Microsoft (MSFT) Stock: Gates Foundation Dumps 17 Million Shares in Massive Sale

TLDR

• The Gates Foundation Trust sold approximately 17 million Microsoft shares in Q3, cutting its position from $13.9 billion to $4.76 billion
• Microsoft dropped from the trust’s largest holding to fourth place, now behind Berkshire Hathaway, Waste Management, and Canadian National Railway
• The trust has been a consistent seller of Microsoft stock quarterly since late 2023, apart from a major purchase in 2022
• Portfolio managers at Cascade Investments handle the trust’s day-to-day operations, not Bill Gates directly
• The sales appear driven by portfolio rebalancing and the foundation’s plan to increase annual grants to $9 billion by 2026

The Gates Foundation Trust executed a major reduction in its Microsoft stake during the third quarter. The trust sold roughly 17 million shares, slashing its position by 65%.

The holding dropped from $13.9 billion to approximately $4.76 billion. Microsoft now sits as the trust’s fourth-largest position.

Microsoft Corporation, MSFT

Bill Gates founded Microsoft but stepped away from daily operations in 2008. He remains connected to the company through the Gates Foundation Trust, which manages nearly $50 billion in assets.

The trust’s Microsoft position previously represented about one-third of its total portfolio value. That concentration has now changed drastically.

Berkshire Hathaway now leads the trust’s holdings at $10.9 billion. Waste Management and Canadian National Railway also rank ahead of Microsoft.

Understanding the Selling Pattern

The Gates Foundation Trust hasn’t made these sales sporadically. The trust has sold Microsoft shares every quarter since the end of 2023.

An external team at Cascade Investments manages the trust’s portfolio decisions. Bill Gates doesn’t control day-to-day trading activity.

The trust did make one large Microsoft purchase in 2022. It added nearly 40 million shares during that period.

Before that 2022 purchase, the trust maintained a long tradition of selling Microsoft stock quarterly. This recent selling continues that historical pattern.

The third quarter sales generated between $8.7 billion and $8.8 billion in proceeds. The trust also trimmed other major positions and exited holdings in Crown Castle and United Parcel Service entirely.

Portfolio Rebalancing for Charitable Goals

The foundation plans to increase its annual grantmaking to $9 billion by 2026. The organization intends to fully spend down its endowment by 2045.

These charitable commitments require steady cash generation. Reducing concentration in a single stock helps create portfolio stability.

The trust needs reliable liquidity for global health and education programs. Diversifying into stable holdings like Berkshire Hathaway aligns with standard endowment management practices.

Microsoft stock currently trades around $478 per share. The stock fell about 12% from its late-October peak near $555.

The broader stock market has become expensive. The S&P 500 trades above 30 times earnings, roughly double its long-term average.

Microsoft trades at nearly 13 times sales. The company last reached this valuation level during the dot-com bubble two decades ago.

The company’s Azure cloud computing division continues driving growth. Microsoft plans to spend $80 billion on new data center infrastructure this year.

Nvidia recently reported strong third-quarter earnings with revenue up over 60%. Those results confirm that enterprise spending on AI infrastructure remains strong, which benefits Microsoft’s Azure business.

The trust still holds over 9 million Microsoft shares worth $4.76 billion. This represents a substantial position, not a complete exit.

The sales don’t appear connected to concerns about Microsoft’s business fundamentals. No public evidence suggests the trust sees problems with AI competition or company valuation.

Microsoft generates strong free cash flow and maintains a lower forward P/E ratio than many AI peers after its recent pullback. Azure growth continues to accelerate while Copilot adoption expands across the company’s product lineup.

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