REDMOND, Washington—It’s May 15, 2026, 06:05 PDT.
- Pershing Square will reveal a fresh position in Microsoft when its 13F lands later Friday.
- Microsoft shares have dropped about 15% this year, hit by investor worries over AI investments and questions around cloud growth. The move lands against that backdrop.
- Investors are eyeing Azure and Microsoft 365 Copilot, gauging if those hefty infrastructure bills might finally drive lasting profit gains.
Pershing Square, run by Bill Ackman, has snapped up shares in Microsoft, turning the spotlight back on a stock that’s struggled this year while investors weigh the price tag of its AI expansion.
Ackman told Reuters that Pershing Square will reveal the new position in a regulatory filing later Friday, describing Microsoft’s valuation as “highly compelling.” The hedge fund snapped up shares after Microsoft slid in the wake of its fiscal second-quarter report, which saw investors rattled by sluggish cloud growth and an uptick in capital spending. Reuters
Timing is key here. Microsoft’s pitch to investors hinges on AI investments paying dividends—specifically through Azure, the company’s cloud arm, and Microsoft 365 Copilot, its AI add-on for Office business customers. Shares last traded at $409.43, putting Microsoft’s market cap near $3.05 trillion.
Microsoft’s latest quarter offered fuel for bulls and bears alike. Revenue hit $82.9 billion for the period ending March 31. Net income climbed 23% to $31.8 billion. Microsoft Cloud pulled in $54.5 billion, up 29%. Azure and related cloud services jumped 40%.
The spending story just won’t quit. Microsoft CFO Amy Hood told investors the company is planning around $190 billion in capital expenditures for calendar 2026, with about $25 billion of that linked to pricier components. Capital expenditures cover big-ticket items—think data centers, chips, servers.
Ackman’s take? Wall Street’s obsessing over the bill when it should be paying more attention to the franchise, he says. Worries about Azure rivals and Microsoft’s evolving OpenAI partnership are “overblown,” and he’s on board with the capital plan, calling it necessary for long-term growth, Reuters reported. Matt Britzman, senior equity analyst at Hargreaves Lansdown, told Reuters the stake lines up with his own view—Microsoft, in his words, still has “scope to re-rate,” and he considers the current share price “not justified.” Reuters
Competition has gotten tougher compared with last year. Alphabet’s Google and Amazon are picking up speed in AI, and Microsoft’s straightforward edge with OpenAI isn’t so clear anymore. This week, Reuters reported that Microsoft is weighing potential deals with AI startups as it eyes a future that leans less on OpenAI—talks have included Inception and, previously, code-generation company Cursor.
Microsoft is putting real numbers to its AI story. CEO Satya Nadella told investors during the latest earnings call that the company’s AI business has now hit a $37 billion annual revenue run rate, up a striking 123% year-over-year. Paid seats for Microsoft 365 Copilot crossed 20 million, according to CFO Amy Hood. The company also pointed out that about 90% of the Fortune 500 are using active agents built on its low-code and no-code platforms.
The hazards are clear. Even as appetite for AI keeps climbing, it might not ramp up quickly enough to offset the steep expenses tied to chips, energy, and building out data center infrastructure—something investors won’t overlook. Microsoft, for its part, warned it will stay capacity-limited through at least 2026. So, outsized spending may not guarantee enough computing resources for every customer.
The cost-cutting angle stands out, too. Microsoft’s LinkedIn is set to lay off roughly 875 employees—about 5% of its staff—even after reporting a 12% jump in revenue last quarter, according to Reuters this week. The move fits the prevailing tech playbook: pouring resources into AI, finding cuts elsewhere.
Ackman’s move echoes his usual playbook—he tends to jump into big tech names once Wall Street has recalibrated its hopes. Microsoft gets a high-profile endorsement here, though it comes at a tricky time for the company and doesn’t guarantee AI-fueled gains will materialize soon. Investors will be looking to the 13F filing set for later Friday for details on exactly how much he’s put on the line.
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