Microsoft's $37B AI Run Rate Masks a Tale of Two Investors and a Revamped OpenAI Pact

Microsoft's AI business surges 123% to $37B run rate, but stock lags. Bill Ackman invests $2.3B as Gates Foundation sells all shares, citing endowment spending goals.

The numbers tell a story of accelerating momentum: Microsoft's artificial intelligence business has breached an annualized revenue run rate of $37 billion — a 123% surge from a year earlier. Azure itself expanded by 40%. Yet for all that operational strength, the stock has spent much of 2026 in retreat, creating the kind of valuation gap that has drawn in a prominent hedge fund manager even as one of the world's most famous charitable trusts walks away entirely.

The Bill & Melinda Gates Foundation offloaded its final 7.7 million Microsoft shares during the first quarter, a stake worth roughly $3.2 billion. The disposal capped a steady unwinding: the trust held about 28.5 million shares at the start of 2025 — then representing roughly 26% of its portfolio — and had pared that to 7.7 million by year-end before the complete exit. The move stems not from any bearish view on the software giant but from the foundation's publicly stated goal of spending its entire endowment on philanthropic causes by 2045 and then shutting down. The shares were never bought on the open market; Bill Gates donated them from his personal holdings over many years.

On virtually the same day the Gates sale came to light, Bill Ackman's Pershing Square revealed it had built a new position of 5.6 million Microsoft shares worth about $2.3 billion. Ackman began accumulating the stock in February, after a post-earnings selloff pushed the valuation down to roughly 21 times forward earnings — a level he considers "highly attractive" and well below historical norms. In his view, the market's worries about Microsoft's AI positioning and decelerating Azure growth are overdone; the stability of Microsoft 365 subscriptions and the rising demand for AI inference workloads on Azure, he argues, provide a durable growth base. He is not alone. Weitz Investment Management, Dodge & Cox, and Generation Investment Management have all added to their Microsoft holdings in recent weeks.

The improving economics of the OpenAI partnership give those bulls further ammunition. Under a revised commercial agreement, Microsoft expects to receive roughly $6 billion in payments during calendar 2026, up from the $4 billion previously anticipated. The deal also locks in access to OpenAI's intellectual property and models through 2032. While OpenAI now has more latitude to use cloud capacity from Amazon Web Services or Google Cloud, Microsoft retains a crucial first-mover advantage: OpenAI products must launch on Azure before they become available anywhere else. Wedbush analyst Dan Ives, who rates the stock at Outperform with a $575 target, describes the new terms as an unambiguous net positive. TD Cowen is similarly constructive at $540, though it cautions that Azure's near-term growth is being crimped by capacity constraints.

The company's third fiscal quarter of 2026 underscored both the promise and the challenge. Revenue climbed 18% year over year to $82.9 billion, but the stock has failed to reflect that trajectory. Shares closed Friday at €362.95, a gain of 3.4% on the day but still down roughly 10% since the start of the year. The gap to the 52-week high of €467.45 stands at more than 22%, a chasm that reflects persistent unease over the massive capital spending required to sustain the AI buildout.

Microsoft is also reshaping its internal structure to channel more resources into that effort. LinkedIn plans to cut about 875 roles — roughly 5% of its workforce — across technology, product, and marketing. The reduction is part of a broader reallocation toward AI infrastructure and automation. On the security front, the company's internal MDASH system has flagged 16 previously unknown Windows vulnerabilities, including four critical remote-code-execution holes, all patched in the latest Patch Tuesday update. A private beta of the tool for enterprise customers is set to begin in June.

Technically, the stock has improved in the short term. It now trades comfortably above its 50-day moving average of €342.82, though it remains below the 200-day line at €396.86. The relative strength index sits at 66.4, indicating a firmer tone without yet signaling a definitive breakout. The next major test arrives in the second half of the calendar year, when TD Cowen expects Azure growth to accelerate as additional capacity comes online. If that materializes, Ackman's valuation thesis and the improved OpenAI terms will have operating results to back them up. If Azure remains capacity-limited, the pressure to show a return on the billions poured into data centers and chips will only intensify.

For income-focused shareholders, a more immediate date looms: the ex-dividend day for the quarterly payout of $0.91 per share falls on May 21, 2026. Microsoft has raised its dividend for 21 consecutive years, and with a payout ratio just below 21%, there is ample room for further increases — provided the AI investment cycle eventually delivers the growth the market is waiting for.