Bill Ackman's Alphabet Sale Has Cost $641 Million — Will His New Mag 7 Pick Save The Trade?
Legendary investor Bill Ackman has been buying up Magnificent Seven stocks in recent years, adding the likes of Amazon.com Inc (NASDAQ:AMZN), Alphabet Inc (NASDAQ:GOOG)(NASDAQ:GOOGL) and Meta Platforms (NASDAQ:META) to the Pershing Square portfolio, which is tracked by Pershing Square USA (NYSE:PSUS).
A new bet on Microsoft Corporation (NASDAQ:MSFT) in the first quarter came at the expense of Alphabet shares, a move that has so far wiped out potential profits for investors.
Ackman's Microsoft for Alphabet Swap
In the first quarter, Ackman bought 5,654,078 shares of Microsoft, making the stock the fourth largest holding in the Pershing Square portfolio at the end of the quarter.
The Magnificent Seven positions at the end of the first quarter were the following:
- Amazon.com: 2nd largest holding, 17% of assets
- Microsoft: 4th largest holding, 15% of assets
- Meta: 6th largest holding, 11% of assets
- Alphabet Class C (GOOG): 9th largest holding, 0.7% of assets
- Alphabet Class A (GOOGL): 11th largest holding, 0.1% of assets
In the first quarter, Ackman sold off 95% of holdings in each of Alphabet Class A and Class C shares. This continued a selling pattern in the stock, dating back several quarters.
Pershing Square sold 5,852,145 GOOG shares and 645,921 GOOGL shares in the quarter, according to data from 13Finfo. Those shares have gained significantly since the end of the quarter. Here are the missed gains:
- GOOG: $576,026,632.35
- GOOGL: $65,373,664.41
- Total: $641,400,296.76
That's just the gains missed by selling in the first quarter until May 19, 2026.
Taking things back even further, Pershing Square likely missed out on significant profits along the way by selling Alphabet shares in the first quarter of 2025, third quarter of 2025 and fourth quarter of 2025.
For comparison, the new position in Microsoft is up since the end of the first quarter, helping to offset the missed gains. The Microsoft position has gained $271.8 million since the end of the first quarter, which is great but not enough to offset Alphabet’s missed profits yet.
Ackman Believes in Microsoft
Ackman announced the Microsoft purchase shortly before the 13F filing, which revealed the exact size.
While the purchase price is unknown, Ackman said the purchases began in February as shares declined after the second-quarter financial results.
Microsoft stock traded between $381.71 and $430.74 in February.
Ackman said the purchases were made when Microsoft stock was trading at around 21 times forward earnings estimates, below the company’s historical trading average in recent years.
Today, Microsoft shares trade at $418.24, likely up from Ackman's average buying price.
The investor highlighted Microsoft's ownership of several core assets and other items, including a stake in OpenAI that could be undervalued by investors. Ackman said the 27% ownership of OpenAI could be worth $200 billion.
“Microsoft operates two of the most valuable franchises in enterprise technology, which account for approximately 70% of the company’s overall profits: M365 and Azure," Ackman said.
Ackman highlighted the large customer base of 450 million people that use Word, Excel, PowerPoint, Outlook and Teams on a daily basis, all units of M365. For Azure, Ackman said the unit is the world’s second-largest hyperscaler cloud platform, trailing only Amazon.com’s AWS.
Time will tell if Microsoft stock can outperform Alphabet from the time of Ackman's purchase, but investors will be watching closely.
Image created using artificial intelligence via Midjourney.