In a recent interview, legendary investor Bill Ackman was asked about why he was bullish on the economy of Israel. The question comes with Ackman owning around a 5% stake in the Tel Aviv Stock Exchange.
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Ackman on Israel’s Opportunity
In his answer, Ackman highlighted the acquisition of cybersecurity company Wiz by Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL), a deal that was done for $32 billion as its largest acquisition ever.
"I’m very bullish on Israel from an economic perspective," Ackman said. "Imagine if Silicon Valley was a country."
Ackman highlighted the density of talent and IP in the small country and entrepreneurs who have been through a pretty brutal war, who have now developed "grit."
The region is seeing top venture capital firms opening offices and companies turning down small offers from large tech companies to grow on their own.
"You’re gonna see a trillion dollar company come out of Israel in the not-too-distant future."
Ackman said the company will likely be in the cybersecurity or AI sectors.
"It’s one of the best economies in the world."
Top Israeli Companies
Investors looking for exposure to Israel can invest in the iShares MSCI Israel ETF (NYSE:EIS), which has stakes in companies that are public in the U.S. and some in Israel, with all having headquarters in Israel.
Here are the current top 10 holdings of the ETF:
- Teva Pharmaceuticals (NYSE:TEVA)
- Bank Leumi
- Bank Hapoalim
- Tower Semiconductor (NASDAQ:TSEM)
- Elbit Systems (NASDAQ:ESLT)
- Nova Ltd (NASDAQ:NVMI)
- Pheonix Financial
- Israel Discount Bank
- Enlight Renewable Energy (NASDAQ:ENLT)
- Check Point Software (NASDAQ:CHKP)
Of the top 10 holdings in the ETF, six can be bought on major U.S. exchanges.
In 2024, Ackman and his wife, Neri Oxman, invested in the Tel Aviv Stock Exchange, with a 5% stake worth around $25 million. The investor could benefit if more people invest in companies headquartered in Israel, meaning his comments should be taken with some caution.
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