In this piece, we will take a look at Bill Gates’ latest 2024 update for his firm’s stock portfolio.
Bill Gates is one of the most consequential people in the modern-day world. His software company, known for selling the Windows operating system, is among the most valuable firms in the world courtesy of its $3.30 trillion market capitalization. This firm has made Gates one of the richest people in the world, with his net worth estimated to sit at $108 billion according to the latest estimates.
The software billionaire retired from his firm in 2014, but he hasn’t stopped making an impact post-retirement. Rather than fade quietly into the distance, Gates refocused his efforts on causes and initiatives he is passionate about. Climate change, human health, and technology remain his key interests, and Gates targets these areas directly through his family office and indirectly through the Bill and Melinda Gates Foundation.
While it’s the Foundation that’s often at the center of media attention when it comes to Gates’ investments, the billionaire also invests through his family office Cascade Investment, LLC and Gates Frontier, LLC. Starting from Cascade Investment, the firm has had a moderately busy 2024. It started the year by disclosing a sizable ownership stake (23.7% of common stock) in a mega car parts company with a presence in the US, Mexico, and Brazil. This stock is up 30% year-to-date in a car market that has slowed down accompanied by a weaker discretionary spending environment due to high interest rates and inflation.
Cascade Investment reported owning a 22% stock in this company on February 13th, and the disclosure came just in the nick of time. This was because just five days later, the firm reported its second fiscal quarter earnings. The results sent the stock soaring by 8.7% as the company benefited from higher car prices leading to greater demand for its products. The firm’s second-quarter revenue and earnings per share of $3.86 billion and $28.89 beat analyst estimates of $3.84 billion and $26.28. By July end, Cascade’s stake grew to 24.9% and since then, the car parts manufacturer’s stock has gained 5.6%.
Bill Gates’ second investment disclosure through Cascade came in October when the firm declared that it owned a 7.1% stake in a diversified firm that sells electricity and plastic products such as pipe and also provides contract manufacturing services. The stock is down 7.4% year-to-date, but since Gates’ filing, it has gained 1.8%. It is also one of Gates’ oldest investments, with the billionaire having held a stake in it as early as 2000. It is also one of his most controversial plays since the firm generates electricity through conventional and polluting energy sources.
While Gates continues to hold stakes in the utility company and the car parts provider, Cascade Investments has also been busy selling one stock. All of its sales started at the end of October and have continued since then. The firm is selling a specialty chemicals company that caters to water treatment and other associated needs of waste treatment, semiconductor fabrication, pharmaceutical, and other industries. The shares had gained 2.74% year-to-date before Gates’ first sale, and since then, they have lost 0.90%. Interestingly, this stock also ranked 16th on our list of Wells Fargo’s Best Growth Stocks: 28 Stocks With The Highest Consensus EPS Growth Estimates. Since it’s an industrial stock, its fortune depends on broader US economic activity which also made it unsurprising that the shares
These three stocks are ones that have seen activity from Gates’ firm Cascade Investment. However, they are not the only ones that the billionaire has tinkered with this year. Gates’ other investment firm, Gates Frontier, also disclosed perhaps the most interesting stock of this introduction in February. This stock operates in one of the hottest industries right now. The shares are up 32% year-to-date, and the firm claims that its robotics technology “uses proprietary human-like surgical robots to virtually transport surgeons inside the patient to perform minimally invasive surgery.” The firm’s V1.0 surgical robot is currently planned to be submitted to the FDA for approval by mid-2026. Since the firm does not sell any products, it does not generate any revenue either. Consequently, it is a very risky play and Gates has likely invested in the to fund a new technology that might also end up making him money.
Our Methodology
To make our list of the latest stocks in Bill Gates’ portfolio, we scanned through the Bill & Melinda Gates Foundation’s SEC filings for the third quarter and picked out the top ten stocks with the highest investment stakes.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10. Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
Bill & Melinda Gates Foundation’s Investment Stake: $551 million
Number of Hedge Fund Investors In Q3 2024: 13
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) is a Mexican firm that is responsible for distributing Coca-Cola beverages in Mexico, Brazil, Argentina, and other countries in the region. Since it’s a distribution company, the firm’s narrative depends on its logistical operations, distribution capabilities, volume shipped, and the macroeconomic conditions in its market. Specifically for Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF), the firm is also digitizing its operations to streamline them. The firm is taking aim at digitization through its Juntos+ software application through which it allows customers to digitally place orders from anywhere through their phone. The application could streamline Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)’s operations and the firm also stands to benefit from a weakening US dollar should the Fed maintain or add aggression to its current interest rate reduction cycle.
Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF) spend the third quarter augmenting Juntos+’s capabilities. Here’s what the firm shared during the earnings call:
“In digital, half of our clients are placing orders on a weekly basis with Juntos+. Additionally, our loyalty plan continues to gain traction with more than 100,000 clients redeeming points year-to-date.
We have also launched the pilot of our new sales force automation tool, Juntos+ Advisor, which has already delivered promising results. Powered by advanced AI model, Juntos+ Advisor enhances our sales force capabilities, enabling us to support our clients to reach their full potential. This tool significantly complements our customers’ omnichannel experience, offering a more seamless and personalized interaction across all touchpoints. We expect to gather learnings from this initiative and expand the rollout to the rest of Brazil and other markets in 2025.”
9. FedEx Corporation (NYSE:FDX)
Bill & Melinda Gates Foundation’s Investment Stake: $693 million
Number of Hedge Fund Investors In Q3 2024: 55
FedEx Corporation (NYSE:FDX) is one of the biggest logistics companies in the world. It operates through all modes of transport, namely, land, air, and sea. The firm also provides services to businesses and consumers. The nature of its business means that FedEx Corporation (NYSE:FDX) depends on global fuel prices, economic activity, and high volumes. Volumes are particularly important for firms like FedEx Corporation (NYSE:FDX) since they enable them to eke out high margins from a sizable operations base. In a tight economy where the firm has battled with competition, it is aware of the impact of costs on its bottom line. FedEx Corporation (NYSE:FDX) is addressing these issues through its DRIVE initiative that aims to reduce costs by $2.2 billion in the firm’s fiscal year 2025. As such, DRIVE is key to the firm’s hypothesis, and successful execution of strategies such as integrating its express and ground delivery networks should influence investor sentiment. In addition, FedEx Corporation (NYSE:FDX) also stands to suffer if tariffs promised by President-elect Donald Trump significantly impact global trade.
Carillon Tower Advisors mentioned FedEx Corporation (NYSE:FDX) in its Q3 2024 investor letter. Here is what the fund said:
“FedEx Corporation (NYSE:FDX) share prices have struggled after reporting disappointing earnings this past quarter. Management has continued its aggressive cost-reduction program, which could permanently improve the company’s operating margins. However, weak freight markets for every mode of transportation have weighed on pricing and volumes, largely offsetting the immediate cost benefits. We believe that the company can benefit from higher earnings power over the next several years tied to a rebound in volumes and its elimination of costs.”
8. Walmart Inc. (NYSE:WMT)
Bill & Melinda Gates Foundation’s Investment Stake: $734 million
Number of Hedge Fund Investors In Q3 2024: 88
Walmart Inc. (NYSE:WMT) is the largest brick-and-mortar retailer in the world. The firm enjoys an enviable moat in its industry as is evident through its 10,000+ locations worldwide and a fortress balance sheet with total assets of $254 billion. As a mega-retailer, Walmart Inc. (NYSE:WMT)’s hypothesis depends on the product volumes that it shifts since they help the firm maintain robust margins in an industry notorious for its low margins. The firm also has to compete with eCommerce players like Amazon in an economy dominated by the Internet. On this front, Walmart Inc. (NYSE:WMT)’s Marketplace and its advertising business are two key fronts through which it is competing. Consequently, along with volumes and margins, these two factors are additional facets of the hypothesis. Walmart Inc. (NYSE:WMT) is also using its massive store footprint to drive its online business by introducing services such as those that allow customers to order online and avail services in physical locations.
Walmart Inc. (NYSE:WMT)’s management commented on its eCommerce business during the Q3 2024 earnings call. Here is what they said:
“As our business model evolves, it’s encouraging to see our margins improve from a diverse set of offerings. Global eCommerce losses continue to narrow in Q3, most notably in Walmart U.S. While improved business mix helped, we’re seeing good progress in core eCommerce margins. There are a few key factors driving this improvement, delivery densification, increased penetration of paid expedited delivery orders and the automation of our supply chain.”
