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

The Gates Foundation’s U.S. stock portfolio is about $33B, with its three largest equity positions in Berkshire Hathaway (22.5% of assets), Canadian National Railway (19.7%) and WM (17.8%). Berkshire showed underwriting income up ~4.5% YoY and operating margin rising from 29.7% to 30.8% (+110 bps), while Canadian National reported Q2 revenue up 11% YoY and generated C$1.8B of free cash flow in H1, with C$2.8B planned for shareholder returns (C$1.3B repurchased in 2026) alongside raised full-year EPS guidance. WM posted adjusted operating margin up 40 bps YoY last quarter and cash flow from operations up 12%, supported by landfill/regulatory moats and a buy-then-refocus strategy that improves cash generation.

Analysis

This is less a growth call than a signal that capital is still chasing durable cash conversion and balance-sheet resilience. The market implication is that in a late-cycle tape, the relative winners are the names that can self-fund buybacks and dividends without relying on multiple expansion; the losers are capital-intensive cyclicals whose valuation leaves little room for volume disappointment.

BRK.B remains the cleanest expression of that preference. The key setup is not operating growth but optionality: elevated cash yields and recurring repurchases create a valuation floor, while any meaningful acquisition would re-rate the stock faster than incremental insurance improvement. The risk is that the cash pile becomes a drag if equities keep outperforming and management stays inert; the falsifier is a sustained slowdown in buybacks or underwriting deterioration that removes the low-vol premium.

CNI is the most exposed to a second-order trade-war slowdown: even if price/mix holds, freight mix deterioration can still compress incremental margins and punish a premium FCF multiple. That makes it vulnerable over the next 1-3 months if industrial data weakens or U.S.-Canada negotiations sour further. By contrast, WM has the strongest structural setup: landfill scarcity supports pricing power, and M&A can bolt on growth without materially increasing competitive intensity, so the real risk is only multiple compression if rates stay high longer than expected.

The contrarian point is that this basket is not obviously underfollowed; it is crowded quality. The consensus is probably underestimating how little upside remains for a 30x FCF railroad versus a mid-teens EV/EBITDA waste name with similar defensiveness. In other words, the trade is not 'buy everything Berkshire likes' but 'own the moat with the cheapest path to compounding and avoid the one already priced for perfection.'

Key Decisions for Investors

• Long WM / short CNI for a 3-6 month relative-value trade: prefer the business with structural pricing power and lower valuation over the one whose multiple leaves no room for trade-related volume misses.
• Accumulate BRK.B on weakness over the next 1-2 quarters as a defensive compounder; the risk/reward is skewed by buyback support and cash carry, with the thesis invalidated if repurchases slow materially.
• If you need a low-beta quality hedge, use BRK.B as the long leg against cyclicals or rate-sensitive industrials rather than paying up for outright equity beta.
• Treat CNI as a watchlist short only on confirmation of trade-related volume deterioration or a guidance reset; do not short simply on valuation without a catalyst.
• Use pullbacks in WM to add; over 6-18 months the moat should keep returns steady, but upside is likely mid-single-digit rather than re-rating-driven, so size accordingly.