We recently published a list of Billionaire Bill Ackman’s 7 Stock Picks with Huge Upside Potential. In this article, we are going to take a look at where Chipotle Mexican Grill, Inc. (NYSE:CMG) stands against other billionaire Bill Ackman’s stock picks with huge upside potential.

Known commonly as Bill Ackman, William Albert Ackman is the founder and Chief Executive Officer of Pershing Square, a hedge fund renowned for its focused investment strategy and high-conviction portfolio. Ackman is known for maintaining a highly concentrated investment approach, often holding stakes in only 8 to 12 companies at any given time. By the end of the fourth quarter of 2024, Pershing Square’s portfolio was valued at $12.66 billion and included ten stocks, with over 50% of the fund’s capital concentrated in just the top four investments. This exemplifies Ackman’s commitment to identifying and capitalizing on undervalued opportunities, favoring companies that he believes are mispriced in relation to their intrinsic, long-term value.

Ackman’s investment philosophy has largely centered on value-based principles and activist strategies. His ability to identify market inefficiencies and apply pressure for change has yielded significant returns in the past. Pershing Square’s portfolio selections typically reflect this strategy, with a strong emphasis on companies with solid fundamentals and potential for operational or financial turnaround.

In early 2024, Ackman took a notable step by launching a U.S. closed-end fund named Pershing Square USA, Ltd. However, the initial public offering (IPO) of the fund was abruptly canceled just one day after filing with the Securities and Exchange Commission (SEC). The cancellation followed an unexpected drop in valuation from an intended $25 billion to just $2 billion. Following the cancellation, Ackman posted on the social media platform X that the firm would “report back once we are ready to launch a revised transaction,” suggesting that Pershing Square USA may still proceed in the future without a traditional stock exchange listing.

Ackman’s active engagement with both market trends and political developments illustrates his multifaceted approach to investing. As Pershing Square continues to evolve, close attention is being paid to the stocks within its concentrated portfolio, particularly those with the highest upside potential in light of current economic and political tailwinds.

Our Methodology

For this list, we searched through Pershing Square’s Q4 2024 13F filings to identify billionaire Bill Ackman’s stock picks with the highest upside potential. We compiled the equities with upside potential higher than 12% at the time of writing this article and analyzed why they stood out as sound potential investments. Finally, we ranked the stocks based on the ascending order of their upside potential. To assist readers with more context, we mentioned the hedge fund sentiment around each stock using data from 1,009 hedge funds tracked by Insider Monkey in the fourth quarter of 2024.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).

Chipotle Mexican Grill, Inc. (NYSE:CMG)

Number of Hedge Fund Holders as of Q4: 83

Pershing Square’s Equity Stake: $1.49 Billion

Upside Potential as of May 5: 12.94%

Chipotle Mexican Grill, Inc. (NYSE:CMG) is an American multinational chain of fast-casual restaurants specializing in Mexican cuisine such as burritos, bowls, and tacos. The brand has earned a strong following among both younger and older demographics, thanks to its responsiveness to local tastes and popular culture. Among its key investors is billionaire hedge fund manager Bill Ackman, who has maintained a stake in the company since 2016. Through his firm, Pershing Square, Ackman currently holds approximately 24.65 million shares of Chipotle, making up 11.74% of his entire portfolio. The company is one of just two restaurant-sector investments in Pershing Square’s portfolio, reflecting Ackman’s long-term confidence in its growth potential.

For the first quarter of 2025, Chipotle Mexican Grill, Inc. (NYSE:CMG) reported adjusted earnings per share of 29 cents, slightly beating analyst expectations of 28 cents. However, revenue came in at $2.88 billion, just under the anticipated $2.95 billion. Despite a 6.4% year-over-year increase in net sales, the company fell short of key performance benchmarks. Same-store sales declined by 0.4%, missing analyst estimates of 1.7% growth, while restaurant transactions dropped 2.3%.

Economic uncertainty appears to be dampening consumer spending, with CEO Scott Boatwright noting that many customers began scaling back visits in February due to financial concerns. This trend was confirmed by the company’s visitation studies, which showed that saving money was the predominant reason for reduced restaurant frequency. The slowdown in traffic continued into April, despite March seeing a modest lift in sales from the limited-time introduction of Chipotle Mexican Grill, Inc. (NYSE:CMG)’s chipotle honey chicken.

Despite these challenges, Boatwright expressed confidence in Chipotle’s ability to rebound in the second half of 2025. He emphasized ongoing investments in key areas such as staffing, culinary innovation, value offerings, and brand growth. The company now forecasts same-store sales to grow in the low single digits for the full year, revising its earlier projection of growth in the low- to mid-single-digit range. Nevertheless, investor sentiment remains relatively optimistic. With an estimated upside potential of 12.94%, Chipotle Mexican Grill, Inc. (NYSE:CMG) remains one of the high-upside stocks in Bill Ackman’s portfolio, underscoring its strategic importance amid a volatile consumer landscape.

Parnassus Growth Equity Fund stated the following regarding Chipotle Mexican Grill, Inc. (NYSE:CMG) in its Q3 2024 investor letter:

“Against the backdrop of macro uncertainty, we opportunistically added high-quality businesses that had sold off amid overstated fears of consumer spending weakness. These new holdings include fast-casual chain Chipotle Mexican Grill, Inc. (NYSE:CMG) and Latin American online retail giant MercadoLibre in the Consumer Discretionary sector.

Chipotle is a leader in the fast casual dining category, bolstered by strong brand affinity and the growing trend toward healthy eating. While near-term consumer weakness and margin pressure are expected, we believe Chipotle can navigate it better than peers due to its superior execution and long runway for new store openings.”

Overall, CMG ranks 7th on our list of billionaire Bill Ackman’s stock picks with huge upside potential. While we acknowledge the potential of CMG as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CMG but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

Disclosure: None. This article is originally published at Insider Monkey.