Bill Ackman Invests Big in Uber

FINANCE
Bill Ackman Invests Big in Uber

Billionaire investor Bill Ackman sees Uber as undervalued and has built a significant stake through Pershing Square Holdings. On Friday, he revealed the firm owns 30.3 million Uber shares, worth $2.3 billion, causing the stock to jump nearly 7%. Ackman, a longtime Uber customer, was introduced to the app by actor Edward Norton and became an early investor.

Despite Uber gaining only 3% in 2024, lagging the S&P 500’s 25% rise, Ackman believes it remains a bargain. Concerns over autonomous vehicles persist, but Uber’s partnerships with Waymo indicate driverless rides may complement rather than disrupt its business.

Ackman praised CEO Dara Khosrowshahi for transforming Uber into a profitable company. Analysts largely agree, with 85% rating Uber a buy and a target price of $88.76. Ackman may push for Uber to divest its struggling freight division or exit unprofitable markets while leveraging a $1.5 billion share buyback plan.

ECONOMY
U.S. Adds 143K Jobs in January

The U.S. economy added 143,000 jobs in January, falling short of the 169,000 forecast and marking a slowdown from December’s revised 307,000. Despite weaker job growth, the unemployment rate dipped to 4% as labor force participation rose slightly to 62.6%.

Job gains were concentrated in health care (44,000), retail (34,000), and government (32,000), while mining lost 8,000 jobs. Average hourly earnings increased 0.5% for the month and 4.1% year-over-year, surpassing expectations of 0.3% and 3.7%.

The Bureau of Labor Statistics also revised 2024 data, cutting total job growth by 589,000 but increasing the number of people reporting employment. Meanwhile, November and December saw upward revisions totaling 100,000 jobs.

The report had little impact on financial markets, with stocks flat and Treasury yields rising. The Federal Reserve is expected to hold interest rates steady until at least June, with policymakers taking a cautious approach to further cuts.

TECH
Amazon Bets Big on AI Growth

Amazon is ramping up AI investment, planning over $100 billion in capital spending for 2025—far exceeding analyst expectations of $86 billion. The company’s Q4 spending hit $26.3 billion, setting a pace for a 35% year-over-year increase.

This move comes amid competition from Alphabet, Meta, and Microsoft, which also announced aggressive AI spending. Amazon’s CEO Andy Jassy dismissed concerns that cost-cutting AI advancements, like those from China’s DeepSeek, would reduce overall tech investment. Instead, he sees growing demand for AI infrastructure, reinforcing Amazon Web Services’ (AWS) expansion, which is expected to surpass $150 billion in revenue by 2026.

Despite this bullish outlook, Amazon’s stock dropped 4% after its earnings report, as its revenue and profit projections fell short of Wall Street expectations. While investors worry about returns on these massive expenditures, Big Tech’s spending spree signals confidence in AI’s long-term potential—particularly benefiting AI chipmakers like Nvidia, which suffered from the recent DeepSeek selloff.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.