Fannie Mae's stock soars 50% after Bill Ackman calls it 'stupidly cheap'
Fannie Mae's stock surged by over 50% in a single day after billionaire investor Bill Ackman called the company 'stupidly cheap'. The sharp rally followed months of decline, with shares still down 34% since the start of the year. Ackman's firm, Pershing Square Holdings, now owns nearly 10% of both Fannie Mae and Freddie Mac, adding weight to his bullish stance. The stock's dramatic rise on March 30 sent its 14-day relative strength index (RSI) to 56.95, signalling strong upward momentum. Despite this, Fannie Mae's longer-term performance remains weak, with shares trading 55.7% below their 52-week high. The company's financial results for Q4 2025 showed flat revenues of $7.33 billion, while net income fell 9% to $3.53 billion.
Analysts still expect modest growth, forecasting a 1.61% year-over-year increase in earnings per share to $0.63 for Q1 2026. Meanwhile, the US government under President Harris has taken a cautious approach to ending Fannie Mae's conservatorship. Unlike earlier expectations of rapid privatisation under a potential second Trump term, the current administration is focusing on regulatory oversight rather than quick market deregulation.
Ackman's optimism has gained support from other high-profile investors. Michael Burry, known for predicting the 2008 housing crash, publicly backed Ackman's positive view of Fannie Mae. Yet, despite the recent rally, the company's stock has only risen 7.27% over the past year, reflecting ongoing uncertainty. Fannie Mae's stock jump follows Ackman's endorsement, but broader challenges remain. The company's financial performance has weakened, and its privatisation prospects stay unclear under the current administration. For now, investors are watching whether the recent momentum can offset the stock's steep year-to-date decline.
