Billionaire Bill Ackman Sold Alphabet and Bought the Dip in This Magnificent Artificial Intelligence (AI) Stock Instead

Bill Ackman’s Pershing Square Capital Management recently exited its $1.9 billion stake in Alphabet (GOOGL, GOOG), reducing exposure by 95% across both share classes by the first quarter of 2026. The fund had initially invested in Alphabet in early 2023, acquiring shares between $90 and $100 each, and held through a rally that more than tripled the stock’s value. Ackman emphasized the move was not bearish on Alphabet but reflected prudent portfolio management, as the stock’s valuation no longer offered the same margin of safety. The shift came after Alphabet’s substantial valuation expansion in late 2025, prompting Ackman to take profits and redeploy capital. Pershing Square instead accumulated roughly 5.6 million Microsoft (MSFT) shares in February 2026, following a sharp stock decline triggered by concerns over Azure cloud revenue slowdowns and surging AI-related capital expenditures. Microsoft’s stock dropped over 18% in early 2026 after its fiscal Q2 results raised investor worries about AI infrastructure spending and margin pressures. Ackman viewed the sell-off as an overreaction, citing Microsoft’s strong position in generative AI monetization through Copilot and Azure. The forward price-to-earnings ratio of 20-23 made Microsoft an attractive entry point compared to prior AI-driven peaks. The move aligns with Ackman’s strategy of patient investing in high-quality companies, followed by decisive repositioning when better opportunities arise. Pershing Square’s new Microsoft stake reflects confidence in its AI-driven growth trajectory, particularly in enterprise and consumer workflows. Ackman’s social media posts clarified the shift was tactical, not a rejection of Alphabet’s long-term prospects.