Discover Ackman's Bold Microsoft Move

Billionaire hedge fund manager Bill Ackman revealed Friday that Pershing Square accumulated a position in Microsoft (MSFT) during a recent market downturn, describing the technology titan as attractively priced. The acquisition demonstrates growing institutional appetite for Microsoft’s artificial intelligence initiatives despite market concerns about elevated AI expenditures and intensifying competition.

Key Takeaways

Ackman bought Microsoft at 21 times forward earnings in February
Position established after stock declined following disappointing quarterly results
Hedge fund manager sees AI concerns as overblown

Market Reaction & Context

Microsoft stock has declined more than 26% from its July 2025 peak, lagging behind the broader technology sector ¹. The downturn reflected investor anxiety that Microsoft’s substantial AI investments might fail to generate anticipated returns and that rivals are making competitive advances.

Ackman revealed Pershing Square started building the position in February following Microsoft’s share price weakness after its fiscal second-quarter earnings announcement. He noted acquiring the stake at a 21 times forward earnings multiple, “broadly in line with the market multiple and well below Microsoft’s trading average over the last few years” ².

Investment Thesis

The prominent fund manager contended that the market has grown excessively worried about Microsoft’s competitive standing in AI and the sustainability of Azure cloud business expansion. He highlighted that Microsoft’s Office productivity platform, branded as M365, remains deeply integrated within enterprise environments and challenging to displace given the company’s robust security, compliance and identity infrastructure ³.

Ackman drew parallels between this Microsoft investment and earlier Pershing Square acquisitions of Alphabet, Amazon and Meta, which were purchased during periods of market doubt regarding AI competition and capital allocation. Though he did not reveal the position size, Ackman characterized it as a “core holding” ⁴.

Management Confidence

“We are encouraged to see Microsoft prioritizing its R&D efforts and investment in Copilot, its own AI agent embedded across M365, with direct involvement from CEO Satya Nadella,” Ackman said ⁵.

The fund manager conveyed optimism that these initiatives will result in accelerated product development and increased customer adoption over time. He also endorsed Microsoft’s $190 billion capital expenditure blueprint for 2026, describing it as crucial for driving future revenue expansion ⁶.

Broader Portfolio Context

The Microsoft holding will be revealed in Pershing Square’s quarterly 13F regulatory filing later Friday. Ackman’s newly launched closed-end vehicle Pershing Square USA, which went public last month, has also designated Microsoft as a core position but will not release a filing ⁷.

The dual investment structure provides investors access to either the underlying portfolio holdings or the management company’s operations directly. Pershing Square USA most recently traded at $41.68, below its initial public offering price of $50 ⁸.

Not investment advice. For informational purposes only.