Bill Ackman’s Pershing Square Capital made a significant portfolio shift, selling its entire stake in Chipotle Mexican Grill (NYSE:CMG) and taking a new position in Meta Platforms (NASDAQ:META | META Price Prediction), marking a rotation from consumer discretionary into AI infrastructure.
The Trade That Turned Heads
Ackman’s firm exited Chipotle along with positions in Nike (NYSE:NKE) and Hilton (NYSE:HLT), while simultaneously investing in Meta Platforms, Amazon.com, and Hertz Global Holdings Inc. (NASDAQ:HTZ).
Chipotle has been an Ackman favorite for years. But something changed. The stock is down 37% over the past year, and the business fundamentals tell a concerning story.
Why Dump Chipotle Now?
Chipotle’s Q4 2025 results revealed cracks in the foundation. Comparable restaurant sales dropped 2.5%, driven by a 3.2% decline in transactions. You can raise menu prices to offset cost inflation, but if customers stop walking through the door, you’ve got a traffic problem, not a pricing problem.
Operating margins compressed to 14.1% from 14.6% the prior year. Management’s 2026 guidance? Flat comparable sales growth. In other words, management isn’t expecting things to get better anytime soon.
CEO Scott Boatwright called 2025 “a year of progress and resilience.” But when you’re guiding for zero comp growth and bleeding transactions, that’s survival mode.
The stock trades at 33x trailing earnings. Wall Street projects earnings will drop from $1.17 in 2025 to $1.14 in 2026. Estimates once again rise to $1.37 in adjusted EPS in 2027, but there are few assurances this rebound will happen as consumers broadly turn away from fast casual concepts.
For a restaurant chain facing traffic headwinds, Ackman saw better opportunities elsewhere.
Why Meta Makes Sense
Meta just reported Q4 2025 earnings that beat expectations. Revenue hit $59.89 billion, up 24% year-over-year. EPS came in at $8.88, crushing the $8.39 estimate. But the real story is what Meta is building.
The company is spending $115 billion to $135 billion in capex this year on AI infrastructure. Zuckerberg laid out the vision: “I’m looking forward to advancing personal superintelligence for people around the world in 2026.”
While operating margins declined to 41% from 48% due to infrastructure spending, this is investment, not deterioration. Ad impressions grew 18%, and average ad prices climbed 6%. The core advertising business is printing cash to fund the AI buildout.
Perhaps most encouraging was Meta’s guidance, which pointed to 33% revenue growth next quarter at the high-end. Yes, Meta will spend 2026 reinvesting almost all of its cash flow back into AI infrastructure, but the company is also demonstrating how much its utilizing AI investments to accelerate its core business.
Meta trades at 28x trailing earnings with 24% revenue growth that could soon accelerate past 30%. Analysts have a target price of $860, implying 32% upside from current levels around $650.
What It Means
Ackman’s move represents a rotation of capital from a mature restaurant chain facing structural headwinds into a technology company building AI infrastructure, funded by its advertising business. Don’t ignore Ackman’s move into other companies like Amazon as well.
Amazon now trades for half the forward P/E of Walmart. It looks like Ackman’s making a bet on leading AI companies that have sold off after massive capex plans in 2026. Yes, there is a risk these companies are overbuilding, but they’re also at the lowest forward P/E levels they’ve traded at in recent years.
Personally, I like Ackman’s bets. Amazon may face risks from its AI build, but I believe its logisitics network becomes even more valuable in an AI world, not to mention the potential margin expansion it can experience from robotics. As AWS growth accelerates into the high-20s by late 2026, my expectation is sentiment around Amazon will flip from today’s lows.
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