Pershing Square has taken a new position in Microsoft, with the size to be disclosed in a 13F filing later on Friday. The stock is down about 16% year-to-date. Bill Ackman has bought Microsoft shares. Pershing Square’s CEO told X on Friday morning that the fund had taken a new position in the software company following the recent drop in the stock price, with the size to be disclosed in a regulatory filing later.
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Bill Ackman said the market is undervaluing Microsoft's business, not AI. Investors have undervalued Microsoft's software "given its deeply embedded role in businesses and its extremely attractive price-to-value ratio," he wrote, presenting the position as a quality bet on the installed base rather than a direction for Azure capital spending.
Ackman has followed this strategy earlier this year. Pershing Square revealed a new stake in Meta in February, three weeks after the latter fell on capital spending, with Ackman describing the position at the time as 'deeply undervalued.' The entry into Microsoft follows the same pattern: a large company that has been hit by a downturn in AI spending guidance, with Ackman seeing it as an opportunity to buy a high-quality business at a temporarily undervalued multiple.
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Funds managing more than $100 million are required to file 13F disclosures for U.S.-listed positions within 45 days of the end of the quarter, making Friday a key day for hedge fund reading. Pershing Square’s latest 13F, covering the December quarter, showed eleven positions and about $16 billion in disclosed U.S. holdings, concentrated in Brookfield, Uber, Amazon, Alphabet and Meta.
Microsoft did not appear. Today’s filing will show whether the company has cut some existing names to fund the new one or whether it has financed it with cash. The deal also falls into a broader conversation about AI infrastructure. Hyperscalers have committed more than $650 billion to AI spending through 2026, according to combined first-quarter numbers from Microsoft, Alphabet, Amazon, Meta and Apple, and the market is now assessing the question of when or if that spending will translate into net operating profits.
Ackman is essentially arguing that Microsoft's existing business with Office, Windows, and Azure is enough to get it over the line, separate from the AI option. Microsoft's deep integration of OpenAI models across Copilot, Azure, and the developer stack has been the dominant narrative in the company's pricing over the past three years. The capex bill is the cost of maintaining that lead.
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Ackman's bet is that the software business underneath isn't getting the recognition it deserves. Pershing Square did not disclose the size of the position or the average purchase price. The 13F filing is expected later Friday, U.S. time.