7. Ecolab Inc. (NYSE:ECL)
Bill & Melinda Gates Foundation’s Investment Stake: $1.3 billion
Number of Hedge Fund Investors In Q3 2024: 47
Ecolab Inc. (NYSE:ECL) is the water treatment specialty chemicals company that we mentioned in our introduction. While Gates’ family office sold the shares this year, the Foundation has not sold any Ecolab Inc. (NYSE:ECL) stock in 2024. The decision is grounded in reality as the shares are up 25% year-to-date despite muted economic activity that does not bode well for industrial companies. However, as broader economic activity has been muted for more than a year due to two-decade-high interest rates, Ecolab Inc. (NYSE:ECL) stands to benefit from pent-up demand. The potential demand unlocking was clear in the firm’s third-quarter earnings which saw its global industrial revenue grow $1.99 billion, or by 2.6% annually. The growth occurred despite the fact that while the US economy has managed to stave off a sharp downturn, other countries have not been so lucky. Another key factor that will drive Ecolab Inc. (NYSE:ECL)’s performance moving forward is customer inventories. They will provide insights into whether its customers are experiencing higher activity to start building inventories for an expected uptick in activity.
Ecolab Inc. (NYSE:ECL)’s management shared its future growth plans during the Q3 2024 earnings call. Here is what they said:
“Now I’d like to transition our attention from Q3 to what our teams are focused on to fuel long-term growth and margin expansion. Our growth engines in clean tech, high tech and biotech are showing strength and momentum, even if each are at the different stage of development.
In the clintech area, institutional and specialty as well as pest elimination are both delivering strong performance, growing 7% and 8%, respectively, with operating income margins north of 20%. Global High Tech, which includes data center cooling and water for microelectronics is growing at strong double digits. And in biotech, our Life Sciences business remains ahead of the curve in what we believe will be a huge long-term growth opportunity. Our innovation pipeline also continues to build as we shift our focus from renovation to breakthrough innovation. With nearly $1.5 billion, our 2024 pipeline is at record levels and laser-focused on the biggest opportunities across our clean tech, high tech and biotech platforms. Finally, our One Ecolab growth initiative, which seeks to leverage our digital technologies to deliver best-in-class business outcomes, operational performance and environmental impact that every customer location around the world is progressing very well.
Over the next few years, One Ecolab looks to more quickly unlock our current $55 billion penetration opportunity. Our early focus on our largest and fastest-growing certified customers is showing promising results with significant total value delivered for our customers and a great growth opportunity for Ecolab. With strong long-term business momentum, record free cash flow and the proceeds from the sale of the Surgical Drapes business, our balance sheet is in a very healthy position. This provides us with many options to allocate capital to organic and inorganic growth opportunities. On organic growth, we are well positioned to scale unique customer solutions like our AI dish machine program for QSR and circular water systems for data centers and microelectronic manufacturers.”
6. Deere & Company (NYSE:DE)
Bill & Melinda Gates Foundation’s Investment Stake: $1.48 billion
Number of Hedge Fund Investors In Q3 2024: 41
Deere & Company (NYSE:DE) is one of the biggest industrial machinery companies in America. Since the firm derives a sizable chunk of its revenue from farming and agricultural machinery, its share price performance has been less than stellar in 2024. This is because lower farm prices have created supply disruptions in the market. The supply disruptions have translated into weak share price movements, as Deere & Company (NYSE:DE)’s shares were up by a hairline 1% by November 20th. However, the narrative shifted afterward when the firm’s fiscal fourth-quarter earnings per share of $4.55 beat analyst estimates of $3.87 by a wide margin. Since then, Deere & Company (NYSE:DE)’s shares have gained 9.7% even though the firm’s fiscal 2025 midpoint profit guidance of $5.25 billion missed estimates of $5.93 billion. Deere & Company (NYSE:DE)’s management shared during the call that it expects machinery demand to remain muted. Therefore, a recovery in crop prices and incentives for farmers to start buying machines again should drive the hypothesis moving forward.
Deere & Company (NYSE:DE)’s management shared how it managed a tough year during the Q4 2024 earnings call. Here is what they said:
“2024 was characterized by our resiliency in the face of significant challenges. The pullback we experienced in global markets this year provided our organization with an opportunity to showcase the structural improvements we’ve made since announcing the smart industrial operating model in 2020. Starting with our financial scorecard, we continued to demonstrate better performance across the cycle. Notably, our margins in 2024 exceeded 18%, reflecting nearly 700 bps of improvement from 2020, which was the last time we were at this point in the cycle. This margin expansion has enabled us to invest record levels back into the business this year. More important than the numbers, I couldn’t be prouder of the resilience demonstrated by our John Deere employee team this year.
