For nearly a decade, hedge fund TCI has been a loyal Microsoft shareholder, putting a tenth of its portfolio in the company. Now, however, the institution has decided to take a drastic step, divesting a stake worth around $8 billion. The stake in the Redmond giant now represents less than one per cent of the fund’s assets. The reason for this sudden evacuation relates to technology, which in the eyes of the market was supposed to be the company’s greatest asset.
TCI’s managers explain that the exit is the result of concerns about the impact of artificial intelligence on Microsoft’s long-term market position. Rapid advances in this field introduce uncertainty and threaten the fundamentals of the business, including the dominance of Office software. In the investor’s view, the new wave of intelligent tools could lead to strong competing Office platforms. The fund also sees a growing risk to Azure’s flagship cloud business.
The fund’s decision contrasts sharply with Microsoft’s recent exceptionally strong financial results for the first quarter of 2026. The company reported revenue growth of 18 per cent to nearly $83 billion, while net income jumped 23 per cent to nearly $32 billion. The Azure service itself grew by as much as 40 per cent, while the commercial and consumer versions of the Microsoft 365 platform reported increases of 19 per cent and 33 per cent respectively.
Microsoft is looking to the future with optimism, forecasting for the current quarter that Azure’s growth rate will remain around 40 per cent and accelerate slightly in the second half of 2026. Despite these hard, positive financial figures, TCI’s move sends a signal to investors that the tech giants’ market moats may prove to be much more fragile than commonly assumed.
