U.S. billionaire hedge fund managers Bill Ackman and Daniel Loeb took opposing investment approaches to Microsoft and Alphabet in the first quarter, a report showed. Differing views on expanding artificial intelligence investment have led to portfolio changes at major hedge funds, an analysis said.

Cryptopolitan, a blockchain media outlet, reported on May 16 that Ackman’s Pershing Square Capital Management added Microsoft as a new holding in the first quarter. Loeb’s Third Point sold its entire existing Microsoft stake.

Securities and Exchange Commission filings showed Pershing Square held about 5.65 million Microsoft shares at the end of the first quarter. The stake was valued at about $2.09 billion and accounted for about 5.3 percent of its U.S.-listed equity portfolio. Microsoft quickly became one of Pershing Square’s core holdings.

Ackman said on social media platform X, formerly known as Twitter, that Pershing Square began buying Microsoft in February. He said he saw the meaningful share-price drop after the company’s fiscal 2026 second-quarter earnings report as a buying opportunity.

Ackman said, "We started building the position after the company had a sharp pullback following its earnings release." He added, "We were able to build the position at a forward price-to-earnings ratio of about 21 times, which is similar to the market average but below Microsoft’s average trading multiple over the past several years."

Third Point, by contrast, sold all of its Microsoft stake that it had held since late 2022 during the first quarter. It instead bought an additional about 175,000 Alphabet shares. Pershing Square sharply reduced its Alphabet weighting over the same period and later sold all of the remaining shares, the report showed.

An analysis said the diverging investment directions reflect differing views on expanding AI spending.

Ackman placed more weight on strengthening long-term competitiveness than on near-term cost pressures from Microsoft’s large AI infrastructure investment. He argued that "Microsoft’s surface-level earnings multiple does not fully reflect the value of about a 27 percent economic stake in OpenAI." He also said, "Microsoft 365 and Azure are the two most valuable franchises in enterprise technology."

Microsoft plans capital expenditure of about $190 billion this year. Spending has accelerated sharply as it expands data centres and AI infrastructure. Ackman effectively viewed the outlays as closer to broadening a long-term growth base than to eroding near-term profitability.

Loeb did not give a detailed explanation for selling Microsoft in full and increasing Alphabet exposure. The market has interpreted Third Point’s move as a sign that stock selection within big tech is becoming more pronounced, the report said.

It also suggests that even within the so-called Magnificent Seven, which had previously moved together, views are beginning to diverge on the burden of AI investment and valuations.

The two funds also added Meta Platforms shares as new holdings in the first quarter. They maintained interest in large technology stocks overall, while sharply differentiating weightings based on the investment appeal of individual companies such as Microsoft and Alphabet.

The market has assessed the disclosures as showing that hedge funds are not approaching big tech as a single bundle during the spread of AI, the report said. Pershing Square bet on Microsoft on the strength of its enterprise software and cloud infrastructure competitiveness, while Third Point is interpreted as judging that Alphabet has greater upside at current price levels.