Shares of Fannie Mae (FNMA) and Freddie Mac (FMCC) surged more than 45% on Monday after billionaire investor Bill Ackman made a bullish case for the mortgage giants. Over the weekend, Ackman stated in a post on X that Fannie Mae and Freddie Mac stocks could rise 10x, and it could happen quickly. He also called the stocks “stupidly cheap,” which led to heavy buying. To be precise, FNMA stock gained 51.23%, while FMCC was up by 47% on Monday.
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For context, Fannie Mae (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are government-backed companies that help make sure people can get home loans easily by supporting banks with money. Meanwhile, Ackman is a U.S.-based billionaire investor and the founder and CEO of Pershing Square Capital Management. He is known for sharing strong, often market-moving views publicly.
Fannie, Freddie Stocks Rebound — But Still Far from Highs
Despite Monday’s rally, Fannie Mae and Freddie Mac remain down more than 50% from their mid-September peak as optimism has faded around the Trump administration’s plans to release them from government control.
Overall, Monday’s gains marked the largest single-day moves for both stocks since May of last year, when the idea of privatizing the two entities was first floated by Trump.
Reading Between the Lines
Many investors appeared to take that confidence at face value. However, Ackman is not a neutral observer—he stands to benefit directly from the trade he is promoting. His firm, Pershing Square, is the largest common shareholder in both Fannie Mae and Freddie Mac. Ackman has held this position for over a decade and has been a leading advocate for their privatization.
The timing also raises questions. Monday’s gains came at the end of Q1, when closing prices are used in quarterly performance reports. These prices are important because they determine how hedge funds and other institutional investors report performance to their clients. A sudden and sharp jump in a fund’s holding can significantly boost reported returns.
Are Fannie Mae and Freddie Mac Stocks a Buy?
Turning to Wall Street, the analysts’ consensus ratings for Fannie Mae and Freddie Mac are Moderate Buys. FMCC stock has an average price target of $16, suggesting a possible 148% upside from its current level. Meanwhile, FNMA stock has an average price target of $11.25, implying a potential 53% upside.
