Does Billionaire Bill Ackman Know Something Wall Street Doesn’t? He Invested in These 2 Stocks That Have Dropped 33% and 18% Over the Past Year
Bill Ackman, the founder and CEO of Pershing Square Capital Management, has an impeccable record, as his firm has outperformed the S&P 500 over the past couple of decades. That’s why every move he and his team make is carefully scrutinized. And during the second quarter, Pershing Square Capital Management made several noteworthy stock purchases.
For instance, it bought shares of Netflix (NFLX -0.69%) and doubled down on Uber Technologies (UBER +0.32%). What’s noteworthy about these purchases is that both stocks have lost significant value over the past year: Netflix is down 33%, while Uber has declined 18%. Should investors follow Ackman’s lead and load up on these stocks on the dip?
Image source: Getty Images.
1. Netflix
Netflix has faced slower revenue growth, unimpressive guidance, and a failed blockbuster acquisition. Further, the company reported that it will release its “What We Watched” engagement report once a year starting in 2027, rather than twice annually. This change comes at a time when Netflix is facing increased scrutiny over whether it can continue to monetize its audience enough to maintain healthy top-line growth, so many investors aren’t exactly thrilled about it. Is there any reason to remain bullish on the company’s prospects?
Yes, there is. Let’s remember that several years ago, the streaming specialist faced significant challenges, notably growing competition and password-sharing. But Netflix adapted, launched new initiatives (such as a low-priced ad-supported tier), and overcame these obstacles.
Today’s Change
(-0.69%) $-0.55
Current Price
$79.59
Key Data Points
Market Cap
Day’s Range
$79.17 – $80.49
52wk Range
$65.08 – $126.71
Volume
23.8M
Avg Vol
42.6M
Gross Margin
49.53%
The past is no guarantee of the future, but what this episode taught us is that Netflix can adapt to a changing environment. The company still boasts one of the deepest ecosystems in streaming, which provides it with ample data to study viewers’ habits and make adjustments as needed. Netflix is currently pursuing various opportunities to boost engagement on its platform. For instance, the company is looking to double down on sports streaming, a vast and highly lucrative market it has only begun to tap.
The company is also reportedly considering launching live TV, an initiative that has proven successful for other streaming leaders, most of whom don’t have Netflix’s large ecosystem and brand name. Meanwhile, the company continues to ramp up advertising and still expects ad revenue to reach $3 billion this year, double what it was in 2025. Between Netflix’s vast remaining opportunities in streaming and in its ad business, the stock could still deliver solid returns over the long run as it navigates recent headwinds. The stock looks like a great buy on the dip.
2. Uber Technologies
Uber Technologies’ financial results haven’t met market standards recently. The company’s shares fell after it second quarter update, due to weak revenue growth and poor guidance. What’s more, the company is investing heavily in artificial intelligence (AI), something some believe will not pay off as much as it expects. And that’s before we mention the rise of autonomous vehicles and robotaxis, which many investors believe will make Uber obsolete or, at the very least, significantly harm its business.
But aside from recent poor results, Uber’s investments are actually a great sign for the business. Take the company’s AI-related efforts. Earlier this year, Uber announced it would decrease its customer service workforce by 10% amid its AI expansions. In other words, the company believes it can achieve the same output with fewer workers, thereby cutting costs and boosting profits and margins.
Today’s Change
(0.32%) $0.25
Current Price
$78.80
Key Data Points
Market Cap
Day’s Range
$77.85 – $80.22
52wk Range
$65.41 – $101.99
Volume
12.8M
Avg Vol
20.7M
Gross Margin
35.42%
We likely won’t see the full effects of these efforts immediately, but they could have a meaningful impact on the business down the road. Uber is also pouring money into making sure it can dominate the robotaxi industry. For instance, the company inked a deal with Rivian (RIVN +6.00%), an electric vehicle (EV) maker. Rivian will provide up to 50,000 autonomous EVs to Uber in exchange for an investment of up to $1.25 billion. Uber plans to start launching these EVs in cities across the U.S. starting in 2028.
And given that it already has a ride-hailing platform everyone recognizes, it could be massively successful. Autonomous vehicles could be an opportunity rather than a death sentence for Uber, as relying less on human drivers will improve the economics of its business model. What does all this mean for Uber’s future? Despite recent setbacks, the company still has attractive prospects, and its shares are worth buying on the dip.
