Bill Ackman's Pershing Square has rebuilt a 3.15 million share stake in Netflix, representing approximately 4.9% of its portfolio, according to the firm's latest interim report. This marks a dramatic reversal from 2022, when Ackman's previous investment ended in a bruising loss of more than $400 million. As reported by BigGo Finance, Pershing Square had initially bought over 3 million shares in early 2022 but dumped them just three months later after Netflix reported its first subscriber decline in a decade. The firm characterized the current purchase as capitalizing on a market dislocation, acquiring a premium business at an attractive price after a steep drawdown. According to The Financial Express, Ackman's opportunity arose after Netflix's share price fell around 50% from its June 2025 high of $134, de-rating from over 40 times forward earnings per share to 21 times.
Pershing Square has executed its most sweeping portfolio expansion in recent years, adding six entirely new positions between March and June 2026. The new additions include Netflix, Visa, Mastercard, S&P Global, Intercontinental Exchange, and Alcon. As reported by The Financial Express, the firm's first-half 2026 performance was negative 12.6%, compared to a positive 10.2% return for the S&P 500. The year-to-date NAV return as of August 11, 2026 was negative 4.3%, compared to positive 13.7% for the S&P 500. Despite the reshuffle, investors since inception have seen their equity investment grow at a 15.6% compound annual rate over the last nearly 23 years, representing a 26-times multiple of their original investment. The fund's portfolio value stood at $13.71 billion as of March 31, 2026, down from $15.53 billion in the previous quarter.
Pershing Square's latest investment comes after Netflix has effectively won the streaming wars, with the company now commanding more than 325 million subscribers globally, nearly double the combined reach of Disney+ and HBO Max. As reported by BigGo Finance, Netflix's content costs are growing at just 2% a year, while roughly 90% of earnings convert directly into free cash flow. The firm projects double-digit annual revenue growth for Netflix, with content costs rising more slowly than sales and driving continued margin expansion. Combined with share buybacks, Pershing Square expects earnings per share to compound at close to 20% a year. According to The Financial Express, Pershing Square highlighted that over the last five years, Netflix has grown revenue 12% annually, operating profit 21% annually, and earnings per share 27% annually.
According to the billionaire investor, Ackman expects the companies he has recently invested in to deliver strong earnings growth. As reported by BigGo Finance, Pershing Square pushed back on two prevailing bear narratives: the rise of short-form video and the threat of artificial intelligence. The firm argues that short-form platforms are draining attention from traditional TV and weaker streaming services, not from Netflix, and that AI tools may actually widen Netflix's competitive moat rather than narrow it due to the company's scale and recommendation engine capabilities. Ackman's value investing approach allowed him to acquire each new investment at a price he believes to be well below intrinsic value during the market volatility in the first half of 2026.
The stock carries a consensus Strong Buy rating from 31 analysts, based on 24 Buy and seven Hold recommendations issued over the past three months, with the average 12-month price target of $96.27 implying roughly 30% upside from current levels. However, risks remain as Morgan Stanley analyst Sean Diffley has flagged that viewing time across paid streaming apps is expanding only slowly, with total hours spent on traditional streaming services growing just 2% in the first half of 2026. Advanced AI video generators also present a wildcard, potentially enabling small teams to produce high-quality content at fractional costs. With major indexes at record highs, the bar for further gains is rising, though the combination of easing price pressures and resilient corporate profits has kept the bull market intact.
