Pershing Square CEO Bill Ackman is pictured in Beverly Hills, Calif., earlier this month.PATRICK T. FALLON/AFP/Getty Images
Bill Ackman’s hedge fund Pershing Square PS-N will disclose a new position in Microsoft MSFT-Q later on Friday, the billionaire investor said, arguing that the tech giant sits at a “highly compelling valuation” after a recent decline in its stock.
In a post on X, Ackman framed his Microsoft bet as the latest in a series of investments in technology companies with attractive valuations and the potential for dominant long-term growth.
He said Microsoft operates two of the most valuable enterprise technology businesses - its Azure cloud division and the M365 Office productivity suite that includes its US$30-a-month Copilot AI assistant, placing the company at the center of rising AI adoption by businesses.
Pershing began building its Microsoft position in February after the technology company’s shares slumped as its quarterly results showed slower cloud revenue growth and a surge in spending, Ackman said.
The Windows maker’s stock is down some 15 per cent this year, with investors also concerned about slow Copilot adoption and changes to the OpenAI partnership that strip Microsoft of exclusive rights to resell the startup’s technology on its cloud.
The stock declines have come as rivals Google and Amazon make strong progress in their own AI efforts.
Ackman, however, said the concerns were overblown.
“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 also backed Microsoft’s US$190-billion spending plan for 2026, saying it is essential to fuel future revenue growth.
The stake will be disclosed in a regulatory filing on Friday. Ackman’s new closed-end fund Pershing Square USA has also made Microsoft a core holding, but will not be putting out a filing, he said.
Microsoft’s shares were up more than 1 per cent in early trading.
“Ackman’s stake aligns with our view that Microsoft has scope to re-rate from current levels,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
“Shares are trading at one of the lowest levels seen in the past decade. We do not think that’s justified.”
Pershing bought shares in Alphabet, which has closed in on Nvidia’s spot as the world’s most valuable company, in 2022 after the release of ChatGPT dragged the stock on fears of disruption to search, Ackman said.
It also bought Amazon in the weeks after U.S. President Donald Trump slapped tariffs on many countries, and Meta more recently after the company rattled investors with a massive spending forecast.