Bill Ackman says analysts price in the cost of data center spending at Amazon, Microsoft, Meta and Alphabet but give little credit to the revenue it could produce. His Pershing Square letter estimates that returns on new capacity could push revenue growth above consensus.
Billionaire investor Bill Ackman argues that Wall Street's forecasts for the four largest AI hyperscalers show a notable disconnect between expectations and fundamentals. In his third-quarter letter to Pershing Square shareholders, he says analysts expect the current level of capital intensity to persist for years while assuming minimal acceleration in revenue growth beyond this year and next.
Spending climbs while shares lag
According to the letter, combined capital expenditure at the four companies is expected to rise from approximately $140 billion in 2023 to an estimated $740 billion in 2026. Projections suggest the group's capex may top $1 trillion in 2027. Ackman describes the push as "Offensive rather than defensive."
Earnings at the hyperscalers have grown at around 27% on average, per the letter, yet their shares posted average gains of only about 8% year to date through early November 2026. Meanwhile, semiconductor stocks rose 44% over the same period.
The return math on a gigawatt
Ackman estimates that 1 gigawatt of AI data center capacity costs the hyperscalers between $40 billion and $50 billion to build. Much of that money goes out well before the capacity can generate revenue, and Amazon CEO Andy Jassy said it takes about two years from breaking ground until a data center is ready for servers and networking equipment.
Once running, Ackman estimates a gigawatt can bring in $15 billion to $20 billion in annual revenue. At a 50% incremental operating margin, that equals $7.5 billion to $10 billion in operating income per year, a return on invested capital of 15% to 25%.
From there, the letter makes its most aggressive claim: under current return assumptions, hyperscaler revenue growth could beat consensus estimates by 5 to 10 percentage points annually through 2029.
Pershing Square buys three of four
Pershing Square bought shares of Microsoft, Meta, and Amazon during price declines tied to capex worries. However, the fund sold its Alphabet position earlier in 2026, so it currently backs three of the four companies its letter defends.
Sources: The Motley Fool, Crypto Briefing
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