Why does Warren Buffett not invest in Microsoft?
Warren Buffett potentially missed out on Microsoft's IPO because of Liberty Media's John Malone. Malone told the investor that he wouldn't buy the software stock due to competitive threats. The media mogul later said he'd be "bigger than Warren Buffett" if he spun off fewer companies.
The list below highlights Warren Buffett stocks like Microsoft, Alphabet, Lululemon, Daqo New Energy, Atkore, and Axon that are in sync with his focus on management quality and long-term growth.
Buffett doesn't own any shares in Microsoft and has said in the past that this was in order to quell fears that he was participating in any insider trading.
However, Buffett has admitted to making a mistake by not buying Alphabet (then Google) years ago. He even played a key role in Google going public in the first place.
The tech company is experiencing decelerating revenue growth, which is disappointing investors. Microsoft (MSFT -0.18%) stock is down after the company released fiscal 2023 first-quarter earnings. Microsoft's revenue growth is slowing as consumers spend more on items outside their homes.
Microsoft offers much to like, but as one of the most consistently innovative companies in the world, Apple is the better stock for investors looking to buy and hold for the long haul. The iPhone company has proven its relative stability in 2022 with its stock down just 10% year to date -- half of Microsoft's decline.
The top shareholders of Microsoft are Satya Nadella, Bradford L. Smith, Jean-Philippe Courtois, Vanguard Group Inc., BlackRock Inc. (BLK), and State Street Corp. Below is a look in more detail at Microsoft's six biggest shareholders.
Bill Gates still owns more than 1% of Microsoft's shares, worth around twenty billion dollars. Gates has a lot of his financial investments held by a family office known as Cascade Investments. He also has substantial real estate holdings and an extensive collection of collectibles.
Buffett is a shareholder in Markel, as his company, technically, has a vested interest in the more than 100 securities in which Markel is invested. This includes 43,000 shares of Netflix, more than 184,000 shares of Meta, and close to 2.75 million shares of Google (Class C, GOOG).
| STOCK | NUMBER OF SHARES OWNED | VALUE OF STAKE |
|---|---|---|
| Chevron (NYSE:CVX) | 165,359,318 | $29.9 billion |
| Coca-Cola (NYSE:KO) | 400,000,000 | $25.2 billion |
| American Express (NYSE:AXP) | 151,610,700 | $23.1 billion |
| Occidental Petroleum (NYSE:OXY) | 194,351,650 | $13.3 billion |
What tech stock is Warren Buffett buying?
But Berkshire's 13F filing just came out for the third quarter and shows that Buffett and his team initiated a large position in one tech stock: Taiwan Semiconductor Manufacturing (TSM -1.43%).
The portfolio's five largest positions are Apple Inc. (AAPL), Bank of America Corp (BAC), American Express Company (AXP), Chevron, and The Coca-Cola Company (KO). Apple is Berkshire's largest holding, accounting for nearly 41% of its stocks portfolio.
Investments Over the Years
Unsurprisingly, Bezos was an angel investor in Google in 1998. His $250,000 is worth roughly $3.1 billion today. During its series B seed funding round, he also invested approximately $37 million in ride-sharing startup Uber in 2011.
To most people's surprise, Buffett's Berkshire Hathaway does own a position in Amazon (NASDAQ: AMZN).
Berkshire Hathaway has all but abandoned its stake in the world's largest retailer. Warren Buffett's Berkshire Hathaway (symbol BRK. B (opens in new tab)) is falling out of love with Walmart Stores (WMT (opens in new tab), $68.87). It sold the majority of its holdings in the world's largest retailer last year.
What is a Good Buy Price for MSFT Stock? Turning to Wall Street, MSFT stock has a Strong Buy consensus rating based on 25 Buys and three Holds assigned in the past three months. Two of those Strong Buy ratings were given last week. The average Microsoft price target is $294.85, implying 33.2% upside potential.
With plans to expand its hold in gaming, digital advertising, and cloud computing in 2023, Microsoft's stock looks like a must buy.
Microsoft Corporation quote is equal to 255.020 USD at 2022-12-04. Based on our forecasts, a long-term increase is expected, the "MSFT" stock price prognosis for 2027-11-24 is 502.288 USD. With a 5-year investment, the revenue is expected to be around +96.96%. Your current $100 investment may be up to $196.96 in 2027.
