Ackman Increases Microsoft Stake, Seizing Investment Opportunity
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 hours ago
0mins
Should l Buy MSFT?
Source: CNBC
- Investment Opportunity Seized: Ackman's Pershing Square began accumulating shares in Microsoft after a stock pullback, believing that buying this global tech giant at a valuation of 21 times forward earnings presents a rare opportunity, reflecting confidence in Microsoft's future growth.
- Core Holding Position: Although the exact stake size was not disclosed, Ackman referred to his investment in Microsoft as a 'core holding,' indicating a long-term bullish outlook, particularly regarding the company's competitiveness in AI and cloud computing.
- Market Reaction Analysis: Microsoft's shares have fallen over 26% since reaching a record high in July 2025, primarily due to market concerns about the returns on its AI investments; Ackman believes this excessive worry provides a favorable entry point for investors.
- R&D Investment Outlook: Ackman expressed encouragement regarding Microsoft's R&D efforts with the AI assistant Copilot embedded in M365, asserting that CEO Nadella's direct involvement will enhance product velocity and customer adoption, further solidifying Microsoft's market position.
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Analyst Views on MSFT
Wall Street analysts forecast MSFT stock price to rise
34 Analyst Rating
32 Buy
2 Hold
0 Sell
Strong Buy
Current: 409.430
Low
500.00
Averages
631.36
High
678.00
Current: 409.430
Low
500.00
Averages
631.36
High
678.00
About MSFT
Microsoft Corporation is a technology company. The Company develops and supports software, services, devices, and solutions. The Company’s segments include Productivity and Business Processes, Intelligent Cloud, and More Personal Computing. The Productivity and Business Processes segment consists of products and services in its portfolio of productivity, communication, and information services. This segment primarily comprises: Office Commercial, Office Consumer, LinkedIn, and Dynamics business solutions. The Intelligent Cloud segment consists of server products and cloud services, including Azure and other cloud services, SQL Server, Windows Server, Visual Studio, System Center, and related Client Access Licenses (CALs), and Nuance and GitHub; and Enterprise Services, including enterprise support services, industry solutions and Nuance professional services. The More Personal Computing segment primarily comprises Windows, Devices, Gaming, and search and news advertising.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Price Increase Impact: Nintendo's decision to raise the Switch 2 price from $449 to $499, despite being a top seller in under a year, could hinder its market share and user base growth.
- Competitor Reactions: Microsoft and Sony have raised Xbox and PS5 prices, resulting in a 33% decline in Xbox hardware revenue and a 46% drop in PS5 unit sales in the latest quarter, indicating direct negative impacts from price hikes.
- Market Trend Shift: Typically, game consoles decrease in price over time to boost sales, but current memory and storage shortages have forced manufacturers to raise prices, a reversal that may affect future sales strategies.
- Uncertain Future Outlook: With shortages expected to last until 2030, Microsoft and Sony may face increased cost pressures and market challenges as they prepare for next-generation consoles, impacting their long-term profitability.
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Ackman Increases Microsoft Stake, Focuses on AI and Cloud Business
- Increased Microsoft Stake: Ackman has disclosed that Pershing Square Capital Management has taken a new stake in Microsoft, reflecting confidence in the company's growth potential, particularly in AI and cloud computing sectors.
- Market Rebound Opportunity: Despite a 23% decline in Microsoft's stock in Q1 2023, Ackman views the accumulation of shares at a forward P/E of 21 as a buying opportunity, indicating a market undervaluation of its long-term prospects.
- Cloud and AI Advantages: Microsoft's Azure cloud platform and Microsoft 365 suite account for approximately 70% of its earnings, and Ackman believes these segments will benefit from the accelerating demand for AI as enterprise IT workloads migrate to the cloud.
- Value of OpenAI Investment: Ackman highlights Microsoft's 27% economic interest in OpenAI, valued at $200 billion, which represents about 7% of Microsoft's total market cap, further bolstering investor confidence in Microsoft's future growth.
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- Increased Stake: Bill Ackman has been building a position in Microsoft through his Pershing Square fund since February, describing its current valuation as 'highly compelling,' with full stake details to be disclosed in a 13F filing later today.
