Bill Ackman likes to keep his hedge fund, Pershing Square Capital, invested in just a few high-conviction companies. Indeed, it’s hard to generate market-beating returns if your investments are spread so thin your portfolio looks pretty similar to the overall stock market. But Ackman and his team hold stock in just 10 publicly traded companies.

Ackman is willing to deploy billions of dollars at once to accumulate shares in his highest-conviction bets, and he likes to hold those stocks for a long time. As such, Pershing Square’s monthly investor updates and quarterly disclosures with the SEC can be a great source of investing ideas. And Ackman’s three best ideas right now account for more than half of Pershing Square’s publicly traded portfolio.

Here are Ackman’s top three holdings.

1. Uber (19.7% of portfolio)

Ackman accumulated 30.3 million shares of Uber (UBER 1.65%) at the start of 2025 before announcing the new position on X in early February. Pershing Square’s first-quarter 13-F filing revealed it was, in fact, Pershing Square’s largest position.

That position has only gotten bigger as Uber stock has climbed about 55% since the start of the year, reaching a new all-time high. A large part of that rally came after Ackman announced Pershing Square’s position.

But the long-term prospects look good for Uber, too. While some see autonomous vehicles as a threat to Uber’s ride-sharing business, it could turn out to be an opportunity for the company. That’s because Uber has, by far, the largest customer base for taxi services. It counted 170 million total monthly active users as of the end of the first quarter. And its market share is growing thanks to the network effect and giving users more ways to use its service.

That’s an incredible asset that most companies building autonomous vehicles would love to tap into. Alphabet‘s Waymo, the leading self-driving car company, has already inked several deals with Uber to operate in multiple cities.

In the meantime, Uber is executing on its financial goals. Gross bookings increased 14% last quarter. With improved operating leverage, the company managed to grow earnings before interest, taxes, depreciation, and amortization (EBITDA) 35%. With limited cash expenditures, it managed to produce 66% growth in free cash flow (converting over 100% of EBITDA).

Despite the strong run-up in price, shares of Uber look fairly valued at an enterprise value less than 23 times forward EBITDA estimates as of this writing. Considering management expects EBITDA growth above 30% over the next couple of years, that’s a very attractive price.

2. Brookfield (18.4%)

Ackman has built a position in Canadian alternative asset manager Brookfield (BN 2.58%)over the last four quarters. On top of asset management, the company operates businesses across several segments, including real estate, renewable power facilities, and infrastructure. Those cash-flowing businesses give it capital to invest in additional operating businesses.

Brookfield Wealth Solutions, its insurance business, provides additional capital via float for management to invest. That’s a strategy Warren Buffett used to grow Berkshire Hathaway, and one Ackman has expressed interest in himself.

Overall, Brookfield has grown distributable earnings per share at an average rate of 19% per year over the past five years. There’s no reason to expect that rate to slow significantly over the next few years, as management uses its considerable cash flows from asset management, insurance, and its operating businesses to buy profitable assets while returning additional cash to shareholders through buybacks. Management is targeting $6.33 in earnings per share by 2029, a 16% compound annual growth rate. It grew 30% in the first quarter.

Despite the strong growth expectations, the stock trades for just 19 times trailing earnings per share. That’s well below comparable comparable companies and appears to undervalue the growth potential of the business.

3. Howard Hughes Holdings (13.3%)

After a deal to acquire an increased stake in Howard Hughes (HHH -0.12%) through Pershing Square in May, Ackman now serves (once again) as executive chairman for the company’s board. Ackman put up $900 million of Pershing Square’s cash in exchange for 9 million shares of the stock, giving it a 46.9% economic stake in the company and 40% control of the vote.

The bigger part of the deal is that Ackman is able to take Howard Hughes and transform its existing real estate operations into a diversified holding company a la Berkshire Hathaway. Ackman has said one of his first moves will be to buy or build an insurance business.

In the meantime, Howard Hughes’ core business looks undervalued. Management estimated the net asset value of its master planned communities, condos, and operating assets (minus its corporate debt) at about $5.8 billion per share at the end of last year. The $900 million cash infusion from Pershing Square’s investment will bring its net asset value even higher, but the company’s total market cap sits at just $4 billion as of this writing.

Howard Hughes generates strong operating cash flow through the sale of its plots to homebuilders and rental income from its commercial and multifamily buildings. Since it controls the entire acreage of its master planned communities, it’s able to build just enough to meet demand for office buildings and multifamily housing, ensuring strong returns on capital spending. The rest of its cash can go toward new investments, especially now as a diversified holding company.

The new structure does come with some drawbacks, though. Howard Hughes will have to pay Pershing Square $3.75 million every quarter on top of a 0.375% incentive fee for increasing the value of the business above inflation. That said, Howard Hughes opens the door for average investors to put their money to work directly with Ackman and gain access to private deals he might make instead of following along with Pershing Square’s public moves. And with the stock trading below management’s estimate for net asset value, it may be a good opportunity for investors.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Adam Levy has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet, Berkshire Hathaway, Brookfield, Brookfield Corporation, Howard Hughes, and Uber Technologies. The Motley Fool has a disclosure policy.

