Bill Ackman built Microsoft stake in first quarter during sell-off, betting on AI and cloud growth

Bill Ackman, the founder and CEO of Pershing Square Inc., has recently revealed that his hedge fund has taken a position in Microsoft. Ackman noted that the recent pullback in Microsoft’s stock presented a rare opportunity to invest in one of the world’s leading technology companies at an attractive valuation.

In a detailed post shared on Friday, Ackman explained that Pershing Square started accumulating shares of Microsoft in February after the stock experienced a decline following the company’s fiscal second-quarter earnings report. He highlighted that the firm was able to establish its position at a valuation of 21 times forward earnings, which is in line with the market multiple and lower than Microsoft’s historical trading average.

Although Ackman did not disclose the exact size of the stake in Microsoft, he referred to it as a “core holding” for Pershing Square. Additionally, Ackman mentioned in a separate post that the sale of shares in Google parent Alphabet was used to fund the acquisition of Microsoft shares. He clarified that the decision to sell Alphabet shares was not a negative reflection on the company, as Pershing Square remains bullish on Alphabet’s long-term prospects.

Microsoft’s stock has declined by more than 26% from its all-time high in July 2025. The drop was largely driven by concerns surrounding the impact of artificial intelligence on software and doubts about the effectiveness of Microsoft’s significant investments in AI.

Ackman expressed confidence in Microsoft’s competitive positioning, particularly highlighting the strength of the company’s Office productivity suite, M365. He emphasized that Microsoft’s focus on research and development, including initiatives like Copilot, an AI agent embedded in M365, will lead to enhanced product innovation and increased customer adoption over time.

Drawing parallels to previous successful investments in Alphabet, Amazon, and Meta during periods of skepticism around AI competition, Ackman sees the current investment in Microsoft as a strategic move for Pershing Square. This decision comes on the heels of Pershing Square’s recent IPOs of Pershing Square USA Ltd. and Pershing Square Inc., providing investors with exposure to either the fund’s portfolio or its management business.

In conclusion, Bill Ackman’s investment in Microsoft reflects his confidence in the company’s long-term potential and strategic positioning in the technology sector. The decision to acquire shares at an opportune valuation underscores Pershing Square’s commitment to identifying compelling investment opportunities in the market.