- Core Profit Analysis: Ackman highlighted that Microsoft's two core franchises, M365 and Azure, account for approximately 70% of its profits, with M365 serving over 450 million daily users and Azure growing 39% in constant currency last quarter, with management guiding for modest acceleration in the second half.
- Market Competition Concerns: Despite investor concerns regarding M365's competitive positioning against AI alternatives like Anthropic's Claude Cowork and the sustainability of Azure's growth, Ackman dismissed these worries, asserting they are not reflected in Microsoft's valuation.
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- Investment Opportunity Seized: Ackman's Pershing Square began accumulating shares in Microsoft after a stock pullback, believing that buying this global tech giant at a valuation of 21 times forward earnings presents a rare opportunity, reflecting confidence in Microsoft's future growth.
- Core Holding Position: Although the exact stake size was not disclosed, Ackman referred to his investment in Microsoft as a 'core holding,' indicating a long-term bullish outlook, particularly regarding the company's competitiveness in AI and cloud computing.
- Market Reaction Analysis: Microsoft's shares have fallen over 26% since reaching a record high in July 2025, primarily due to market concerns about the returns on its AI investments; Ackman believes this excessive worry provides a favorable entry point for investors.
- R&D Investment Outlook: Ackman expressed encouragement regarding Microsoft's R&D efforts with the AI assistant Copilot embedded in M365, asserting that CEO Nadella's direct involvement will enhance product velocity and customer adoption, further solidifying Microsoft's market position.
See More
Ackman Increases Microsoft Stake, Sees Long-Term Value
- Investor Confidence: Billionaire hedge fund manager Bill Ackman revealed that Pershing Square has recently increased its stake in Microsoft, believing that the market underestimates the resilience of M365, which is expected to drive long-term growth for the company.
- Core Business Performance: Microsoft's two core franchises, M365 and Azure, generate approximately 70% of its profits, with M365 regarded as the dominant workplace productivity platform, used daily by over 450 million people, indicating its deep integration within enterprises.
- Market Opportunities: Ackman pointed out that the current market volatility and the rise of passive index investing have created rare dislocations in high-quality stocks, similar to his previous investments in Google, Amazon, and Meta, asserting that MSFT offers compelling long-term value at today's valuation.
- Valuation Analysis: Pershing Square began building its Microsoft position in February at roughly 21x forward earnings, which is close to the broader market multiple and below Microsoft's historical average, reflecting confidence in future growth.
See More
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- Price Increase Impact: Nintendo's decision to raise the Switch 2 price from $449 to $499, despite being a top seller in under a year, could hinder its market share and user base growth.
- Competitor Reactions: Microsoft and Sony have raised Xbox and PS5 prices, resulting in a 33% decline in Xbox hardware revenue and a 46% drop in PS5 unit sales in the latest quarter, indicating direct negative impacts from price hikes.
- Market Trend Shift: Typically, game consoles decrease in price over time to boost sales, but current memory and storage shortages have forced manufacturers to raise prices, a reversal that may affect future sales strategies.
- Uncertain Future Outlook: With shortages expected to last until 2030, Microsoft and Sony may face increased cost pressures and market challenges as they prepare for next-generation consoles, impacting their long-term profitability.
See More
Ackman Increases Microsoft Stake, Focuses on AI and Cloud Business
- Increased Microsoft Stake: Ackman has disclosed that Pershing Square Capital Management has taken a new stake in Microsoft, reflecting confidence in the company's growth potential, particularly in AI and cloud computing sectors.
- Market Rebound Opportunity: Despite a 23% decline in Microsoft's stock in Q1 2023, Ackman views the accumulation of shares at a forward P/E of 21 as a buying opportunity, indicating a market undervaluation of its long-term prospects.
- Cloud and AI Advantages: Microsoft's Azure cloud platform and Microsoft 365 suite account for approximately 70% of its earnings, and Ackman believes these segments will benefit from the accelerating demand for AI as enterprise IT workloads migrate to the cloud.
- Value of OpenAI Investment: Ackman highlights Microsoft's 27% economic interest in OpenAI, valued at $200 billion, which represents about 7% of Microsoft's total market cap, further bolstering investor confidence in Microsoft's future growth.
