Ackman exits – Billionaire investor Bill Ackman disclosed that Pershing Square fully exited its multi-year Alphabet position and used the proceeds to build a 5.65 million-share stake in Microsoft in the first quarter. The move has sparked debate as Microsoft’s stock lags whi
Bill Ackman’s latest trade didn’t arrive quietly. It landed on X last week, with two disclosures that snapped attention onto one question: when the biggest “AI winners” are still moving, what does it mean to bet on the laggard?
On Friday. May 15. Ackman revealed that Pershing Square had quietly built a 5.65 million-share position in Microsoft (MSFT) during the first quarter. The next day. he confirmed the funding came from fully exiting the firm’s multi-year long investment in Alphabet (GOOG) (GOOGL). Google’s parent company.
For investors who have watched Alphabet surge, the timing feels like a jolt. Alphabet has been one of the market’s clearest AI winners this year. with shares climbing roughly 23% year to date and reaching all-time highs at one point in mid-May. Microsoft. by contrast. is down about 14% year to date as of this writing. trading far below its 52-week high of more than $555.
Ackman was careful to draw a line between his action and the temptation to read it as a rejection of Alphabet. “To be clear, our sale of $GOOG was not a bet against the company,” he wrote on X. “We are very bullish long term on Alphabet. But at current valuations and in light of our finite capital base. we used $GOOG as a source of funds for $MSFT.”.
That framing—borrowing from Alphabet to expand Microsoft—explains the mechanics. It doesn’t entirely settle the debate over the why.
In his comments, Ackman said the Microsoft purchase began in February, right after Microsoft’s fiscal second-quarter report triggered a sharp sell-off over softer Azure growth and a planned ramp in AI spending. He said Pershing Square built the position at about 21 times forward earnings.
He also pointed to Microsoft 365. arguing it is “tightly integrated into the daily workflow of nearly every large enterprise” and hard to dislodge. Another pillar of his case is what he sees as Microsoft’s financial exposure to OpenAI: he pegged Microsoft’s roughly 27% economic interest in OpenAI at about $200 billion—about 7% of Microsoft’s total market capitalization.
And on the numbers, Microsoft is showing clear momentum. For the fiscal third quarter. the period ended March 31. 2026. Microsoft reported Azure growth of 39% in constant currency. closing in on a 40% year-over-year growth rate after a brief dip to 38% the prior quarter. Total revenue rose 18% year over year to $82.9 billion. The company said its commercial backlog ended the quarter at $627 billion.
Microsoft also said the annualized run rate of its AI business reached $37 billion, up 123% from a year earlier.
But the crux of the pushback is that the same period doesn’t show Microsoft pulling away—cloud rivals are accelerating too.
Alphabet’s Google Cloud, for instance, grew at a pace Microsoft has struggled to match lately. In the first quarter of 2026, Google Cloud’s revenue surged 63% year over year to $20 billion. Its backlog nearly doubled sequentially to more than $460 billion, a major jump from 48% growth in the prior quarter. Alphabet CEO Sundar Pichai said during the company’s first-quarter earnings call. “Cloud accelerated again this quarter due to strong demand for our AI products and infrastructure.”.
Amazon’s AWS is also gaining. AWS grew 28% year over year in Q1—its fastest pace in 15 quarters—and that was an acceleration from 24% growth in the prior quarter.
Microsoft’s Azure growth has held “roughly steady in the high-30s range for several quarters now,” which makes Ackman’s move feel, to some, like a bet on a business that is improving while competitors are surging.
Then there’s the shift in Microsoft’s relationship with OpenAI. In late April, Microsoft revised its partnership terms. The changes ended OpenAI’s exclusivity with Azure and ended Microsoft’s revenue-share payments to OpenAI. while OpenAI’s revenue-share payments to Microsoft continue through 2030. subject to a cap. Any cloud provider can now serve OpenAI’s models.
Ackman’s OpenAI stake point still stands as equity economics, but the partnership tweak chips at part of the “moat” investors often associate with Microsoft AI workloads.
There’s another worry simmering under the surface for everyone holding enterprise software: the fear that AI tools could disintermediate parts of the software stack that companies rely on every day. including portions of Microsoft 365. Ackman thinks that fear is overdone, and he may be right. Yet it remains a real risk—one that complicates any bull case when the bill is getting bigger.
Microsoft is committing to roughly $190 billion of capital expenditures in 2026, a 61% jump from 2025.
At the same time, the market math around “reasonably priced” stocks doesn’t erase the practical question investors are now asking themselves: if Alphabet’s cloud is growing faster and search revenue is reaccelerating, does Alphabet simply offer the better risk-reward?
Alphabet’s first quarter showed search revenue reaccelerating to 19% growth. Add that to Google Cloud’s 63% surge and the near doubling of backlog to more than $460 billion. and the trade begins to look less like a clean switch—and more like a bet on which company will translate AI demand into durable. monetizable advantage first.
For now. Ackman’s logic is direct: he says his sale of $GOOG wasn’t a bet against Alphabet. it was a funding decision driven by valuations and a finite capital base. Pershing Square’s actions—exiting Alphabet and building Microsoft to 5.65 million shares in the first quarter—are already forcing investors to confront the same tension that’s been defining this market: who benefits most as AI spending rises. and who wins when cloud competition stops moving in sync?.
Bill Ackman Pershing Square Microsoft Alphabet Google Cloud Azure AWS OpenAI partnership AI spending stock trade 5.65 million shares capex 2026