Bill Ackman Increases Stake in Microsoft, Citing Compelling Valuation
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: Yahoo Finance
- 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.
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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: 421.060
Low
500.00
Averages
631.36
High
678.00
Current: 421.060
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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