Bill Ackman Sold Alphabet to Buy an AI Stock Down Roughly 20% From Its High. Was That the Right Call?

Bill Ackman's Pershing Square completely exited its Alphabet position to increase its stake in Microsoft during mid-2026. Microsoft, which had fallen ~20% from its highs due to enterprise software sector concerns and OpenAI-related uncertainties, was trading at a lower valuation (low 20s P/E) compared to Alphabet (low 30s P/E). The trade has paid off so far, with Microsoft up 26% and near all-time highs, while Alphabet is down 15%. However, both companies remain solid long-term investments with strong fundamentals.