Bill Ackman, a billionaire investor and chief executive of Pershing Square Capital Management, stated on May 15 that his hedge fund would reveal a new stake in Microsoft (NASDAQ: MSFT).
In a post published on X, Ackman called the software giant ‘highly compelling’ at current valuation levels, adding that his newly launched closed-end fund, Pershing Square USA, has already included Microsoft as one of its core holdings.
More specifically, the investor highlighted Microsoft’s enterprise dominance, arguing that roughly 70% of its profits are driven by two core franchises, namely Microsoft 365 and Azure, the former being the dominant productivity platform.
“In our view, investors underestimate the resilience of the M365 franchise given its deeply embedded role across enterprises and highly attractive price-value proposition,” Ackman wrote.
Beyond the core platforms, the post also mentioned additional assets including LinkedIn, Xbox and Activision Blizzard, as well as the company’s search and advertising operations, arguing these too expand the company’s overall franchise value.
Bill Ackman invests in Microsoft
Ackman said that Pershing began building its Microsoft position in February after a share price decline following fiscal Q2 2026 results, estimating an entry valuation of around 21 times forward earnings.
He further argued that Microsoft’s valuation does not fully reflect its estimated 27% economic interest in OpenAI, which he said could be worth around $200 billion based on recent funding rounds.
Addressing recent weakness in the stock, he argued that M365 remains highly resilient due to its deep integration into enterprise workflows and its bundled economics, noting that average revenue per user is around $20 per month, which is well below assembling cost.
“Unlike point software solutions, which may be vulnerable to disintermediation by better-performing AI alternatives, M365 is tightly integrated into the daily workflow of nearly every large enterprise and is supported by Microsoft’s identity, security, compliance, and data governance infrastructure, which would be nearly impossible to replicate,” Ackman added.
Finally, Ackman noted that Microsoft has raised its 2026 capital expenditure plan to about $190 billion. Accordingly, he sees it as a growth-oriented investment designed to support long-term AI-driven demand.
The investment marks another major technology bet for Ackman as Pershing continues to expand its exposure to the sector. Earlier this year, the fund disclosed a position in Meta, citing the company’s artificial intelligence (AI) prospects as a key driver.
Featured image via Shutterstock