See More
Bill Ackman Increases Stake in Microsoft, Citing Compelling Valuation
- Increased Stake: Bill Ackman has been building a position in Microsoft through his Pershing Square fund since February, describing its current valuation as 'highly compelling,' with full stake details to be disclosed in a 13F filing later today.
- Core Profit Analysis: Ackman highlighted that Microsoft's two core franchises, M365 and Azure, account for approximately 70% of its profits, with M365 serving over 450 million daily users and Azure growing 39% in constant currency last quarter, with management guiding for modest acceleration in the second half.
- Market Competition Concerns: Despite investor concerns regarding M365's competitive positioning against AI alternatives like Anthropic's Claude Cowork and the sustainability of Azure's growth, Ackman dismissed these worries, asserting they are not reflected in Microsoft's valuation.
- OpenAI Investment Value: Ackman argued that Microsoft's roughly 27% economic interest in OpenAI is not captured in the headline multiple, valuing OpenAI at approximately $200 billion, which represents about 7% of Microsoft's current market capitalization.
See More
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- Fed Chair Transition: Jerome Powell's last day as Fed Chair coincides with falling stock futures, indicating investor uncertainty regarding future monetary policy, which may lead to increased market volatility in the short term.
- Cerebras IPO Success: Cerebras shares surged 68% on their Nasdaq debut, pushing the company's market cap to approximately $95 billion, marking the largest IPO in the U.S. tech sector in years and reflecting strong demand and renewed investor confidence in high-tech firms.
- Automotive Industry Layoffs: The Detroit Three automakers—GM, Ford, and Stellantis—have collectively cut over 20,000 U.S. salaried jobs, about 19% of their combined workforce, highlighting the industry's struggle to adapt to AI and technological changes, which could impact future production capabilities.
- Crypto Regulation Progress: The Senate Banking Committee approved the Clarity Act, providing a regulatory framework for the cryptocurrency industry despite opposition from banks and law enforcement, indicating lawmakers' recognition of the crypto market's significance and potential compliance challenges ahead.
See More
Ackman Increases Microsoft Stake, Seizing Investment Opportunity
- Investment Opportunity Seized: Ackman's Pershing Square began accumulating shares in Microsoft after a stock pullback, believing that buying this global tech giant at a valuation of 21 times forward earnings presents a rare opportunity, reflecting confidence in Microsoft's future growth.
- Core Holding Position: Although the exact stake size was not disclosed, Ackman referred to his investment in Microsoft as a 'core holding,' indicating a long-term bullish outlook, particularly regarding the company's competitiveness in AI and cloud computing.
- Market Reaction Analysis: Microsoft's shares have fallen over 26% since reaching a record high in July 2025, primarily due to market concerns about the returns on its AI investments; Ackman believes this excessive worry provides a favorable entry point for investors.
- R&D Investment Outlook: Ackman expressed encouragement regarding Microsoft's R&D efforts with the AI assistant Copilot embedded in M365, asserting that CEO Nadella's direct involvement will enhance product velocity and customer adoption, further solidifying Microsoft's market position.
See More
Ackman Increases Microsoft Stake, Sees Long-Term Value
- Investor Confidence: Billionaire hedge fund manager Bill Ackman revealed that Pershing Square has recently increased its stake in Microsoft, believing that the market underestimates the resilience of M365, which is expected to drive long-term growth for the company.
- Core Business Performance: Microsoft's two core franchises, M365 and Azure, generate approximately 70% of its profits, with M365 regarded as the dominant workplace productivity platform, used daily by over 450 million people, indicating its deep integration within enterprises.
- Market Opportunities: Ackman pointed out that the current market volatility and the rise of passive index investing have created rare dislocations in high-quality stocks, similar to his previous investments in Google, Amazon, and Meta, asserting that MSFT offers compelling long-term value at today's valuation.
- Valuation Analysis: Pershing Square began building its Microsoft position in February at roughly 21x forward earnings, which is close to the broader market multiple and below Microsoft's historical average, reflecting confidence in future growth.
See More
