Bill Ackman says Wall Street is misreading Amazon, Microsoft, Meta, and Alphabet

In Pershing Square Capital Management's Q3 2026 shareholder letter, the hedge fund manager argued that analysts are mispricing the four biggest AI hyperscalers by focusing on costs while ignoring revenue potential.

According to the letter, combined capital expenditures for Amazon, Microsoft, Meta, and Alphabet are expected to rise from approximately $140 billion in 2023 to an estimated $740 billion in 2026, potentially exceeding $1 trillion in 2027.

Ackman described this spending surge as offensive rather than defensive positioning in the AI market.

Earnings growth outpaces stocks

The disconnect Ackman highlights shows in performance data: the hyperscalers' earnings have grown at around 27% on average, while their shares posted only about 8% gains year to date through early November 2026.

Meanwhile, semiconductor stocks rose 44% and technology hardware gained 36% over the same period, benefiting from the AI infrastructure buildout.

Ackman's thesis rests on AI data-center economics, estimating each gigawatt of new capacity could cost $40-50 billion to build but generate $15-20 billion in annual revenue.

Pershing Square backs its view

The fund has put money behind its thesis, buying shares of Microsoft, Meta, and Amazon during price declines tied to capital spending concerns.

Ackman discussed the Meta purchase on CNBC's Squawk Pod, noting the fund bought at a steep discount after the company announced its capital spending plans.

Pershing Square sold its Alphabet position earlier in 2026, currently backing three of the four companies its letter defends.

If Ackman's view proves correct, the gap between earnings growth and share performance could narrow as revenue materializes, benefiting investors who bought during capex-driven selloffs.