Ackman's Pershing Square takes Microsoft stake, exits Google parent Alphabet
Bill Ackman's Strategic Moves in the Tech Sector
By Deborah Mary Sophia and Aditya Soni
Overview of Recent Investments
May 15 (Reuters) - Billionaire investor Bill Ackman built a new position in tech giant Microsoft after its stock price dropped recently, and sold his long-owned investment in Google parent Alphabet to help pay for it.
Writing on social media platform X, Ackman said the investments will be detailed in a regulatory filing that his firm Pershing Square will make later on Friday with the U.S. Securities and Exchange Commission.
Details of the Alphabet Exit
That filing will show that Pershing Square owned some Alphabet shares at the end of the first quarter, but a person familiar with the portfolio said Ackman no longer owns any stake in Alphabet and fully liquidated the position in the second quarter.
Rationale Behind the Microsoft Stake
Ackman argued that Microsoft sits at a "highly compelling valuation" after a recent decline in its stock.
The Microsoft bet is the latest in a series of investments in technology companies with attractive valuations and the potential for dominant long-term growth, Ackman said.
Microsoft's Business Strengths
He said Microsoft operates two of the most valuable enterprise technology businesses - its Azure cloud division and the M365 Office productivity suite that includes its $30-a-month Copilot AI assistant, placing the company at the center of rising AI adoption by businesses.
Timing and Market Conditions
Pershing Square began building its Microsoft position in February after the technology company's shares slumped as its quarterly results showed slower cloud revenue growth and a surge in spending, Ackman said.
Meanwhile he sold Alphabet stock, which he bought three years ago for an average price of $94 a share. Alphabet's Class C stock traded at $392 on Friday.
Challenges Facing Microsoft
The Windows maker's shares are down some 15% this year, with investors also concerned about slow Copilot adoption and changes to the OpenAI partnership that strip Microsoft of exclusive rights to resell the startup's technology on its cloud.
The stock declines have come as rivals Google and Amazon make strong progress in their own AI efforts.
Ackman's Perspective on Market Concerns
Ackman said the concerns were overblown.
"We view Microsoft's recent decision to restructure its OpenAI partnership not as a concession but as part of a deliberate pivot toward a more open, multi-model architecture that better serves enterprise customers," Ackman said.
He also backed Microsoft's $190 billion spending plan for 2026, saying it is essential to fuel future revenue growth.
Pershing Square's Broader Investment Strategy
Ackman's new closed-end fund Pershing Square USA has also made Microsoft a core holding, but will not be putting out a filing, he said.
Microsoft's shares were up more than 3% in early trading.
Analyst Reactions
"Ackman's stake aligns with our view that Microsoft has scope to re-rate from current levels," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.
"Shares are trading at one of the lowest levels seen in the past decade. We do not think that's justified."
Other Tech Bets by Pershing Square
It also bought Amazon in the weeks after U.S. President Donald Trump slapped tariffs on many countries, and Meta more recently after the company rattled investors with a massive spending forecast.
(Reporting by Deborah Sophia and Aditya Soni in Bengaluru and Svea Herbst-Bayliss in New York; Editing by Arun Koyyur, Maju Samuel and Daniel Wallis)
