ValueAct's Strategic Shift: From Meta and Disney to Rocket Companies – A Play for AI-Driven Financial Innovation?

In the ever-evolving landscape of institutional investing, ValueAct Capital's recent portfolio adjustments signal a strategic pivot toward AI-driven financial innovation. Once synonymous with high-profile stakes in media and tech giants like Meta (META) and The Walt Disney Company (DIS), the firm has increasingly turned its attention to fragmented industries ripe for disruption—most notably, the financial technology sector. This shift raises a critical question: Is ValueAct's evolving portfolio a roadmap for identifying undervalued tech disruptors in sectors where AI can unlock latent value?

The Decline of Media and the Rise of Financial Tech

ValueAct's reduced exposure to Meta and Disney reflects a recalibration of priorities. While the firm increased its Meta stake by 379.85% in Q1 2025, it simultaneously trimmed its Disney position by 22.52%. This duality underscores a nuanced approach: maintaining long-term bets in transformative tech while reallocating capital to sectors with higher growth potential. The media and entertainment industries, though still significant, face saturation and shifting consumer behaviors. In contrast, financial technology—particularly mortgage and real estate platforms—offers a fragmented, capital-light sector where AI can drive efficiency and scalability.

Rocket Companies (RKT), a 9.99% stake in ValueAct's portfolio, epitomizes this new focus. As the largest U.S. mortgage originator, Rocket leverages AI to reduce loan processing costs by two-thirds and cut closing times to 21 days. Despite its operational prowess, Rocket's stock has underperformed since its 2020 IPO, hindered by a small public float and complex share structure. ValueAct's investment thesis hinges on structural improvements—such as pending acquisitions of Redfin and Mr. Cooper—which are expected to expand the public float to 35%, attracting institutional investors and unlocking valuation potential.

Criteria for Disruptors: AI, Fragmentation, and Scalability

ValueAct's investment criteria for AI-driven disruptors in fragmented industries align with broader 2025 trends:
1. AI-First Business Models: Companies like Rocket integrate AI into core operations, enabling cost efficiency and competitive differentiation.
2. Fragmented Markets with Consolidation Potential: Financial services, healthcare, and BPO sectors remain fragmented, offering opportunities for AI-driven platforms to consolidate operations.
3. Strong Management and Governance: Rocket's CEO, with a background at Intuit and Microsoft, exemplifies leadership capable of leveraging AI for innovation.
4. Scalable Infrastructure: Rocket's technology-first approach allows rapid scaling, a critical factor in fragmented industries where niche solutions can expand into broader markets.

These criteria mirror ValueAct's historical focus on long-term value creation through strategic partnerships. For instance, its stake in Salesforce (CRM) and Visa (V) reflects a preference for companies with recurring revenue models and enterprise-grade AI capabilities.

The AI Value Chain: From Infrastructure to Applications

The broader AI investment landscape in 2025 is shifting toward customer-facing applications. While foundational AI (e.g., large language models) remains critical, investors increasingly prioritize solutions that deliver tangible business outcomes. Rocket's AI-driven mortgage platform aligns with this trend, addressing pain points in a $1.5 trillion U.S. mortgage market. Similarly, ValueAct's investments in Nu Holdings (NU) and MongoDB (MDB) highlight a focus on horizontal AI use cases—such as data management and customer experience—that can be applied across industries.

Strategic Implications for Investors

ValueAct's pivot to financial tech disruptors offers a blueprint for identifying undervalued opportunities in fragmented industries:
- Look for Structural Catalysts: Rocket's pending acquisitions and share-class simplification are catalysts for unlocking value. Investors should prioritize companies with clear, near-term structural improvements.
- Assess AI Integration Depth: Disruptors must embed AI into their core operations, not just as a cost-saving tool but as a competitive moat.
- Balance Long-Term and Short-Term Metrics: While Rocket's stock has risen 33.64% since ValueAct's Q1 2025 investment, patience is key. The firm's 3–5-year investment horizon underscores the importance of aligning with long-term AI adoption trends.

Conclusion: A New Frontier for ValueAct

ValueAct's strategic shift from media to financial tech reflects a broader industry trend: the migration of capital toward AI-driven disruptors in fragmented markets. By targeting companies like Rocket, the firm is positioning itself to capitalize on AI's transformative potential in sectors where traditional incumbents lag. For investors, this signals an opportunity to follow ValueAct's lead—focusing on undervalued tech disruptors with scalable AI applications, strong governance, and structural catalysts. In an era of rapid technological change, the ability to identify and partner with such innovators may well define the next decade of investment success.