The velocity at which markets slowed tested our discipline and our agility. However, in the face of these difficulties, we emerged more focused than ever on our mission to help our customers do more with less. Our dedicated teams across factories, engineering centers, dealerships, branches, offices, and in the field showed remarkable fortitude as we made proactive decisions based on hard-learned lessons from the past. We maintain our focus on the customer, ensuring we not only retain but also actively seek out the best talent with the skills and experience necessary to help us solve the significant challenges facing our customers.”
5. Caterpillar Inc. (NYSE:CAT)
Bill & Melinda Gates Foundation’s Investment Stake: $2.9 billion
Number of Hedge Fund Investors In Q3 2024: 50
Caterpillar Inc. (NYSE:CAT) is an American industrial machinery company. The firm sells a wide variety of products such as construction equipment, mining machinery, engines, and turbines. Its product lineup means that Caterpillar Inc. (NYSE:CAT) depends on a handful of industries for robust financial performance. During the nine months ending in September, 44% of the firm’s revenues came from machinery sold to the energy and transportation industries. An additional 40% came from the construction sector. Therefore, Caterpillar Inc. (NYSE:CAT) needs to see an uptick in the construction industry, favorable coal and copper mining activity, and lower interest rates to stimulate its two markets and generate tailwinds for the firm. The lack of these catalysts was evident during the third-quarter earnings as Caterpillar Inc. (NYSE:CAT) cut 2024 guidance and missed analyst EPS estimates of $5.34 by posting $5.17.
Diamond Hill Capital mentioned Caterpillar Inc. (NYSE:CAT) in its Q3 2024 investor letter. Here is what the fund said:
“Other top Q3 contributors included HCA Healthcare and Caterpillar Inc. (NYSE:CAT). Heavy construction machinery manufacturer Caterpillar has held up better than industry peers against a challenging macroeconomic backdrop and a generally slowing construction environment.”
4. Canadian National Railway Company (NYSE:CNI)
Bill & Melinda Gates Foundation’s Investment Stake: $6.4 billion
Number of Hedge Fund Investors In Q3 2024: 44
Canadian National Railway Company (NYSE:CNI) is a diversified Canadian logistics company that provides rail and road-based transportation services to industries. The firm’s revenue is neatly divided across a variety of sub-sectors such as automotive, metals, coal, petroleum, and agriculture. Yet, since Canadian National Railway Company (NYSE:CNI) caters exclusively to the industrial sector, it also depends on heightened economic activity for prosperity. Consequently, the fact that the firm’s shares are down 14.9% year-to-date is unsurprising. However, as Canadian National Railway Company (NYSE:CNI) is one of the biggest firms of its kind (as evidenced by its 20,000 route-miles of track), the firm can benefit from significant tailwinds once the North American economy kicks into high gear.
Appalaches Capital mentioned Canadian National Railway Company (NYSE:CNI) in its Q3 2024 investor letter. Here is what the fund said:
“During the quarter, we established core positions in two railroads: Canadian National Railway Company (NYSE:CNI) and CSX Corporation (CSX). The investment thesis is simple. Domestic railroads have not seen volume growth over the last 20 years despite being the cheapest, cleanest, and safest form of freight transportation.4 The lack of volume growth and related share losses to trucking is due to the poor reliability of the networks. However, there is strong evidence to believe that this may not be the case going forward. It seems that investors are overweighting historical characteristics of the industry and not giving credit to recent and sustainable improvements in service metrics. If the rails are able to show any sign of sustained volume growth, our investment should perform very well.
The Canadian railroads have more or less operated at full capacity over the last two decades, while the U.S. networks have not. Why is that? There are a few reasons for the anemic volume growth domestically, but only one of which is not shared by the Canadian railroads: service. In 2017, had you shipped goods by rail in Canada, the odds that your shipment would arrive on time, or the “trip plan compliance” rate, was around 90% or higher. In the U.S., these levels were closer to 50%.5 Maybe you have a different opinion, but I am not particularly excited about using a shipping service that only has a coin flip’s chance of arriving on time, even if it may be more economical…” (Click here to read the full text)
3. Waste Management, Inc. (NYSE:WM)
Bill & Melinda Gates Foundation’s Investment Stake: $6.7 billion
Number of Hedge Fund Investors In Q3 2024: 54
Waste Management, Inc. (NYSE:WM) is a Houston-based mega-corporation that provides trash transportation services and operates recycling facilities and landfills. Its scale and market position, with a customer base covering more than 20 million people, offer Waste Management, Inc. (NYSE:WM) a wide moat in its industry and make it one of the largest waste management firms in the US. The energy-intensive nature of its operations means that the firm is vulnerable to any upticks in energy prices as these drive up its logistics, landfill, and recycling plant costs. Additionally, Waste Management, Inc. (NYSE:WM) is also focusing on generating renewable energy for its facilities, which can help it bring down these costs in the future. The firm also depends on efficient route planning, and in 2024, it has benefited from higher prices in the wake of turmoil in the auto industry that has stressed the refurbishment market. Looking ahead, facility automation, route planning, and renewable energy will drive Waste Management, Inc. (NYSE:WM)’s hypothesis.
