Billionaire Bill Gates Has 59% of His Foundation's $36 Billion Portfolio Invested in 3 Brilliant Stocks

Key Points

Bill Gates plans to give away practically all of his wealth through his foundation by 2045.

His foundation's top three holdings are mostly boring businesses with wide economic moats.

Although wonderful businesses, not all of them are trading at great values right now.

• 10 stocks we like better than Berkshire Hathaway ›

Bill Gates was once the wealthiest person in the world thanks to the remarkable success of Microsoft, the company he co-founded and led to become one of the largest businesses in the world. Today, he's still worth over $100 billion despite giving away a large chunk of his wealth through the Gates Foundation.

Gates founded the philanthropy organization focused on improving global health, combating poverty, and overcoming inequality in 2000. Gates has mostly moved away from Microsoft to focus on the foundation, with plans to give away practically all of his remaining wealth by 2045.

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The main vehicle for that is through a trust fund established by the foundation, which includes a stock portfolio worth about $36 billion as of this writing. But you won't find Microsoft among its top three holdings. Instead, the trust prefers to hold great value stocks, and 59% of the portfolio is invested in just three brilliant companies.

1. Berkshire Hathaway (25.4%)

The Gates Foundation receives shares of Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) every year from Warren Buffett as part of his annual giving. While Buffett's donation requires the foundation to spend an amount equal to what he gives plus 5% of the trust's remaining assets, the trust fund managers have built up a substantial stake in Berkshire worth over $9 billion, as of this writing.

Berkshire Hathaway stock has traded lower over the last year, following Warren Buffett's resignation announcement. Greg Abel took over as CEO at the start of 2026, and he's picking up right where Buffett left off.

The bulk of Berkshire's value stems from its liquid assets, including $373 billion in cash and Treasury bills and $318 billion in marketable equities. Abel has made a few small moves in the portfolio as he looks for ways to deploy that massive cash pile, and he outlined stocks he considers core holdings that should be in the portfolio indefinitely in his first letter to shareholders. That list includes Apple, which Buffett consistently sold through the last two years of his tenure as CEO. It also includes Berkshire's Japanese stock holdings, which Abel recently added to with Tokio Marine.

Berkshire's core insurance business produced positive results in 2025. The terrible L.A. wildfires at the start of the year led to underwriting losses, but that was balanced out by an extremely quiet hurricane season. The railroad business showed improvements in operating margin, but Abel noted there's still room to expand its profits based on competitors' results.

The solid results aren't reflected in the company's stock performance, though. The decline in share price has pushed its price-to-book ratio to the lowest level since the start of 2024. It led Abel to restart Berkshire's share repurchase program, and it looks like an opportunity for retail investors to buy into the stock as well.

2. WM (18.6%)

WM (NYSE: WM), formerly Waste Management, is one of the longest-held stocks in the Gates Foundation trust's portfolio. The vertically integrated waste hauler sports a vast network of transfer stations and a sizable portfolio of landfills. That's a position unlikely to be replicated, thanks to the significant regulatory hurdles involved in establishing new landfills. As such, it collects tipping fees from third-party waste haulers using its resources.

WM has expanded horizontally as well, most recently through the 2024 acquisition of Stericycle. It rebranded the medical waste service, WM Healthcare Solutions, and it's seeing good progress integrating it with its broader waste hauling service. The segment's adjusted operating margin reached 17.1% last quarter, up from 15.1% in the fourth quarter of 2024.

Management looks to continue investing in new areas to expand the business while producing strong free cash flow growth. Management's outlook for 2026 calls for 29% growth in free cash flow at the midpoint on top of 27% growth in 2025. Meanwhile, its investments in renewable energy and recycling are expected to generate between $235 billion and $255 billion in additional earnings before interest, taxes, depreciation, and amortization (EBITDA) next year.

WM shares currently trade for 28 times earnings. That's certainly high for a company producing organic revenue growth in the single digits. However, margin expansion combined with share repurchases should enable the company to grow earnings per share at a double-digit pace. As such, investors may want a slightly better price to invest in the stock, but it doesn't appear too far above fair value right now.

3. Canadian National Railway (15%)

Canadian National Railway (NYSE: CNI) operates one of the largest networks of railroad tracks that spans from coast to coast in Canada and down the middle of the United States to New Orleans. It can efficiently transfer freight from Canada to the Southern United States, bypassing Chicago when it makes sense, which is often a bottleneck for other railroads.

The international railroad operator has faced challenges due to tariffs over the past year, after President Trump imposed significant tariffs on Canadian forest products, metals, and automobiles. That led to a noticeable drop in shipments for those items, but Canadian National made up for it with an increase in grain shipments and intermodal shipping opportunities. As a result, it managed to eke out a 2% increase in revenue for the year.

The main opportunities for Canadian National Railway in the near term are consolidating its gains and increasing its cash flow. Management is pulling back significantly on capital expenditures this year, with expectations for just $2.8 billion in capital expenditures for 2026, down 15% from 2025. That should allow it to execute on its buyback program, which has authorization to buy up to 24 million shares.

The company may see its operating ratio and revenue improve as pressure from tariffs abates in 2027 and beyond. That could lead to strong earnings growth when combined with the share repurchase activity. As such, its P/E ratio of 18.8 looks like a good price to pay for the stock right now.

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Adam Levy has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Apple, Berkshire Hathaway, and Microsoft and is short shares of Apple. The Motley Fool recommends Canadian National Railway and WM. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.