Bill Gates amassed a fortune worth $100 billion by the turn of the century, thanks to the success of Microsoft and a little help from a frothy stock market. At that point, he decided to step down as CEO of the company to focus on philanthropic endeavors. The Gates Foundation has become his primary vehicle for deploying his billions toward causes such as global health and equality. Gates, still worth over $100 billion today despite massive donations, plans to give away 99% of his wealth within the next 19 years.
To help manage the nonprofit's grants, the foundation maintains a trust with investments, including a $33 billion portfolio of publicly traded U.S. stocks. Quarterly reporting requirements give investors a glimpse of what Gates and the investment managers hold, and the stocks might be surprising, considering Gates co-founded one of the biggest tech companies in the world.
Here are the top three stocks in the Gates Foundation's equity portfolio.
Image source: Getty Images.
1. Berkshire Hathaway (22.5% of assets)
The Gates Foundation received an annual donation from Warren Buffett for 20 years, which came in the form of Berkshire Hathaway (BRKA -0.60%) (BRKB -0.34%) Class B stock. Buffett's donations came with the stipulation that the foundation must deploy the entire value of the donation plus 5% of its other assets over the next year to receive the next donation. But that hasn't stopped Gates from holding on to a significant chunk of the stock, making it the largest position in the portfolio.
Berkshire Hathaway's core insurance business has produced solid results so far this year. Underwriting income has grown by about 4.5% through the first six months of the year, despite continued downward pricing pressure. The railroad business continues to lag the market leaders in profitability, but CEO Greg Abel has made it a focus since taking over the role at the start of the year. Operating margin has improved from 29.7% in the first half of last year to 30.8% this year.
NYSE: BRKB
Key Data Points
Much of the focus with Berkshire Hathaway is on its investment portfolio. Between equities, cash, and Treasuries, the company has approximately $720 billion in investable assets. The biggest move so far this year has been a big increase in Berkshire's stake in Alphabet, which is now its third- or fourth-largest equity position, depending on the day. That's a pretty rapid deployment, considering the company didn't have any Alphabet stock until the third quarter of last year.
Despite solid operating results and strong portfolio performance, the stock has traded sideways so far in 2026. That may present a buying opportunity for investors. Buffett and Abel seem to think so. Abel bought back roughly $8 billion in stock between April and July, something he'll do only when both he and Buffett believe the stock trades below its intrinsic value.
2. Canadian National Railway (19.7%)
Canadian National Railway (CNI -3.47%) operates a tri-coastal network of rails from the west coast of Canada to the east coast and down through the middle of the United States to the Gulf of Mexico. Despite headwinds from tariffs and an escalating trade war, revenue climbed 11% year over year in the second quarter.
Tariffs impacted shipments for forest products and fertilizers, as well as international intermodal shipments. Auto imports were weak, but the Canadian market made up for it. The escalating trade war could put pressure on operations through the back half of the year, but management raised its full-year EPS guidance along with its second-quarter earnings.
NYSE: CNI
Key Data Points
The railroad business is focused on capital efficiency this year, and it generated $1.8 billion in Canadian dollars in free cash flow through the first half of the year. It plans to return C$2.8 billion to shareholders through its capital return program, including dividends and buybacks. So far, it has repurchased C$1.3 billion worth of shares in 2026.
Investors have bid up the price of Canadian National so far this year. The stock now trades at 30 times its free cash flow from the previous 12 months. Despite strong improvements in free cash flow and its robust capital return program, investors may want to wait for a better entry point, especially considering the uncertain impact of trade negotiations between the U.S. and Canada.
3. WM (17.8%)
WM (WM +0.39%), formerly Waste Management, is a leading waste collection and disposal company. Its network of landfills gives it a tremendous competitive advantage, as it's practically impossible to replicate due to regulations that make building new landfills nearly impossible. As a result, it can collect fees from third parties while benefiting from vertical integration.
That's enabled it to produce solid operating margin improvements over the years and produce significant free cash flow. Adjusted operating margin improved by 40 basis points year over year last quarter, and cash flow from operations climbed 12%. Management is focused on paring down low-margin, low-growth businesses to improve cash flow and return excess to shareholders.
NYSE: WM
Key Data Points
The company is a slow-and-steady revenue grower, with strong pricing power and stable operating expenses. Its ability to add ancillary businesses through acquisitions, as it did in 2024 with the purchase of Stericycle, should produce mid-to-high-single-digit revenue growth for the foreseeable future. A recent pullback in the share price has pushed the stock's EV-to-EBITDA (earnings before interest, taxes, depreciation, and amortization) ratio to near 13, which is a fair value for the steady grower.
