Pershing Square announced on Friday that it had added Microsoft Corp. (NASDAQ:MSFT) to its portfolio, with founder Bill Ackman describing recent swings in the market as an opportunity to buy into what he called a dominant long-term franchise at an appealing price.
According to the disclosure, Pershing Square started acquiring Microsoft shares in February 2026 after the company released fiscal second-quarter results. At the time the initial purchases were made, Microsoft was trading at about 21 times forward earnings, a multiple Ackman described as below historical norms for the company.
Ackman framed the move as a reaction to short-term overreactions by investors to transitory headwinds, creating an entry point for longer-term capital. He drew a parallel to past investments in other large technology platforms during periods of market uncertainty.
Profit drivers and competitive positioning
The investor emphasized Microsoft’s enterprise distribution as a key advantage, noting that M365 and Azure together generate roughly 70% of the company’s profits. He highlighted the retention dynamics for those platforms and linked that stickiness to Microsoft’s security and compliance capabilities.
On M365 specifically, Ackman pointed to the platform’s scale, noting it serves 450 million daily users and functions as a central productivity platform for enterprises. For Azure, he cited continued tailwinds from cloud migration and growing contributions from AI workloads.
Addressing concerns about competitive pressure from newer AI-focused labs, Ackman singled out Anthropic and its Claude Cowork platform as examples cited by some investors, but he argued that integrated platforms such as M365 are difficult to replace. He noted a pricing comparison in which M365’s average revenue per user is about $20, roughly half of the per-user revenue for standalone applications, which he said creates a barrier to customer migration.
OpenAI stake and strategic shifts
Ackman also discussed Microsoft’s relationship with OpenAI. He characterized Microsoft’s move to restructure its partnership with OpenAI not as a retreat but as a strategic pivot toward a more open, multi-model architecture, saying, "We view Microsoft’s recent decision to restructure its OpenAI partnership not as a concession but as part of a deliberate pivot toward a more open, multi-model architecture."
Pershing Square pointed out that the market appears not to fully price Microsoft’s approximately 27% economic interest in OpenAI. Using OpenAI’s most recent funding round as a reference, Ackman estimated that stake is worth roughly $200 billion.
Capital expenditure and monetization opportunities
Ackman characterized Microsoft’s planned $190 billion capital expenditure budget for 2026 as growth investment. He emphasized potential upside from a shift in pricing models - from per-seat licensing toward metered consumption - which could accelerate revenue as AI agents drive higher platform utilization.
In sum, Pershing Square’s filing lays out a thesis built on valuation, platform economics and the optionality from Microsoft’s OpenAI exposure and capex program. Ackman framed the purchase as taking advantage of volatility to acquire a sizable position in what he views as a long-term compounder.
Key context and data points included in the filing
- Pershing Square began purchasing Microsoft shares in February 2026, after fiscal Q2 results.
- Microsoft was trading at about 21 times forward earnings at the time of initial purchases.
- M365 and Azure generate approximately 70% of Microsoft’s profits; M365 has 450 million daily users.
- Ackman estimates Microsoft’s ~27% economic interest in OpenAI is worth roughly $200 billion based on OpenAI’s most recent funding round.
- Microsoft’s capital expenditure plan for 2026 is $190 billion, described as growth investment.