The Bill & Melinda Gates Foundation Trust revealed Friday that it sold its last 7.7 million shares of Microsoft (NASDAQ:MSFT) during the first quarter, an outflow of approximately $3.2 billion that ends a decades-long position in the company Gates co-founded (1).
That morning a very different story had already been revealed. Hours before Gates’ filing reached the SEC, Bill Ackman’s Pershing Square Capital Management used a lengthy X post to announce a new position in Microsoft (2). Pershing’s Form 13F, filed that same afternoon, showed approximately 5.65 million shares worth approximately $2.09 billion at the end of the quarter (3).
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The next morning, Ackman explained that he used Pershing’s stakes in Google (NASDAQ:GOOG) to pay for it. “To be clear, our sale of $GOOG was not a bet against the company,” he wrote on
So why is Gates selling?
The sale of 7.7 million shares is the final leg of a multi-year sale. The Trust held approximately 28.5 million Microsoft shares at the end of the first quarter of 2025, trimmed to 7.7 million at the end of the year and reduced to zero this quarter.
Gates announced in May 2025 that the foundation will close operations in 2045 and spend approximately $200 billion on charity over the next 20 years (5). A foundation that closes its donation has no choice but to sell: it has to finance the donation.
Why is Ackman bullish on Microsoft?
Pershing began accumulating Microsoft stock in February, just after the company’s fiscal second-quarter 2026 earnings sent shares tumbling (2). He continued buying during a stretch where Microsoft fell sharply on the year and well below its July 2025 all-time high.
Two concerns had spooked the market:
First, the adoption of a co-pilot. Microsoft has converted only about 15 million of its 450 million paid commercial Microsoft 365 seats into paid Copilot users. Independent research showed that Copilot’s market share fell from 18.8% in July 2025 to 11.5% in January 2026. That data led CEO Satya Nadella to reorganize the AI ​​division in March and sideline the AI ​​executive he paid $650 million to hire.
Second, the AI ​​capital spending bill. Microsoft will spend $190 billion on capital expenditures in 2026. Some investors think the math doesn’t work.
Ackman thinks they’re wrong on the capital spending part. Azure revenue grew 39% in constant currency last quarter. Microsoft’s AI business hit an annualized run rate of $37 billion, up 123% year-over-year (8). He called the $190 billion “a capital investment for growth that should drive future revenue generation” rather than a threat at the margin (2).
He also believes the market is undervaluing the flagship franchise. Microsoft 365 and Azure together generate approximately 70% of Microsoft’s total profits. M365’s monthly ARPU is around $20, less than half of what customers would pay for the underlying applications individually. Investors, he wrote, “underestimate the resilience of the M365 franchise given its deeply embedded role across the company and its highly attractive price-value proposition” (2).
Then there’s what’s at stake with OpenAI. Microsoft financially owns approximately 27% of OpenAI. In the most recent funding round, that equates to about $200 billion, or 7% of Microsoft’s market capitalization (2). Ackman says the stock price doesn’t reflect any of that.
Pershing earned about 21 times forward earnings. Ackman called it “broadly in line with the market multiple and well below Microsoft’s business average in recent years” (2).
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It is not a rebalancing
The Google side of the rotation is where the conviction shows.
Pershing owned more than 6.1 million Alphabet Inc. Class C shares at the end of 2025. By the end of the first quarter, that number had dropped to about 312,000 (6). A 95% cut, worth approximately $1.64 billion at end-of-quarter prices. Class A holdings fell from about 678,000 shares to 32,000 during the same period. The remaining position was fully liquidated in the second quarter, according to a person familiar with the portfolio cited by Reuters (6).
Pershing had owned Google for three years at an average cost of about $94 per share. Class C was near $392 on Friday that fell on 13F(7). That’s about four times Ackman’s base cost.
He invested the proceeds directly into Microsoft and then moved on to X the next morning to make clear that the sale was not a decision about Google’s prospects.
The conclusion for investors
Ackman zeroed out a three-year multibillion-dollar position in Google, acquired Microsoft at 21 times forward earnings and bet that the market has misvalued the business franchise in the face of its AI uncertainty. Gates’ sale, while reported on social media as a bearish signal, is something unique: a foundation funding $200 billion in donations. Selling Microsoft for that reason would be a mistake.
Ackman’s profession is one that has a thesis behind it. Copilot’s paid base represents about 3% of its addressable seats. That gap is what you are buying.
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Author’s Note: 13F filings are delayed data and do not constitute financial advice. I also do not currently own shares of Microsoft or Google.
Article sources
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Securities and Exchange Commission (1, 3); Bill Ackman on X (2, 4); Bill and Melinda Gates Foundation (5); Reuters (6); The balloon and the mail (7); microsoft (8)
This article originally appeared on Moneywise.com with the title: The Gates Foundation Sold All of Its Microsoft Stock. Bill Ackman is taking stock. What is Wall Street missing?
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