Ackman Builds $2.1 Billion Stake in Microsoft Amid P/E Ratio Rebound

Billionaire hedge fund manager Bill Ackman has built a $2.1 billion stake in Microsoft through his firm, Pershing Square Capital Management.

The investment was made earlier this year when Microsoft stock was trading at a price-to-earnings ratio of 21, the lowest it had been since 2017 and some 32% below Microsoft's average P/E ratio of 31.

Ackman wrote in an X post that Microsoft offered a 'highly compelling valuation' due to its two valuable franchises in enterprise technology: M365 and Azure, which account for approximately 70% of the company's overall profits.