Bill Ackman built Microsoft’s stake in the first quarter during the sales, betting on AI and cloud growth

Bill Ackman’s Pershing Square has built a position Microsoftas the hedge fund manager said the latest software downturn has created a rare opportunity to buy the world’s dominant technology franchises at a compelling price.

Ackman disclosed the investment in a lengthy post Friday ahead of his company’s quarterly 13F filing, saying Pershing Square began accumulating shares in February after Microsoft’s stock fell following its second-quarter earnings report.

“We were able to find our position at 21 times earnings, in line with most markets and below Microsoft’s trading average over the past several years,” Ackman wrote. Although Ackman didn’t note the size of his stake in the tech giant, he called it a “core holding.”

In another post on Saturday, Ackman said his company used the sale of shares in Google parent Alphabet to help finance the acquisition of Microsoft shares.

“To be clear, our sale of $GOOG was not a bet on the company. We are very long-term in Alphabet. But with current valuations and considering our large equity base, we used $GOOG as a source of funds $MSFT,” Ackman wrote.

Microsoft shares have fallen more than 26% since their record high reached in July 2025. The sell-off was largely due to fears that artificial intelligence will consume software and in particular that Microsoft’s massive investment in AI will not produce the desired results.

The hedge fund manager said investors have become overly concerned about Microsoft’s competitive position in AI and the strength of growth in its Azure cloud business. He said the company’s productivity Office, known as M365, remains embedded across businesses and is difficult to replicate due to security, compliance and Microsoft’s proprietary infrastructure.

“We are encouraged to see Microsoft prioritizing its R&D efforts and investment in Copilot, its AI agent embedded throughout M365, with direct involvement from CEO Satya Nadella. We believe these efforts will translate to improved product speed and greater customer adoption over time,” Ackman said.

Ackman compared the investment to previous purchases of Pershing Square Alphabets, Amazon again MetaHe said they were discovered during times of market uncertainty about artificial intelligence competition and spending.

The move follows Ackman’s public offering of closed-end fund Pershing Square USA Ltd., which began trading under the ticker PSUS, and asset manager Pershing Square Inc., listed on PS, last month. The dual structure allows investors to gain exposure to the underlying portfolio or the management business itself. PSUS last traded at $41.68, below its IPO price of $50.