Key Takeaways
- Pershing Square founder Bill Ackman revealed a significant new stake in Microsoft (MSFT) through a Friday 13F regulatory filing
- The position was initiated in February at approximately 21x forward earningsāmatching the broader market’s valuation multiple
- Ackman liquidated his entire Alphabet (GOOGL) holdings to finance the Microsoft acquisition, emphasizing this wasn’t a bearish stance on Google
- Shares of Microsoft jumped 3% Friday, though the stock remains 17% lower year-to-date compared to a 10% S&P 500 advance
- The billionaire investor argues Microsoft’s OpenAI ownership (~$200B value, representing 7% of total market cap) remains underappreciated by the market
Billionaire investor Bill Ackman has unveiled a major new stake in Microsoft (MSFT) through Pershing Square’s latest 13F regulatory disclosure filed Friday. The announcement sent Microsoft shares climbing 3%, finishing the session at $421.92.
According to Ackman, Pershing Square started accumulating shares in February following a substantial selloff triggered by Microsoft’s fiscal Q2 2026 earnings results. The hedge fund established its position at approximately 21 times forward earningsāa valuation multiple consistent with the broader S&P 500 and significantly below Microsoft’s historical trading range.
Microsoft’s 2026 performance has been challenging. Shares have declined 17% year-to-date, sharply underperforming the S&P 500’s 10% gain.
The weakness followed a disappointing Q3 earnings release that sparked investor concerns about Azure’s expansion rate. Microsoft simultaneously announced plans to invest $190 billion in capital expenditures during calendar 2026ārepresenting a 61% year-over-year surge and exceeding analyst expectations by roughly $35 billion.
While Ackman recognizes these challenges, he contends the market is overlooking a critical value component.
The OpenAI Factor Markets Are Ignoring
Ackman highlighted Microsoft’s 27% ownership in OpenAI, which he estimates is worth approximately $200 billionāequivalent to roughly 7% of Microsoft’s total market capitalization. He believes this substantial asset isn’t being properly reflected in the current share price.
The investor also dismissed concerns that Microsoft 365 faces existential threats from AI competitors. He maintains M365’s deep integration across enterprise infrastructureāspanning identity management, cybersecurity, regulatory compliance, and data governanceācreates formidable barriers against displacement by emerging AI applications.
“Unlike point software solutions, which may be vulnerable to disintermediation by better-performing AI alternatives, M365 is tightly integrated into the daily workflow of nearly every large enterprise,” Ackman wrote on X.
Ackman financed the Microsoft investment by completely exiting Pershing Square’s longstanding Alphabet position. He clarified Saturday that this strategic reallocation doesn’t reflect negative sentiment toward Google.
No Bearish View on Google, Ackman Clarifies
“Our sale of Google was not a bet against the company. We are very bullish long term on Alphabet. But at current valuations and in light of our finite capital base, we used it as a source of funds for Microsoft,” Ackman wrote.
Wedbush analyst Dan Ives backed the move. He said the Street is still underestimating Azure’s growth trajectory and called Microsoft one of his “favorite large cap tech names to own over the coming years.”
From a technical perspective, Evercore ISI’s Rich Ross highlighted that Microsoft displays one of the strongest chart patterns among mega-cap technology stocks currently, noting the shares have decisively reclaimed their 50-day moving average and returned to a historically reliable support level that’s remained intact since the European debt crisis.
This marks a continuation of Ackman’s investment in dominant technology platforms, having previously maintained Alphabet as a core holding before rotating into Microsoft.
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