Hedge fund manager Bill Ackman has made a name for himself in the investment world by buying high-quality shares when they offer a lot of value. Stocks he’s had success with in the past include Alphabet (Google), Amazon, and Chipotle Mexican Grill.
Last week Ackman filed a 13F form for his investment company with US regulators, revealing his latest trades. And what’s interesting is that, in the first quarter of 2026, he was aggressively buying a well-known tech stock.
Ackman’s new stock
Ackman’s 13F reveals that in Q1, the hedge fund manager bought 5.7m shares in Magnificent 7 powerhouse Microsoft (NASDAQ: MSFT). At today’s share price of $424, that position is worth about $2.4bn.
We don’t know if Ackman still owns that many shares – he may have bought more since the end of Q1 or sold some. But what we do know is that this was a new purchase for him and that at the end of the quarter the stock represented about 15% of his US equity holdings.
A high-quality name on sale
I’m not surprised that Ackman is buying this tech name. Because, as I said earlier this month, Microsoft today looks a lot like Alphabet mid-last year (when it was near $150).
Right now, no one’s interested in it because it’s a software company (and there’s a theory that AI is going to kill software). As a result, it has a relatively low valuation – the forward-looking price-to-earnings (P/E) ratio is only 22.
But it’s far too early to write this company off. This is a business with a history of navigating changes in the tech landscape (it has been around since 1975).
Looking ahead, we could see the company have success with generative AI (it has a major partnership with OpenAI). Alternatively, we could see it pivot and focus more on cloud computing and chips instead of software.
Is there an investment opportunity?
Should investors consider following Ackman’s move here? I think so.
At current levels (it’s down about 20% from its highs), I’m bullish on the stock. Taking a three-to-five-year view, I reckon today’s valuation will turn out to be cheap.
I’ll point out that a lot of UK investors appear to share my view. Over the last month, Microsoft has been among the top 10 most bought stocks on AJ Bell.
Of course, there are no guarantees that the stock will be a winner from here (Ackman has made mistakes in the past). There are plenty of risks.
For me, a key risk is white-collar layoffs. These could negatively impact subscription revenues.
Another risk is customer concentration. Right now, a lot of its cloud revenues are coming from OpenAI.
Weighing everything up, however, I like the long-term risk-reward set-up. I believe this Mag 7 name is worth a look.
Edward Sheldon has positions in Microsoft, Alphabet, and Amazon.
