dailynewsnblog
Warren Buffett disciple Bill Ackman has gone fishing for value again, and he’s bringing back a new catch: beaten-up shares of Microsoft (MSFT).
The news: Ackman said in a new X post on Friday morning that his hedge fund Pershing Square (PS) will disclose a new position in Microsoft in a 13F filing later on Friday. He added that Microsoft is “a company we have followed for many years now offered at a highly compelling valuation.”
“We began building our position in MSFT in February following a meaningful share price decline after the company reported its fiscal Q2 2026 results,” Ackman explained. “We were able to establish our position at a valuation of 21 times forward earnings, broadly in line with the market multiple and well below Microsoft’s trading average over the last few years.”
Ackman added that Microsoft’s multiple does not reflect the value of its 27% stake in OpenAI (OPAI.PVT), which he said would be approximately $200 billion, or 7% of Microsoft’s market capitalization.
“We believe Microsoft’s recent share price decline has been principally driven by investor concerns around two key issues: i) the competitive positioning of M365 against increasingly capable AI lab offerings (notably Anthropic’s Claude Cowork), and ii) the durability of Azure’s growth, especially in light of Microsoft’s evolving relationship with OpenAI,” Ackman continued.
“In our view, investors underestimate the resilience of the M365 franchise given its deeply embedded role across enterprises and highly attractive price-value proposition. Unlike point software solutions, which may be vulnerable to disintermediation by better-performing AI alternatives, M365 is tightly integrated into the daily workflow of nearly every large enterprise and is supported by Microsoft’s identity, security, compliance, and data governance infrastructure, which would be nearly impossible to replicate. “
Microsoft odds and ends: Microsoft’s stock has dropped 17% this year versus a 10% gain for the S&P 500 (^GSPC), as its third quarter results underwhelmed and worries about artificial intelligence investment surfaced.
