Billionaire Bill Ackman Sells Alphabet Stock and Buys a Mega-Cap Stock Down 42% From Its High

Billionaire investor Bill Ackman's hedge fund, Pershing Square, executed significant portfolio adjustments in the second quarter by liquidating its entire stake in Alphabet and initiating a new position in Netflix (NASDAQ: NFLX). The move highlights shifting institutional sentiment as Netflix trades roughly 42% below its peak valuation, pressured by concerns over subscriber growth following failed acquisition pursuits for Warner Bros. Discovery and Roku. Despite recent market headwinds, Netflix maintains industry dominance across monthly active users, engagement, and viewing share. Wall Street projects Netflix's earnings to grow at an annual rate of 21% over the next three years, leaving its current multiple of 24.7 times earnings attractive to value-oriented growth investors. The consensus price target of $94 per share indicates potential upside of approximately 20% from current price levels near $78. Meanwhile, Pershing Square exited Alphabet amid rising capital expenditures on artificial intelligence infrastructure, which resulted in negative quarterly free cash flow. Netflix's untapped expansion potential in live sports, ad-supported tiers, and pricing power positions it favorably for long-term growth.