Bill Gates’ Investment Strategy: Insights from His Trust Holdings
Bill Gates is a name that resonates throughout the technology industry. Best known as the co-founder and former CEO of Microsoft (NASDAQ: MSFT), Gates dedicated over 25 years to leading the company before shifting his focus to philanthropy. As of now, his net worth stands at $104.8 billion, according to Forbes, ranking him as the 13th richest person globally. Notably, Gates has committed to directing “the vast majority of my wealth toward helping as many people as possible.”
To realize this vision, he established the Bill & Melinda Gates Foundation Trust. The foundation’s mission is “to create a world where every person has the opportunity to live a healthy, productive life,” as stated on its website. By the end of 2023, the foundation had allocated $77.6 billion to combat major global challenges.
As of the last quarter, the Trust holds stakes in 24 different stocks, with 80% of its value concentrated in just four key investments.
Image source: Getty Images.
1. Microsoft: 27% of Holdings
It comes as no surprise that Microsoft ranks as Gates’ largest investment. The Trust holds around 39 million shares of Microsoft, valued at approximately $12.4 billion. Microsoft’s prominence in his portfolio stems from its diverse revenue streams, notably in browsers, software, operating systems, and it being the world’s second-largest cloud infrastructure provider with 20% of the market share. Furthermore, Microsoft is heavily invested in artificial intelligence, connecting directly to its cloud services growth. Analysts anticipate that AI offerings could generate an additional $143 billion in revenue by 2027.
Since 2004, Microsoft has consistently paid dividends, which have increased annually since 2011. Although the current yield stands at 0.8%, the stock has appreciated by 190% over the past five years. With a modest payout ratio of 25%, additional dividend increases seem likely. This multi-faceted growth potential justifies Microsoft’s significant presence in the Trust.
2. Berkshire Hathaway: 23% of Holdings
Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), is not only Gates’ friend but also a co-founder of the “Giving Pledge.” Buffett has pledged that “99% of my wealth will go to philanthropy.” To date, he has contributed around $43 billion to the Trust, which explains why Gates Foundation owns over 22 million shares in Berkshire Hathaway, valued at more than $10 billion.
Known for its stable investment portfolio and diverse business interests, Berkshire Hathaway is viewed as a reliable choice. It generates substantial annual dividend income and boasts $325 billion in cash reserves.
Given Buffett’s reputation as one of the most successful investors, it’s no wonder Gates continues to maintain a significant investment in Berkshire Hathaway.
3. Waste Management: 16% of Holdings
Waste Management (NYSE: WM) may not seem glamorous, but it is valued for its consistent revenue and strong pricing strategy. The Foundation holds over 32 million shares of Waste Management, worth around $7.1 billion.
Beyond its core waste collection services, Waste Management is investing in automation to enhance recycling profitability. Its renewable natural gas initiatives are also yielding positive results.
The company has maintained a dividend payout every year since 1998, increasing it for 21 consecutive years. Currently, its yield stands at 1.3%, with a payout ratio of just 45%, which supports further dividend growth.
4. Canadian National Railway: 13% of Holdings
Railroads, known for being cost-effective and environmentally friendly, are another facet of the Gates Trust portfolio. The Trust holds nearly 55 million shares of Canadian National Railway (NYSE: CNI), valued at approximately $6 billion.
Canadian National Railway uniquely serves as the only transcontinental railroad in North America, linking the Pacific and Atlantic coasts with the Gulf of Mexico. Trains are four times more efficient than trucks and produce 75% less greenhouse gas emissions. The company’s strong economic moat and high entry barriers make it an attractive investment.
Dividends from Canadian National have been consistently paid since its IPO in 1995, and the current yield is 2.2% with a modest payout ratio of 39%, paving the way for continued increases.
Data by YCharts.
Overall Performance of Gates’ Investments
Three of the four major stocks held in the Gates Trust have seen triple-digit returns over the past five years, well surpassing the returns of the S&P 500. The only exception has been Canadian National Railway, affected by broader economic challenges and inflationary pressures. Overall, the strong performance of these investments reinforces their status as prudent choices for growth.
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Danny Vena holds positions in Canadian National Railway and Microsoft. The Motley Fool has positions in and recommends Berkshire Hathaway and Microsoft. The Motley Fool recommends Canadian National Railway and Waste Management and has the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool’s disclosure policy applies.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
