Bill Ackman Bets Big on Microsoft, Citing AI Tailwinds and Undervalued OpenAI Stake

Billionaire hedge fund manager Bill Ackman revealed Friday that Pershing Square Capital Management has made Microsoft a core holding, calling the stock a 'highly compelling valuation' opportunity. Ackman's team began quietly accumulating shares in February after Microsoft's stock slid following a disappointing second-quarter earnings report — entering the position at roughly 21 times forward earnings, a meaningful discount to where the stock has historically traded.

Ackman's bull case rests on two pillars: Microsoft 365 and Azure. He argues M365 — the suite encompassing Word, Excel, and PowerPoint — is far more durable than investors currently credit, given how deeply embedded it is in enterprise workflows. On the cloud side, Azure posted 39% revenue growth in constant-currency terms last quarter, and Microsoft has guided toward modest acceleration in the back half of the year. Ackman also flagged Microsoft's roughly $190 billion in planned capital expenditure for 2025 as growth-oriented spending that should translate into future revenue, not a red flag.

A key argument in Ackman's thesis: the market is entirely ignoring Microsoft's approximately 27% economic stake in OpenAI. At OpenAI's most recent funding round valuation, that interest is worth roughly $200 billion — equivalent to about 7% of Microsoft's total market cap — yet Ackman contends it is essentially unpriced in the stock today. He also noted Microsoft's additional asset base: LinkedIn, Xbox, Activision Blizzard, Bing, and Edge.

The move fits a pattern for Ackman, who has been selectively buying dominant tech franchises when they trade at what he considers irrational discounts. He previously built large positions in Alphabet (~$2.1B), Amazon (~$2.2B), and Meta (~$1.8B) under similar logic. Microsoft, down roughly 15% year-to-date even as the S&P 500 has surged nearly 10% to record highs, presented an analogous setup. The position will be formally disclosed via a 13F SEC filing covering holdings as of March 31.