The investment fund Pershing Square, founded by American billionaire Bill Ackman, made a significant purchase of Microsoft shares totaling $2.1 billion. Ackman took advantage of the recent drop in stock prices to invest in a company he believes is more powerful and resilient than other market participants assess.
This is reported by Finway
Microsoft Becomes a Priority for Pershing Square
In his address on platform X, Bill Ackman emphasized that Microsoft is now one of the fund’s core investments. He highlighted the products in the Microsoft 365 lineup, including Word, Excel, and the cloud platform Azure, calling them “two of the most valuable franchises in corporate technology.” Pershing Square’s stake in Microsoft is currently less than one-tenth of a percent of the company’s total market capitalization.
At the same time, Ackman reported selling shares of Alphabet (Google) in response to a user question on X, without specifying what portion of the position was sold. According to Bloomberg, last December, Pershing Square had already sold about 4.1 million shares of Alphabet, retaining just over 678,000 shares of the giant.
“To be clear, the sale of $GOOG was not a bet against the company,” Ackman wrote in a separate post. “We still have a very positive outlook on Alphabet in the long term. But at current valuations and considering the limitations of our capital, we used $GOOG as a source of funds to buy $MSFT.”
Market Trends and Ackman’s Strategic Decisions
On Friday, Microsoft shares rose by 3.1%, marking the best daily performance in the past month, while Alphabet’s shares fell by 1.1%. Since the beginning of the year, Microsoft’s stock price has dropped by approximately 13% due to concerns about the speed of the rollout of the AI assistant Copilot and the competitiveness of the Microsoft 365 business. Additionally, the Redmond company has faced a shortage of data centers to meet the demand for cloud services.
Bill Ackman is known as an activist investor who is not afraid to concentrate capital in a small number of companies and actively engages on social media. His net worth is estimated at $12.5 billion.
He described Microsoft 365 products as “deeply integrated” into the business processes of large corporations, supported by Microsoft’s infrastructure in a way that is “practically impossible to replicate.” Ackman emphasized that the high demand for Azure indicates the unfounded nature of concerns regarding a potential slowdown in the growth of this service.
Microsoft has become a relatively new asset in Ackman’s technology portfolio. Along with Alphabet shares, the fund holds significant stakes in Amazon.com and Meta Platforms. Ackman also noted that Microsoft has leading businesses outside its core areas, including LinkedIn and Xbox.
In April, Microsoft and OpenAI agreed to relinquish Microsoft’s exclusive right to sell the startup’s AI models, opening the door for OpenAI to collaborate with Microsoft’s competitors, such as Amazon. This weakening of the partnership is viewed by many as a victory for OpenAI, which seeks to expand collaboration with various cloud providers to meet growing computational needs.
According to Ackman, the restructuring of Microsoft’s partnership with OpenAI is not a concession, but a “deliberate shift towards a more open multi-model architecture that better meets the needs of corporate clients.”
Previously, while investing in Meta, Ackman also expressed the view that investors underestimate the long-term potential of the company in the field of artificial intelligence. Last year, when opening a position in Amazon, he predicted that the company would overcome the downturn in its cloud business. Since the beginning of this year, Meta’s shares have decreased by 7%, while Amazon’s shares have increased by 14%.