Billionaire Bill Ackman Has 15% of Pershing Square's Portfolio in a $2.4 Billion Microsoft Stake. Is It Still a Buy After the Rally?

When Bill Ackman has roughly 15% of Pershing Square's portfolio in a $2.4 billion Microsoft (NASDAQ: MSFT) stake, the obvious question for investors is whether there's still room to buy after the stock has already bounced.

To me, the answer depends less on his conviction and more on whether you share his specific thesis about how Microsoft's AI strategy and capital spending will play out over the next decade.

Bill Ackman, chief executive of Pershing Square Capital Management. Image source: Getty Images.

In his own comments and filings, Ackman has been clear that this isn't a trade on short‑term earnings. Pershing Square began buying Microsoft in February 2026 after the stock sold off following its fiscal second-quarter report and amid concerns about cloud growth and a heavy capital expenditure plan. Ackman has said he was able to build the position at around 21 times forward earnings at the time, roughly in line with the broader market and below Microsoft's usual premium multiple.

More importantly, he argues that the current valuation doesn't fully reflect Microsoft's 27% stake in OpenAI, which he estimates could be worth about $200 billion, or 7% of Microsoft's market cap, if it were valued independently. That's a very specific view: The market is underpricing Microsoft's AI assets and overreacting to near‑term spending.

Microsoft sits at a large chunk of equity

The portfolio weight reinforces that message. In Pershing Square's latest update, Microsoft sits at about 15% of the equity portfolio, right alongside positions like Uber Technologies. Ackman trimmed other big tech holdings to make room. For a concentrated, high‑conviction investor, that's the capital allocation equivalent of saying, "This is one of the main ways I want to express my AI thesis." He's also described Microsoft as a quintessential beneficiary of the AI era, with Azure, data center infrastructure, and developer tooling positioned to capture outsize economics as AI workloads grow.

That said, investors shouldn't treat Ackman's enthusiasm as a blanket "buy no matter what" endorsement. The same factors that make Microsoft attractive here also create risk. The company is committing roughly $190 billion to capital spending over 2026 to build out AI and cloud capacity. If AI demand or pricing falls short of expectations, those investments could drag on returns.

Competition in AI infrastructure is intense, and while Ackman believes Microsoft's moats and cash flows are underappreciated, the market could stay cautious longer than he expects. There's also basic concentration risk: A 15% position works for a hedge fund that accepts volatility; individual investors may need more diversification.

So is Microsoft still a buy after the rally? If you broadly share Ackman's view that Microsoft's AI platform, OpenAI stake, and cloud infrastructure will generate returns that justify both the current valuation and massive capital spending, then the stock can still be attractive as a long‑term holding, even off the lows.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft and Uber Technologies. The Motley Fool has a disclosure policy.