The Bill & Melinda Gates Foundation Trust made a striking portfolio move in the first quarter of 2026, selling its remaining 7.7 million shares of Microsoft. The exit ends a decades-long relationship between the foundation and the company its co-founder built. Today, the trust's public equity portfolio of roughly $33 billion has about 46% sitting in just two stocks: Berkshire Hathaway and Waste Management.
At first glance, this pairing seems odd. One is Warren Buffett's sprawling conglomerate, the other a waste collection company. But together they tell a clear story about how the Gates philanthropic machine is being run — and why it decided to walk away from its most iconic holding.
The Microsoft Exit: A Liquidity Decision, Not a Break
Microsoft has long been the emotional center of the Bill Gates narrative. He co-founded the company in 1975, led it to dominate personal computing, and remains its largest individual shareholder with about 103 million shares worth roughly $43 billion. But the foundation trust, managed separately by Cascade Asset Management, operates with a different mandate. Its job is to fund the foundation's grant-making, not to hold founder stock forever.
The trust began reducing its Microsoft stake years ago, concluding with a complete sell-down in early 2026. The decision was not a vote of no confidence. Microsoft's business remains strong, with its cloud computing and AI segments driving growth. Rather, the move reflects the trust's need for greater liquidity and diversification. As one market commentary noted, the trust was behaving "like a portfolio manager, not a founder."
The foundation now expects to spend more than $200 billion between now and 2045, when it plans to wind down. A concentrated position in a single technology stock, no matter how successful, creates risk. Selling Microsoft allowed the trust to lock in gains and reallocate to assets that offer steady cash flows and lower volatility — exactly what a spending machine needs.
Berkshire Hathaway: The Gift That Keeps Giving
Berkshire Hathaway is the trust's largest holding, accounting for roughly a quarter of the portfolio. This position comes largely from Warren Buffett's ongoing donations. Since 2006, Buffett has pledged most of his Berkshire shares to philanthropic causes, with the Gates Foundation the largest recipient. The foundation has regularly sold some of those shares to fund its activities, but it has also retained a significant block.
Berkshire itself is a natural fit for the trust's current needs. The conglomerate owns a diverse array of businesses — insurance, railroads, utilities, manufacturing — that generate substantial cash. Under CEO Greg Abel, who succeeded Buffett in 2024, Berkshire has continued to produce solid results. Its stock recently traded at about 1.4 times book value, near the lower end of its historical range, suggesting reasonable valuation. The company's lack of dependence on any single technology cycle aligns with the foundation's long horizon.
Buffett's giving also imposes a practical constraint. The foundation is required to spend the value of its annual gift from Buffett, plus an additional amount tied to its remaining assets. This forces a natural churn in the portfolio — shares flow in and must be monetized over time. The Berkshire position thus serves as both a funding source and a stable anchor.
Waste Management: The Quiet Compounder
The second major holding, Waste Management (WM), accounts for about 18% of the trust's public equity portfolio. It is far less glamorous than Microsoft, but it has been a staple in the trust for decades with relatively little turnover. The investment case rests on a simple but powerful asset: Waste Management owns or operates the largest landfill network in North America, with 262 landfill sites.
This infrastructure is extremely difficult to replicate. Obtaining permits for new landfills is a years-long process that often faces local opposition. Smaller waste haulers frequently need access to Waste Management's disposal sites, giving the company pricing power and scale advantages. The business is also recession-resistant — people and businesses generate trash regardless of the economic cycle. As Motley Fool analyst Adam Levy described it, "A boring business with a seemingly insurmountable competitive moat."
Waste Management has used its position to generate steady revenue growth and consistent free cash flow. The company has also invested in renewable energy from landfills and recycling technologies, adding a sustainability angle that aligns with the Gates Foundation's broader environmental goals. For a trust that needs predictable cash flows to fund billions in annual grants, Waste Management is an ideal fit.
The trust's concentration in just two stocks might seem risky, but both Berkshire and Waste Management are themselves diversified. Berkshire owns dozens of businesses across sectors, while Waste Management dominates an essential industry. Together, they provide a foundation that can withstand market turmoil while generating the income the foundation needs.
Behind these holdings is Cascade Asset Management, the firm that manages the foundation's endowment. Cascade was originally established to oversee Bill Gates' personal wealth and later took on the trust's portfolio. Its approach is long-term, low-turnover, and focused on high-quality businesses with durable competitive advantages. The shift away from Microsoft and toward more conservatively structured assets fits that philosophy.
The Gates Foundation itself has undergone significant changes in recent years. Bill and Melinda French Gates finalized their divorce in 2021, and Melinda resigned from the foundation in 2024. The foundation now operates under Bill Gates's leadership with a new CEO, Mark Suzman, and a clear timeline: spend down the endowment by 2045. That deadline adds urgency to portfolio decisions. Cash must be available when needed, and volatile stocks can disrupt grant-making plans.
Both Berkshire Hathaway and Waste Management offer the kind of stability that supports a spending plan. Berkshire's insurance float and operating earnings provide a steady stream of cash, while Waste Management's fee-based revenue holds up even in downturns. The trust's other holdings include smaller positions in industrial and consumer stocks, but none approach the weight of these two.
Critics might argue that the trust is too concentrated. But the foundation is not a typical pension fund or endowment. Its sole purpose is to disburse money to charitable causes. A concentrated portfolio of high-quality, cash-generative assets can be more efficient than a highly diversified one that includes marginal holdings. The trust's managers have clearly decided that Berkshire and Waste Management offer the best risk-adjusted returns for the foundation's unique mission.
In the end, the story of Bill Gates' foundation trust is not about a break with Microsoft. It is about a mature philanthropic institution making sober portfolio choices. The trust sold Microsoft to reduce risk and raise cash. It held onto Berkshire and Waste Management because they provide exactly what the foundation needs: reliable income, low volatility, and the ability to fund a $200 billion spending plan over the next two decades. The market may see two odd bedfellows — but for the Gates Foundation, they are the perfect partners.
Source: MSN News