Billionaire investor Bill Ackman disclosed on Friday that his hedge fund, Pershing Square Capital Management, has taken a new position in Microsoft Corp., calling the stock “highly compelling” at its current valuation. The move came as Ackman dumped the fund’s entire stake in Alphabet Inc., the parent company of Google, to fund the purchase, marking a direct sector swap within big tech.
Pershing Square began accumulating Microsoft shares in February after the software giant’s stock slid over 13% year-to-date. The decline followed weaker-than-expected December-quarter results and mounting concerns over Microsoft’s heavy artificial intelligence spending, slowing cloud growth, and changing ties with OpenAI. Ackman pushed back against these fears, arguing that investors “underestimate the resilience” of Microsoft’s enterprise software ecosystem, especially the Microsoft 365 suite with its deeply embedded Copilot AI assistant, priced at about $30 per month for enterprise users.
The hedge fund manager also addressed the restructured OpenAI partnership, which no longer grants Microsoft exclusive reseller rights via Azure. “We view Microsoft’s recent decision to restructure its OpenAI partnership not as a concession but as part of a deliberate pivot toward a more open, multi-model architecture that better serves enterprise customers,” Ackman said. He estimated Microsoft’s economic interest in OpenAI at roughly $200 billion, a figure he believes Wall Street is underappreciating.
Microsoft shares jumped as much as 4.1% on Friday, trading at around $424.81 by noon ET, even as the broader S&P 500 fell. The company recently reported adjusted earnings of $4.27 per share on revenue of $82.9 billion, beating estimates, with Azure cloud growing 40%. However, capital expenditures are set to soar to $190 billion this calendar year, fueling skepticism. In a sharp divergence, TCI Fund Management—another prominent hedge fund run by Chris Hohn—sold most of its $8 billion Microsoft stake, citing uncertainty over AI’s impact on Microsoft’s long-term competitive position.
