Gates Foundation's $38 Billion Portfolio Reveals Warren Buffett's Investment DNA

The Quiet Billionaire’s Wealth Transfer Strategy

Bill Gates isn’t your typical tech billionaire anymore. After founding Microsoft, he gradually shifted focus toward philanthropy, and today his fortune flows through the Gates Foundation rather than his personal accounts. What’s fascinating isn’t just that he’s giving wealth away—it’s how the foundation’s $38 billion portfolio is invested.

The most eye-catching detail: 59% of the foundation’s holdings sit in just three stocks. This concentration reveals something interesting about Gates’ investment philosophy and the unmistakable fingerprints of his long-time ally Warren Buffett all over the strategy.

Why These Three Stocks Dominate the Portfolio

Berkshire Hathaway Anchors Everything (29.1%)

Berkshire Hathaway isn’t a random choice—it’s the foundation’s largest holding at nearly $11 billion. Buffett himself has been the primary reason, donating shares annually since his trustee days. The foundation now holds approximately 21.8 million shares, and every year it receives fresh contributions from the Oracle of Omaha.

Here’s where it gets interesting: Buffett’s donations come with a string attached—the foundation must spend the full value plus 5% of other assets annually. Yet the fund managers have been holding substantial portions in stock rather than deploying everything. That speaks to confidence in the underlying business.

The leadership transition matters too. Greg Abel took the helm after Buffett stepped back, and while less famous, he’s proven his operational chops. The company’s insurance operations continue churning out cash, and with shares trading at roughly 1.5 times book value, there’s rational patience built into holding this position.

WM: The Unglamorous Cash Machine (16.7%)

WM (formerly Waste Management) seems like an odd choice for a tech founder’s foundation, but that’s precisely why it belongs here. The stock embodies everything Buffett loves: boring, predictable, and surrounded by an economic moat.

The mechanics are simple. WM operates the nation’s trash collection and recycling systems, backed by over 260 landfills. The regulatory barriers to building new landfills make competing nearly impossible—smaller operators have no choice but to use WM’s infrastructure. This trapped competitive advantage translates into pricing power.

Revenue keeps growing as the company raises rates on households and businesses. Operating margins expand through scale. The 2024 Stericycle acquisition (now WM Healthcare Solutions) adds a higher-growth segment that management can eventually merge into the core business model.

At an enterprise value-to-EBITDA ratio below 14, the valuation remains attractive relative to peers despite WM’s market dominance.

Canadian National Railway: The Continental Moat (13.6%)

Canadian National Railway represents another Buffett-style investment: a geographically entrenched monopoly disguised as a boring utility.

The company’s tracks run from Canada’s coasts down through the U.S. to New Orleans, giving it unmatched reach. The business isn’t growing explosively—volume grew just 1% annually from 2020-2024—but that’s fine when barriers to competition are nearly insurmountable. You can’t simply decide to lay new rails and start collecting freight.

This structural advantage allows management to focus on efficiency rather than aggressive growth. Free cash flow surged 14% in the first nine months of 2025, and capital expenditure cuts should fuel further gains in 2026. With an enterprise value-to-EBITDA ratio under 12, it trades at a discount to peers while offering long-term dividend and buyback potential.

What This Portfolio Says About Bill Gates’ Investment Logic

The pattern is unmistakable: Gates Foundation dollars flow toward companies with durable competitive advantages, predictable cash flows, and reasonable valuations. These aren’t flashy growth stories. They’re the kind of investments that generate returns decade after decade with minimal drama.

That’s Buffett’s playbook written in the foundation’s ledger—and it’s working at a $38 billion scale.