Billionaire investor Bill Ackman says the market is significantly undervaluing Microsoft, and he reveals that he poured more than $2 billion into MSFT last quarter.
In a new post on X, Ackman says Pershing Square began building its Microsoft position in February following a meaningful share price decline after the company reported its fiscal Q2 2026 results.
Ackman says Pershing Square accumulated 5,654,078 MSFT shares worth $2.092 billion at a valuation of 21 times forward earnings, broadly in line with the broader market multiple.
According to Ackman, the market is not currently pricing in Microsoft’s huge stake in the ChatGPT creator OpenAI.
“MSFT’s headline multiple does not reflect the value of Microsoft’s approximately 27% economic interest in OpenAI, which would represent approximately $200 billion, or 7% of Microsoft’s market capitalization, at OpenAI’s most recent funding round valuation.”
Looking closer at the OpenAI partnership restructuring, Ackman says the market has misinterpreted what is actually a strategic strengthening of Microsoft’s position.
“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 that better serves enterprise customers, who increasingly seek optionality across model providers.”
On the two concerns that have driven Microsoft’s share price lower, and that Ackman believes are overdone, he says investors are underestimating the resilience of M365 and misreading Microsoft’s evolving relationship with OpenAI.
“We believe Microsoft’s recent share price decline has been principally driven by investor concerns around two key issues: the competitive positioning of M365 against increasingly capable AI lab offerings, and the durability of Azure’s growth. In our view, investors underestimate the resilience of the M365 franchise given its deeply embedded role across enterprises and highly attractive price-value proposition.”
As for Azure’s growth trajectory, Ackman says Microsoft’s $190 billion capital expenditure budget for 2026 should be viewed as growth investment rather than cost, noting that roughly two-thirds is allocated to server and networking equipment that correlates directly with near-term revenue generation.
Ackman says the Microsoft investment follows a similar thesis to positions Pershing Square has built in Alphabet, Amazon and Meta.
“Like our purchases of GOOG, AMZN and META, we believe that MSFT offers analogous and compelling long-term value at today’s valuation.”
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