Why This Billionaire Is Buying Google In Spades

In the second quarter, Bill Ackman’s Pershing Square Capital added another 900,000+ shares of Alphabet Class A (NASDAQ: GOOGL).

Combined with its Class C (NASDAQ: GOOG) shares, Alphabet now makes up about 21% of Pershing Square’s portfolio, one of the fund’s biggest bets.

So what makes Alphabet such a perfect Ackman stock, and is there still room for investors to profit?

Key Points

• Alphabet now makes up 21% of Pershing Square’s portfolio, aligning with Ackman’s focus on simple, cash-rich businesses with durable moats.

• Google controls ~90% of search, YouTube drives huge ad revenue, and Gemini is expanding in AI.

• With a P/E around 26, double-digit growth, and rising shareholder returns, Alphabet remains a strong long-term compounder.

Alphabet Fits the Ackman Formula

Ackman favors durable businesses with wide moats, simple models, and consistent free cash flow. Alphabet checks every box.

Despite Bing’s AI-fueled comeback, Google still controls roughly 90% of global search. That dominance creates a feedback loop, more searches mean better data, which improves results, which drives even more usage.

YouTube, now the second-largest search engine in the world, adds another powerful revenue stream, pulling in over $9 billion in quarterly ad sales.

Alphabet is also quietly building momentum in AI. Its Gemini chatbot now commands about 13% of the U.S. chatbot market, and more importantly, it’s being woven into Google Search, YouTube, Workspace, and Android, effectively turning AI into a core layer of Alphabet’s ecosystem.

Cash, Returns, and a Fortress Balance Sheet

Ackman loves cash-rich companies that don’t depend on outside capital, and few fit that better than Alphabet.

Over the past year, return on invested capital reached 32% and return on equity 35%, supported by $67 billion in free cash flow. Even after major AI infrastructure investments, Alphabet holds a staggering $95 billion in cash and marketable securities.

That gives the company the flexibility to fund growth, buy back stock, and still maintain one of the strongest balance sheets in corporate America.

Management and Execution That Compound Value

Ackman also values strong leadership, and Alphabet’s management team continues to deliver. CEO Sundar Pichai has scaled Alphabet into a $3 trillion powerhouse while keeping a lean, innovation-driven structure.

The company’s ability to dominate search, video, and now AI infrastructure through Google Cloud is a testament to its long-term discipline and adaptability.

Still Worth Buying?

Ackman began accumulating Alphabet in 2023, locking in a lower cost basis, but the stock still looks appealing today.

In Q2, revenue rose 14% to $96 billion+, while net income jumped 19% to $28.2 billion, its ninth straight quarter of earnings growth. Analysts see EPS growing around 15% annually through the decade, fueled by advertising, cloud, and AI expansion.

Despite that growth, Alphabet trades at a P/E of about 26x, well below peers like Microsoft or Nvidia.

Management also returned over $33 billion to shareholders in the first half of 2025 through buybacks and dividend, small now, but likely to grow quickly as cash piles up.

So, Now What?

Ackman’s heavy bet on Alphabet isn’t about chasing hype, it’s about owning a rare franchise that combines massive scale, durable moats, and relentless cash generation.

For retail investors, Alphabet may no longer be cheap, but it remains one of the most dependable long-term compounders in tech. In short, Ackman’s favorite stock might still deserve a place in your portfolio.