Bill Gates is turning heads again, but not for anything tech-related. While Microsoft (NASDAQ:MSFT) remains his largest holding (about $15.4 billion) in the Bill & Melinda Gates Foundation portfolio, Gates has been making some surprising moves.
Over the past year, he sold nearly a quarter of his Microsoft stock, but his bold third-quarter buys have everyone talking. Gates put his money into two transportation companies, signaling he’s betting big on an industry bounce-back.
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The S&P 500 Transportation Index had a tough 2024, slipping 0.5% while the overall S&P 500 soared 23%. But Gates seems to see opportunity in the midst of it all.
According to market analysts, his two picks – Paccar and FedEx – reflect a belief that the sector is poised for a turnaround, especially if the economy improves in 2025. These strategic buys are worth a closer look.
Paccar (NASDAQ:PCAR) might not ring a bell, but it’s heavy in heavy-duty trucks. The company’s Peterbilt and Kenworth brands command 14.9% and 14.7% of the U.S. Class 8 truck market, second only to Freightliner’s dominant 36.5% share, as reported by ATD.
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These massive trucks, weighing over 33,000 pounds, are critical to the economy and Paccar’s performance reflects that.
Paccar had a strong start to 2024, with a quarterly revenue of $8.74 billion in the first quarter. But as truckload demand dipped, the momentum faded. Still, signs of a recovery are emerging. Kenny Vieth, president of ACT Research, told Transport Topics, “We’re in the early stages of building 2025 backlogs and November orders were up 21% from October.”
Gates scooped up one million Paccar shares at around $100 each, a $100 million investment in a company he believes has long-term promise.
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Then there’s FedEx (NYSE:FDX), a logistics powerhouse navigating turbulence. Its third-quarter report fell short of expectations and the company revised its full-year forecast downward, unsettling investors. But Gates saw an opportunity, snapping up another one million shares at an average of $273 each.