Billionaire Bill Gates' Trust Sells Microsoft, Buffett's Berkshire Hathaway in Q1, Walmart Stake Increases by 200%

Update May 28: Headline and subtitle was modified correctly pertain to Gates' foundation's stake in Walmart.

Philanthropist billionaire and former CEO of Microsoft (NASDAQ: MSFT), Bill Gates, has a significant stake in Microsoft through his holdings and the Bill and Melinda Gates Foundation Trust.

While the Trust has gradually reduced its share in the tech giant over decades, the latest 13F filing for Q1 2024, released on May 15, shows a marked drop in its Microsoft stake by 1.71 million shares to 36,499,597, worth $15.35 billion. However, it remains the largest holding of the Trust's $45.85 billion portfolio. This move comes despite Microsoft undergoing transformation growth with AI.

Meanwhile, the Trust also sold 2.61 million shares of his friend Warren Buffett's Berkshire Hathaway (NYSE: BRK.B) in Q1. It currently owns 17,303,097 company shares, as Berkshire dropped to the third position in Gates' portfolio.

Buffett's relationship with Bill and Melinda French Gates goes way back, and the Trust also receives shares donated by Berkshire under a 2006 grant. Buffett played a crucial role in Bill's retiring at 50 to focus on the foundation. French Gates has also credited Buffett for helping bring balance to her life. The grant earmarked 10 million of Buffett's shares, where 5% of it would go to the Gates Foundation annually for spending on good causes.

The decision of the Trust to trim top holdings last quarter might be influenced by French Gates' recent decision to step down as co-chair. The 13F filing coincided with her May 13 announcement on X that she will resign from the Trust, effective June 7, 2024. She will also receive $12.5 billion under an agreement with Bill Gates to pursue her philanthropic efforts directed towards women in the US.

What happens to the vast wealth bequeathed by Buffett to the Gates Foundation? While there is no update on whether French Gates' departure changes the terms of Buffett's gift to the foundation, the offering applies during Buffett's lifetime. This clause could mean changes to the grant agreement may be possible after her exit and consolidate that power in the hands of Bill Gates.

Meanwhile, the Gates Foundation went heavy on Walmart (NYSE: WMT) in Q1. The Trust's stake in the retail giant increased by 200% quarter-over-quarter to 9,090,477 shares worth $546.97 million.

Walmart's total revenues in Q1 jumped 6% year-over-year to $161.5 billion on robust growth in advertising business and e-commerce penetration worldwide. The firm's Q2 guidance suggested a consolidated net sales increase between 3.5%-4.5% and operating income growth of 3% to 4.5%.

Walmart believes AI is integral to cater to a growing number of customers seeking "do it for me" experiences. The company has been deploying generative AI in its services across verticals this decade.

Walmart's customers can now shop much faster than they can text using its AI-powered Voice Order feature that leverages natural language understanding (NLU) capabilities. The firm also uses NLU in its chatbots to swiftly understand the conversation's context and resolve millions of customer queries so that agents can focus on more complex issues. Furthermore, the Ask Sam AI voice assistant for in-store associates helps them save significant time looking up items, store maps, prices, and sales summaries through voice commands.

Recently, Google invested $350 million in Walmart-owned Indian e-commerce giant Flipkart as part of a $1 billion funding round to advance AI adoption, enhance digital infrastructure using Google's cloud services, and improve its seller support ecosystem. Flipkart boasts over 500 million registered users, making it a leading online shopping platform in the sub-continent.

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