Bill Ackman invests in Microsoft, with details on the investment size to be revealed today.

      Pershing Square has established a new position in Microsoft, with the size to be revealed in a 13F filing later on Friday. The stock has declined approximately 16% year-to-date.

      Bill Ackman has acquired shares of Microsoft. The CEO of Pershing Square mentioned on X Friday morning that the fund has initiated a new position in the software firm following its recent drop in share price, with details on the size to be disclosed in a regulatory filing later today.

      Ackman explained that he believes the market is mispricing the enterprise segment rather than the AI sector. He stated that investors have undervalued Microsoft’s software due to its essential role in enterprises and its appealing price-to-value ratio, presenting the position as a quality-compounding investment based on the existing base rather than a directional bet on Azure’s capital expenditures.

      The timing is crucial to the investment. Microsoft’s shares have fallen about 16% this year and have hovered around $413 since late April, when CFO Amy Hood used the company’s fiscal Q3 results to increase full-year capital expenditure guidance to roughly $190 billion, well exceeding the approximately $155 billion that analysts had expected.

      The results themselves surpassed expectations, with Azure growing by 40%, the AI run-rate reaching $37 billion, and total revenue surpassing $82.9 billion. Nevertheless, the stock still declined, attributed to a widely shared buy-side note describing the $190 billion capital expenditure plan as impacting AI valuations.

      Earlier this year, Ackman adopted a similar strategy. Pershing Square announced a new stake in Meta in February, shortly after Meta’s own sell-off due to capital expenditures, with Ackman labeling that position as a 'deeply discounted valuation'.

      The acquisition of Microsoft mirrors this pattern: a large-cap stock affected by an AI spending forecast, framed by Ackman as a chance to invest in a high-quality company at a temporarily lower valuation.

      Hedge funds managing over $100 million are required to submit Form 13F disclosures of US-listed positions within 45 days following the end of the quarter, making Friday a significant day for analyzing hedge fund reports.

      Pershing Square’s last 13F, covering the December quarter, listed eleven positions and around $16 billion in disclosed US holdings primarily in Brookfield, Uber, Amazon, Alphabet, and Meta, with Microsoft not included. Today’s filing will reveal whether the firm has reduced any previous positions to finance this new investment or if it was funded from cash reserves.

      This investment also falls within a broader discussion on AI infrastructure. Major cloud providers have pledged over $650 billion to AI capital expenditures through 2026, reacting to combined Q1 figures from Microsoft, Alphabet, Amazon, Meta, and Apple. The market is now assessing when, or if, that spending will translate into solid operating profits.

      Ackman essentially argues that Microsoft’s established businesses, including Office, Windows, and Azure, will meet performance expectations separately from the AI potential.

      The deep integration of OpenAI’s models throughout Copilot, Azure, and the developer ecosystem has been a key narrative in Microsoft’s re-evaluation over the last three years (TNW has monitored this trend). The capital expenditure is the cost of maintaining that leadership. Ackman’s investment suggests that the underlying enterprise software business is not receiving the recognition it deserves.

      Pershing Square has yet to reveal the size of the position or the average purchase price. The 13F filing is anticipated later on Friday in the US.