Billionaire hedge fund legend Bill Ackman’s Pershing Square Inc. (PS.US) reported its first full quarter earnings as a publicly traded company on Wednesday, posting distributable earnings per share of $0.14, beating the analyst consensus of $0.12. Total revenue for the second quarter came in at $54.2 million, below the expected $75.8 million but above last year’s $53.2 million. Management fee revenue edged up to $54.2 million from $50.8 million a year ago.

Fee-related revenue grew 25% to $68 million, while fee-related earnings rose 24% to $56.1 million. The profit margin dipped slightly to 82.4% from 82.6% in the prior year’s second quarter. Total GAAP expenses surged to $144.3 million from $33 million, driven by a jump in profit-sharing compensation from $8.45 million to $69.3 million and a rise in employee costs from $3.93 million to $50.3 million.

The firm’s assets under management grew from $26.6 billion to $32.5 billion in the quarter, supported by $5.63 billion in inflows, $829 million from market value changes, and $573 million in outflows.

Unveiling Ackman’s Latest Portfolio: Visa, Mastercard Lead Six New Positions

During the earnings call, CEO Bill Ackman and Chief Investment Officer Ryan Israel detailed new investments made since the start of the year. These include payment network giants Visa (V.US) and Mastercard (MA.US), streaming titan Netflix (NFLX.US), market analytics and credit rating firm S&P Global (SPGI.US), exchange operator Intercontinental Exchange (ICE.US), and ophthalmology-focused healthcare giant Alcon (ALC.US).

Ackman and Israel noted that these new holdings, combined with existing positions in dominant growth companies like Microsoft (MSFT.US), Amazon (AMZN.US), Meta (META.US), Uber (UBER.US), Brookfield (BN), and Restaurant Brands (QSR.US), create a portfolio with compelling fundamental quality and growth prospects, positioning it for strong returns.

Shares of Pershing Square Inc. rose 1.7% in after-hours trading, while Pershing Square USA (PSUS.US) edged up 0.7%. Pershing estimates the core portfolio trades at roughly 19 times earnings, with a 3-5 year EPS CAGR of about 20%, compared to the S&P 500’s approximate 20x valuation and 12% EPS CAGR, offering a more favorable growth-to-valuation ratio.

In Ackman’s view, the long-term trend for AI infrastructure remains intact. However, amid the deleveraging and unwinding of crowded trades in AI-themed stocks, the next phase of alpha may come from low-momentum, low-capital-intensity, high-cash-flow, high-ROIC compounders that can still leverage AI for growth. The inclusion of Visa, Mastercard, ICE, and S&P Global signals this strategic shift.

Understanding Pershing Square Inc. vs. Pershing Square USA

Pershing Square Inc. is essentially Ackman’s asset management platform, where shareholders benefit from management fees, profit-sharing, and the economic upside of AUM expansion. In contrast, Pershing Square USA is a closed-end fund listed in the US, managed by the platform, giving investors direct exposure to Ackman’s stock portfolio and its net asset value. In simple terms, buying PS.US means betting on the asset management business itself, while buying PSUS.US means investing in the fund’s portfolio. Both were jointly listed in 2026 but trade independently on the NYSE.

From High-Beta AI to High-Cash-Flow Compounders

Ackman’s latest positioning underscores a pivot from extreme leverage in AI themes and crowded high-beta momentum trades toward high-quality cash-flow compounders with valuation dislocation. In the first half of 2026, the S&P 500 rose about 10%, but semiconductor and tech hardware stocks—the “AI picks-and-shovels” plays—contributed roughly 85% of the index’s gains, while over 90% of S&P components contributed less than 2%. By early July, a Bank of America fund manager survey showed 82% of respondents viewed semiconductors as the most crowded and leveraged trade. The Philadelphia Semiconductor Index subsequently fell over 20% from its June peak.

Leveraged ETFs, short-dated options, and margin positions amplified the deleveraging shock. Amid this extreme market breadth imbalance, Ackman deployed nearly $5 billion in new capital during the volatility. This is not a risk-off retreat into defense but a shift from AI infrastructure fully priced by momentum capital to “non-crowded quality assets” with strong fundamentals not yet reflected in long-term cash flow value.

Holdings like Visa, Mastercard, S&P Global, and ICE epitomize this framework: buying high-quality stocks at dislocated prices. This strategy mirrors a broader market style shift from a single AI infrastructure and momentum focus to a broader alpha expansion driven by cash-flow-rich, low-concentration, high-quality assets. It is not a rejection of the AI bull thesis.

Ackman remains heavily invested in Microsoft, Amazon, and Meta, viewing Microsoft’s AI capex as a rational growth investment and Meta as a clear AI beneficiary. The new additions—Netflix, Visa, Mastercard, S&P Global, ICE, and Alcon—diversify earnings sources from single momentum and AI beta into payments, financial infrastructure, streaming, and healthcare.

Visa and Mastercard are capital-light, global payment toll booths that bear minimal credit risk, have low marginal transaction costs, and boast cash conversion rates above 100%. Pershing expects both to generate double-digit revenue growth, with EPS CAGRs of roughly 16% and 18% over 3-5 years. Recent market concerns over stablecoins, AI agentic commerce, and regulatory issues compressed their valuations to about 22x forward earnings, providing an entry point.

S&P Global and ICE are closer to financial infrastructure—ratings, indices, pricing, data, trading, and clearing—with high barriers to entry, recurring revenue, and strong network effects. ICE was purchased after its stock fell about 21% over the prior year, compressing its valuation from 25x to about 17x earnings.