Key Takeaways
- Billionaire investor Bill Ackman revealed a significant new stake in Microsoft (MSFT) through Friday’s 13F regulatory filing
- The position was initiated in February when shares traded at approximately 21x forward earnings, matching the overall market valuation
- Ackman financed the Microsoft purchase by exiting his entire Alphabet (GOOGL) holding, emphasizing it wasn’t a bearish stance on Google
- Shares of Microsoft jumped 3% on Friday despite trading down 17% for the year, compared to the S&P 500’s 10% advance
- The activist investor argues the market is ignoring Microsoft’s OpenAI ownership stake, valued at roughly $200B or 7% of total market capitalization
Billionaire hedge fund manager Bill Ackman revealed his firm Pershing Square has established a substantial position in Microsoft (MSFT) through a Friday regulatory 13F disclosure. The tech giant’s shares surged 3% following the news, finishing the session at $421.92.
According to Ackman, Pershing Square started accumulating Microsoft shares in February following a “significant” valuation compression that followed the company’s fiscal second-quarter 2026 results. The firm entered the position at approximately 21 times forward earnings — a multiple consistent with the broader S&P 500 and substantially lower than Microsoft’s traditional premium valuation.
The software giant has struggled throughout 2026. Shares have declined 17% year-to-date even as the S&P 500 index has climbed 10%.
The weakness came after a disappointing third-quarter earnings release that sparked concerns about Azure cloud computing growth momentum. Microsoft additionally disclosed plans for $190 billion in capital spending during calendar 2026 — representing a 61% year-over-year increase and roughly $35 billion beyond analyst projections.
While Ackman recognizes these headwinds, he believes the market is overlooking a critical asset.
Market Undervaluing OpenAI Investment
The investor highlighted Microsoft’s 27% ownership position in OpenAI, which he estimates is worth approximately $200 billion, representing about 7% of Microsoft’s entire market valuation. According to Ackman, this substantial asset isn’t being reflected in the current share price.
Ackman also dismissed concerns that Microsoft 365 might lose market share to AI competitors. He contends M365 has become too fundamentally integrated into corporate IT infrastructure — spanning identity management, cybersecurity, regulatory compliance, and data governance — to face meaningful disruption from standalone artificial intelligence 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.
To generate capital for the Microsoft investment, Ackman liquidated Pershing Square’s entire Alphabet position. He took to social media Saturday to clarify the rationale behind the Google exit.
Google Sale Not a Bearish Call
“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 analysis perspective, Evercore ISI’s Rich Ross highlighted that Microsoft displays one of the “best acting charts” among technology stocks currently, noting the shares have decisively reclaimed their 50-day moving average and retreated to a long-standing support threshold that’s remained intact since the European debt crisis.
Ackman’s track record includes previous major investments in large-capitalization technology companies, most notably his multi-year Alphabet position before the recent portfolio rotation into Microsoft.
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