7.7 million shares sold entirely, Bill & Melinda Gates Foundation liquidates Microsoft holdings

Another well-known foundation has liquidated its Microsoft holdings.

According to the latest filings with the U.S. Securities and Exchange Commission (SEC), in the first quarter of 2026 the Gates Foundation Trust sold all of its remaining 7.7 million shares of Microsoft, raising approximately $3.2 billion in cash. As a result, this fund—managed under Bill Gates as the sole trustee and entrusted to Cascade Asset Management—no longer holds any Microsoft shares.

Just one year ago, the trust still held 28.5 million shares of Microsoft, valued at about $10.7 billion, accounting for 26% of the fund’s total assets. From 28.5 million shares to zero took less than a year.

The news was first disclosed by Barron’s on May 15. The Gates Foundation redirected media inquiries to Cascade Asset Management, which declined to comment, and Microsoft also did not respond.

It is worth noting that Bill Gates himself still holds about 103 million shares of Microsoft, valued at roughly $43 billion, and his personal holdings have not changed. The liquidation is by the foundation—not by Gates personally.

Why sell? Perhaps not because of a bearish outlook

On the surface, it sounds like a major bearish signal that the philanthropic foundation of Microsoft’s co-founder has liquidated its Microsoft holdings. But according to market analysis, the actual logic is far more subdued.

There are three reasons:

First, concentration risk. The primary responsibility of a charitable foundation is to fund charitable projects, not to bet on a single stock. Even if the stock is of a company you personally founded, over-concentration is still risky.

Second, liquidity needs. The Gates Foundation needs to allocate hundreds of billions of dollars in charitable funding outward every year. Holding one stock—even if it is of the highest quality—cannot efficiently meet the ongoing cash-outflow needs.

Third, the foundation has a clear “termination date.” Gates announced last year that the foundation would complete its mission and close within 20 years, at which point all assets would be used for charitable spending. This means the foundation itself is already in a systematic process of realizing assets; liquidating Microsoft is part of that plan, rather than a temporary decision.

The analysis points out that this move looks more like an asset allocation exercise by a portfolio manager than a founder expressing pessimism about the company.

Microsoft stock is becoming a “battlefield” for top investors—some liquidate, others bargain for bargains

In the same period when the Gates Foundation liquidated its holdings, Microsoft stock has been going through a rare public showdown among top investors.

Sir Christopher Hohn, founder of the well-known UK hedge fund TCI, nearly completely liquidated Microsoft, reducing his holdings from about 10% to roughly 1%—about $8 billion in value.

TCI has held Microsoft since Q4 2017. During that time, Microsoft’s share price rose nearly 400% in total, bringing TCI substantial gains. This sell-off marks the substantive end of nearly a decade-long investment relationship.

In a letter to investors, Hohn clearly expressed concerns: the rapid evolution of AI may create a new generation of productivity platforms, undermining Microsoft Office’s long-standing market dominance; meanwhile, he also described the growth outlook for Azure as involving “a certain degree of risk.”

While reducing its Microsoft holdings, TCI increased its stake in Google’s parent company Alphabet from 3% to 5%, making it the fund’s largest technology holding at present. This rebalancing action makes TCI’s judgment clear: within the technology sector, the shift is from Microsoft to Google.

In sharp contrast to Hohn’s direction, Bill Ackman of the U.S. hedge fund Pershing Square announced that it has built a new core Microsoft position of about $2.4 billion, and disclosed it in its 13F filing.

Ackman posted on the X platform, directly responding to Hohn, saying that he was “wrong.”

His build-up logic centers on three points:

First, the moat of M365 is “almost impossible to replicate.” The suite currently has more than 450 million active users, and Word, Excel, PowerPoint, Outlook, and Teams have been deeply embedded in the day-to-day workflows of almost all large enterprises. He also cited the bundled pricing advantage: M365 charges an average of about $20 per user per month, less than half the cost that users would incur if they purchased similar tools separately from distributed vendors.

Second, Azure has strong growth, but there are concerns about “misalignment.” Ackman cited that Azure’s last quarter’s revenue growth was 39% on a constant-currency basis, and pointed out that Microsoft has raised its 2026 full-year capital expenditure budget to about $190 billion, with roughly two-thirds directly related to recent revenues.

Third, the valuation is undervalued. Ackman noted that Microsoft’s share of OpenAI’s economic interests is about 27%, and based on OpenAI’s latest round of funding valuation it is equivalent to about $200 billion, representing 7% of Microsoft’s market capitalization. However, this is not yet reflected in the roughly 21x forward P/E ratio—while this valuation level is broadly in line with the overall market, it is far below Microsoft’s historical average in recent years.

In response to the market’s negative interpretation that Microsoft is giving up exclusive rights to sell OpenAI models, Ackman offered a different view: this is not a concession to OpenAI, but an active transition to “a more open multi-model architecture,” which is more beneficial for enterprise customers that need flexible deployment across multiple models. He cited data showing that more than 10,000 enterprise customers are already using more than one model on Azure Foundry.

AI—Is it Microsoft’s “threat” or “engine”?

As mentioned in an article from Wall Street Seen, the fundamental disagreement between Hohn and Ackman lies in their completely different views on the relationship between AI and the existing software ecosystem.

Hohn takes a “disruptor” stance: AI will create entirely new entry points to productivity, thereby eroding the user barriers that Microsoft Office has built up over decades.

Ackman takes a “strengthener” stance: AI will embed incremental features into existing platforms, and with Copilot’s deep integration and Microsoft’s transition to a multi-model architecture for Azure, Microsoft will become one of the largest enterprise beneficiaries of the AI wave.

This public standoff has had a direct impact on the market. According to Wall Street Seen, in the week of May 16, Microsoft closed up 3.05%, while Alphabet A shares—which Ackman also said he reduced—closed down 1.07%.

However, Microsoft’s stock price is still down more than 15% year-to-date, and market doubts about whether its massive AI spending can be converted into commercial returns have not disappeared.

Risk warning and disclaimer

There are risks in the market; invest with caution. This article does not constitute personal investment advice, and it does not consider any individual users’ special investment objectives, financial conditions, or needs. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. You bear responsibility for making investments based on this.