Why Bill Ackman Bet $2.3 Billion That the Market Is Dead Wrong

In early 2025, billionaire investor Bill Ackman, CEO of Pershing Square Capital Management, revealed a substantial new position in Uber Technologies. By January, Pershing Square had accumulated 30.3 million Uber shares, a ~1.4% stake worth about $2.3 billion.

Ackman described Uber as “one of the best-managed and highest-quality businesses in the world,” yet still “available at a massive discount to its intrinsic value.”

So is he right about Uber or will the bet flop?

Key Points

• Strong leadership turned Uber into a cash-generating powerhouse, with $3.4B in free cash flow and 40%+ EBITDA growth projected.

• Despite record highs, Uber’s ~23× forward earnings suggest room for massive upside.

• Ackman backs Uber’s market dominance, network effects, and CEO Dara Khosrowshahi’s execution.

Catalysts Driving the Uber Investment

Under CEO Dara Khosrowshahi’s leadership since 2017, Uber transitioned from years of heavy losses to consistent profitability by 2024. Ackman noted that Uber is “highly profitable and generating a ton of cash.”

Uber reported its first full-year operating profit and positive GAAP net income, with free cash flow soaring to $3.4 billion from just $390 million in 2022. Management, convinced of undervaluation, authorized a $7 billion share buyback in early 2024.

For Q4 2024, Uber’s revenue reached $11.96 billion, growing ~20–25% YoY. Gross bookings rose 18%, while adjusted EBITDA surged over 40% to $1.84 billion.

Full-year 2024 operating income was $2.8 billion on ~$44 billion in revenue, reflecting a ∼6% operating margin. Management forecasts high-30s to 40% adjusted EBITDA growth over the next three years.

Uber’s Valuation and Market Position

Despite strong financials, Uber’s stock traded at ~23× forward earnings this month, suggesting room for appreciation. The stock had risen ~30% but still, Ackman believed it was undervalued.

Uber dominates North American ride-hailing and has an unmatched global footprint. Its competitive moat includes network effects, brand recognition, and infrastructure advantages. Lyft’s pricing strategies have failed to challenge Uber’s leadership.

Beyond ridesharing, Uber’s multi-vertical platform in food delivery and logistics adds resilience. Uber Freight expands its reach into enterprise logistics, and cross-platform engagement strengthens customer loyalty.

The Dara Effect

Ackman credited Khosrowshahi with turning Uber around after a period of “erratic management.”

Since taking over in 2017, Dara transformed Uber into a profitable company with disciplined execution.

Unlike past investments requiring activism, Ackman sees no need for intervention—Uber’s current leadership aligns with his investment philosophy.

Long-Term Growth Runway

Uber’s total addressable market spans mobility, delivery, and logistics, with significant upside beyond its ~$45 billion revenue. Pershing Square targets companies with expanding margins and strong management, and Uber checks both boxes.

Ackman also sees potential in Uber’s autonomous vehicle partnerships. Rather than building its own AVs, Uber is positioning itself as the dominant platform for future robotaxi operators, creating an asset-light profit center.

By 2025, regulatory clarity, including California’s Prop 22, helped Uber stabilize its labor model. The industry had shifted from aggressive pricing wars toward sustainable profitability. Like in past Pershing Square investments, market consolidation favored the strongest player—Uber.

Why Uber Fits Pershing Square’s Playbook

Pershing Square looks for undervalued companies with improving margins, strong moats, and capable management. Uber aligns with this approach:

• Margin Expansion: After years of losses, Uber now generates strong cash flow.
• Competitive Moat: Network effects and platform diversification create resilience.
• Management Strength: Dara’s execution has transformed Uber’s profitability.

Ackman’s conviction stems from Uber’s inflection point—expanding profits, a rationalized industry, and a growing global footprint. If the market recognizes Uber’s true value, Pershing Square stands to gain significantly.

The bottom line: Ackman’s Uber investment follows his time-tested approach—finding great businesses, investing when others doubt them, and holding for long-term value creation. 2025 appears to be Uber’s moment, and Pershing Square is betting big on its future.