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Just For You
Ackman and Berkshire Are Betting Against Each Other on AISubmitted by Leo Miller. Originally Published: 5/19/2026. 
Key Points
- Bill Ackman's Pershing Square and Berkshire Hathaway both shook up their AI hyperscaler investment in a big way during Q1.
- The biggest divergence was around Alphabet, with one firm drastically lowering its stake while another more than tripled its position.
- Ackman also made a case for a huge name that has fallen out of favor: Microsoft.
- Special Report: Elon Musk: This Could Turn $100 into $100,000
Pershing Square Capital Management (NYSE: PS), headed by Bill Ackman, has become one of the key investment funds investors watch closely. Pershing is vastly smaller than Berkshire Hathaway (NYSE: BRK.B) in terms of assets. The firm ended Q1 2026 with around $13.7 billion in public equity investments, just a fraction of Berkshire’s $263 billion. Furthermore, Berkshire has around $397 billion in cash sitting on the sidelines.
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However, the firms have similarities in that both drive significant stock market discourse. Interestingly, during Q1 2026 they made several moves that were in direct opposition to one another when it comes to artificial intelligence (AI). Pershing Cuts Google Stake Sharply as Berkshire BuysOne of the most interesting parts of Pershing’s Q1 2026 13F filing is the contrast in its hyperscaler investments compared with Berkshire Hathaway. Notably, Berkshire more than tripled the number of Alphabet’s (NASDAQ: GOOGL) Class A shares it held. It also bought more than $1 billion worth of Alphabet’s Class C shares (ticker symbol GOOG). Pershing did essentially the exact opposite. It reduced its stake in both Alphabet’s Class A and Class C shares by 95%, representing nearly a complete exit. Overall, Alphabet now represents less than 1% of Pershing's portfolio, compared with more than 6% of Berkshire's. This marks a very clear divergence between two of the world’s highest-profile asset managers. Still, it is worth noting that Pershing has been invested in Alphabet since Q1 2023, generating significant returns. Meanwhile, Berkshire joined the party much later, not investing in Alphabet until Q3 2025. Thus, Pershing participated in much more of Alphabet’s more than 200% run from the end of 2022 to the end of Q1 2026. However, Berkshire’s decision is looking like a good one lately, with Alphabet shares up more than 35% since the end of Q1 2026. Despite selling Alphabet, Bill Ackman stated that he still has a very positive outlook on the stock. “To be clear, our sale of $GOOG was not a bet against the company. We are very bullish long-term on Alphabet. But at current valuations and in light of our finite capital base, we used $GOOG as a source of funds for $MSFT.” Pershing Gets in on Microsoft; Ackman Rejects Bearish NarrativesAs Ackman’s post notes, the company used funds from selling Alphabet to buy Microsoft (NASDAQ: MSFT). Notably, Microsoft was the only new holding in Pershing’s 13F. Pershing invested nearly $2.1 billion in Microsoft, making the position equal to 15.7% of the portfolio at the end of the quarter. Meanwhile, Berkshire does not have an allocation to Microsoft. Ackman provided a lengthy explanation of Pershing’s Microsoft investment on X. In Q1, Microsoft shares fell as much as 26%. Ackman noted that Pershing believes the recent weakness in Microsoft shares is due to two factors. First is the competitive positioning of the Microsoft 365 software suite as AI labs gain momentum. Second is the durability of growth in Microsoft’s cloud segment, Azure. Pushing back against these narratives, Ackman said, “In our view, investors underestimate the resilience of the M365 franchise given its deeply embedded role across enterprises and highly attractive price-value proposition. Unlike point software solutions, which may be vulnerable to disintermediation by better-performing AI alternatives, M365 is tightly integrated into the daily workflow of nearly every large enterprise and is supported by Microsoft's identity, security, compliance, and data governance infrastructure, which would be nearly impossible to replicate." In regard to Azure, Ackman said, “We believe concerns regarding Azure's growth trajectory are similarly misplaced, particularly in light of the franchise's exceptional recent performance. Azure revenue grew 39% in constant currency last quarter, with the company guiding to modest acceleration through the second half of the year." Pershing Increases Amazon Stake Significantly as Valuation FallsThe big divergences don’t end there. Pershing also increased its shares held in Amazon.com (NASDAQ: AMZN) by 19%. Meanwhile, Berkshire completely sold out of its position. Amazon is now Pershing’s second-largest holding, worth nearly $2.4 billion and representing 17.4% of the portfolio. Valuation appears to be a clear sticking point in Pershing’s decisions. Alphabet and Amazon both trade at a forward price-to-earnings (P/E) ratio near 30x. That is well above Alphabet’s average forward P/E over the past three years, near 23x, but far below Amazon’s average near 40x. Meanwhile, at nearly 25x, Microsoft’s forward P/E is also well below its three-year average of around 32x. Pershing also maintained the vast majority of its position in Meta Platforms (NASDAQ: META), reducing its shares held by less than 1%. Similar to Microsoft, Pershing previously provided a lot of rationale for its Meta investment earlier this year. Pershing Buys Depressed Hyperscalers, Berkshire Goes All-In on AlphabetAckman’s post related to Alphabet indicates that he does not believe Berkshire is making the wrong decision in allocating more to the company. Rather, Pershing sees better opportunities in the market, especially in light of its smaller asset base. Pershing appears to be taking more of a “value” approach to hyperscaler investing through Amazon, Microsoft, and Meta. Meanwhile, Berkshire is doubling down on Google, a name trading near its all-time highs. That is interesting, considering that value investing is often seen as Berkshire’s M.O. |
