Why Microsoft Stock Is Surging Today
Key Points
Microsoft stock is rising on news that Bill Ackman's Pershing Square has purchased shares last quarter.
Pershing also sold out of its Alphabet position last quarter.
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Microsoft (NASDAQ: MSFT) stock is solidly in the green on Friday despite a bearish backdrop for tech stocks. The company's share price was up 3% as of noon ET. Meanwhile, the S&P 500 was down 1.2%, and the Nasdaq Composite was off 1.4%. The stock had been up as much as 4.1% earlier in the session.
Microsoft is rising today following news that Bill Ackman's Pershing Square Capital Management had bought shares and sold out of its position in Alphabet. Despite today's pop, Microsoft is still down 13% in 2026 and 22% from its lifetime high.
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Ackman drops Alphabet and buys Microsoft
Pershing Square is a hedge fund founded and run by billionaire Bill Ackman, and it has an impressive track record of success. As a result, some investors pay close attention to what stocks the fund is buying and selling.
With Pershing moving out of Alphabet and into Microsoft, the latter company has gotten a high-profile vote of confidence from a leading investment firm. Ackman cited Microsoft's "highly compelling valuation" on the heels of recent sell-offs as a core reason for backing the stock.
What's next for Microsoft?
Despite strong business results, Microsoft has seen sell-offs this year as some investors have bet that the company faces meaningful disruption risks from other artificial intelligence (AI) players. On the other hand, the tech giant has a very strong position in the AI market and broader software space.
Ackman pointed to Microsoft's strong positioning in cloud-infrastructure services and office productivity software as reasons for Pershing buying the stock, and there are good reasons to think that the company can still deliver long-term wins even though its Copilot software hasn't been as successful as other AI chatbots.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet and Microsoft. The Motley Fool has a disclosure policy.
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