Why Bill Ackman Switched From Google to Microsoft (MSFT) Stock
Microsoft Corporation, MSFT According to Ackman, the position was initiated in February following a “substantial” selloff that came after Microsoft reported fiscal Q2 2026 results. The fund accumulated shares at approximately 21 times forward earnings — a valuation matching the broader S&P 500 and significantly below Microsofts historical trading range. The tech giant has faced headwinds in 2026. Shares have declined 17% year-to-date, contrasting sharply with the S&P 500s 10% gain. The weakness followed a disappointing Q3 earnings announcement that sparked concerns regarding Azures expansion rate. Microsoft further revealed plans for $190 billion in capital spending for calendar 2026 — representing a 61% annual increase and exceeding analyst expectations by roughly $35 billion. While Ackman recognizes these challenges, he maintains the market is overlooking a critical asset. The Hidden Value in OpenAI Ackman highlighted Microsoft‘s 27% ownership in OpenAI, which he estimates carries a $200 billion valuation — equivalent to approximately 7% of Microsoft’s total market capitalization. He contends this substantial value remains absent from current share prices. The investor also dismissed concerns about Microsoft 365 facing displacement from AI competitors. He maintains that M365s deep integration across enterprise systems — encompassing identity management, security infrastructure, compliance frameworks, and data governance — creates formidable barriers against replacement