In a significant portfolio reshuffling, Bill Ackman's Pershing Square has divested nearly its entire stake in Alphabet Inc., the parent company of Google, and simultaneously built a substantial position in Microsoft Corp. worth approximately $2.09 billion, according to the firm's latest 13F filing with the Securities and Exchange Commission. The move positions Ackman on the bullish side of a contentious debate over the returns on massive artificial intelligence investments.
The shift is notable because it runs counter to recent market momentum. Alphabet has been one of the stronger-performing megacap technology stocks this year, while Microsoft's cloud rivals have posted faster growth in recent quarters. Pershing Square now holds 5.65 million shares of Microsoft, while slashing its Alphabet position by 95% during the first quarter of 2026.
The filing also revealed that Pershing Square increased its stake in Amazon.com Inc. by 19%, while exiting its position in Hilton Worldwide. At the end of the quarter, the fund's concentrated portfolio was led by Brookfield, Amazon, and Uber Technologies.
However, Ackman is not alone in reshuffling among these tech giants. Daniel Loeb's Third Point took the opposite approach, selling 925,000 Microsoft shares and purchasing 175,000 Alphabet shares. Both funds also opened new positions in Meta Platforms during the same period, according to the filings reviewed by Reuters.
The divergence in strategy comes as both Alphabet and Microsoft reported strong cloud and AI-driven growth. Microsoft's Azure and other cloud services revenue rose 40% in its fiscal third quarter, with Microsoft Cloud revenue reaching $54.5 billion. CEO Satya Nadella described the current environment as "one of the most consequential platform shifts" as AI agents become embedded in software.
Alphabet's performance has been equally robust. CEO Sundar Pichai reported that Google Cloud revenue surged 63% to over $20 billion in the first quarter, with backlog nearly doubling to more than $460 billion, driven by demand for AI products and infrastructure. Amazon's AWS also posted strong results, with sales up 28% to $37.6 billion, marking its "fastest growth in 15 quarters," according to CEO Andy Jassy, helped by AI demand and custom chip development.
Despite the strong numbers, the Microsoft trade carries risks. If AI spending fails to translate into margin expansion, or if AI tools undermine the dominance of Microsoft 365, the bet could backfire. Chris Hohn's TCI Fund cut its Microsoft position and increased its Alphabet stake, citing "uncertainty over Microsoft's competitive position." QuotedData analyst Matthew Read noted that Pershing's separate buyback plan was unlikely to significantly move its discount.
Pershing Square Holdings, the London-listed fund, has faced its own pressures. As of May 19, its net asset value stood at $79.71 per share, with a year-to-date return of negative 6.4%, according to the fund's website. Microsoft shares last traded at $419.09, down less than 1%, while Alphabet Class A shares were at $387.66, also slightly lower after the U.S. market close on Thursday. Amazon and Meta edged higher.
The bottom line: Ackman has placed a clean but risky bet that Microsoft's heavy AI spending will generate durable revenue from cloud, software, and Copilot faster than investors currently expect. Meanwhile, Alphabet and Amazon are not standing still, ensuring that the AI race remains highly competitive and unpredictable.
