Key Takeaways
- • Bill Ackman told CNBC that he sees no bubble in US stock prices, arguing that the real risk lies in short-term trading on borrowed money, which he says has revived "casino-type" markets.
- • Ackman cited leverage, one-day options, sports betting and perpetual futures as drivers of wild price swings, which he said are bad for the country but benefit Pershing Square when it buys stocks cheaply.
- • Pershing Square has used these dislocations to buy Microsoft during this year's software sell-off and Amazon after its tariff slump.
- • Pershing expects its holdings to grow earnings about 20% a year over the next three to five years, versus 13% for the S&P 500, and added Visa, Mastercard and Netflix in the second quarter.
- • Ackman rejected an Elliott Investment Management comparison of today's market to the 1920s, while acknowledging that private startup funding shows more bubble-like buying, citing Ramp's $44 billion valuation as justified.
Summary
Bill Ackman says he sees no bubble in US stock prices. In comments to CNBC on Tuesday, his concern centered on short-term trading using borrowed money, which he said has revived "casino-type" markets. He named leverage, which multiplies gains and losses, and one-day options, bets on a stock's same-day close, as key contributors. He also cited sports betting and perpetual futures, contracts with no end date. Ackman quoted himself as saying, "We're back to the casino-type markets when there was 95% leverage."
Ackman said the resulting price swings are harmful to the country but beneficial to Pershing Square, which uses dislocations to buy stocks at lower prices. According to the article, those swings allowed Pershing to buy Microsoft during this year's software sell-off and Amazon after its tariff-related slump.
Pershing argues that enthusiasm for AI infrastructure companies has drawn attention away from businesses with durable earnings growth, leaving those firms undervalued. The firm expects its holdings to grow earnings about 20% annually over the next three to five years, compared with 13% for the S&P 500. Ackman called Visa and Mastercard two of the world's greatest businesses. Pershing added both in the second quarter, alongside Netflix, and began building an eighth new 2026 position after the third quarter.
Ackman also responded to an Elliott Investment Management letter, reported by the Wall Street Journal, that compares current conditions to the boom before the Great Depression. Elliott flagged debt-funded spending, public backlash against AI and circular AI deals, in which chipmakers invest in AI firms that then buy their chips. Ackman said, "I don't see a Roaring 20s in the stock market," noting that profit forecasts rose sharply this year and that valuations look reasonable relative to that growth. He said the US is in a global race for superintelligence and cannot slow down in response to backlash.
Ackman acknowledged that private startup funding shows more bubble-like buying. He said corporate card startup Ramp justifies its valuation, which the company put at $44 billion in June, and that American Express should be concerned. Pershing's next 13F filing, which discloses holdings to US regulators, is due by mid-November and will reflect positions as of Sept. 30.
Ackman said the resulting price swings are harmful to the country but beneficial to Pershing Square, which uses dislocations to buy stocks at lower prices. According to the article, those swings allowed Pershing to buy Microsoft during this year's software sell-off and Amazon after its tariff-related slump.
Pershing argues that enthusiasm for AI infrastructure companies has drawn attention away from businesses with durable earnings growth, leaving those firms undervalued. The firm expects its holdings to grow earnings about 20% annually over the next three to five years, compared with 13% for the S&P 500. Ackman called Visa and Mastercard two of the world's greatest businesses. Pershing added both in the second quarter, alongside Netflix, and began building an eighth new 2026 position after the third quarter.
Ackman also responded to an Elliott Investment Management letter, reported by the Wall Street Journal, that compares current conditions to the boom before the Great Depression. Elliott flagged debt-funded spending, public backlash against AI and circular AI deals, in which chipmakers invest in AI firms that then buy their chips. Ackman said, "I don't see a Roaring 20s in the stock market," noting that profit forecasts rose sharply this year and that valuations look reasonable relative to that growth. He said the US is in a global race for superintelligence and cannot slow down in response to backlash.
Ackman acknowledged that private startup funding shows more bubble-like buying. He said corporate card startup Ramp justifies its valuation, which the company put at $44 billion in June, and that American Express should be concerned. Pershing's next 13F filing, which discloses holdings to US regulators, is due by mid-November and will reflect positions as of Sept. 30.
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