Hedge fund manager Bill Ackman’s Pershing Square has revealed a significant investment in Microsoft, accumulating shares during the tech giant’s recent stock decline. Ackman characterized the move as seizing a rare opportunity to acquire a stake in one of the world’s leading technology companies at an attractive valuation, now considering it a “core holding” within his firm’s portfolio. The strategic purchases commenced in February, following Microsoft’s fiscal second-quarter earnings report, which saw the stock pull back.

Ackman expressed the view that investors have become unduly concerned regarding Microsoft’s competitive standing in artificial intelligence and the sustained growth trajectory of its Azure cloud computing division. He highlighted that Pershing Square was able to establish its position at approximately 21 times forward earnings, a valuation broadly aligning with the broader market multiple and notably below Microsoft’s average trading multiples over recent years. Microsoft shares had previously seen a substantial drop, falling over 26% from their July 2025 peak, largely driven by market anxieties surrounding the impact of AI on software and the potential returns on Microsoft’s considerable AI investments.

Despite market skepticism, Ackman remains confident in Microsoft’s long-term prospects. He emphasized that the company’s Office productivity suite, M365, remains deeply integrated across numerous enterprises, proving difficult to replicate due to Microsoft’s robust security, compliance, and identity infrastructure. Furthermore, Ackman lauded Microsoft’s intensified research and development efforts, particularly its investment in Copilot, the AI agent embedded across M365, noting CEO Satya Nadella’s direct involvement. He anticipates these initiatives will lead to accelerated product development and increased customer adoption over time. Ackman drew parallels to Pershing Square’s prior successful investments in tech behemoths like Alphabet, Amazon, and Meta, which were also made during periods of market uncertainty regarding AI competition and expenditure.

This significant investment follows Pershing Square’s recent expansion initiatives, including the initial public offerings of its closed-end fund, Pershing Square USA Ltd. (trading as PSUS), and asset manager Pershing Square Inc. (listed as PS) last month. These dual structures offer investors avenues to gain exposure either to the underlying portfolio or the asset management business itself.