Bill Gates was once the wealthiest person in the world by an absolutely astonishing margin. The Microsoft (MSFT 0.43%) founder became the world's first centibillionaire, reaching a net worth of $100 billion in 1999 amid the dot-com bubble. It would be another 18 years until another person crossed that threshold.
While Microsoft's value has far surpassed its peak at the turn of the century, Gates' net worth still sits around $100 billion. That's because he's steadily donated his wealth to his nonprofit, the Gates Foundation. Over the years, he's stepped back from his responsibilities at Microsoft to focus on his philanthropic goals, and he plans to donate practically all of his remaining wealth over the next two decades.
While a technology company made Gates wealthy, his foundation's portfolio is heavily concentrated in a handful of value stocks, reflecting Gates' investment strategy and the influence of a key mentor, Warren Buffett. In fact, about 59% of the entire portfolio of marketable equities is held in just three outstanding stocks.
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1. Berkshire Hathaway (28.5% of assets)
Berkshire Hathaway (BRK.A 0.20%) (BRK.B 0.24%) chairman Warren Buffett donates a sizable number of his company's shares to the Gates Foundation each year as part of his annual giving. Last year's donation amounted to 9.4 million Class B shares of the stock.
While the Gates Foundation is tasked with using up the entire value of Buffett's donation every year, plus 5% of its other assets at the time of the donation, the trust managers have held on to a good chunk of Berkshire shares. As of the end of the third quarter, the trust held 21.8 million shares, which are worth $11 billion as of this writing.
Buffett handed over the reins of Berkshire Hathaway to Greg Abel at the start of the year, but that's unlikely to change the Gates Foundation's position in the stock. While Berkshire Hathaway will undoubtedly undergo some changes under Abel's leadership, Buffett left him with a portfolio of excellent businesses and minority equity stakes.
NYSE: BRK.B
Key Data Points
At the core of Berkshire is its insurance business, which has produced excellent results over the last few years. Despite a setback at the start of 2025 due to the California wildfires, the insurance business produced underwriting earnings up 3% through the first nine months of 2025. Investors can expect the operational excellence of the insurance business to remain consistent under Abel.
Shares of the stock currently trade around 1.55 times book value, which has been seen as a fair price to pay for the stock in recent years. However, nearly one-third of that book value stems from its marketable equity portfolio, which Buffett might argue contains several large stakes in overpriced stocks. As such, the valuation might be a fair price, but it's not a bargain price for the stock. Nonetheless, the foundation is likely going to hold on to most of its shares at this price, and it'll receive even more later this year from Buffett's annual donation.
2. WM (17% of assets)
WM (WM +2.08%), formerly Waste Management, is a longtime holding for the Gates Foundation trust. Despite selling some shares in the third quarter, it still held 28.9 million shares as of the most recent update. That stake is worth about $6.6 billion as of this writing.
WM benefits from its dominant landfill portfolio of over 260 locations. Regulatory hurdles make it practically impossible for smaller competitors to encroach on WM's position. Instead, many opt to pay WM to use its landfills and other facilities. As a result, the waste disposal company holds a massive competitive advantage in the slow-growing industry, enabling it to produce steady profit growth and use excess cash to make bolt-on acquisitions.
WM's legacy waste-hauling business posted an adjusted operating margin of 31.5% in 2025, benefiting from price increases and automation. That's up from 30% in 2024, and management expects further margin expansion in 2026.
NYSE: WM
Key Data Points
Meanwhile, the company successfully integrated its Stericycle acquisition, renaming it WM Healthcare Solutions. The business still accounts for a small percentage of the overall operations, and its margin profile is thinner, producing a 16.9% adjusted operating margin in 2025. But there's plenty of room to improve both the top and bottom lines going forward.
Management disappointed investors with its 2026 outlook, which calls for 5.2% revenue growth at the midpoint. It could make up for that disappointing top line with further operational improvements. With its forward P/E around 27.5, it might be a bit expensive. But investors should look for opportunities to buy shares of the company amid any pullback.
3. Canadian National Railway (13.3% of assets)
Canadian National Railway (CNI 1.35%) is another longtime holding for the Gates Foundation. The foundation received an infusion of 44.6 million shares of the stock in 2022 from Gates' personal portfolio. It now holds 51.8 million shares worth about $5.1 billion.
The railroad business is a slow-growing industry with increasing consolidation among the biggest competitors. That puts Canadian National in an excellent position, thanks to its size and its set of tracks that run coast to coast in Canada and down through the middle of the United States to New Orleans. Revenue climbed 2% year over year in 2025 despite pressure on import volume due to President Trump's tariffs. The company was able to offset the impact through record grain transport volumes in the last four months of the year.
NYSE: CNI
Key Data Points
Management's 2026 outlook calls for flat revenue, with earnings improvements driven by operational improvements. It also authorized a share repurchase program for up to 24 million shares (about 3.9% of shares outstanding), which should boost earnings per share.
And the company should have the cash to support that buyback. Management is cutting its capital expenditures budget for 2026 to $2.8 billion, down 15% from 2025. Combined with improvements in operating margin, this should produce a solid amount of additional free cash flow for its capital return program.
With an enterprise value-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio below 12, the stock trades at a lower valuation than its peers. It could be worth adding to your portfolio, as it's capable of producing steady earnings per share growth over time.
What's in it for you?
While most investors can’t mirror the Gates Foundation portfolio dollar-for-dollar, the lesson is clear: owning a small number of truly outstanding companies can matter far more than owning many average ones. If you are a patient investor willing to think long term, backing businesses with durable competitive advantages, resilient cash flows, and the ability to compound value for years are drivers to building lasting wealth.
