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

Bill Ackman thinks Wall Street is reading only half the spreadsheet on Big Tech.

In Pershing Square Capital Management’s Q3 2026 shareholder letter, the hedge fund manager argued that analysts are mispricing the four biggest AI hyperscalers: Amazon, Microsoft, Meta Platforms, and Alphabet. His complaint is simple. Forecasts fully reflect the enormous cost of building AI infrastructure, but they don’t give much credit to the revenue those investments could generate.

The spending bill nobody wants to look at

The numbers driving investor anxiety are hard to ignore. According to the letter, combined capital expenditures for the four companies are expected to rise from approximately $140 billion in 2023 to an estimated $740 billion in 2026.

The forecasts don’t stop there. Pershing Square’s letter points to projections suggesting the group’s capex may top $1 trillion in 2027.

Ackman described the spending surge as aggressive positioning rather than a reluctant cost of staying in the game.

“Offensive rather than defensive.”

Earnings growing, stocks shrugging

The disconnect Ackman highlights shows up clearly in the performance data. Earnings at the hyperscalers have grown at around 27% on average, per the letter.

Their shares have not kept pace. The group posted average gains of only about 8% year to date through early November 2026.

Meanwhile, the companies selling the picks and shovels have thrived. Semiconductor stocks rose 44% over the same period, and technology hardware gained 36%.

Ackman’s core thesis rests on the economics of AI data-center capacity. The letter estimates that each gigawatt of new capacity could cost $40 billion to $50 billion to build. Each gigawatt could potentially generate $15 billion to $20 billion in annual revenue.

From there, the letter makes its most aggressive claim. Under current return assumptions, it suggests hyperscaler revenue growth could beat consensus estimates by 5 to 10 percentage points annually through 2029.

Ackman put money behind the thesis, mostly

Pershing Square hasn’t just theorized about this. The fund bought shares of Microsoft, Meta, and Amazon during price declines tied to capex worries.

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

There’s one notable absence from the shopping list. Pershing Square sold its Alphabet position earlier in 2026, so the fund is currently backing three of the four companies its letter defends.

What this means for investors watching Big Tech

If the Pershing Square view proves correct, the current gap between earnings growth of around 27% and share gains of about 8% could narrow as revenue shows up. Investors who bought during capex-driven selloffs would benefit, which is precisely the position Pershing Square has taken in Microsoft, Meta, and Amazon.

Projections of revenue beating consensus by 5 to 10 percentage points a year rely on assumptions about pricing, demand, and utilization holding up for several years. A spending trajectory heading toward a potential $1 trillion in 2027 leaves little room for disappointment.