Warren Buffett is one of the Gates Foundation’s largest donors, and his influence is clear.
The foundation’s trust invests primarily in slow-growth value stocks with wide moats.
All three companies trade around fair value and have predictable future growth.
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Bill Gates passed Microsoftone of the world’s largest technology companies. He and co-founder Paul Allen were at the bottom of the personal computing revolution, amassing wealth as the company’s value rose as the personal computer boom of the 1980s and 1990s grew. Gates became the world’s first billionaire (net worth $100 billion) in 1999, nearly two decades before anyone else reached this level of wealth.
Today, although Microsoft’s market value has surged about six times from its 1999 peak, Gates is still worth about $100 billion. That’s because he’s turned his attention to his foundation and plans to give away 99% of his remaining wealth over the next 20 years.
Gates has historically donated his Microsoft stock to the foundation, but the foundation trust’s portfolio has sold those shares while remaining heavily invested in a number of distinctly non-tech companies. In fact, about 60% of the trust’s portfolio is invested in three lower-tech companies, after the investment manager sold about two-thirds of its Microsoft shares last quarter. That’s where the Gates Foundation is investing today.
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Berkshire Hathawayof (NYSE: BRK.A)(NYSE: BRK.B) CEO Warren Buffett is a longtime donor to the Gates Foundation. Each year, he joins several other charitable organizations in donating Class B shares to the foundation. At the end of June this year, he donated more than 9.4 million shares to the foundation.
Berkshire Hathaway’s insurance business posted solid results in 2025, despite being hit by the California wildfires at the beginning of the year. Third-quarter results were particularly impressive, with underwriting earnings increasing to $3.2 billion from $1.0 billion in the third quarter of 2024. That was more than enough to offset the decline in earnings in the first half.
Meanwhile, Berkshire’s vast portfolio continues to generate gains. However, Buffett and his investment team have struggled to find significant opportunities to invest Berkshire’s growing cash hoard. The pile gets bigger as Berkshire sells more shares than it buys each quarter.
The group currently trades at about 1.55 times book value. While this price is above the stock’s historical average, it is still below what investors paid in early 2025. With Buffett’s retirement announcement taking some of the steam out of the stock, it’s trading closer to fair value at today’s prices based on the assets held in its portfolio and the core operating performance of its insurance business.
waste management(NYSE: WM) It is one of the longest-held securities in the Gates Foundation Trust. There’s a good reason for this. This is a recession-proof business with huge competitive advantages.
Waste Management’s primary waste hauling business benefits from its size and dominant landfill ownership position. Thanks to its scale, the company is able to build a more efficient network of collection routes and transfer stations, benefiting its operating bottom line. Waste Management, meanwhile, has 262 active landfills, putting it in an enviable position among other waste hauling companies because regulations make it extremely costly to obtain approvals and build new landfills. As a result, as landfill space becomes increasingly scarce, the company is able to raise prices each year while charging third-party waste haulers to use its facilities.
The business had an adjusted operating margin of 32% last quarter and continues to show room for improvement as it leverages pricing power and scale.
Additionally, Waste Management now operates a medical waste management business after acquiring Stericycle, which it renamed WM Health Solutions. Management sees room for synergies to cut costs in the business, but expects the market for health solutions to climb rapidly over the next decade due to the aging U.S. population. Currently, this business accounts for less than 10% of revenue.
No wonder the trust rarely sells the stock, which has grown significantly over the past 25 years. Even though the company’s enterprise value is about 15 times expected EBITDA over the next 12 months, it appears to be a good value. Strong earnings growth from Health Solutions, coupled with solid growth in its key waste-hauling business, should keep the stock climbing higher.
Canadian National Railway(NYSE: CNI)(TSX: CNR) Connects the east and west coasts of Canada with the U.S. Midwest and Gulf Coast. Rail continues to be an important method of transporting goods across dry land because large scale rail operations reduce overall costs. Better fuel efficiency than trucks and the ability of trains to transport large volumes of freight make them more economical for long-distance transportation. That said, this is a very slow-growing industry.
On the plus side, there are significant barriers to entry. It would be nearly impossible for a new company to compete with larger companies, as it would require thousands of trucking contracts to build the scale needed to operate profitably. Instead, the industry has been consolidating for years as companies seek to take advantage of scale. To do this, Petro-Canada was able to steadily increase prices while increasing contract volumes. This pushed up its operating margins. It reached 38.6% last quarter.
Many worry the tariffs will negatively impact the railroad’s international freight operations from Canada to the central United States. While management saw shipments of metals, minerals and forest products decline due to tariffs, shipments of petroleum and chemicals, grains, coal and fertilizers increased.
Despite slow revenue growth, management was able to improve operating results while reducing capital expenditures. As a result, free cash flow grew 14% in the first nine months of the year. Management expects free cash flow to further improve in 2026, driven by further reductions in capital expenditures. It returns excess cash flow to shareholders through dividends and share buybacks, the latter of which supports mid-single-digit earnings per share growth.
The company’s enterprise value is around 12 times analysts’ EBITDA estimates, which looks high relative to its peers, trading at nearly 14 times. Given the obstacles to protecting the business, it’s no surprise that the Gates Foundation continues to have a strong presence in the railroad space.
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Adam Levy works at Microsoft. The Motley Fool owns and recommends Berkshire Hathaway and Microsoft. The Motley Fool recommends Canadian National Railway and WM and recommends the following options: long January 2026 $395 Microsoft calls and short January 2026 $405 Microsoft calls. The Motley Fool has a disclosure policy.
Billionaire Bill Gates will invest 60% of his foundation’s $37 billion portfolio in non-tech stocks through 2026 originally published by The Motley Fool
