Market Divergence: Ackman's Alphabet Stake Reduction Challenges Wall Street's Bullish Consensus on AI Giant

A Contrarian Move in Q3 2025

Billionaire investor Bill Ackman made headlines in the third quarter of 2025 with a notable portfolio repositioning. His Pershing Square Capital Management, which maintains a concentrated 11-stock portfolio, reduced its position in Alphabet Class A shares by approximately 9.7%—offloading over 519,000 shares. This move stands in stark contrast to the broader investment community’s stance on the search and AI powerhouse.

The reduction marks Ackman’s most significant adjustment to his artificial intelligence exposure in the quarter. While his hedge fund maintained stakes in Amazon and Uber earlier in the year, and held both classes of Alphabet shares since 2023, the latest action signals a tactical rebalancing rather than a fundamental loss of confidence. Yet Wall Street has questioned whether this capital reallocation represents a strategic error.

Why the Skepticism?

Despite Ackman’s decision to prune his Alphabet holdings, the overwhelming market consensus remains decidedly optimistic. In a November survey by S&P Global, not a single analyst among 66 Alphabet watchers recommended selling the stock. The conviction runs deep: twelve analysts rated Class A shares as a “strong buy,” while 45 assigned a “buy” rating. Only nine dissenting voices suggested holding—none recommended exit positions.

This near-unanimous bullish stance reflects Alphabet’s demonstrated momentum. The company delivered Q3 revenue of $102.3 billion, representing 16% year-over-year growth. Even more impressively, earnings surged 33% to approximately $35 billion. These figures underscore why analysts believe Alphabet competitors should have abandoned concerns about the company lagging in the AI race.

The AI Catalyst Driving Optimism

Google’s performance across its AI-powered services justifies Wall Street’s enthusiasm. The Search division has accelerated thanks to generative AI features like AI Overviews. Google’s Gemini large language model now boasts over 650 million monthly active users—a testament to adoption traction.

Google Cloud represents perhaps the most compelling growth narrative. The division’s acceleration stems largely from enterprise demand for AI infrastructure and services. Additionally, Waymo’s autonomous ride-hailing operations have expanded to five U.S. cities with plans to reach 11 additional markets plus London. Google Quantum AI continues achieving computing breakthroughs, positioning the company for potential breakthrough innovations within the decade.

The Investment Case Despite Ackman’s Positioning

While Ackman’s decision to reduce his stake warrants respect given his investment track record and net worth of $9.2 billion, the long-term case for Alphabet appears robust. Pershing Square continues holding over 11 million combined Class A and Class B shares valued around $3.3 billion—hardly a signal of diminished conviction.

Agentic AI adoption should continue attracting customers to Google Cloud, potentially expanding the total addressable market. Enhanced AI capabilities could further strengthen Google Search economics as these agents increasingly serve as intelligent shopping assistants. The recent launch of Gemini 3.0 should provide additional momentum for cloud expansion.

Reconciling Different Time Horizons

The divergence between Ackman’s tactical pruning and Wall Street’s sustained enthusiasm likely reflects differing investment horizons and portfolio construction philosophies. Ackman may have harvested gains from the shares’ appreciation since early 2023, strategically redeploying capital within his constrained portfolio framework. Conversely, analysts maintaining their bullish stance focus on multi-year growth trajectories driven by structural AI adoption.

For individual investors evaluating whether Alphabet belongs in their portfolio, the company’s demonstrated execution, expanding AI moat, and financial momentum suggest the broader market assessment deserves serious consideration. The plant label stakes in any growth-oriented tech allocation arguably warrant exposure to Alphabet’s long-term AI positioning.