Hedge Fund TCI Nearly Sells Off $8 Billion Worth of Microsoft Holdings

According to a report from the British Financial Times, Christopher Hohn's hedge fund TCI nearly liquidated $8 billion worth of Microsoft holdings in the first quarter, reducing Microsoft's proportion in the portfolio from 10% at the end of last year to 1% at the end of March.

TCI has held Microsoft for a long time and has witnessed a near 400% increase in Microsoft's stock price over the past nine years. This reduction is more like a repricing of Microsoft's AI narrative. TCI has not completely exited large-cap tech stocks. Its Alphabet position increased from 3% to 5% in the first quarter, becoming the fund's largest tech holding.

Hohn stated in a letter to investors that the rapid development of AI is increasing the uncertainty of Microsoft's competitive position in the future. TCI's greatest concern is Office productivity software, as AI could change users' existing workflows and give birth to new productivity platforms.

Azure represents another pressure point. Azure's revenue growth accelerated in the first quarter of 2026, but after Microsoft disclosed that OpenAI accounted for over 40% of Azure's revenue backlog orders, some investors began to worry whether the growth of the cloud business is overly dependent on a single customer.

This makes Microsoft's AI narrative more complex. Microsoft was originally a significant beneficiary of Wall Street's AI deals, with investments in OpenAI helping its stock price gain support in recent years. The issue arises when AI can both strengthen cloud demand and possibly replace traditional software gateways, leading investors to reassess Microsoft's moat.

Microsoft's stock price fell by more than 1% on Friday, May 8th, and has noticeably retreated this year in 2026.