More Than Half Of Bill Gates Portfolio Is Tied Up In Just Two Stocks

The Microsoft MSFT founder is one of the few people who can legitimately claim to be one of the world's first big-tech titans. He has also become one of the world's most famous investors and his moves are very closely monitored by traders looking for an edge. Gates does most of his investments via his foundation and the latest breakdown of his trades shows that just two stocks make up over 50% of its portfolio.

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Microsoft – 28%

This one seems pretty obvious. Gates, after all, is the founder of Microsoft, which produces the world's most popular PC operating system. That alone gives Microsoft a large, and permanent market share in one of the world's most lucrative business sectors. The company's ubiquitous presence in the PC market helps explain why Microsoft is a member of the S&P 500 Magnificent Seven.

Like most big tech outfits, Microsoft is heavily involved in AI and cloud services. Both pursuits supplement the revenue Microsoft generates from sales of its Windows operating system and related software. Additionally, Microsoft's giant market share in the PC and OS sectors creates a built-in customer base for its latest AI endeavor, Microsoft 365 Copilot.

Microsoft 365 Copilot is an enhanced version of its bread-and-butter operating system that uses AI to enhance the user's experience across the company's product line (e.g., Microsoft Excel, Powerpoint). Despite Apple's AAPL high visibility and intense user loyalty, Microsoft still controls the lion's share of the PC market for business and professional purposes.  When you combine that with Microsoft's burgeoning AI capabilities, you get a bona fide mega-cap tech giant.

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That helps explain this tech giant's $416.91 stock price and why CEO Satya Nadella claimed the company's AI business is "on track to surpass an annual revenue run rate of $10 billion next quarter," on Microsoft's last earnings call. Benzinga's survey of 31 analysts also shows a consensus price target of 509, which means there is plenty of upside left in this stock. No wonder the Bill and Melinda Gates Trust Fund is so heavily invested.

Berkshire Hathaway – 23%

It's hard to argue against Warren Buffett's investment acumen and Berkshire Hathaway's BRK BRK.B)) multi-decade run as a winning stock is proof positive of why. The holding company owns interests in dozens of different businesses across multiple sectors that include, but are not limited to:

 ·      Retail

·      Tech

·      Transportation

·      Insurance

·      Manufacturing

·      Utilities

Owning Berkshire shares gives investors the luxury of buying into companies hand-selected by Buffett. In that sense, it's like buying into a high-performing hedge fund without the annual fees. However, it's Berkshire's insurance investments that give it so much financial muscle. Insurance companies generate something called "float," which is the combined total of policy premiums left over after the insurer pays its claims.  

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This float is for all intents and purposes, a zero-interest loan. Berkshire's ownership in so many insurance companies means it has a massive pile of cash to invest with. Buffett uses this float to his advantage by making smart investment decisions that generate profit for Berkshire and major stockholders like The Bill and Melinda Gates Trust Fund.

The Problem With Copying Bill Gates' Investment Style

Public filings show the Bill and Melinda Gates Trust Fund has beaten the S&P 500 by 13% over the past three years. Much of that performance is down to the success of its massive holdings in Microsoft and Berkshire. The only potential downside to trying to duplicate Gates' methods is that Berkshire and Microsoft shares are very expensive, so you may need to start small before you can copy Gates' style.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.

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