Bill Ackman's Pershing Square Made Microsoft Its Largest AI Holding by Selling Alphabet. Here's the Thesis Behind the Switch.

Billionaire investor Bill Ackman's hedge fund, Pershing Square Capital Management, significantly reorganized its technology holdings during the second quarter, establishing Microsoft as its top artificial intelligence bet. Pershing acquired an additional 553,000 shares of Microsoft, expanding its total holding to 6.2 million shares valued at approximately $2.3 billion. The position now accounts for 11.9% of Pershing's concentrated 14-stock portfolio. To fund this reallocation, Ackman liquidated his entire stake in Alphabet and trimmed his position in Amazon by 25%, offloading 2.9 million shares. The strategic shift underscores institutional confidence in Microsoft's monetization trajectory and robust financial profile compared to mega-cap peers. In its recent quarterly report, Microsoft delivered an 18% year-over-year revenue increase to $90 billion and a 31% rise in net income to $35.76 billion, while Azure cloud revenue exceeded $100 billion for the full fiscal year. Pershing highlighted Microsoft's competitive advantage in maintaining positive free cash flow of $19.6 billion despite heavy capital expenditure in AI infrastructure, in stark contrast to peers facing negative cash flows. Market analysts view Ackman's conviction as a strong vote of confidence in Microsoft's Copilot integration across Microsoft 365 and Azure hyperscaler growth.