Just 3 Stocks Make Up 65% of the Bill & Melinda Gates Foundation Portfolio. Should They Be a Part of Yours?

Celebrating its 25th anniversary this year, the Bill & Melinda Gates Foundation is one of the largest philanthropic organizations in the world. To support its efforts at facilitating improvements in the lives of people around the world, the foundation, which has provided more than $77 billion in funding from its inception through 2023, manages the Bill & Melinda Gates Foundation Trust, which is currently valued at around $42 billion.

While it includes 24 holdings, just three stocks represent the lion's share of the portfolio. Combined, Microsoft (NASDAQ: MSFT), Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B), and Waste Management (NYSE: WM) make up 65% of the Bill & Melinda Gates Foundation Trust. Let's look at each one more closely.

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Microsoft retains the top spot

Its weighting may be smaller -- 28.6% as of February compared to about 34% in February 2024 -- but Microsoft still represents the largest position in the trust portfolio. As the only tech stock in the portfolio, it offers significant artificial intelligence (AI) exposure.

In addition to its ownership stake in OpenAI, Microsoft has developed Copilot, an AI tool that helps users increase their productivity. It also owns the Azure cloud computing platform, which Microsoft characterizes as the "infrastructure layer for AI." These AI offerings are contributing heavily to Microsoft's strong financial performance.

During its fiscal 2025's second-quarter earnings presentation, for example, Microsoft reported that its AI business has soared more than 175% compared to the same period last year and now represents an annual run rate over $13 billion.

Berkshire Hathaway remain a prominent fixture

The foundation may have trimmed its position in Berkshire Hathaway by about 5 million shares in the second half of 2024, but Berkshire Hathaway stock still represents a sizable position in the portfolio. While Berkshire Hathaway had a 16.8% weighting at the end of 2023, it grew to represent 21.2% at the end of 2024.

Frequently outperforming the S&P 500, Berkshire Hathaway stock is a solid choice for the foundation as it provides a bulwark against the volatility that growth stocks like Microsoft and others such as Coupang and Schrödinger may exhibit. With Warren Buffett at the helm, Berkshire Hathaway consistently generates both strong profits and free cash flow, making it about as reliable a company as they come.

It's no wonder, therefore, that Berkshire Hathaway has been a mainstay in the Bill & Melinda Gates Foundation Trust since Warren Buffett gifted the trust more than 19 million shares in 2011.

The trust highly treasures Waste Management

With a 15.5% weighting, Waste Management represents the third-largest position in the trust's portfolio, slightly edging out Canadian National Railway, which has a 13.2% weighting. The trust is one of the largest institutional holders of Waste Management stock. As of the end of 2024, it had an 8% ownership stake, second to Vanguard Group, which owned 9.3% of the company's stock.

As with Berkshire Hathaway, Waste Management helps to fortify the trust with a conservative stock that mitigates the risk of more speculative investments. The self-proclaimed "leading provider of comprehensive waste management environmental services" in North America, Waste Management is an appealing investment option since customer demand for waste management will not likely taper off in the coming years.

Plus, the company has a diverse customer base with its largest customer representing less than 5% of annual revenue in 2024. Furthermore, the company strengthened its leadership position with the recent acquisition of Stericycle, which both broadens its exposure to the healthcare market and grows its recycling business.

Do these stocks belong in your portfolio, too?

Smart investors know the perils of blindly buying stocks simply because others have done so. Nonetheless, those interested in gaining AI exposure would be wise to consider Microsoft right now as its Azure business is booming, and the stock is trading at a discount to its historic valuation; its current price-to-earnings ratio is 31.7 compared to its five-year average of 33.1.

While shares of Berkshire Hathaway and Waste Management aren't sitting in the bargain bin, their higher valuations shouldn't dissuade those looking to fortify their portfolios with rock-solid stocks that have convincingly outperformed the S&P 500 over the long term. Of course, investors should always remember to perform thorough due diligence before deciding to buy any stock for themselves.

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Scott Levine has positions in Coupang. The Motley Fool has positions in and recommends Berkshire Hathaway and Microsoft. The Motley Fool recommends Coupang and Waste Management and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.