63% of the Bill Gates Foundation's Stock Portfolio Is Invested in Just 3 Large-Cap Stocks

Bill Gates will always be best known for founding Microsoft, the tech conglomerate that created the suite of office tools that essentially power the business world today, along with many other great business lines. Microsoft is one of the largest companies in the world with a market cap of more than $3 trillion.

Gates is long removed from running the company's operations, but after stepping down as CEO in 2000, Gates and his ex-wife Melinda formed the Bill & Melinda Gates Foundation, which now goes by the Gates Foundation.

The philanthropic organization has made charitable donations totaling $8.5 billion to 1,472 grantees, all with a variety of noble causes.

The Gates Foundation's endowment is managed by the Gates Foundation Trust, so philanthropic and investment decisions are kept separate. At the end of the first quarter, the trust had more than $31.6 billion in assets.

While Cascade Asset Management manages the trust, it's always interesting to see what the fund managers are up to. At the end of the first quarter, 63% of the Gates Foundation Trust was invested in just three large-cap stocks.

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1. Berkshire Hathaway: 26% of portfolio

It should come as no surprise to see Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) as the largest stock in the portfolio. Warren Buffett, the company's former CEO, has helped fund the endowment and continues to make contributions, although the legendary investor has no involvement in how the funds are invested.

However, Berkshire stock is a good place to invest money for those looking to preserve and grow their wealth. It's the only non-tech and artificial intelligence (AI) company with a market cap topping $1 trillion. Unlike most of the other largest companies in the market, Berkshire built this massive valuation over decades.

Berkshire is a very well-diversified company. It runs one of the largest property and casualty insurance businesses in the country through its ownership of Geico. Berkshire also owns several large energy assets, the Burlington Northern Santa Fe railroad, and a large mortgage business, among others.

Berkshire also runs what is now a $332 billion stock portfolio, which the market closely follows to see what Buffett, and now Greg Abel, as well as their investing team, are buying and selling each quarter in terms of stocks.

The company generates tremendous free cash flow and earnings each year. While it is a mature business that isn't going to grow like a pure-play AI company, it has generated market-crushing returns for six decades.

Investors were disappointed to see Buffett step down as CEO, but he personally chose Abel, a longtime Berkshire veteran and more than capable leader.

2. Waste Management: 20% of portfolio

Roughly a fifth of the Gates Foundation's portfolio is invested in Waste Management (NYSE: WM), the longtime garbage-collection company that is now transitioning into other areas.

While still running its core business, Waste Management also has a renewable energy segment in which gas is generated as waste decomposes in the company's landfills. The U.S. Environmental Protection Agency (EPA) has endorsed landfill gas as a renewable energy resource, similar to wind, solar, and geothermal power.

Waste Management also has a healthcare solutions segment following its 2024 acquisition of Stericycle, which specializes in safely disposing of medical, pharmaceutical, and hazardous waste.

Along with the company's recycling processing and sales business, these three sectors made up roughly 18% of total net operating revenue in the first quarter, with strong growth in the renewable energy segment, although this segment alone is still a small part of the business.

Waste Management is also investing in AI-powered robotics to help address the company's high turnover.

In the first quarter, the company actually more than doubled free cash flow year over year but still has significant long-term debt, with a debt-to-equity ratio of about 2.22.

Ultimately, some of the company's new segments certainly have potential, and I don't think the business is bad because it tends to be more recession-proof than most. But there's nothing particularly exciting about the stock right now, so investors can keep an eye on it, but certainly don't need to rush in.

3. Canadian National Railway: 17% of portfolio

Lastly, the Gates Trust holds 17% of its portfolio in Canadian National Railway (NYSE: CNI), headquartered in Montreal. The company operates a rail network of roughly 20,000 route miles in Canada and parts of the U.S. in the Midwest and South.

It's one of Canada's two largest railway networks, transporting more than $181 billion of goods annually.

Canadian National stock hasn't performed well over the past five years, only generating a total gain of about 1.5%. Like other railways, the stock has taken a hit due to tariffs and trade tensions with the U.S., as well as a freight recession in North America. Other issues, such as weather and labor strikes in Canada, also made the operating environment difficult.

In the first quarter of 2026, both revenue and net income were down a bit, as the company continued to operate in a difficult macro environment.

With a debt-to-equity ratio slightly below 1, the company is not highly leveraged. However, S&P Global lowered its debt rating from A to A- in 2023, while maintaining a stable outlook.

Investors typically like railway stocks because their massive networks give them strong moats and, therefore, pricing power, but it's definitely been tough sledding for the company given secular headwinds.

While Canadian National does repurchase stock and has a trailing dividend yield of 2.34%, it's another stock that I'm not particularly excited about. However, it's been able to hang in there despite challenges, so it's probably a better stock for those looking to preserve their wealth, especially in the near term.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway, Microsoft, and S&P Global. The Motley Fool recommends Canadian National Railway and WM. The Motley Fool has a disclosure policy.