Billionaire Bill Gates Has 68% of His Foundation's $48 billion Portfolio Invested in 3 Remarkable Stocks

Key Points

• Bill Gates primarily uses Microsoft stock to fund his charitable foundation.

• The investment strategy that he uses for the Gates Foundation's portfolio is heavily influenced by his longtime friend Warren Buffett.

• 10 stocks we like better than Microsoft ›

In 1999, Bill Gates became the first person ever to reach centibillionaire status. That's a net worth of $100 billion. The rising value of Microsoft (NASDAQ: MSFT) stock in the late 1990s ballooned his wealth well beyond that of anyone else in the world. In fact, it would be another 18 years until another tech company founder joined Gates in the club.

Today, though, Gates isn't worth much more than he was in 1999 despite the fact that Microsoft's market value climbed almost eightfold from its April 1999 level. That's because he's given much of his wealth away to the Gates Foundation, a nonprofit that supports public health, gender equality, economic development, and education around the world. He plans to contribute practically all of his remaining wealth to the foundation before it winds down operations in 2045.

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Funding the efforts and research that go into supporting those causes is a trust with a portfolio of publicly traded equities worth about $48 billion as of this writing. And more than two-thirds of that portfolio is invested in just three remarkable stocks.

Image source: Getty Images.

1. Microsoft (28% of assets)

The primary way Gates funds the foundation is with donations of his shares of Microsoft, the company he founded 50 years ago. In 2022, he donated $5 billion on top of a $15 billion pledge made in 2021. As of the end of June, the foundation's trust fund held 26,191,207 shares of Microsoft stock, according to its Form 13F filing with the SEC. That's worth about $13.4 billion as of this writing.

While the Gates Foundation sold some shares of Microsoft to fund its grants, that position remains the trust's largest holding. That's in part due to the strong performance of the stock over the last few years.

Microsoft has been one of the biggest beneficiaries of artificial intelligence spending in recent years. Its cloud computing segment, Azure, is now a $75 billion business, and it grew 39% year over year in the company's fiscal 2025 fourth quarter. That growth should continue, as management notes it remains supply constrained.

Indeed, Microsoft sports a massive backlog of remaining performance obligations for its cloud business. While that figure includes its cloud-based enterprise software solution, Microsoft 365, growing demand from AI developers for computational power has been the segment's key growth driver. But the enterprise software business remains a key component of the business, too, providing huge amounts of cash flow and stable demand, and supporting Microsoft's massive investments in new data centers. The company plans to spend a record $30 billion in capital expenditures this quarter alone.

Microsoft currently sports a forward P/E ratio of 33. That's a premium price, to be sure, but its consistent growth and position among AI stocks make it well worth that premium.

2. Berkshire Hathaway (25%)

Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) has been a longtime holding of the Gates Foundation trust fund due to many years of contributions from CEO Warren Buffett. Buffett, a longtime friend of Gates, donates a sizable number of shares to the foundation each year, but those donations come with the stipulation that it disburses an amount equal to the value of his donations plus 5% of its existing assets. Buffett has decided to discontinue his annual donation upon his death.

With plans to spend $200 billion over the next 20 years, the Gates Foundation should have no problem meeting Buffett's requirements. Even with the requirements in place, the trust has built up a sizable position in the stock. It held 24,123,684 shares as of the end of June, a stake worth $11.8 billion today.

Shares of Berkshire Hathaway have declined in value since May, when Buffett announced that he's retiring as CEO effective Jan. 1. It seems that investors aren't willing to pay as much of a premium for the stock if Buffett's no longer going to be in charge of the investment decisions at the conglomerate.

But Berkshire's operating results have been strong. Its operating earnings came in above expectations last quarter, and were even stronger if you discount the impact of foreign exchange rates. However, the combination of growing operating cash flows, interest income, and the reduction of some positions in the portfolio has left a massive stockpile of cash on Berkshire's balance sheet as Buffett and his team wait for good opportunities to invest that money.

Berkshire now trades at a price-to-book ratio of just under 1.6. Buffett last had the company repurchase its own shares when the ratio was closer to 1.5, so investors may want to wait for the stock to come down to that level before picking up shares.

3. Waste Management (15%)

Waste Management (NYSE: WM) has been a longtime buy-and-hold investment for the Gates Foundation trust, which rarely sells the company's shares. In fact, the only quarterly decline in the trust's WM share count came last summer, when it sold a small portion of its holding. It still owns 32,234,344 shares, worth a total of about $7 billion as of this writing.

Waste Management is emblematic of an investing style Gates picked up in part from Buffett and that he has directed his investment team to follow: it's a boring business with a wide competitive moat.

Regulatory hurdles make it practically impossible to open new landfills in many parts of the U.S., which makes the more than 250 landfills that Waste Management already owns and operates extremely valuable assets that aren't likely to face fresh competition. Meanwhile, Waste Management's scale allows it to optimize route density to maximize revenue and minimize operating expenses.

That's reflected in its EBITDA margin, which came in at 29.9% last quarter, despite headwinds from its newly acquired medical waste business. While the new business segment contributed significant operating revenue, it's a drag on its profit margins. Still, strong organic growth enabled it to maintain a similar margin profile to the same period a year ago, resulting in overall EBITDA growth of 19%.

Shares of Waste Management trade today at an enterprise-value-to-EBITDA multiple of about 15, based on forward estimates. That's a fair price to pay for a company that's producing strong organic growth and strategically acquiring new businesses exhibiting good synergies with its excess cash flow. It has been a long-term winner for Gates, and it could be a great boring business for average investors to own as well.

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Adam Levy has positions in Microsoft. The Motley Fool has positions in and recommends Berkshire Hathaway and Microsoft. The Motley Fool recommends Waste Management and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.