NEW YORK, May 17, 2026, 12:05 EDT
- Microsoft ended Friday at $421.92, up 3.05%. The Nasdaq Composite lost 1.5%.
- Pershing Square, run by Bill Ackman, picked up Microsoft shares after the stock slid earlier this year.
- U.S. markets are shut on Sunday. Nvidia earnings and bond yields are on deck this week, testing where AI-led tech trades next.
Microsoft is one of the few big tech names to gain ground to start the new week. Bill Ackman’s Pershing Square revealed a fresh stake, lifting shares 3.05% to $421.92 on Friday. That came as the Nasdaq Composite gave back ground from a record. Nasdaq’s normal hours are Monday through Friday, 9:30 a.m. to 4 p.m. ET; the market is closed Sundays after a volatile week.
Microsoft stock gained about 1.6% on the week, closing at $421.92 Friday after opening the week lower. The stock had closed at $415.12 on May 8. The move now comes as Microsoft shifts between investor doubts around AI infrastructure costs and fresh interest in Azure cloud and Microsoft 365 software.
Ackman called Microsoft’s valuation “highly compelling” after the stock dropped, Reuters said. Pershing started buying in February following Microsoft’s pullback tied to weaker cloud growth and bigger spending. Ackman sold Alphabet shares to fund the move. Reuters
Pershing is making a simple case: Azure and Microsoft 365 are still tough for big companies to swap out, and Copilot, Microsoft’s AI software assistant, could be key as more businesses turn to AI tools. Ackman supported Microsoft’s $190 billion spending plans for 2026, arguing the outlay is necessary for long-term revenue growth.
Investors remain uneasy about Microsoft’s AI outlook. Reuters said some are concerned about slower than expected Copilot uptake and Microsoft losing its exclusive right to resell OpenAI tools on Azure as that partnership shifts. Competition from Alphabet and Amazon is only growing as both companies keep advancing in AI, making things tougher for Microsoft.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, told Reuters Ackman’s stake lines up with his view that Microsoft had “scope to re-rate,” or that investors might value it higher. “We do not think that’s justified,” Britzman said of the current share valuation. Reuters
Microsoft bulls can look to the company’s latest numbers. Revenue climbed 18% in its fiscal third quarter as Microsoft Cloud chipped in. Operating income went up 20%. Cloud gross margin narrowed again, with Microsoft saying it’s still investing in AI infrastructure and seeing more AI product usage.
Microsoft also told investors it expects Azure revenue to grow 39% to 40% in constant currency for the fourth quarter. The constant currency view leaves out exchange-rate moves to give a clearer look at sales. The company said demand from customers kept outpacing supply, which means Microsoft is still working to boost its computing capacity.
Nvidia will be in focus this week as the market looks for fresh evidence on the strength of AI spending. Nvidia reports earnings Wednesday. Investors see the numbers as a gauge for continued demand in cloud computing at Microsoft, Amazon and Google. “AI and energy-price inflation” are moving markets on “almost parallel tracks,” Allen Bond, a portfolio manager at Jensen Investment Management, told Reuters. Reuters
S&P 500 slid 1.2% Friday, with the Dow off 1.1% and the Nasdaq down 1.5%. The Nasdaq slipped 0.1% for the week. Tech names weighed after bond yields climbed on fresh inflation fears as oil moved higher.
Microsoft’s rebound could just be about market positioning and not actual strength. Stocks face pressure when Treasury yields climb, since higher yields make borrowing pricier and bonds more appealing. Reuters reported the 30-year Treasury went above 5% last week, and the 10-year Treasury passed 4.5%. “There was a real fear inflation had become embedded,” said Peter Tuz, president of Chase Investment Counsel. Reuters
Microsoft holders face a tight call this week. Nvidia could show strong AI demand and if yields drop, Ackman’s move looks smart for a lower-priced megacap. But if inflation heats up, or if Nvidia throws fresh questions at AI returns, Microsoft’s big spend—key to its future—might drag shares again.
