Key Takeaways
- • Bill Ackman's Pershing Square initiated a substantial new Microsoft position in Q1 2026, accumulating 5.65 million shares valued at approximately $2.09 billion, representing 5.3% of its U.S.-listed equity portfolio, after the stock declined 15% following earnings.
- • Ackman built the Microsoft stake at a forward P/E of approximately 21x, comparable to the market average but below Microsoft's historical trading multiple, citing undervaluation of the company's AI investments and $200 billion OpenAI partnership.
- • Daniel Loeb's Third Point executed the opposite trade, completely exiting its existing Microsoft position accumulated since late 2022 and instead purchasing an additional 175,000 Alphabet shares during the same period.
- • Pershing Square simultaneously reduced and ultimately liquidated its Alphabet holdings, reflecting divergent strategic views between the two billionaire investors on the trajectory of AI spending and technology sector valuations.
- • The divergence reflects fundamental disagreement on AI investment priorities, with Ackman betting Microsoft's cloud infrastructure and OpenAI partnership are undervalued while Loeb appears to favor Alphabet's alternative positioning in the artificial intelligence landscape.
Summary
Two of Wall Street's most prominent billionaire hedge fund managers, Bill Ackman and Daniel Loeb, took diametrically opposed positions on major technology stocks during the first quarter of 2026, with their portfolio decisions reflecting fundamentally different assessments of artificial intelligence spending trends and technology valuations.
Ackman's Pershing Square Capital Management initiated a significant new position in Microsoft after the company's stock experienced a sharp pullback following its fiscal 2026 second-quarter earnings report. According to SEC filings, Pershing Square held approximately 5.65 million Microsoft shares valued at $2.09 billion at quarter-end, accounting for roughly 5.3% of its U.S.-listed equity portfolio. Ackman announced via social media that Pershing Square began accumulating the position in February at a forward price-to-earnings multiple of approximately 21x, a valuation he characterized as reasonable compared to the market average and below Microsoft's historical trading multiples. The billionaire investor justified the thesis by emphasizing that Wall Street was underestimating Microsoft's artificial intelligence capabilities, particularly the company's partnership with OpenAI, which he valued at approximately $200 billion.
In stark contrast, Loeb's Third Point completely liquidated its entire existing Microsoft stake—which it had maintained since late 2022—during the first quarter. Rather than rotating into alternative technology positions, Third Point deployed capital into additional Alphabet shares, purchasing approximately 175,000 shares while Pershing Square simultaneously reduced and ultimately eliminated its Alphabet holdings. This direct opposition in positioning between the two hedge funds underscores a critical divide among sophisticated investors regarding which technology platform is best positioned to capitalize on artificial intelligence infrastructure spending and revenue opportunities.
The diverging strategies highlight a broader market debate about the sustainability and profitability of AI investments across the technology sector. While Ackman appears convinced that Microsoft's valuation provides an attractive risk-reward opportunity given its entrenched position in enterprise cloud computing and its deep partnership with OpenAI, Loeb's preference for Alphabet suggests confidence in an alternative narrative—potentially centered on Alphabet's autonomous search capabilities, advertising technology advantages, or other AI-driven revenue streams. These opposing bets from two of the most closely watched hedge fund operators suggest continued uncertainty and legitimate strategic disagreement about how the artificial intelligence investment cycle will ultimately reward different technology incumbents.
Ackman's Pershing Square Capital Management initiated a significant new position in Microsoft after the company's stock experienced a sharp pullback following its fiscal 2026 second-quarter earnings report. According to SEC filings, Pershing Square held approximately 5.65 million Microsoft shares valued at $2.09 billion at quarter-end, accounting for roughly 5.3% of its U.S.-listed equity portfolio. Ackman announced via social media that Pershing Square began accumulating the position in February at a forward price-to-earnings multiple of approximately 21x, a valuation he characterized as reasonable compared to the market average and below Microsoft's historical trading multiples. The billionaire investor justified the thesis by emphasizing that Wall Street was underestimating Microsoft's artificial intelligence capabilities, particularly the company's partnership with OpenAI, which he valued at approximately $200 billion.
In stark contrast, Loeb's Third Point completely liquidated its entire existing Microsoft stake—which it had maintained since late 2022—during the first quarter. Rather than rotating into alternative technology positions, Third Point deployed capital into additional Alphabet shares, purchasing approximately 175,000 shares while Pershing Square simultaneously reduced and ultimately eliminated its Alphabet holdings. This direct opposition in positioning between the two hedge funds underscores a critical divide among sophisticated investors regarding which technology platform is best positioned to capitalize on artificial intelligence infrastructure spending and revenue opportunities.
The diverging strategies highlight a broader market debate about the sustainability and profitability of AI investments across the technology sector. While Ackman appears convinced that Microsoft's valuation provides an attractive risk-reward opportunity given its entrenched position in enterprise cloud computing and its deep partnership with OpenAI, Loeb's preference for Alphabet suggests confidence in an alternative narrative—potentially centered on Alphabet's autonomous search capabilities, advertising technology advantages, or other AI-driven revenue streams. These opposing bets from two of the most closely watched hedge fund operators suggest continued uncertainty and legitimate strategic disagreement about how the artificial intelligence investment cycle will ultimately reward different technology incumbents.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.