Parnassus Investments mentioned Waste Management, Inc. (NYSE:WM) in its Q3 2024 investor letter. Here is what the fund said:
“Waste Management, Inc. (NYSE:WM) announced second-quarter revenue and earnings that fell just short of analyst expectations, weighing on the stock. However, company management reiterated their optimistic full-year guidance for adjusted operating EBITDA (earnings before interest, taxes, depreciation and amortization) and free cash flow.”
2. Berkshire Hathaway Inc. (NYSE:BRK-B)
Bill & Melinda Gates Foundation’s Investment Stake: $10.1 billion
Number of Hedge Fund Investors In Q3 2024: 120
Berkshire Hathaway Inc. (NYSE:BRK-B) is the investment holding company for Warren Buffett. However, while the firm mostly makes the news for Buffett’s investment forays, its primary line of business is insurance. Berkshire Hathaway Inc. (NYSE:BRK-B) is one of the biggest insurance providers in the US, and it operates primarily through its GEICO business division. Apart from GEICO, the firm also offers home insurance products. Yet, over decades, Buffett has carefully built Berkshire Hathaway Inc. (NYSE:BRK-B) into a well-oiled business empire that benefits from having a variety of businesses under its wing. Some of the firm’s business include railroad, renewable energy, construction, and industrial operations. That’s why Berkshire Hathaway Inc. (NYSE:BRK-B)’s fate is also tied to the broader economic health, which was clear in 2022 when the stock fell by 25% between April and June as the Fed rapidly hiked interest rates in multiple 75-basis point increments.
1. Microsoft Corporation (NASDAQ:MSFT)
Bill & Melinda Gates Foundation’s Investment Stake: $12.4 billion
Number of Hedge Fund Investors In Q3 2024: 279
Microsoft Corporation (NASDAQ:MSFT) is one of the biggest technology companies in the world. Its success in making Windows the most widely used PC operating system in the world is responsible for Bill Gates’ riches. However, since Gates’ retirement, Microsoft Corporation (NASDAQ:MSFT) has diversified its business and made itself into one of the most important cloud computing players in the world. Cloud computing has also driven the firm’s hypothesis in 2024 due to the billions of dollars that it has invested in OpenAI. Investors expect Microsoft Corporation (NASDAQ:MSFT) to drive a profit from its AI investments, particularly by providing AI services to the business world through the Azure cloud computing platform. After the firm indicated during its Q2 earnings call that profitability might be further down the road, the stock sank and is down by 4.5% since then. Consequently, for Microsoft Corporation (NASDAQ:MSFT) to scale previous highs and retake the crown of the world’s most valuable company, it has to perform well with its cloud computing business on the AI front.
Mar Vista Investment mentioned Microsoft Corporation (NASDAQ:MSFT) in its Q3 2024 investor letter. Here is what the fund said:
“Microsoft Corporation (NASDAQ:MSFT) stock was pressured in the quarter as investors fretted over rising capex as Microsoft invests heavily in the burgeoning generative AI market. Investors are concerned about the rising capital intensity of the business and the uncertain return on that investment. We continue to believe that Microsoft occupies a strong competitive and strategic position and that it is poised to capture market share as businesses, both large and small, navigate the transition to a digital-first landscape and embrace generative AI-driven productivity tools. The company’s commanding presence in the enterprise arena, combined with its comprehensive product portfolio encompassing Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS), establishes it as a crucial provider of IT solutions for companies of all scales. Microsoft is effectively executing its strategy in a sizable market by offering a roadmap for digital transformation and adoption of cutting-edge, AI-driven solutions, such as ChatGPT and its suite of Copilot applications, which enhance productivity and reduce costs. Consequently, we anticipate that Microsoft’s solutions should exhibit resilience even in a more challenging macroeconomic environment, supporting low double-digit growth in intrinsic value within our investment horizon.”
MSFT is the top stock of Bill Gates’ investment firm. While we acknowledge the potential of MSFT as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MSFT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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