How a Legendary Investor's Portfolio Move Could Signal Long-Term Value in Ride-Hailing

Pershing Square Capital Management operates with a highly selective investment strategy, maintaining a concentrated portfolio of just 10-12 holdings at any given time. This disciplined approach allows for deep fundamental analysis on each position, making every capital allocation decision significant enough to catch Wall Street’s attention.

The Case for Uber as a Cash Generation Engine

When billionaire investor Bill Ackman’s fund began accumulating shares of Uber Technologies (NYSE: UBER) in January, the market took note. By the third quarter, Pershing’s position had grown to approximately $3 billion, representing 20% of the fund’s total portfolio—a substantial bet reflecting considerable conviction.

Ackman highlighted Uber’s operational transformation under CEO Dara Khosrowshahi, calling it “a highly profitable and cash-generative growth machine” and noting that the company ranks among “the best-managed and highest-quality businesses in the world” while still trading at what he views as a discount to intrinsic value.

The fundamentals support this assessment. Through the first nine months of 2025, Uber generated nearly $7 billion in free cash flow, representing a 34% increase compared to the prior year period. The ride-hailing core business has matured significantly, while Uber Eats contributed meaningfully to overall expansion, with third-quarter gross bookings climbing 21% company-wide and 25% at the food delivery segment specifically.

Multiple Expansion Catalysts on the Horizon

Ackman’s investor analysis points to several drivers that could propel earnings higher over the medium term. The fund projects 30%-plus earnings per share growth ahead, while also highlighting management’s capital allocation discipline—Pershing estimates $4 billion in share repurchases this year alone, approximately 4% of market capitalization, creating a permanent reduction in share count.

The current valuation presents an interesting paradox. Despite a 32% year-to-date gain, Uber trades at roughly 23 times forward earnings for 2026 (when consensus estimates point to $3.60 per share), largely in line with historical multiples. Should the company deliver on 30%+ EPS growth, multiple expansion would likely follow naturally.

The Autonomous Vehicle Wild Card

Perhaps the most compelling longer-term narrative involves autonomous transportation. While Uber itself doesn’t manufacture self-driving vehicles, it has positioned its platform as the network layer for emerging autonomous companies, including Alphabet’s Waymo, WeRide, and Lucid Group.

In October, Nvidia announced a strategic collaboration with Uber focused on scaling autonomous vehicle deployments to 100,000 units—a significant milestone that incorporates artificial intelligence into Uber’s infrastructure. Management has previously valued this autonomous opportunity at over $1 trillion, suggesting substantial optionality beyond the current business.

This combination of near-term cash generation, medium-term earnings acceleration, and long-term autonomous potential positions the stock as potential long-term value creation opportunity, according to Ackman’s investment thesis.