Bill Ackman Exits Alphabet to Invest in Promising AI Stock at a Discount

Key Points

• In early 2023, Pershing Square Capital Management, led by Bill Ackman, acquired approximately 10.3 million shares of Alphabet, valued at about $1.9 billion.

• In Q1 2026, Ackman sold nearly all of his Alphabet stake and reallocated funds into Microsoft, purchasing roughly 5.6 million shares.

• Microsoft’s share price dropped over 18% in early 2026, prompting Ackman to view it as an attractive buying opportunity.

Pershing Square Capital Management, managed by Bill Ackman, initiated a position in Alphabet (NASDAQ: GOOGL, GOOG) in early 2023, acquiring about 10.3 million shares. However, in a recent Q1 filing, Ackman revealed he sold nearly all of this stake, valued at approximately $1.9 billion, and redirected the proceeds into Microsoft (NASDAQ: MSFT). This strategic shift was made after Microsoft’s stock fell over 18% due to concerns about slowing growth in its cloud business and rising AI investment costs.

Ackman’s sale of Alphabet was not indicative of a bearish outlook but rather a reflection of prudent portfolio management, as he believed Microsoft presented a better risk-reward opportunity. By February 2026, he had established a core position in Microsoft, which was trading at a forward price-to-earnings ratio between 20 and 23, below historical levels. The company’s average 12-month price target among analysts is projected to reach $560, approximately 34% higher than current trading levels.