Bill Gates quit his job as CEO of Microsoft (MSFT 0.22%) in 2000 at age 44. He had already become the wealthiest person in the world, reaching centibillionaire status briefly in 1999. He slowly stepped back from the company he founded over the next 20 years, ultimately resigning from its board in 2020.
Gates' focus over the last 25 years has shifted from building a leading technology company to solving some of the world's toughest health, equality, and educational challenges through the Gates Foundation. In that time, he and ex-wife Melinda French Gates donated about $60 billion of their wealth, making them two of the biggest donors in history. Their philanthropic giving is only outdone by Gates' friend Warren Buffett, who has been a longtime donor to his foundation.
While Gates' fortune was built on Microsoft, he's mostly followed Buffett's investing style when it comes to his personal portfolio and that of the Gates Foundation trust fund. Buffett is a big proponent of the idea of putting a lot of your capital to work in just a few outstanding companies. As a result, over two-thirds of the Gates Foundation's trust's marketable equity portfolio is held in just three marvelous stocks all reflecting the combined influence of Gates and Buffett.
Image source: Getty Images.
1. Microsoft (33%)
The majority of Gates' wealth comes from his stake in Microsoft, the company he co-founded in 1975. After his most recent donation to the Gates Foundation in 2022, Gates' stake in the company fell to less than 1%. Of course, 1% of a $4 trillion company is still $40 billion.
The Gates Foundation still holds a significant stake in Microsoft as well, even though it regularly sells shares to fund its operations. As of its most recent 13-F filing with the Securities and Exchange Commission (SEC), the Gates Foundation held 28.5 million shares of Microsoft. Those shares are worth $14.8 billion as of this writing.
Microsoft's seeing strong results across its cloud computing business, Azure, as well as its core enterprise software. Both are benefiting from growing demand for artificial intelligence (AI).
Azure is now a $75 billion business, up 34% over the past year, generating a strong operating margin for Microsoft. Not only that, but Azure revenue is accelerating, as demand continues to outstrip supply. Microsoft is investing tens of billions of dollars in building capacity for AI training and inference.
On the software side of the business, management is seeing strong adoption of its Copilot AI agent. Management said it surpassed 100 million monthly active users across its family of Copilot apps. Moreover, its Copilot Studio, which enables businesses to harness their own data to develop custom AI agents, saw customers create 3 million new agents over the past year.
That's resulted in revenue acceleration over the past year (up 18% last quarter) as well as margin expansion. Earnings per share climbed an impressive 24% last quarter. While the stock responded positively, increased earnings expectations for the stock mean shares trade for about 34 times earnings estimates. That's an attractive price for the stock with accelerating earnings growth and tens of billions in quarterly free cash flow it can use to invest in future opportunities or return to shareholders.
2. Berkshire Hathaway (17%)
Warren Buffett makes an annual donation of Berkshire Hathaway (BRK.A -0.40%) (BRK.B 0.83%) shares to the Gates Foundation every summer. Buffett earmarked 10 million Class B shares for the foundation in 2006, or 500 million shares after adjusting for splits. Every year, Buffett donates 5% of the remaining earmarked shares as long as the Gates Foundation's total giving from the previous year is equal to the amount donated in the previous year plus 5% of the foundation's other assets.
Despite that stipulation, the foundation has managed to hold onto a good chunk of Berkshire shares. It counted 17.2 million shares as of the end of March this year. Those shares are worth about $7.9 billion as of this writing. The foundation received another 9.4 million shares on June 30, according to SEC filings.
Shares of Berkshire Hathaway suffered since the company's annual meeting in May, when Buffett announced his resignation as CEO effective Jan. 1. While some of that is due to a loss of the "Buffett premium" some shareholders may have put on Berkshire Hathaway, the company has also faced some challenges.
The insurance business saw outstanding results in 2024, but that's normalized in 2025. Price increases haven't added meaningful revenue while increases in payouts in the first quarter led to worse underwriting results.
Additionally, Buffett hasn't seen very many opportunities to invest Berkshire's capital, leading him to leave a lot of cash on the sidelines even as stock prices continue to rise. In fact, Buffett's been a net seller of stocks for 11 consecutive quarters. Berkshire ended the second quarter with $344 billion in cash and equivalents, significantly more in value than its marketable equities.
Buffett hasn't even found Berkshire shares particularly attractive, passing on the opportunity to buy back shares with Berkshire's cash hoard. Even after the pullback in price, shares trade for roughly 1.5 times book value. That's around the valuation where Buffett initially stopped repurchasing shares.
However, if the stock falls meaningfully below that 1.5-times-book-value threshold, Buffett might resume buying shares, and investors should consider buying up the stock at that price as well. Berkshire's operations remain strong and the opportunity for Buffett or his team of investment managers to make a move with $344 billion at their disposal holds a lot of potential value.
3. Waste Management (17%)
Waste Management (WM 0.81%) is a boring stock that the Gates Foundation Trust has held in its portfolio for decades. In fact, it's added to its stake in the company, and it now holds 35.2 million shares (up from 1.2 million shares in 2002). Those shares are worth about $7.5 billion as of this writing.
The waste collection and disposal company has seen strong organic growth over the last few years, with revenue climbing 6% per year from 2022 through 2024. That's continued in 2025, growing 5.4% in its most recent quarter.
On top of that organic growth, management has made strategic acquisitions that have been accretive. Its most recent acquisition, Stericycle, pushed Waste Management into the medical waste space. Rebranded as WM Healthcare Solutions, the business contributed about 10% of Waste Management net operating revenue in the second quarter.
The company managed to produce strong operating margins despite taking on the lower-margin medical waste business. Last quarter's earnings before interest, taxes, depreciation, and amortization (EBITDA) margin of 29.9% was essentially in line with last year's margin without the Healthcare Solutions business. As management unlocks synergies in the acquisition and scales the business, it should see strong improvements in profitability over time.
That margin expansion is supported by Waste Management's incomparable position in the industry thanks to its landfill portfolio. New entrants face high barriers to entry as regulatory hurdles make it impractical to develop new landfills. Additionally, Waste Management's scale gives it a better margin profile as it's able to develop denser routes and benefit from economies of scale.
Despite Waste Management's dominant position in the industry, the stock trades at a lower valuation than its two biggest competitors. At an enterprise value of 15 times forward EBITDA estimates, it's a fair price to pay for a company with expanding EBITDA margins and strong organic revenue growth.
