As AI-driven trading faces liquidation, Ackman turns to high-quality cash flow! Visa and Mastercard lead six new positions for Pershing Square (PS.US).

Billionaire and hedge fund legend Bill Ackman announced the first complete quarterly performance report for Pershing Square Inc. (PS.US), which he founded and personally leads, on Wednesday during Eastern Time. The reports indicate that its profitability exceeded market consensus expectations. Additionally, the company disclosed that it had recently established new positions in financial giants Visa (V.US) and Mastercard (MA.US), along with four other companies that have historically maintained low concentration and high cash flow quality. According to the financial report, Pershing Square's Distributable EPS for the second quarter was $0.14, surpassing analysts average expectations of $0.12, and also up from $0.12 year-over-year. The total revenue for the second quarter was $54.2 million, below the consensus expectation of $75.8 million, but higher than $53.2 million in the second quarter of last year. Management fee income slightly increased from $50.8 million in the same period last year to $54.2 million. In other key performance metrics, Fee-related Revenue grew by 25% year-on-year to $68 million. Earnings related to fees rose by 24% year-on-year to $56.1 million. The profit margin slightly declined from 82.6% in the second quarter of last year to 82.4%. Under GAAP standards, total expenses surged from $33 million in the same period last year to $144.3 million in the second quarter, with profit-sharing partner compensation soaring from $8.45 million to $69.3 million, and employee compensation and benefits rising sharply from $3.93 million to $50.3 million. The report indicated that the total assets under management (AUM) of Pershing Square grew from $26.6 billion to $32.5 billion during the second quarter, which includes $5.63 billion in inflows, $829 million in gains from market value changes, and $573 million in outflows. Ackmans latest investment updates reveal his new positions in Visa and Mastercard, along with a total of six newly established positions. During the earnings call, Pershing Square CEO Bill Ackman and Chief Investment Officer Ryan Israel discussed new investments made by the firm's funds since the beginning of this year. Among these are card network giants Visa (V.US) and Mastercard (MA.US), streaming leader Netflix (NFLX.US), credit rating and market analytic company S&P Global, Inc. (S&P Global, SPGI.US), exchange operator Intercontinental Exchange, Inc. (Intercontinental Exchange, ICE.US), and healthcare giant Alcon (ALC.US) focusing on ophthalmic treatments. Ackman and Israel stated: "When combining these new stock investments with our existing positionssuch as dominant and fast-growing companies in specific market segments like Microsoft Corporation (MSFT.US), Amazon.com, Inc. (AMZN.US), Meta (META.US), Uber Technologies, Inc. (UBER.US), Brookfield (BN), and Restaurant Brands (QSR.US)we believe that the current portfolio is highly attractive in terms of corporate fundamentals and future profit growth prospects, thus in a favorable position poised for strong returns in the future." Pershing Square Inc. (PS) saw its stock price rise by 1.7% in after-hours trading, while Pershing Square USA (PSUS) experienced a slight increase of 0.7%. Pershing estimates that the current core portfolio trades at an average multiple of about 19 times earnings, corresponding to an expected EPS CAGR of about 20% over the next 3-5 years, compared to the S&P 500s approximately 20 times valuation and 12% EPS CAGR, forming a more favorable "growth/valuation ratio." According to Ackman, the long-term industrial trend of AI computational power remains intact; however, at this juncturefollowing a deleveraging wave in AI stocks and a cleansing of crowded positionsfuture excess returns might stem from high-quality compounding assets with low momentum, low capital dependence, high cash flow, high ROIC, that can still leverage AI for growth; this is precisely why Visa, Mastercard, along with ICE and S&P Global are noteworthy signals of Ackmans portfolio. Essentially, Pershing Square Inc. is Ackmans asset management company/platformit includes Pershing Square Capital Management as the investment manager. Shareholders of Pershing Square (PS.US) primarily benefit from management fees, profit-sharing, and economic benefits arising from future AUM expansion in the entire asset management business; while Pershing Square USA (PSUS.US) is a U.S. listed closed-end investment fund managed by the platform, where investors effectively buy into the stock investment portfolio managed by Ackman and its net asset value (NAV) performance. In simple terms, if investors choose to buy Pershing Square (PS.US) = buying into and firmly believing in Ackmans entire asset management business, buying Pershing Square USA (PSUS.US) = indirectly handing money to Ackman for investment or buying into his publicly traded fund portfolio on the secondary market. Although both are set for joint IPO in 2026, they will trade independently thereafter on the NYSE. As the crowding trade in AI gradually recedes, Ackman shifts from high beta towards high cash flow compounding assets. Ackmans latest positions and investment layout emphasize that his focus is now shifting towards high cash flow compounding assets, accelerating the transition from leveraged positions in AI computational powerreaching historically extreme levelsand the highly crowded high beta momentum trading towards high-quality cash flow compounding + valuation misalignment alpha expansion. In the first half of 2026, the S&P 500 rose about 10%, but the semiconductor and technology hardware sectors, known as AI shovel sellers, contributed nearly 85% of the index's gains, while over 90% of S&P component stocks combined contributed less than 2%. Subsequently, early Julys Bank of America fund manager survey indicated that as high as 82% of respondents viewed semiconductors as the most crowded and leveraged trading theme in the market. The SOX index (Philadelphia Semiconductor Index) subsequently pulled back over 20% from its June peak. Individual stock leveraged ETFs, short-term options, and financing positions further amplified the deleveraging impact, and in this extreme imbalance in market breadth, Ackman noted that Pershing was able to deploy nearly $5 billion in new capital amidst the volatilitynot as a risk-off move (selling high beta and crowded risk assets) into defense, but rather seeking strong fundamentals in non-crowded quality assets that are yet to reflect long-term cash flow value from AI infrastructure that had become fully priced by passive capital and had extreme leverage. Visa, Mastercard, S&P Global, and ICE vividly illustrate this investment framework of buying fundamentally high-quality stocks at misaligned or distressed prices, but Ackmans strategy appears more as a microcosm of the market style shift in 2026, transitioning from singular AI computational power + momentum strategy to cash flow abundance + low concentration positions + fundamental high-quality alpha breadth expansion, rather than a denial of the super bull market surrounding AI. Ackman remains heavily invested in Microsoft Corporation, Amazon.com, Inc., and Meta, clearly believing that Microsoft Corporation's AI capital expenditures are reasonable growth investments and that Meta is one of the clearest beneficiaries of AI; the newly added positions of Netflix, Visa, Mastercard, S&P Global, ICE, and Alcon expand the portfolios profit sources from a singular focus on momentum and AI beta to include payments, large financial giants, trading infrastructure, streaming, and healthcare. Visa and Mastercard essentially function as global payment toll booths with extremely light capital: they do not bear significant credit risk, have extremely low marginal transaction costs, and maintain cash flow conversion rates exceeding 100%. Pershing expects both to maintain double-digit long-term revenue growth, with EPS exhibiting about 16% and 18% compound growth potential over the next 3-5 years, and the previously compressed valuations to about 22 times future earnings due to the stablecoin wave, AI agentic commerce business models, and regulatory concerns provide an entry window. S&P Global and ICE are closer to financial infrastructurerating, indexing, pricing, data, trading, and clearing businesses with high entry barriers, recurring revenues, and strong network effects; ICE was even bought after its stock price fell about 21% in the previous year, with valuations compressed from 25 times to about 17 times.