We recently compiled a list of the 10 Best Stocks to Buy According to Bill Gates. In this article, we are going to take a look at where Canadian National Railway Company (NYSE:CNI) stands against the other stocks.
Bill Gates is one of the most influential figures in the modern world. The software company he co-founded, best known for its Windows operating system, ranks among the most valuable companies globally, boasting a market capitalization of $3 trillion. This success has contributed to Gates becoming one of the wealthiest individuals, with his net worth recently estimated at $108 billion.
In 2000, Bill and Melinda Gates established the Bill & Melinda Gates Foundation, now one of the world’s largest charitable organizations. The foundation focuses on public health, poverty reduction, education, and climate change. Since 1994, the Gateses have contributed over $50 billion to its initiatives, including more than $1.94 billion in grants for vaccine research during the COVID-19 pandemic.
According to a report by Business Insider, Bill Gates, Melinda French Gates, and Warren Buffett have collectively contributed around $100 billion to the Gates Foundation to date. During an interview with the BBC, the Microsoft co-founder and Gates Foundation chair disclosed the extent of his philanthropic efforts. According to a foundation fact sheet, Gates and French Gates, who are now divorced, donated a total of $59.5 billion between the organization’s inception in 2000 and the end of 2023. Meanwhile, Buffett, the CEO of Berkshire Hathaway, has contributed an additional $39.3 billion.
The foundation has been a major financial backer of the National Institutes of Health (NIH) for malaria and tuberculosis vaccine research. It also played a pivotal role in launching Gavi, the Vaccine Alliance, which spearheads immunization efforts in low-income nations. Headquartered in Seattle, the foundation continues to expand its global impact. Following a $20 billion donation, Gates outlined plans to boost its annual spending by 50%, targeting $9 billion by 2026.
Bill Gates has dedicated years and billions of dollars to addressing climate change. His foundation has directed substantial funding toward climate technology solutions while consistently highlighting major sources of greenhouse gas emissions, particularly those from large energy and manufacturing companies that burn fossil fuels extensively. However, Gates believes that many people overlook one of the significant contributors to climate change: agriculture, particularly methane emissions from livestock and the impact of fertilizers.
Since 2015, Breakthrough Energy, the climate-focused investment firm he founded, has allocated $2.2 billion to more than 160 startups and initiatives, aiming to generate investor returns while reducing emissions. In addition to these investments through the firm, Gates has also pursued climate-focused ventures independently. Some of these startups focus on practical solutions, such as sealants to improve heating efficiency, while others explore more unconventional approaches, including burying plant waste to capture carbon dioxide from the atmosphere.
As of Q4 2024, The Gates Foundation, managed by Michael Larson, has a portfolio valued at over $42 billion. The tech and industrial goods sectors represented 29% and 26.3% of the portfolio, respectively. The finance sector made up over 21% of the fund’s portfolio. In view of this, we will take a look at the best stocks to buy according to Bill Gates.
Our Methodology
To make our list of the latest stocks in Bill Gates’ portfolio, we scanned through the Bill & Melinda Gates Foundation’s SEC filings for the fourth quarter and picked out the top ten stocks with the highest investment stakes.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A driverless train traversing vast countryside, illustrating the companies long-distance rail transport services.
Canadian National Railway Company (NYSE:CNI)
Stake Value as of Q4 2024: $5,565,467,047
A leading North American transportation and logistics company, Canadian National Railway Company (NYSE:CNI) transports more than C$250 billion worth of goods annually for a wide range of business sectors, ranging from resource products to manufactured products to consumer goods, across a rail network of approximately 20,000 route-miles spanning Canada and mid-America.
Canadian National Railway Company (NYSE:CNI) had a difficult Q4 2024, facing a number of challenges including labor issues and strikes. The looming threat of tariffs by the Trump administration could also seriously hamper its operations. The company reported a Q4 2024 revenue of around $3 billion, down 9.38% YoY and below market expectations by over $24.2 million. However, CNI’s overall 2024 revenue still surged by around 1.3% YoY to a little over CAD $17.04 billion (approx. $11.96 billion). CNI also generated $3.1 billion in free cash flow in 2024, down $800 million from the year before due to higher capital spending and lower cash flow from operations. Reiterating its commitment to its shareholders, the company recently announced a 5% dividend increase for 2025, marking 29 consecutive years of growth. It also authorized a new buyback program for up to 20 million shares from February 2025 to February 2026.
It was announced last month that Canadian National Railway Company (NYSE:CNI) has gained regulators’ approval to acquire Iowa Northern Railway Company. The merger will further bolster CNI’s network, adding 175 route miles within the state of Iowa, and will offer single-line service to better connect grain, fertilizer, renewable fuels, and industrial markets to CNI’s North American network.
Appalaches Capital stated the following regarding Canadian National Railway Company (NYSE:CNI) in its Q3 2024 investor letter:
“During the quarter, we established core positions in two railroads: Canadian National Railway Company (NYSE:CNI) and CSX Corporation (CSX). The investment thesis is simple. Domestic railroads have not seen volume growth over the last 20 years despite being the cheapest, cleanest, and safest form of freight transportation. The lack of volume growth and related share losses to trucking is due to the poor reliability of the networks. However, there is strong evidence to believe that this may not be the case going forward. It seems that investors are overweighting historical characteristics of the industry and not giving credit to recent and sustainable improvements in service metrics. If the rails are able to show any sign of sustained volume growth, our investment should perform very well.
The Canadian railroads have more or less operated at full capacity over the last two decades, while the U.S. networks have not. Why is that? There are a few reasons for the anemic volume growth domestically, but only one of which is not shared by the Canadian railroads: service. In 2017, had you shipped goods by rail in Canada, the odds that your shipment would arrive on time, or the ‘trip plan compliance’ rate, was around 90% or higher. In the U.S., these levels were closer to 50%.5 Maybe you have a different opinion, but I am not particularly excited about using a shipping service that only has a coin flip’s chance of arriving on time, even if it may be more economical…” (Click here to read the full text)
Overall CNI ranks 4th on our list of the best stocks to buy according to Bill Gates. While we acknowledge the potential for CNI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CNI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.