In a bold move that has the investment world buzzing, billionaire hedge fund manager Bill Ackman has sold off his entire stake in Hilton Worldwide (NYSE: HLT) to double down on a red-hot artificial intelligence (AI) stock. The decision reflects Ackman's unwavering conviction in the transformative potential of AI, which he believes will reshape industries across the board.
Doubling Down on AI Dominance
Ackman's Pershing Square Capital Management has reportedly allocated a staggering 10% of its $15 billion portfolio to a single AI-driven technology company that has skyrocketed over 1,650% since its initial public offering (IPO). This move signals Ackman's laser-like focus on capitalizing on the exponential growth of AI, a trend that McKinsey estimates could add up to $13 trillion to the global economy by 2030.
The identity of Ackman's latest AI bet remains closely guarded, but industry analysts speculate it could be one of the so-called "Magnificent Seven" tech giants leading the AI revolution, such as Alphabet, Microsoft, or Meta Platforms. What this really means is that Ackman sees massive upside potential in a company at the forefront of AI development and deployment, even if it means parting ways with a reliable performer like Hilton.
Hilton Stake Sold to Fund AI Ambitions
Ackman's decision to exit his long-held position in Hilton Worldwide, a company he has championed for years, underscores the seismic shift in his investment priorities. As CNBC reports, Ackman sold the Hilton stake, which was valued at over $1 billion, to free up capital for his AI-centric investments. The bigger picture here is that Ackman believes the potential returns from AI-driven companies will far outweigh the steady, albeit slower, growth of a hospitality giant like Hilton.
Ackman's bold move comes at a time when the AI sector is experiencing unprecedented investor interest and valuation growth. Bloomberg reports that AI-related stocks have surged an average of 70% over the past year, underscoring the market's insatiable appetite for exposure to this transformative technology. By doubling down on AI, Ackman is positioning Pershing Square to potentially reap outsized rewards from the continued dominance of this disruptive force.