CNBC's Squawk Pod on Election Day that his firm bought Meta Platforms after the company announced large capital spending plans, describing the purchase as occurring "at a huge discount." He said Pershing Square has used similar market dislocations to buy Microsoft, when investors worried about its capex, and Amazon, when tariffs were announced. Ackman said he supports the heavy spending at all three companies because they can afford it and are seeing strong demand and high returns.

Ackman's central argument is that analysts include the cost of the AI build-out in their models but do not credit a meaningful acceleration in growth. According to TIKR, Meta's revenue grew 22% in 2025 to $201 billion, and consensus expects roughly 28% growth in 2026 before settling near 20% annually in 2027 and 2028. Since the end of September 2025, analysts have raised their 2027 revenue estimate 19% but their 2027 earnings estimate only 1.4%, with most of the additional sales absorbed by higher costs. Consensus 2027 and 2028 earnings per share are $34.80 and $40.42, respectively.

The cost side is substantial. Meta's capex was $69.7 billion in 2025, and management guides 2026 to $135-145 billion including finance leases, with analysts expecting $209.7 billion in 2027. Consensus depreciation is projected to rise from $18.6 billion in 2025 to $64.1 billion in 2028. Third-quarter revenue rose 26% to $64.6 billion, with price per ad up 14%, and management guided fourth-quarter revenue growth of 22% to 27%. Ackman's broader thesis centers on Muse, Meta's personal AI agent, which more than 10 million users in the US and Canada set up in its first six weeks, according to management on the third-quarter call. Most users pay nothing, Meta's chief AI officer Alexandr Wang told Nikkei there are no plans for ads inside Muse, and management has not disclosed a revenue figure for it.

Risks noted in the article include balance sheet and cash flow pressure. At September 30, Meta had $83.7 billion of debt against $82.45 billion of cash and marketable securities. Consensus projects negative free cash flow in 2026, 2027 and 2028. S&P Global Ratings revised its outlook on Meta to negative on October 30, and by its own measure sees a cash deficit more than twice the size of Wall Street's estimate. Meta's shares fell 15% in October. The stock trades at 18x forward earnings, below its five-year average of 21x, against expected earnings growth of 15% in 2027 and 16% in 2028. Meta's fourth-quarter call in late January is the next key checkpoint.