Pershing Square Discloses New Microsoft Stake

Bill Ackman's Pershing Square Capital Management disclosed a new investment position in Microsoft on Friday, citing the software giant's attractive valuation amid a year-to-date share price decline of about 16 percent.

Ackman, the hedge fund's chief executive, announced the stake on the social media platform X, stating that the market has mispriced Microsoft's established enterprise software business, including its Office, Windows and core Azure offerings. "Investors have underestimated Microsoft's software given its deeply embedded role across enterprises and highly attractive price-value proposition," he wrote, describing the bet as one on a "quality compounder" rather than solely on artificial intelligence growth. The size of the position and average purchase price were not immediately revealed, with details expected in a regulatory Form 13F filing later Friday.

The investment follows Microsoft's fiscal third-quarter earnings in late April, which exceeded expectations with total revenue of $82.9 billion, Azure cloud growth of 40 percent and an AI run-rate reaching $37 billion. Shares fell anyway after Chief Financial Officer Amy Hood raised full-year capital expenditure...