Investing

3 Genius Stocks in Bill Gates' Portfolio Worth Following Him Into

Joey Frenette

Published: September 29, 2024 9:02 am

For decades, Bill Gates has been praised for being one of the richest men and biggest philanthropists in the world. He’s the genius behind software firm Microsoft (NASDAQ:MSFT), and though he could have done even better by keeping all or at least most of his wealth in that one company’s stock, I do think that his diversified portfolio is better prepared to deal with a broader range of market conditions.

Indeed, Microsoft has been an exceptional performer in recent years, but as the technology sector becomes the epicenter of market volatility, there’s a chance that MSFT stock could amplify any downside faced by the rest of the market. In any case, Bill Gates knows the value of diversification, and if you want a peek inside what the man is investing in, just have a look inside Gates’ private investment firm, Cascade Investments.

Indeed, Cascade’s portfolio is well-constructed, likely thanks in part to the wisdom that long-time friend Warren Buffett shared with Gates in their many past meetings. It’s clear that Gates’ portfolio is influenced by the teachings of the Oracle of Omaha. And in this piece, we’ll look at three of the most intriguing stocks in the portfolio that I believe could make genius bets today.

Key Points About This Article

• Bill Gates is actually a fantastic investor with a portfolio that reeks of Warren Buffett’s investment philosophy.
• Microsoft, Berkshire Hathaway, and Deere are among the most notable bets in Gates’ portfolio.
• If you’re looking for some stocks with huge potential, make sure to grab a free copy of our brand-new “The Next NVIDIA” report. It features a software stock we’re confident has 10X potential.

Microsoft

No surprises here. The legend that built Microsoft still holds onto a great deal of shares today. And though he’s sold in the past, MSFT stock still remains the largest holding in the Gates portfolio. After soaring more than 211% in the past five years, it’s hard not to have the enterprise software giant as one’s largest holding (currently comprises less than 33% of Gates’ portfolio).

As Microsoft continues betting big on generative artificial intelligence (gen AI), I think the strong pace of gains could continue. As the firm builds on its Copilot AI while doubling down on AI accelerators, Microsoft could be one of the driving forces behind the automation of the workplace.

All considered, MSFT stock still looks like a genius bet, even at more than 36 times trailing price-to-earnings (P/E). Where else can you get leading AI exposure from a proven heavyweight champ in the tech scene?

Berkshire Hathaway

Any investor who believes in Warren Buffett’s investing philosophy should strive to buy and hold shares of Berkshire Hathaway (NYSE:BRK-B) for the extremely long haul. At writing, Berkshire comprises just north of 21% of the Gates portfolio.

Despite being one the wealthiest men on the planet, Gates still prefers those more affordable class B shares. Though the class A shares of Berkshire are betting for bragging rights, the B shares are more liquid and more practical, given very few folks can afford a single share of BRK-A, which trades at just shy of $700,000 per share.

In any case, Berkshire is a sound investment that’s diversified across a broad range of businesses Buffett would deem as “wonderful.” From See’s Candies to Geico to BNSF railway and everything in between, there are so many magnificent companies under the hood.

The best part, though, is that each business is run independently, with Buffett’s blessing. That makes Berkshire a no-brainer buy in most conditions, even in seemingly toppy-looking markets. Berkshire always tends to have plenty of cash on hand to buy on dips, and right now, it’s looking at a record cash hoard.

Deere

Over the years, Gates has quietly been buying up a large amount of farming land across the U.S. With farmland reportedly spread across 17 states, Gates is the largest private owner of farmland in the country. As a problem-solver and philanthropist, Gates likely wants to “level up” farming so that more mouths can be fed more efficiently.

Given Gates’ interesting farming, it should be no shocker to see shares of Deere & Co. (NYSE:DE) in his portfolio. The popular green farming equipment maker is a driving force behind a technological revolution at your local farm. Indeed, it seems strange to view the firm as an AI company.

However, as more equipment is equipped with autonomous tech, it’s not hard to imagine Deere as one of the most influential forces automating much of the labor involved in farming. Additionally, Deere’s tech may also help farmers save resources, which, in turn, could save farmers (and the world) big money.

Deere is a genius investment by Gates that looks relatively cheap at 14.0 times trailing price-to-earnings (P/E). Even if Deere steers away from assembly plants in Mexico due to the threat of 200% Trump tariffs, I don’t think there’s stopping the secular growth to be had from the name.