Sold $8 billion worth of Microsoft shares! Renowned tech hedge fund liquidates decade-long holdings in one day.

Renowned hedge fund TCI has massively liquidated its Microsoft holdings, selling off nearly all of its long-standing, nearly decade-long heavy investment, citing structural threats posed by artificial intelligence to Microsoft’s core software business.

On May 8, according to an investor letter acquired by the UK's Financial Times, TCI Fund founder Sir Christopher Hohn has drastically reduced Microsoft holdings from 10% of his portfolio at the end of last year to just 1% at the end of the first quarter this year, involving about $8 billion.

Hohn stated clearly in the letter: “We reduced our Microsoft holding because the rapid advancements of AI are bringing uncertainty to Microsoft’s future competitive position.” He specifically pointed out impacts facing Microsoft’s Office software business and also expressed some concern about the prospects of its cloud platform Azure.

This sell-off occurred against the backdrop of Microsoft’s stock price falling more than 12% so far this year, reflecting widespread market doubts about whether Microsoft can turn its massive AI investments into commercial returns. Meanwhile, TCI increased its holdings in Alphabet during the same period, raising its portfolio share from 3% to 5%, making it the fund’s largest tech holding.

AI shocks Office and Azure, Microsoft’s moat in question

Hohn’s concerns about Microsoft in the investor letter focus on two aspects.

First is the Office software business. He believes that rapid AI advancement may reshape existing workflows and spawn entirely new productivity platforms, undermining Office’s longstanding dominance. Second is Azure’s cloud business, where Hohn also expressed “a certain degree of risk.”

Microsoft benefited from Wall Street’s AI boom in recent years through its stake in OpenAI, with its stock soaring at one point. However, in 2026, market sentiment shifted markedly—investors began to question whether Microsoft could turn its steadily expanding AI capital expenditures into substantial commercial returns, and Microsoft’s stock has already dropped more than 12% this year.

While reducing Microsoft, TCI took the opposite approach with Alphabet, raising its holdings from 3% to 5%, making Alphabet the fund’s largest tech holding.

This shift reveals TCI’s structural reshuffling within the tech sector—from shaken confidence in Microsoft to relative optimism about Alphabet’s competitive prospects.

However, TCI is not a technology-themed fund overall; tech stocks make up a relatively limited fraction of its portfolio.

World’s most profitable hedge fund, heavy on infrastructure and aerospace

Since the fourth quarter of 2017, TCI has almost continuously held Microsoft shares (in 2023 briefly disappeared from regulatory filings), during which Microsoft’s stock price has risen nearly 400% and TCI has benefited significantly.

This reduction marks the substantive end of a nearly decade-long investment relationship. Hohn is known for long holding periods, averaging around nine years—far longer than most hedge fund peers.

His investment philosophy is to concentrate bets on a handful of companies with strong competitive moats—currently, TCI holds only 15 stocks, while most large hedge funds hold dozens or even hundreds.

Last year, TCI topped the list of the world’s most profitable hedge funds with $18.9 billion in investor gains, surpassing Ken Griffin’s Citadel and Izzy Englander’s Millennium.

From the overall portfolio structure, TCI’s main allocations are concentrated in infrastructure and aerospace, not tech stocks. Its largest holding is GE Aerospace, accounting for an 18% share of its portfolio; it also holds significant positions in Visa, Moody’s, and infrastructure company Ferrovial.

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