Bill Ackman revealed on Friday that Pershing Square Inc. has established a new position in Microsoft Corporation (MSFT), betting on the software giant's artificial intelligence ambitions after a recent pullback in its stock price. Ackman described Microsoft's current valuation as 'highly compelling,' signaling confidence in the company's long-term prospects despite near-term headwinds.
The disclosure comes just weeks after Pershing Square Inc. and its U.S.-listed closed-end fund, Pershing Square USA, completed a combined $5 billion initial public offering and private placement. The fund began trading on the New York Stock Exchange on April 29, with Pershing Square Inc. shares opening at $24 and Pershing Square USA at $42, below its $50 offering price before accounting for bonus shares distributed to IPO buyers.
Ackman told investors that Pershing Square began accumulating Microsoft shares in February, following a post-earnings decline triggered by slower cloud growth and elevated capital expenditure plans. Microsoft's Azure cloud platform remains a critical growth driver, while its M365 productivity suite bundles Office software with the Copilot AI assistant, priced at $30 per month per user.
Microsoft's AI strategy has drawn skepticism from some investors. In April, the company unveiled a massive $190 billion capital spending plan for 2026, heavily weighted toward AI infrastructure. However, uptake of Copilot and cloud revenue growth remain under close scrutiny as the market assesses whether these investments will generate adequate returns.
Adding to the complexity, Microsoft recently renegotiated its agreement with OpenAI, losing its exclusive rights to sell the ChatGPT developer's AI models. This opens the door for OpenAI to strike cloud deals with competitors such as Amazon Web Services, potentially diluting what many viewed as Microsoft's key competitive advantage in the AI race.
Ackman pushed back against any notion of a setback, characterizing Microsoft's revised OpenAI collaboration as 'a deliberate pivot toward a more open, multi-model architecture that better serves enterprise customers,' rather than a concession.
Competitive pressures are mounting. Reuters reported that Google Cloud outpaced Microsoft's Azure in growth during the most recent quarter. Meanwhile, Meta Platforms boosted its 2026 capital expenditure outlook, with additional funds directed at AI infrastructure.
Despite these challenges, some analysts see opportunity. Matt Britzman, senior equity analyst at Hargreaves Lansdown, told Reuters that 'Ackman's stake aligns with our view that Microsoft has scope to re-rate from current levels,' noting that Microsoft shares are trading near decade lows relative to historical valuations.
Pershing Square Holdings, the London-listed arm of Pershing Square, reported a net asset value of $81.55 per share as of May 12. Year-to-date, the fund's performance has declined 4.2%, according to the company.
The size of Pershing Square's Microsoft position will be closely watched. A substantial stake would cement Microsoft as the firm's core technology holding, similar to past investments in Alphabet, Amazon, and Meta. A smaller position, however, might be interpreted more as a symbolic statement from Ackman than a foundational bet.
