Bill Ackman’s Pershing Square Capital Management built a $2.1 billion stake in Microsoft in the first quarter of 2026, betting that the software giant’s artificial intelligence investments and cloud business are undervalued despite a sharp share-price decline.
Ackman disclosed the position on May 15, saying Pershing Square began accumulating Microsoft shares in February after the company’s stock fell following its earnings report. He called the valuation “highly compelling” and made the investment a core holding in his flagship fund and its newly launched US-listed mirror vehicle, Pershing Square USA.
The move marks a significant portfolio rotation for Ackman, who sold 95 percent of Pershing Square’s Alphabet position to fund the Microsoft bet. In subsequent months, the fund exited the remainder of its Google parent stake. The shift reflects Ackman’s reassessment of value in the technology sector, moving away from search and toward cloud infrastructure and AI-integrated productivity software.
Ackman’s thesis centers on Microsoft’s competitive advantages that he believes the market is overlooking. He highlighted the company’s 365 suite—including Word and Excel—and its Azure cloud service as “two of the most valuable franchises in enterprise technology.” More significantly, he argues that Microsoft’s approximately 27 percent economic interest in OpenAI, which he values at roughly $200 billion, is not reflected in the company’s stock price.
Microsoft’s shares had declined about 15 percent in 2026 and lost more than a quarter of their value since peaking the previous fall, driven by broader software-sector weakness and investor concerns over the company’s substantial spending on artificial intelligence infrastructure. The stock gained 3 percent on the day Ackman announced his stake.
Ackman’s shift toward large-cap technology represents a broader evolution in his investment approach. In recent years, he has tilted Pershing Square away from consumer stocks like Chipotle Mexican Grill and Hilton Worldwide Holdings, instead building concentrated positions in big tech names during periods of share-price weakness. He took stakes in Alphabet in 2023, then Amazon and Meta Platforms in 2024 and 2025 after each had sold off.
The Microsoft position aligns with Ackman’s stated view that he now operates as a value investor in the mold of Warren Buffett, seeking long-term holdings in durable, high-quality businesses trading at reasonable multiples. He established the Microsoft position at a valuation of 21 times forward earnings, roughly in line with the broader market multiple and well below historical levels for the software industry.
Sources
- Bloomberg — Microsoft stake size ($2.1 billion), timing (Q1 2026, initiated in February), and Ackman’s rationale citing Azure and 365 franchises
- Wall Street Journal — Position value as of May 15 ($2.4 billion), timing of announcement, and Ackman’s statements on valuation and AI investments
- QuotedData — Alphabet position reduction (95 percent sold), OpenAI stake valuation ($200 billion), and portfolio reallocation details
- Yahoo Finance — OpenAI valuation context and Microsoft’s 27 percent economic interest
