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

As a result, some investors pay close attention to what stocks the fund is buying and selling. The hedge fund manager said investors have become overly concerned about Microsoft’s competitive positioning in AI and the durability of growth at its Azure cloud business. A high-profile hedge fund recently bought Microsoft stock and sold its Alphabet shares. The sell-off was driven largely by fears that artificial intelligence will eat software and specifically that Microsoft’s hefty AI investments won’t produce the desired results. Ackman cited Microsoft’s « highly compelling valuation » on the heels of recent sell-offs as a core reason for backing the stock. Microsoft (MSFT +3.04%) stock is solidly in the green on Friday despite a bearish backdrop for tech stocks.

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• In a separate post on Saturday, Ackman said his company used the sale of shares of Google parernt Alphabet to help fund the Microsoft share acquisition.
• With Pershing moving out of Alphabet and into Microsoft, the latter company has gotten a high-profile vote of confidence from a leading investment firm.
• A high-profile hedge fund recently bought Microsoft stock and sold its Alphabet shares.
• « We were able to establish our position at a valuation of 21 times forward earnings, broadly in line with the market multiple and well below Microsoft’s trading average over the last few years, » Ackman wrote.
• As a result, some investors pay close attention to what stocks the fund is buying and selling.
• He said the company’s Office productivity suite, known as M365, remains deeply embedded across enterprises and difficult to replicate because of Microsoft’s security, compliance and identity infrastructure.

« To be clear, our sale of $GOOG was not a bet against the company. We are very https://sirgikaldental.com/ bullish long term on Alphabet. But at current valuations and in light of our finite capital base, we used $GOOG as a source of funds for $MSFT, » Ackman wrote. In a separate post on Saturday, Ackman said his company used the sale of shares of Google parernt Alphabet to help fund the Microsoft share acquisition. Ackman disclosed the investment in a lengthy post Friday ahead of his firm’s quarterly 13F filing, saying Pershing Square began accumulating shares in February after Microsoft’s stock declined following its fiscal second-quarter earnings report. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.

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The move followed Ackman’s initial public offerings of closed-end fund Pershing Square USA Ltd., which began trading under the ticker PSUS, and asset manager Pershing Square Inc., listed as PS, last month. While Ackman didn’t note the size of his stake in the tech giant, he called it a « core holding. » « We were able to establish our position at a valuation of 21 times forward earnings, broadly in line with the market multiple and well below Microsoft’s trading average over the last few years, » Ackman wrote.

The company’s share price was up 3% as of noon ET. He said the company’s Office productivity suite, known as M365, remains deeply embedded across enterprises and difficult to replicate because of Microsoft’s security, compliance and identity infrastructure. Microsoft shares have fallen more than 26% from their record high reached in July 2025.

Cost basis and return based on previous market day close. Microsoft is rising today following news that Bill Ackman’s Pershing Square Capital Management had bought shares and sold out of its position in Alphabet. The stock had been up as much as 4.1% earlier in the session.

Keith Noonan has no position in any of the stocks mentioned. With Pershing moving out of Alphabet and into Microsoft, the latter company has gotten a high-profile vote of confidence from a leading investment firm. Pershing Square is a hedge fund founded and run by billionaire Bill Ackman, and it has an impressive track record of success. The dual structure allows investors to gain exposure either to the underlying portfolio or to the management business itself.

Bill Ackman’s Pershing Square has built a position in Microsoft, as the hedge fund manager said the software giant’s recent pullback created a rare opportunity to buy one of the world’s dominant technology franchises at a compelling valuation. Despite strong business results, Microsoft has seen sell-offs this year as some investors have bet that the company faces meaningful disruption risks from other artificial intelligence (AI) players. On the other hand, the tech giant has a very strong position in the AI market and broader software space.