Bill Ackman's Pershing Square Capital Management has revealed a significant new position in Microsoft Corp., purchasing 5.65 million shares worth approximately $2.09 billion as of March 31, according to the firm's latest 13F filing. The disclosure, which came after Friday's market close, provided a notable boost to the software giant's stock, which ended the session up 3.1% at $421.92.
The investment arrives during a turbulent period for big tech, as rising bond yields and concerns over AI-related spending have pressured growth stocks. Microsoft's gain of roughly 1.6% for the week stood in contrast to the broader Nasdaq Composite, which lost ground over the same period. The filing, though backward-looking, carries weight given Ackman's reputation and his characterization of Microsoft's valuation as "highly compelling."
Analysts echoed that sentiment. Matt Britzman of Hargreaves Lansdown told Reuters that Microsoft shares have "scope to re-rate from current levels," adding that the recent weakness "is not justified." The stock touched a session high of $428.17 on Friday before settling near $422.
Pershing Square's move was funded in part by selling its stake in Alphabet, signaling a strategic shift within big tech. Alphabet's Google and Amazon remain fierce competitors in the AI and cloud computing arenas, where companies rent computing power and storage rather than operating their own servers.
Microsoft's March-quarter results underscored its AI ambitions. Revenue climbed 18% year-over-year to $82.9 billion, with the Microsoft Cloud segment jumping 29% to $54.5 billion. Azure and other cloud services surged 40%. CEO Satya Nadella highlighted that the company's AI business had "surpassed an annual revenue run rate of $37 billion." Capital expenditures continued to rise, with $30.9 billion in property and equipment additions in the March quarter, bringing the nine-month total to $80.1 billion for data centers, servers, and networking gear.
Despite Microsoft's strong performance, broader market conditions remain challenging. The S&P 500 fell 1.24% on Friday, the Nasdaq slid 1.54%, and the Dow dropped 1.07%. The 10-year Treasury yield climbed 13.8 basis points to 4.597%, a move that Kenny Polcari of Slatestone Wealth attributed to the market having "gotten way ahead of itself."
Market odds suggest the Federal Reserve will hold rates steady at its June meeting, with prediction platforms Kalshi and Polymarket showing 97% and 98% probabilities, respectively. Polymarket data also indicated a 70% chance of no rate cuts through 2026.
The risk remains that macro headwinds—such as higher oil prices, persistently elevated yields, or expectations of further rate hikes—could weigh on Microsoft's valuation. The company has cautioned about intense competition, delivery risks in cloud and AI, and the possibility that large investments may not meet management's expectations.
Looking ahead, traders will monitor Treasury yields and crude prices as markets reopen Monday. Microsoft's ability to push through the $428 resistance level could sustain the Ackman-driven momentum, while a slip toward $409.43 might signal that the broader Nasdaq selloff remains in control. The next session will likely hinge more on the impact of higher rates on megacap stocks than on a single 13F filing.
