Ackman builds a position in Microsoft, calling its moat "impossible to replicate," reduces holdings in Google.
Bill Ackman announced that his hedge fund, Pershing Square, has established a new position in Microsoft, believing that the core business of this software giant is underestimated by the market and its moat is "almost impossible to replicate."
Ackman posted on the X platform on Friday, stating that Pershing Square began building the position in Microsoft this February and will submit the relevant disclosure documents to regulatory authorities on the same day, also listing Microsoft as a core holding.
He noted that the Microsoft 365 suite is "deeply embedded" in large enterprises and its moat is "almost impossible to replicate"; the demand for Azure cloud services is strong and concerns about its growth outlook are "completely misplaced."
Meanwhile, Ackman revealed that he has reduced his holdings in Alphabet. According to Bloomberg data, Pershing Square sold about 4.1 million shares of Alphabet last December, leaving only about 678,000 shares. This statement further confirms his ongoing reduction in Google holdings.
On Friday, Microsoft closed up 3.05%, while Google A shares closed down 1.07%.
Why Microsoft Attracted Ackman
Ackman regards Microsoft as one of the most valuable assets in the enterprise technology sector.
He stated that the Microsoft 365 suite, including Word and Excel, is "deeply embedded" in large enterprises, and the moat built on the company’s existing infrastructure is "almost impossible to replicate"; the strong demand for Azure cloud services proves that concerns about its growth prospects are "completely misplaced."
Microsoft's stock price has come under pressure this year, and the market has two main concerns:
First, the penetration rate of the AI assistant Copilot among enterprise users is below expectations; second, whether the 365 business can maintain its market share against competition from rivals. Secondly, Microsoft faces the dilemma of data center capacity expansion lagging behind cloud demand growth. Ackman believes that this price pullback has provided Pershing Square with a good opportunity to intervene.
On the adjustment of Microsoft’s cooperation with OpenAI, Ackman also gave an interpretation that differs from mainstream market views.
In April this year, Microsoft gave up its exclusive rights to sell OpenAI models, which was generally seen as a concession by Microsoft. Ackman, however, believes this move marks Microsoft’s "intentional transition to a more open and multi-model architecture," which better serves enterprise clients instead of simply conceding ground.
Entering Against the Trend from a Long-Term Perspective
In his X post, Ackman also explained the current market structure, pointing out that two forces are converging: The continuously expanding scale of index investing, and a large amount of capital controlled by extremely short-term, highly leveraged investors with low tolerance for volatility. Ackman believes the combination sometimes creates windows to buy quality assets.
This judgment forms the macro backdrop for building a position in Microsoft: When the market systematically sells off quality assets due to short-term volatility, focused, long-term investors are able to establish positions opportunistically.
This new position in Microsoft is the latest expansion of Pershing Square's big tech investment portfolio. Currently, the fund already holds large positions in Amazon and Meta, and Microsoft’s addition further concentrates its technological sector layout.
When Pershing Square built its Meta position, Ackman similarly stated that investors underestimated the company’s long-term AI potential; when the Amazon holding was disclosed last year, he predicted the company would emerge from its short-term slump in cloud business. The two stocks’ performance this year has diverged significantly: Meta is down 6.3%, while Amazon is up 16%.
According to Bloomberg, Ackman currently has a net worth of $12.5 billion. He is well known in the industry as an activist investor, famous for establishing concentrated positions in a few stocks and for voicing his opinions loudly on social media.
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