Billionaire investor Bill Ackman has made a significant portfolio shift, fully exiting Alphabet and rotating those funds into a major new stake in Microsoft.
His hedge fund, Pershing Square, began buying Microsoft shares in February 2023 at roughly 21 times forward earnings, a valuation in line with the broader S&P 500. At the time, Microsoft's stock had fallen about 15% year-to-date amid concerns over cloud competition from Amazon and Google.
But the fundamentals told a different story. Microsoft reported $82.89 billion in revenue, up 18% year-over-year, with Azure cloud revenue surging roughly 40%.
Ackman is particularly bullish on Microsoft 365 Copilot, the AI assistant embedded in Word, Excel, and PowerPoint, priced at $30 per enterprise user per month.
By contrast, Google's core advertising model faces existential questions as AI chatbots increasingly replace traditional search queries. Microsoft is insulated from that disruption, deriving its revenue from subscriptions and enterprise contracts.
This is not a short-term trade. Ackman runs a concentrated portfolio and typically holds positions for years. His full exit from one tech giant and entry into another signals a long-term conviction about AI platform dominance.