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Below are the reasons the prominent investor and his companies are making that bet:
M365 and Azure businesses: Ackman pointed to the Microsoft 365 productivity suite and the Azure cloud service, describing them as “two of the most valuable franchises in enterprise technology.” Both account for about 70% of the tech giant’s revenue, he pointed out. He believes investors are underestimating the resilience of the M365 franchise, pointing out that they are integrated into the daily workflow of almost all large business organizations.
Other portfolio businesses: Outside M365 and Azure, Microsoft also owns the professional networking platform LinkedIn, gaming platforms Xbox and Activision Blizzard, and Bing and Edge browsers for search and news advertising.
Valuation and OpenAI: The Pershing Square CEO noted that Microsoft’s market value does not reflect its 27% stake in OpenAI, which could fetch Microsoft about $200 billion, or 7% of its market capitalization, based on the startup’s latest valuation. He sees Microsoft’s recent reset of its ties with OpenAI as “a deliberate pivot” to open up more AI models to its enterprise customers.