Apple lost all claims in the Microsoft suit except for the ruling that the trash can icon and folder icons from Hewlett-Packard's NewWave windows application were infringing.
However, an investment in Microsoft is one in a high-quality company with an extremely intelligent management team. MSFT is a rare AAA rated gem, one of the safest in the world.
Is Microsoft stock good for long term investment?
Microsoft's long-term outlook is still stable
Its paltry forward dividend yield of 1.1% also won't attract any serious income investors. Microsoft's stock will likely head higher over the long term, but its valuation could limit its near-term gains.
If Bill Gates kept all of his shares after the first day of the Microsoft IPO he would now be a trillionaire. This would even allow for several billion in charitable donations.
Gates has sold almost 8 million shares of Microsoft (MSFT, Fortune 500), bringing down his total to roughly 330 million which puts him behind Microsoft's former CEO Steve Ballmer who owns 333 million shares. Gates owned 49% of Microsoft at its IPO in the year 1986, which made him an instant multi-millionaire.
Gates is believed to own about $28.6 billion worth of Microsoft stock, a bit over 1% of the company. He stopped reporting his ownership stake in Microsoft in 2020 after he stepped down from the board of directors.
| Type | Private |
|---|---|
| Founded | 1995 |
| Founder | Bill Gates |
| Headquarters | Kirkland, Washington , United States |
| Key people | Bill Gates (Chairman) Michael Larson (CIO) |
One of the most popular has to do with Microsoft starting as a penny stock. It's not true, but I'll show you how the fraudsters try to trick you. Here's the truth: Microsoft's stock debuted on the Nasdaq market on March 13, 1986. Its price at the end of that first day was $28.
As part of the agreement, Gates agreed not to sell the Apple stock for three years. (Skin is only skin if it stays in the game.) In 2003, Microsoft sold its entire stake for $550 million.
| Stockholder | Stake | Shares owned |
|---|---|---|
| The Vanguard Group, Inc. | 7.55% | 172,092,284 |
| Fidelity Management & Research Co... | 4.75% | 108,224,960 |
| BlackRock Fund Advisors | 4.39% | 100,059,506 |
| SSgA Funds Management, Inc. | 3.92% | 89,417,436 |
This company was acquired in 2017 by the Chan Zuckerberg Initiative (CZI), a foundation established by Zuckerberg and his wife Priscilla Chan, and became one of their projects.
What stocks Bill Gates own?
- Weber Inc. (NYSE:WEBR)
- Coca-Cola FEMSA, S.A.B. de C.V. (NYSE:KOF)
- Vroom, Inc. (NASDAQ:VRM)
- Schrödinger, Inc. (NASDAQ:SDGR)
- Waste Connections, Inc. (NYSE:WCN)
- Coupang, Inc. (NYSE:CPNG)
- Madison Square Garden Sports Corp. (NYSE:MSGS)
- The Kraft Heinz Company (NASDAQ:KHC)
1. Apple. Apple (AAPL -0.34%) ranks by far as the top Buffett stock. Berkshire Hathaway directly owns nearly 895 million shares of the consumer tech giant.
- Series I bonds.
- Short-term corporate bond funds.
- S&P 500 index funds.
- Dividend stock funds.
- Value stock funds.
- Nasdaq-100 index funds.
- Rental housing.
- Cryptocurrency.
When asked about the impact the internet might have on Berkshire's businesses at the 1999 annual meeting of shareholders, the Oracle of Omaha replied: "The internet is going to have an important impact on retailing. It will have a huge impact on some forms of retailing. Change them and maybe revolutionize them...
Arguably the most notable move by Buffett and Berkshire in the quarter was their investment in the world's largest chipmaker, Taiwan Semiconductor Manufacturing Company (TSM -1.43%), also known as TSMC.
“Price is what you pay, value is what you get.” This famous Buffett quote strikes at the heart of the “value investor” approach and reveals the secret of how Buffett made his fortune.
On August 6, 1997, Microsoft's Bill Gate invested $150 million in Apple which was in the brink of bankruptcy. Following the deal, Steve Jobs told Gates, “Bill, thank you.
Berkshire Hathaway Inc.
