Renowned investor Bill Ackman is making a bold move, doubling down on artificial intelligence (AI) by exiting his long-standing position in Hilton Worldwide (NYSE: HLT) to invest over 10% of his portfolio in a little-known AI upstart. What this really means is that Ackman sees massive potential in this AI-powered company, even as many remain skeptical of the sector's sky-high valuations.
Ackman Bets Big on AI Disruptor
Ackman's hedge fund, Pershing Square Capital, has revealed that it has completely sold out of its Hilton Worldwide stake and used the proceeds to take a significant position in a rapidly growing AI company. According to The Motley Fool, this new AI investment now accounts for nearly 10% of Pershing Square's total portfolio.
The AI stock in question has seen its share price skyrocket 1,650% since its initial public offering, underscoring Ackman's belief in the company's disruptive potential. As Reuters reports, the broader AI sector has faced increased scrutiny amid concerns over overhyped promises and unreliable performance. However, Ackman seems convinced that this particular AI player has the right formula to succeed in the long run.
Hilton Exit Signals Shift in Priorities
Ackman's decision to exit his long-held position in Hilton Worldwide is equally noteworthy. Hilton has been a core holding in Pershing Square's portfolio for years, with the fund reaping substantial gains from the hotel giant's steady growth. The bigger picture here is that Ackman is willing to sacrifice a reliable performer to bet on what he sees as the next big thing in technology - artificial intelligence.
This move underscores Ackman's confidence in the AI stock's potential to outpace traditional industries like hospitality. As CNBC reports, the billionaire investor believes AI will be "the next renaissance" in technology, with the power to transform entire industries. By doubling down on this AI disruptor, Ackman is positioning Pershing Square to potentially reap outsized rewards from the AI revolution.