Brind.
Part of The financial stakes in AI companies like OpenAI and Anthropic are impacting the operating income of major players like Microsoft, while Amazon benefits from its AI investments.

How could Microsoft excluding OpenAI investments affect Bill Ackman's holdings?

Possible What happens if… A possibility worth considering, not a forecast.

Microsoft's earnings exclusion may shift valuation for Bill Ackman When Microsoft reports its fiscal first quarter of 2027, it excludes the effect of its investments in OpenAI from its Non-GAAP (adjusted) earnings per share. This adjustment changes the key metric used by investors to value the company. Since Bill Ackman holds a significant equity stake in Microsoft, any shift in the company's valuation, driven by the market's interpretation of these adjusted earnings, directly impacts the value of his investment. The market's reaction to the reported figures versus the adjusted figures will determine whether the change is positive or negative for his holdings.

Reported by 1 independent outlet Written Oct 25
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How it reaches Bill Ackman

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Tap any step to see the evidence behind it.

The facts so far

As reported. Each one links to where it comes from.

  • Microsoft's revenue grew 18% to $331.8 billion in fiscal 2026.fool.com
  • Non-GAAP (adjusted) earnings per share, stripping out OpenAI investments, increased 22% to $17.28.fool.com
  • Reported earnings per share for fiscal 2026 were $17.95.fool.com
  • Management forecasts operating income growth of around 14% to 17% for the September quarter.fool.com

Why it matters

Bill Ackman is a major investor in Microsoft, and the value of his significant equity stake is tied directly to the company's market valuation. The way Microsoft reports its earnings—specifically whether it includes or excludes the financial impact of its massive investments in AI firms like OpenAI—is a critical factor in how the market prices the company's future growth and stability.

The AI sector is central to Microsoft's strategy, and the investments in OpenAI are seen as key drivers of its future revenue. By adjusting earnings to exclude these investments, Microsoft is providing a view of the company's core operational performance, but this choice can lead to different market interpretations regarding the company's true growth trajectory and risk profile.

What we don't know yet

  • How will the market react to the difference between the reported and adjusted earnings per share?
  • How will Microsoft's future capital spending plans affect its free cash flow?

Is this still moving?

Gone quiet Reached 2 outlets in its first 24 hours
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What would change this answer

The market reacts positively to the adjusted earnings figuresThis would suggest investors view the core business performance favorably, potentially increasing the value of Bill Ackman's stake.
Microsoft provides weaker guidance on Azure's growthThis would raise concerns about the company's primary revenue stream, likely leading to a decrease in the valuation of Bill Ackman's holdings.

Who else could feel it

Other possible ripples from the same event.

Reporting

Keep going

The full eventMicrosoft Earnings Exclude OpenAI Investment Impact in Q1 2027 Everything aboutBill Ackman

Brind's analysis is written by AI from the reporting linked above and can be wrong. This explainer is a possibility worth considering, not a forecast: steps marked as Brind's reasoning are not stated in the reporting. It is not investment advice; do your own research.