The company has been overseen since 1965 by its chairman and CEO Warren Buffett and vice chairman Charlie Munger, who are known for their advocacy of value investing principles.
Another one of Google's China footprints is through CapitalG, Alphabet's investment arm that has deployed an increasing amount of capital in China through AI investments.
Who owns the most Amazon stock?
| Stockholder | Stake | Shares owned |
|---|---|---|
| The Vanguard Group, Inc. | 6.52% | 664,770,900 |
| BlackRock Fund Advisors | 3.68% | 375,545,302 |
| SSgA Funds Management, Inc. | 3.23% | 329,849,003 |
| T. Rowe Price Associates, Inc. (I... | 2.77% | 282,601,501 |
| Stockholder | Stake | Shares owned |
|---|---|---|
| The Vanguard Group, Inc. | 7.58% | 452,472,631 |
| BlackRock Fund Advisors | 4.37% | 261,128,738 |
| Fidelity Management & Research Co... | 3.67% | 219,391,351 |
| SSgA Funds Management, Inc. | 3.64% | 217,154,306 |
Buffett was raised as a Presbyterian, but has since described himself as agnostic.
Via his investment company Berkshire Hathaway, Buffett has 894m shares in Apple, according to Q2 filings. This has an approximate value of $122bn, by far the largest holding in the $300bn portfolio. In fact, it accounts for 40.76% of the invested funds.
Bill Gates and Warren Buffett have been best friends for over 30 years. Initially, they weren't interested in meeting each other — but they hit it off right away. They've partnered on political and philanthropic ventures, and mentored each other along the way.
| Company | Ticker | Berkshire ownership stake |
|---|---|---|
| Apple Inc. | AAPL, +0.42% | 5.41% |
| General Motors Co. | GM, -0.86% | 4.13% |
| StoneCo Ltd. Class A | STNE, +0.47% | 4.07% |
| Verizon Communications Inc. | VZ, +1.83% | 3.78% |
Bill Gates's position in Walmart is currently worth $464 Million. That's 1.22% of their equity portfolio (8th largest holding). The first Walmart trade was made in Q2 2006. Since then Bill Gates bought shares eight more times and sold shares on five occasions.
Walmart is, however, a publicly traded company, so it is technically owned collectively by its shareholders, including the Walton Family, the Vanguard Group, as well as many individual shareholders across the world. Some of these shareholders likely live in China, but Walmart is not a Chinese company.
Microsoft Investment Opportunity
Microsoft has a volatility of 2.58 and is 1.73 times more volatile than NYSE Composite. 22 of all equities and portfolios are less risky than Microsoft.
The top shareholders of Microsoft are Satya Nadella, Bradford L. Smith, Jean-Philippe Courtois, Vanguard Group Inc., BlackRock Inc. (BLK), and State Street Corp. Below is a look in more detail at Microsoft's six biggest shareholders.
Why didnt Buffett invest in technical?
Over the years, Buffett has at times expressed a reluctance to invest in tech stocks, considering the industry to be outside his circle of maximum competence as an investor.
Through his Cascade investment firm, Gates also owns stakes in waste management companies Republic Services and Waste Management and car seller AutoNation, among others. Gates is believed to own about $28.6 billion worth of Microsoft stock, a bit over 1% of the company.
Microsoft's analyst rating consensus is a 'Strong Buy. This is based on the ratings of 28 Wall Streets Analysts.
| Building 92 on the Microsoft Redmond campus | |
|---|---|
| Founders | Bill Gates Paul Allen |
| Headquarters | One Microsoft Way Redmond, Washington, U.S. |
| Area served | Worldwide |
| Key people | Satya Nadella (chairman and CEO) Brad Smith (vice chairman and president) Bill Gates (technical adviser) |
MSFT President Brad Smith said in 2020 that China only accounted for 1.8% of Microsoft's revenues, which would still be around US$3.0 billion if projected onto its fiscal 2021 sales of US$168 billion for the year through June 30. That US$3 billion is nothing to scoff at, of course.
Buying at the wrong price, confusing revenue growth with a successful business, and investing in a company without a sustainable advantage are all mistakes the Buffett has shared with his shareholders in his legendary annual letters to them.
Warren Buffett doesn't directly own any Bitcoin.