The Gates Foundation's $38 Billion Stock Holdings: How Three Companies Drive Investment Strategy

Bill Gates built his $100+ billion fortune through Microsoft, one of the most dominant tech companies of the past three decades. Yet today, his wealth remains relatively stable—not because he stopped earning, but because he’s systematically giving it away. Through the Gates Foundation, he’s committed to distributing nearly all his assets over the next two decades, reshaping global philanthropy in the process.

A Portfolio Shaped by Warren Buffett’s Philosophy

The Gates Foundation trust manages approximately $38 billion in publicly traded securities, according to SEC filings. What’s striking isn’t the size—it’s the composition. Just three stocks account for 59% of this massive portfolio, revealing the deep influence of Warren Buffett, the legendary investor who once served as a foundation trustee and continues funding it annually.

This concentration strategy reflects a clear investment philosophy: boring businesses with durable competitive advantages, generating predictable cash flows that can fund philanthropy for generations.

Berkshire Hathaway: 29.1% - The Anchor Position

The largest single holding is Berkshire Hathaway, representing nearly 30% of the trust’s equity portfolio. The foundation holds approximately 21.8 million Class B shares, currently valued around $10.9 billion.

Buffett’s annual donations of company stock come with a mandate: the foundation must deploy the entire donation plus 5% of other assets annually. Instead of immediately liquidating Buffett’s gifts, trust managers have accumulated these contributions strategically. This created the dominant Berkshire position.

Under Buffett’s 60-year stewardship, the conglomerate built an unparalleled business empire—a $670 billion machine spanning insurance, utilities, railroads, and dozens of wholly owned subsidiaries. The company’s insurance operations continue generating strong underwriting cash flow, which Buffett deployed into opportunistic investments.

New CEO Greg Abel inherited this fortress in January 2025. Though less renowned as an investor than his predecessor, Abel is a proven operational executive who can maintain the company’s trajectory while potentially delegating more portfolio decisions to trusted lieutenants.

From a valuation perspective, Berkshire trades near 1.5x book value—a reasonable entry point given the company’s fortress balance sheet, consistent earnings generation, and the quality of assets on its books.

WM (Waste Management): 16.7% - The Unglamorous Moat

The second-largest position may surprise tech-minded observers: WM, formerly Waste Management, occupies 16.7% of the portfolio, about $6.3 billion in value.

It’s precisely the kind of investment Buffett advocates for—a revenue-generating machine with structural competitive advantages. WM operates over 260 landfills, controls essential waste infrastructure across North America, and raises regulatory barriers so high that competitors have no choice but to partner with them.

The business mechanics are straightforward: households and businesses pay for trash removal; WM collects and processes that waste. Revenue grows through rate increases leveraging market dominance, operational leverage from fixed asset bases, and strategic acquisitions—including the recent purchase of Stericycle, integrating medical waste services.

Margins continue expanding as the company scales, despite periodic headwinds like fluctuating recycling commodity prices. With an enterprise value-to-EBITDA ratio below 14, valuation remains attractive relative to industry peers, even as WM dominates its market.

Canadian National Railway: 13.6% - Infrastructure with Moats

Rounding out the big three is Canadian National Railway, representing 13.6% of holdings worth roughly $5.1 billion.

The railroad spans from coast to coast across Canada and extends into the U.S. heartland, reaching New Orleans. This geographic footprint provides immense strategic value—moving commodities across North America requires either using established rail networks or building competing infrastructure from scratch. The latter is prohibitively expensive and impractical without pre-existing freight contracts.

The industry consolidated over decades precisely because scale advantages are insurmountable. Like WM, CNR benefits from rate increases and operational leverage, even as freight volumes remain relatively flat (averaging 1% annual growth). In 2025, volumes stayed essentially unchanged, but pricing pushed revenue higher—though growth has moderated.

Management expertly navigates this mature industry by controlling capital expenditures and converting operations into robust free cash flow. The company expects 2026 to bring further improvement as capex declines, enabling increased share buybacks and steady earnings-per-share growth.

At an enterprise value-to-EBITDA ratio below 12, CNR represents compelling long-term value for patient capital seeking steady cash generation.

What This Reveals About Kevin Gates Net Worth Context and Foundation Strategy

The Gates Foundation’s portfolio construction mirrors Buffett’s template: predictable, inflation-resistant businesses with sustainable competitive moats. These aren’t growth stories—they’re cash-generation machines.

This approach allows the foundation to pursue its dual mandate: generate returns funding philanthropic work today while deploying capital into global health, education, and development initiatives. The $38 billion represents years of Buffett’s donations and strategic reinvestment of foundation earnings.

For individual investors, the three-stock concentration offers a masterclass in long-term value investing: identify businesses so essential, so difficult to replicate, that they’ll remain profitable regardless of economic cycles. Boring doesn’t mean unprofitable—it means predictable, which is precisely what large institutional investors need.