Ackman says 2027 could be 'an incredible year' for markets

War's end may bring lower oil prices, easing inflation pressure

Billionaire stays bullish on Meta, Netflix despite sharp selloffs

Fannie Mae, Freddie Mac shares seen rising tenfold

The Nasdaq composite index board. [Reuters/Yonhap]
The Nasdaq composite index board. [Reuters/Yonhap]

With US markets rattled by the Iran war and persistent inflation, billionaire investor Bill Ackman has offered a strongly bullish outlook for next year's stock market. He argues that if the pressures of war and inflation that have weighed on equities this year begin to ease, 2027 could bring an entirely different market environment.

According to CNBC, Ackman, who leads hedge fund Pershing Square Capital Management, appeared on the network Thursday (local time) and said "2027 is going to be an incredible year."

"The aftermath of the war is fading, and the relationship between Russia and Ukraine also seems to be moving in a positive direction," he said. "Energy prices could fall significantly, and that would be very positive for inflation and for markets."

On the Iran war, Ackman said it had been "a very well-executed war," adding that peace in the Middle East would benefit not only the region as a whole but the United States as well.

West Texas Intermediate crude has surged 72 percent this year, while Brent crude has jumped 83 percent. The war-driven rise in energy prices has pushed up US consumer prices and added pressure on equity markets.

The US consumer price index rose 3.7 percent in September from a year earlier, with gasoline prices accounting for more than half of the overall increase. The mounting price pressure has also made it harder for the Federal Reserve to cut interest rates.

Ackman said US stocks would have performed far better had it not been for the war, high oil prices and elevated interest rates. He explained that if the war subsides and energy prices fall, easing inflation and rate pressures, conditions could become much more favorable for equities.

The Meta logo. [Reuters]
The Meta logo. [Reuters]

Ackman also offered an upbeat assessment of big-tech companies whose share prices have tumbled recently.

He praised Netflix's content strength and management capabilities, saying the stock is currently undervalued. He noted that Netflix's price-to-earnings ratio stands at around 18 times — historically low — and projected that the company could sustain earnings growth in the mid-to-high teens percentage range for a considerable period. He described Netflix as a "high-growth utility company."

Ackman also maintained his investment view on Meta. The company reported third-quarter sales that beat market expectations, but its share price tumbled on concerns over the scale of its AI investment spending.

Ackman, who holds Meta as a major position, said it was "meaningless to look at the first-day stock movement right after an earnings release," adding that "Meta has proven that AI helps accelerate business growth, and the stock is still massively undervalued."

He said Meta's investment in AI infrastructure could generate attractive returns over the long term.

Ackman offered an even bolder outlook for Fannie Mae and Freddie Mac, the US housing finance agencies in which he is a major shareholder.

"These stocks are going to go up tenfold," he said, calling them "the most asymmetric investment opportunity in the stock market that I know of." He cited the two institutions' capital buildup, noting they now hold five times more capital than they did in the past.

However, Ackman's optimism rests on the assumption that the war will ease and global oil prices will fall. Fannie Mae and Freddie Mac's share prices could also vary depending on policy variables such as changes to their government conservatorship structure. It is also worth noting that Ackman is himself an investor in Meta and both housing finance agencies.


sjy@heraldcorp.com