It’s easy to think that institutional money managers somehow possess knowledge that’s superior to the rest of the investment community. After all, these billionaires are called “smart money” for a reason.

What I find helpful, though, is when portfolio managers admit that they may have made a mistake. To me, this sheds light into how these investors think, and what strategies they may hone in order to mitigate making the same oversight.

Stanley Druckenmiller of the Duquesne Family Office admitted that he sold Nvidia stock far too early — going as far as to say that he made a “big mistake” in doing so.

Since making these comments, Druckenmiller has definitely had multiple chances to get back on the Nvidia train. After all, Cathie Wood of Ark Invest did just that after she too sold the semiconductor darling prior to its epic rally a couple of years ago. Nevertheless, recent filings indicate that Druckenmiller may have accepted his decision with Nvidia and is seeking opportunity elsewhere.

Let’s dig into the new artificial intelligence (AI) chip stock that the Duquesne Family Office just increased its stake in by a whopping 457%. Now may be a lucrative time to follow Druckenmiller’s lead.

What AI stock did Druckenmiller just buy?

Per its most recent 13F filing, the Duquesne Family Office recently plowed into Taiwan Semiconductor Manufacturing (TSM 0.72%) stock. In the table, I’ve summarized the fund’s position in TSMC over the last year:

Data source: Hedge Follow. Table by author.

Sometimes when a hedge fund increases its position in a particular stock, you can begin identifying a pattern by looking at prior filings. In this case, however, I don’t think these dynamics really hold up.

A year ago, Druckenmiller’s portfolio had zero exposure to Taiwan Semi. And while the firm did buy the stock during the previous two quarters, the position itself was relatively nominal. Looked at a different way, the most recent purchase of TSMC stock during Q1 is a clear outlier compared to the previous two quarters.

Why might Druckenmiller like Taiwan Semiconductor stock?

While Taiwan Semi might not receive nearly as much coverage as Nvidia, Advanced Micro Devices, or Broadcom, don’t be fooled by its quiet reputation.

Companies such as Nvidia, AMD, Broadcom, Amazon, Qualcomm, Apple, and many more all design or buy chips and integrated network equipment for AI data centers. Where TSMC comes into play is that they actually manufacture the equipment that is designed by these companies.

So while Nvidia and its cohorts get to sell the best shovels that money can buy during the AI gold rush, Taiwan Semi is in the background actually making the shovels. In other words, a good chunk of the AI chip opportunity hinges on TSMC’s ability to manufacture these products.

What’s even more encouraging is that Taiwan Semi is investing heavily into infrastructure in an effort to maintain its lead over the competition. The company has already built factories here in the U.S., and has plans to double down on this initiative over the next few years. These investments are strategic, as they should allow for more efficiencies and improved supply chain logistics with domestic chip partners — a strategy that I think will further cement TSMC’s market share lead.

TSM Revenue Estimates for Current Fiscal Year data by YCharts

Wall Street seems to be bullish on Taiwan Semi, too. Per these estimates, analysts are forecasting impressive growth across both revenue and profits for TSMC over the next few years. I see these projections as a proxy for continued robust demand for AI chips, and Taiwan Semi’s ability to win business over the competition such as Intel or Samsung.

Is Taiwan Semi stock a buy right now?

Right now, Taiwan Semiconductor’s shares trade at a forward price-to-earnings (P/E) multiple of 20.8 — essentially identical to its five-year average. Given how influential TSMC’s foundry services are to the broader chip narrative, it’s a little perplexing to see the company’s forward valuation ratios trading in line with levels prior to the AI revolution.

I think the recent valuation compression in TSMC can be attributed to two primary factors: uncertainty around tariff policies and geopolitical tensions with China.

TSM PE Ratio (Forward) data by YCharts

While I’ll acknowledge both as potential risk factors, I think the bearish narrative surrounding each of them is overblown. Despite ongoing trade negotiations, demand for AI infrastructure remains incredibly high. These dynamics bode well for TSMC. Moreover, if management were questioning the long-term growth trajectory of the company, I’d be suspicious that it would be looking to expand its footprint beyond Asia.

To me, Taiwan Semiconductor is humming along just fine — and I don’t see its tailwinds slowing down anytime soon. For these reasons, investors may want to follow Druckenmiller’s lead and take advantage of Taiwan Semi’s attractive price levels right now.

More importantly, unlike what Druckenmiller did with Nvidia, TSMC looks primed for years to come, and growth investors may want to hold on tight for the long haul.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Adam Spatacco has positions in Amazon, Apple, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Apple, Intel, Nvidia, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and recommends the following options: short August 2025 $24 calls on Intel. The Motley Fool has a disclosure policy.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Uber Technologies. The Motley Fool has a disclosure policy.