Billionaire Bill Gates Has 60% of His Foundation's $33 Billion Portfolio Invested in 3 Fantastic Stocks

The Gates Foundation equity portfolio highlights three top holdings: Berkshire Hathaway (22.5% of assets), Canadian National Railway (19.7%), and WM (17.8%). Berkshire has ~$720B in investable assets and continues portfolio reallocation (including a rapid increase in Alphabet), while CNI reported 11% YoY Q2 revenue growth and generated C$1.8B FCF in H1, with C$2.8B planned shareholder returns and C$1.3B already repurchased in 2026. WM improved adjusted operating margin by 40 bps YoY and CFO rose 12%, while trade/tariff uncertainty and valuation concerns (e.g., CNI at ~30x FCF) suggest investors may want a better entry point despite solid fundamentals.

Analysis

The portfolio mix reads like a quality factor expression, not a charity-specific signal: cash-rich franchises with pricing power, tangible asset scarcity, and large buyback capacity. That matters because in a slower growth / higher-for-longer regime, the market is willing to pay up for self-funding compounding, but only when the entry multiple is not already pricing perfection. Among the three, the most durable support is WM: landfill scarcity creates an embedded inflation hedge, and incremental M&A can be accretive because the competitive barrier is regulatory, not capital intensity.

CNI is the most vulnerable to a second-order reset. Rail volumes often look fine until trade friction hits inventory cycles; then the earnings hit shows up with a lag and is amplified by operating leverage. At a rich cash-flow multiple, even modest volume deceleration or a less favorable tariff headline path can compress the stock faster than fundamentals deteriorate, making it a cleaner short than a pure cyclical industrial because the rerating risk is asymmetric.

BRK.B remains a capital-allocation story more than an operating one. The hidden catalyst is not growth, but the combination of excess liquidity and repurchases: if buybacks continue while the stock stays rangebound, intrinsic value accretes quietly and downside should be shallow versus the market. Contrarian take: the article implicitly rewards “boring,” but if rates fall sharply or risk appetite improves, these defensives can lag; the best entry is on weakness, not on perceived endorsement from a prominent holder.

Key Decisions for Investors

• Long WM on pullbacks over the next 1-3 months; expect low-teens downside protection and mid-single-digit relative upside versus defensives if pricing and M&A discipline hold. Falsify if EV/EBITDA expands materially above ~14.5x without a corresponding acceleration in cash flow.
• Short CNI against UNP or CP for a 1-3 month relative-value trade; CNI carries higher policy beta and richer valuation, so a tariff or trade-negotiation setback should hit it harder. Exit if cross-border freight data re-accelerate or trade rhetoric de-escalates cleanly.
• Accumulate BRK.B on weakness for a 6-12 month horizon; the risk/reward is driven by buyback compounding and balance-sheet optionality, not immediate earnings momentum. Thesis weakens if repurchase pace slows materially or operating earnings begin to roll over.
• Use WM as the lower-volatility long leg versus a broad market ETF if seeking defensive exposure; this isolates pricing-power cash generation from macro beta. Stop if waste volumes soften or landfill pricing loses discipline in the next two quarters.