Bill Ackman builds Microsoft (MSFT) stake after selloff, citing AI growth

Bill Ackman said on Thursday that Pershing Square built a position in Microsoft (MSFT) during the first quarter, using the software group’s selloff to buy into what he described as one of the market’s strongest AI and cloud franchises. In a CNBC interview, Ackman said the hedge fund started buying in February after the stock’s pullback left it trading at about 21 times forward earnings.

The new stake gives Ackman exposure to one of the market’s main AI bellwethers at a moment when investors have been reworking valuations across megacap technology. Microsoft shares were down about 15 per cent for the year, Reuters reported, and roughly 26 per cent below the record high they reached in July 2025, according to CNBC’s account of the disclosure. That decline, rather than any clear deterioration in the business, appears to be the centre of Ackman’s argument.

“We were able to establish our position at a valuation of 21 times forward earnings,” Ackman said, framing the purchase as a rare chance to buy a dominant platform company after sentiment had cooled.

For markets investors, the read-through is straightforward. One of Wall Street’s highest-profile hedge-fund managers is not treating the recent wobble in AI-linked equities as a reason to retreat. He is treating it as a chance to pay less for the same exposure to enterprise software, Azure and generative AI demand.

Ackman also used the disclosure to push back on concerns that Microsoft’s recent reset with OpenAI weakens its position in artificial intelligence. In comments reported by Reuters, he said the company’s decision to restructure that partnership looked less like a concession than part of a broader move toward a more open, multi-model architecture. That matters because Microsoft’s AI thesis is no longer just about privileged access to one lab. It rests on whether the company can turn its cloud infrastructure, software distribution and installed corporate base into durable pricing power.

Why Ackman bought the dip

The timing of the purchase is part of the story. Microsoft remains one of the market’s biggest AI spenders, with Reuters pointing to a planned 2026 spend of about $190 billion while the company also pushes products such as the $30-a-month Copilot add-on inside Microsoft 365. Investors are weighing two questions at once: whether the capital bill is rising too fast, and whether Microsoft will be one of the few groups able to monetise AI at scale.

Ackman is on the second side of that debate.

Reuters also reported that Pershing Square exited Google parent Alphabet as it added Microsoft, making the trade look less like passive diversification and more like a deliberate portfolio reshuffle. In effect, Ackman appears to be choosing the company he thinks has the cleaner route from AI enthusiasm to recurring enterprise revenue.

That is a sharper statement than simply adding another large-cap technology name after a market pullback.

The position also fits a broader pattern in investor behaviour this year. Rather than abandon large-cap technology altogether, many managers have become more selective about where they want AI exposure and what multiple they are willing to pay for it. A stock that had already fallen 26 per cent from a prior high, yet still controlled key corporate software and cloud channels, offered Ackman a less crowded entry point than some of the market’s more momentum-driven AI trades.

Matt Britzman, senior equity analyst at Hargreaves Lansdown, told Reuters that Ackman’s investment “aligns with our view that Microsoft has scope to re-rate from current levels.” That does not make the call risk-free. Microsoft still has to show that AI products can justify the scale of infrastructure spending and that enterprise customers will keep paying up as competition broadens. But the disclosure suggests a prominent stock picker sees the recent drawdown as a valuation event, not a broken thesis.

For Microsoft investors, the next test is whether operating results over the coming quarters support the same conclusion. If Azure demand holds, Copilot pricing sticks and the company protects its enterprise AI position even with a looser OpenAI structure, Ackman’s February purchase may look well timed. If not, the trade will be a reminder that even the market’s preferred AI names still have to prove the economics. Either way, Pershing Square’s new position has put Microsoft’s selloff back at the centre of the debate over how much investors should pay for AI and cloud growth.