Billionaire Investor Bill Ackman Just Dumped His Fund's Stake in Hilton and Piled Into a "Magnificent Seven" Stock Trading at a "Deeply Discounted Valuation."

Core Viewpoint - Billionaire investor Bill Ackman and his team are focusing on the "Magnificent Seven" companies, particularly highlighting their investment in Meta Platforms, while exiting their position in Hilton Hotels due to valuation concerns [3][8][10]. Group 1: Investment Decisions - Pershing Square Capital Management sold its stake in Hilton Hotels after a long-term investment, citing that prospective returns no longer met their high return threshold [3][8]. - The investment in Hilton resulted in a 70% increase in fee revenue and a 150% increase in earnings per share during the holding period [5][7]. - Pershing Square has taken a new position in Meta Platforms, investing approximately $2 billion, which represents 10% of its capital [9][10]. Group 2: Company Performance - Hilton's stock valuation increased from 20 times earnings to approximately 32 times during Pershing's investment, currently trading at around 36 times forward earnings [7]. - Meta Platforms is viewed as a significant beneficiary of artificial intelligence, with expectations of substantial earnings growth following increased capital expenditures [10][14]. - Meta's stock surged after its earnings report, which projected capital expenditures of $115 billion to $135 billion for 2026 [10]. Group 3: Market Trends - Investor concerns regarding high AI-related capital expenditures are seen as overshadowing the long-term potential of companies like Meta [10][14]. - The market is shifting from a broad investment strategy in AI to a more selective approach, focusing on identifying winners and losers in the AI space [15].