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Pershing Square Holdings, an investment holding company, released its second quarter 2026 investor letter. A copy of the letter can be downloaded here. Pershing Square is an alternative asset manager that primarily manages capital in publicly traded investment vehicles, with 98% of its capital structure dedicated to such assets, including Howard Hughes Holdings. This capital permanency allows for long-term investments, fostering sustainable competitive advantages and yielding substantial market returns since 2018. The investment strategy focuses on acquiring high-quality companies at safe price points, anticipating significant annual EPS growth of 15% or more in the coming years. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026.

In its Q2 2026 investor letter, Pershing Square Holdings highlighted Meta Platforms, Inc. (NASDAQ:META). Meta Platforms, Inc. (NASDAQ:META), the parent company of dominant social media platforms, is a multinational technology company that develops products to connect people. On August 17, 2026, Meta Platforms, Inc. (NASDAQ:META) closed at $568.97 per share. The one-month return for Meta Platforms, Inc. (NASDAQ:META) was -11.62%, and its shares lost 24.29% over the past 52 weeks. Meta Platforms, Inc. (NASDAQ:META) has a market capitalization of $1.45 trillion.

Pershing Square Holdings stated the following regarding Meta Platforms, Inc. (NASDAQ:META) in its Q2 2026 investor letter:

"Meta Platforms, Inc.'s (NASDAQ:META) share price declined 1% during the second quarter and remains down 15% year-to-date. The company's share price remains pressured by its substantial ramp in operating expenses and capital expenditures funding its AI initiatives.

We view Meta as one of the clearest beneficiaries of AI, which is driving higher engagement through better content recommendation, greater ad monetization through improved targeting, and meaningful product innovation in consumer and business agents. Though still in the early days, these benefits are already visible in greater revenue acceleration in Meta's core advertising business, which is growing at its fastest quarterly pace since 2021.

Meta's compute investment also affords downside protection as capacity not consumed internally can be profitably monetized in a highly supply-constrained compute market. Following this year's elevated investment, we expect Meta to grow earnings at a 20%-plus rate over the next few years. Against this growth backdrop, we view Meta's 18 times forward earnings multiple as a highly discounted valuation for a dominant consumer internet franchise with a stable user base of 3.6 billion daily active users."

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Meta Platforms, Inc. (META) "Still Has A Low Multiple," Says Jim Cramer

Meta Platforms, Inc. (NASDAQ:META) holds 5th position on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 262 hedge fund portfolios held Meta Platforms, Inc. (NASDAQ:META) at the end of the first quarter, compared to 256 in the previous quarter. While we acknowledge the potential of Meta Platforms, Inc. (NASDAQ:META) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

In another article, we covered Meta Platforms, Inc. (NASDAQ:META) and shared a list of blue chip stocks Jim Cramer is crazy about. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

Disclosure: None. This article is originally published at Insider Monkey.

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Haftungsausschluss: Der Text wurde mit Hilfe einer KI zusammengefasst und übersetzt. Für Aussagen aus dem Originaltext wird keine Haftung übernommen!

Pershing Square Holdings, an investment holding company, released its second quarter 2026 investor letter. A copy of the letter can be downloaded here. Pershing Square is an alternative asset manager that primarily manages capital in publicly traded investment vehicles, with 98% of its capital structure dedicated to such assets, including Howard Hughes Holdings. This capital permanency allows for long-term investments, fostering sustainable competitive advantages and yielding substantial market returns since 2018. The investment strategy focuses on acquiring high-quality companies at safe price points, anticipating significant annual EPS growth of 15% or more in the coming years. Additionally, reviewing the Fund's top five holdings could help identify its best picks for 2026.

In its Q2 2026 investor letter, Pershing Square Holdings highlighted Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions, holding dominant positions in software, cloud infrastructure, generative AI, and gaming. On August 17, 2026, Microsoft Corporation (NASDAQ:MSFT) closed at $480.35 per share, reflecting a market capitalization of $3.57 trillion. Microsoft Corporation (NASDAQ:MSFT) posted a one‑month return of 20.77%, while its shares lost 5.77% over the past 52 weeks.

Pershing Square Holdings stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its Q2 2026 investor letter:

"Microsoft Corporation's (NASDAQ:MSFT) share price increased 1% during the second quarter and is down 8% year-to-date from our average cost. The company's share price trades at one of its lowest earnings multiples of the past decade, reflecting investor concerns around AI disruption to the company's core M365 productivity suite and the growth prospects of its Azure cloud business as well as skepticism about the company's dramatically increased investment in compute infrastructure.

We believe M365's deep embeddedness in daily workflows, superior price-to-value proposition and proprietary Copilot AI agent make it far more resilient to AI disruption than point solution software. With direct involvement from CEO Satya Nadella, the company has redoubled Copilot product innovation and growing adoption should further entrench M365 as agentic work scales. In our view, Azure, the second largest public cloud hyperscaler, is well positioned in a supply-constrained compute market, and its capital expenditures are prudent investments to accelerate growth. Microsoft is leading the shift toward a more open, multi-model ecosystem that lets enterprise customers optimize the ROI of their AI initiatives, which we believe will expand token consumption to Azure's benefit. Together, we believe that these tailwinds should enable Microsoft to sustain its high-teens historical earnings growth algorithm over the long term."

Story Continues

Microsoft (MSFT) Stock: Truist Raises Price Target to $675, Reiterates Buy

Microsoft Corporation (NASDAQ:MSFT) ranks second on our list of 40 Most Popular Stocks Among Hedge Funds. According to our database, 282 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the first quarter, compared to 312 in the previous quarter. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

In another article, we covered Microsoft Corporation (NASDAQ:MSFT) and highlighted the company's remarkable quarterly beat. In addition, please check out our hedge fund investor letters Q2 2026 page for more investor letters from hedge funds and other leading investors.

READ NEXT: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 Years.

Disclosure: None. This article is originally published at Insider Monkey.

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