Ackman Likens Amazon, Meta, Microsoft to Berkshire in 2000 at 18x-28x Forward Earnings
Updated
Updated · The Motley Fool · Jun 24
Ackman Likens Amazon, Meta, Microsoft to Berkshire in 2000 at 18x-28x Forward Earnings
3 articles · Updated · The Motley Fool · Jun 24
Summary
Bill Ackman said Amazon, Meta and Microsoft resemble Berkshire Hathaway in 2000, arguing the market has left them undervalued despite strong long-term prospects.
Forward P/E multiples now sit at 28 for Amazon, 22.5 for Microsoft and 18 for Meta, levels the report says are unusually low given their accelerating revenue growth.
AI enthusiasm has instead lifted suppliers: semiconductor stocks are up more than 90% this year and energy stocks nearly 60%, versus a 9% gain for the S&P 500.
Ackman argues investors are wrongly punishing heavy capital spending, saying higher outlays should be welcomed when demand is rising and management is trusted.
The Berkshire parallel rests on valuation: after lagging badly in 1999, Berkshire returned 176% over the next decade while the S&P 500 delivered -4.8%.