Billionaire Bill Gates Has 67% of His Foundation's $45 Billion Portfolio Invested in 3 Marvelous Stocks

The Gates Foundation Trust's highly concentrated equity portfolio, influenced by Bill Gates and Warren Buffett, allocates over two-thirds of its capital to three 'wide moat' companies. Microsoft, its largest holding (33%, $14.8B), exhibits robust growth driven by AI-fueled Azure (up 34%) and enterprise software, with EPS climbing 24%, presenting an attractive valuation at 34x earnings. Berkshire Hathaway (17%, $7.9B) remains a core holding despite recent leadership transitions and a substantial $344 billion cash reserve. Waste Management (17%, $7.5B) provides consistent organic growth (5.4% last quarter) and strong margins, underpinned by its dominant industry position and fair 15x forward EBITDA valuation.

Analysis

The Gates Foundation Trust's equity portfolio is highly concentrated, with over two-thirds of its value allocated to Microsoft (MSFT), Berkshire Hathaway (BRK.B), and Waste Management (WM), reflecting a strategy focused on companies with wide economic moats. Microsoft, constituting 33% of the portfolio at $14.8 billion, is experiencing significant growth driven by artificial intelligence. Its Azure cloud division grew 34% over the past year, contributing to an overall company revenue acceleration of 18% and a 24% increase in earnings per share last quarter. Despite this performance, its valuation at 34 times forward earnings is presented as attractive. In contrast, Berkshire Hathaway, a 17% holding valued at $7.9 billion, faces headwinds from the upcoming CEO transition and normalizing insurance results. Management's cautious stance is evident from its 11 consecutive quarters as a net seller of stocks and a record $344 billion cash balance, signaling a perceived lack of attractive investment opportunities. The company has also paused share buybacks as its stock trades near 1.5 times book value. Waste Management, also a 17% holding at $7.5 billion, provides stable, defensive growth. The company reported 5.4% organic revenue growth and maintained a strong EBITDA margin of 29.9% even after acquiring the lower-margin Stericycle business. Its dominant position, supported by high barriers to entry, is coupled with a valuation of 15 times forward EBITDA, which is noted as being lower than its main competitors.

Key Decisions for Investors

• Investors could view Microsoft's valuation of 34 times forward earnings as a reasonable entry point, given its accelerating revenue, 24% EPS growth, and dominant position in the high-growth AI and cloud computing sectors.
• Caution is warranted for Berkshire Hathaway due to management's reluctance to deploy its $344 billion cash hoard and the halt in buybacks, signaling that leadership finds neither external equities nor its own stock attractively priced; a drop below the 1.5x book value multiple could be a key signal for a potential re-entry.
• Waste Management offers a compelling defensive investment case, characterized by steady organic growth, strong margins, a formidable competitive moat, and a valuation that is favorable relative to its peers.
• The portfolio's structure suggests that a highly concentrated, long-term strategy in companies with significant competitive advantages can be effective, though it requires high conviction and tolerance for unsystematic risk.