1 Super Artificial Intelligence (AI) Stock Billionaire Bill Gates Has 25% of His Foundation's Portfolio Invested In
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Interestingly, Bill Gates is a well-known entrepreneur, having co-founded Microsoft (MSFT 0. 54%) in the mid-1970s. This analysis suggests that made him a fortune, and he constantly ranks among...
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July 27, 2025
05:00 AM
The Motley Fool
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Interestingly, Bill Gates is a well-known entrepreneur, having co-founded Microsoft (MSFT 0. 54%) in the mid-1970s
This analysis suggests that made him a fortune, and he constantly ranks among the richest people in the world
Meanwhile, He established the Gates Foundation Trust, one of the world's most well-funded foundations, considering recent developments
By examining its holdings, investors can gain insight into what one of the world's brightest minds considers top stock picks, and they've identified an AI stock that has been a stellar performer in recent years (noteworthy indeed)
However, In fact, the stock has more than doubled since the start of 2023 alone
Additionally, What is this stock (which is quite significant)
Moreover, It's none other than Microsoft (something worth watching)
Image source: Getty Images
Microsoft is the foundation's top holding This really shouldn't come as a surprise to anyone
Bill Gates runs the fund, so he will fill it with a company that he thinks will succeed
Most of this stock was donated from Gates' wealth; however, if the foundation didn't think Microsoft was set to succeed, they would have sold it a long time ago and moved on to something else
On the other hand, 25% of the foundation's worth is tied up in Microsoft stock, valued at around $10
Additionally, That's a concentrated bet for a charitable foundation, but it has worked out well with Microsoft's recent success
Moreover, Microsoft has emerged as a top AI pick due to its role as a facilitator in the space
Nevertheless, It isn't its own generative AI model; instead, it's offering many of the leading ones on its cloud computing platform, Azure
Developers can choose from OpenAI's ChatGPT, a leading option, Meta Platforms' Llama, DeepSeek's R1 (a more affordable alternative from China), or xAI's Grok, a company founded by Elon Musk
By offering a wide range of generative AI models, Microsoft isn't locking its clients into a single vider
This has made Azure a top choice for building AI models on, which is why it has outgrown its peers in recent quarters
We'll get an on how the other cloud computing viders -- namely Alphabet's Google Cloud and Amazon's Amazon Web Services (AWS) -- in the next few weeks, but I'd be shocked if Azure isn't growing quicker than they are
Azure has become a top platform for building AI applications, but has it done enough to make Microsoft a top buy now
Meanwhile, Microsoft's stock is starting to look a bit pricey for its growth If Microsoft derived all of its revenue from Azure, I'd be a buyer at nearly any price
However, Microsoft has other duct lines that aren't growing as quickly, which slows the company's overall growth pace
In its period -- the third quarter of fiscal 2025 -- overall revenue rose to $70. 1 billion at a 13% pace
While Microsoft doesn't break out the revenue generated by Azure, we know from prior information that it accounts for over half of the Intelligent Cloud division, which brought in $26
Nevertheless, 8 billion during Q3 (ending March 31)
This leads to the conclusion that y do vide Azure's growth rate, which was Microsoft's top-performing division in Q3, rising 33% year over year, in today's market environment
Microsoft's diluted earnings per also rose an impressive 18%, but is that fast enough to justify its valuation, in this volatile climate
Microsoft trades at nearly 40 times trailing earnings, which is a very expensive price tag and exceeds its recent highs reached during the AI arms race period (this bears monitoring)
MSFT PE Ratio data by YCharts Wall Street analysts ject $15. 14 in earnings per for fiscal 2026 (ending June 30, 2026), which indicates the stock trades at 33
On the other hand, On the other hand, 7 times forward earnings (fascinating analysis)
Meanwhile, That's still a high valuation, and investors need to start being a bit cautious when stocks reach that level, especially when they're growing at Microsoft's pace
Yes, Microsoft is growing faster than the market, but it's not growing as fast as some of its peers
Moreover, Take Meta Platforms, for example
It trades at 28 times trailing earnings and grew revenue at a 16% pace during its last quarter with 36% earnings-per- growth
Nevertheless, That's a cheaper stock growing faster, which should cause Microsoft investors to question whether it's the best big stock to be in right now
Numerous other big stocks have better growth numbers and cheaper valuations than Microsoft
Although it's a dominant company, it's starting to look a bit expensive compared to its peers.
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