A 13F-HR filing with the US Securities and Exchange Commission (SEC) revealed that the Gates Foundation Trust’s portfolio size declined by £2.31 billion to £38.4 billion in Q4 2024.
For the second consecutive quarter, Gates sold a considerable amount of Microsoft (NASDAQ:MSFT) and Berkshire Hathaway (NYSE:BRK.B) shares.
For the quarter ended 31st December 2024, the foundation trimmed its stake in Microsoft by 1.73%, or 500,000 shares, to 28.46 million shares worth £9.26 billion.
In the same quarter, the billionaire sold 2.48 million shares of Berkshire Hathaway, reducing his stake in the company by 11.21% to 19.66 million shares worth £6.88 billion.
Despite these trades, Microsoft and Berkshire Hathaway remain Gates’ top portfolio holdings, making up almost 50% of his total portfolio size.
Microsoft Continues To Face Widespread Outages
Alongside a Crowstrike crash in 2024, which crippled millions of devices running on Microsoft Windows systems, the company’s services continue to struggle with massive outages, disrupting user access to key tools like Outlook and Microsoft 365.
Last week, Microsoft users in the US couldn’t access Outlook, Microsoft 365, and other services due to a widespread outage. Downdetector logged over 37,000 complaints about Outlook alone. Complaints for 365 services mounted to 24,000 users, while many people reported problems with Microsoft Teams, Azure, and Xbox services. The company has faced similar disruptions in 2024 and 2023.
Late last year, the US Federal Trade Commission (FTC) launched an antitrust investigation into Microsoft’s cloud computing, cybersecurity, and AI units, asking the tech firm to divulge details about its business practices. Since Microsoft is a top government contractor offering cloud and software products to US agencies, the FTC stated that outages impacting a cloud provider’s services as big as Microsoft could have a “cascading impact” on the overall economy.
Berkshire Hathaway Shares Could Be Overvalued
Gates sold almost five million Class B shares of Berkshire Hathaway in the past two quarters. His moves coincided with his friend and legendary investor Warren Buffett’s decision not to buy back shares of his own company in Q3. This was the first time Buffett made such a decision in six years, probably because the Oracle of Omaha thought his company could be overvalued.
A company regulatory filing mentioned Buffett would purchase shares when he feels the stock price is ‘below Berkshire’s intrinsic value, conservatively determined,’ showcasing his decades-long adherence to value investing principles of buying great businesses at lower prices.
In Q4, Berkshire Hathaway’s cash reserves ballooned to £258.4 billion, fueling speculation about whether there are no bargains in the market. However, Buffett reassured investors about his preference for equities over cash.
‘Despite what some commentators currently view as an extraordinary cash position at Berkshire, the great majority of your money remains in equities,’ Buffett noted. ‘That preference won’t change.’
He added that although Berkshire’s stock holdings fell last year, the value of its private holdings rose ‘and remains far greater than the value of the marketable portfolio.’