Ackman Announces Major Stake in Uber: Should You Follow His Lead?
Recent breaking news gave Uber (NYSE: UBER) investors a welcome boost as the stock swung into positive territory over the past year. The ride-hailing giant, which had significantly underperformed over the previous year, surged 6.59% on Friday and over 11% for the week following its Q4 2024 earnings report. However, what truly drove the stock’s sharp rally was not its earnings. It was a revelation from famed investor Bill Ackman.
The billionaire hedge fund manager and founder of Pershing Square took to X (formerly Twitter) to announce that his firm had built a significant position in Uber, which sparked renewed investor enthusiasm. Given Uber’s recent struggles, should investors consider following Ackman’s lead despite its lagging performance relative to the broader market over the past year?
Bill Ackman Reveals Investment in Uber
On Friday, Bill Ackman revealed that Pershing Square had amassed a substantial stake in Uber, asserting that the stock is still trading at a “massive” discount. According to his post on X, his fund began accumulating shares in early January and now holds 30.3 million Uber shares, valued at nearly $2.3 billion based on Friday’s closing price.
Ackman expressed his confidence in Uber’s management, calling it one of the best-run businesses in the world. He highlighted that the stock remains significantly undervalued despite its quality, an unusual characteristic for a large-cap company. Uber shares responded positively to the news, surging over 6.5% on Friday. Just days earlier, the stock had taken a hit, dropping over 7% following softer guidance and an earnings miss.
Ackman also disclosed that he had been a day-one investor in Uber through a small venture fund investment and praised CEO Dara Khosrowshahi’s leadership. He credited Khosrowshahi for transforming Uber into a highly profitable and cash-generating company.
Uber’s Recent Earnings Disappointment
Despite the stock rallying in 2025, with gains of nearly 25% year-to-date after declining 2% in 2024, Uber’s recent earnings report failed to impress investors. The company reported lower-than-expected operating income, raising concerns about its near-term financial performance. At the same time, there is increasing speculation about how self-driving technology could impact Uber’s business model.
Uber’s stock initially dipped after the earnings report as investors worried about the competitive threat of robotaxis. Companies like Waymo and Tesla are making significant advancements in autonomous vehicle technology, which could either disrupt Uber’s operations or present an opportunity for the company to expand its platform. Uber is taking proactive steps to integrate autonomous vehicles, investing in infrastructure, developing new app features, and partnering with companies like Waymo in Austin. CEO Dara Khosrowshahi acknowledged the uncertainty but emphasized that Uber is working hard to be prepared for the future.
Uber’s Growth Trajectory Remains Intact Despite Earnings Miss
Uber’s earnings report showed mixed results. Operating income for the December quarter rose to $770 million, but this figure was well below the $1.19 billion analysts had expected. Net income significantly jumped to $6.88 billion, mainly due to a tax valuation release. Gross bookings, the total value of transactions on Uber’s platform, increased by 18%, which was stronger than anticipated. As a result, Uber’s revenue, which is derived from those bookings, grew by 20%.
Uber has set its gross bookings forecast between $42.0 billion and $43.5 billion for the current quarter. Analyst expectations were closer to the higher end of that range. The company also projects adjusted earnings of between $1.79 billion and $1.89 billion, which aligns with Wall Street estimates.
Bill Ackman’s Investment Boosts Market Sentiment
Despite Uber’s underperformance in 2024 and the recent earnings miss, overall sentiment toward the stock remains positive. Among 36 analysts covering Uber, the stock holds a Moderate Buy rating, with a consensus price target suggesting over 20% potential upside. The stock’s technical outlook has also improved following Ackman’s investment disclosure.
It recently broke out of a short-term downtrend, which could indicate the start of a new upward movement. If Uber’s stock can pull back toward its 200-day simple moving average and establish support above it, a higher low formation could confirm a longer-term uptrend.
With Uber already up 23.6% in 2025, momentum may be shifting in its favor.
Bill Ackman’s endorsement of Uber has added a new layer of optimism, reinforcing confidence in its long-term growth potential. While recent earnings were mixed and concerns around autonomous vehicles persist, Uber’s strategic positioning, improving profitability, and strong backing from major investors like Ackman suggest that the stock may have more room to run.
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