Bill Gates has been named the world’s richest man a record 18 times. Although the billionaire has shifted his focus to philanthropic efforts as time has gone on, the Bill & Melinda Gates Foundation Trust still relies on stock investments to finance its worthwhile goals.
While the Trust’s holdings are heavily concentrated in traditionally stable blue-chip stocks like Berkshire Hathaway (NYSE: BRK.A), Microsoft (NASDAQ: MSFT) stands out as a unique opportunity.
Although blue-chip stocks are typically associated with stability rather than significant capital appreciation, Microsoft’s dominant position, advancements in AI and cloud computing, and strategic acquisitions position it as an exception with strong growth potential.
Finbold has analyzed the company’s latest 13-f filing through a different lens — focusing on stocks like Microsoft that provide growth prospects rather than holding weight.
Microsoft (NASDAQ: MSFT)
Bill Gates’ very own brainchild and the world’s largest software company by market cap, Microsoft accounts for 32% of the Bill & Melinda Gates Foundation Trust’s holdings.
Wall Street analysts are quite bullish on MSFT — with an average price target of $504.91 for the next 12 months, up 21.04% from the stock’s current price. Overall, Wall Street seems to be quite optimistic — with all 31 analysts featured on TipRanks rating the stock a buy based on performance in the last 3 months, and nary a sell or hold rating in sight.
Wall Street’s 12-month MSFT stock price targets. Source: TipRanks
On the high end of estimates, some analysts have even set price targets as high as $570, which would represent a 37% increase from the stock’s current trading price of $415.70.
MSFT is currently up 12.09% YTD, and 24.77% when compared to this time last year — although stock price experienced a significant pullback in July, primarily owing to less-than-stellar results in the company’s cloud computing segment amidst a general tech selloff.
MSFT stock YTD price chart. Source: Finbold
For the time being, MSFT’s stock price is quite stable — having increased by 0.33% on the daily chart, adding to an advance of +1.13% across the week for a total gain of +5.32% over the last month.
Schrodinger Inc (NASDAQ: SDGR)
In contrast to MSFT, Schrodinger Inc (NASDAQ: SDGR) comprises only 0.28% of the Trust’s holdings. The biotech company is currently engaged in efforts to find a computational solution to drug development — focusing primarily on predicting toxicity risk.
Although biotech stocks tend to be quite speculative, Wall Street Analysts predict that the stock could see a price increase of 54.61% — with some analysts even setting price targets that would represent a 104.56% gain.
Wall Street’s 12-month SDGRstock price targets. Source: TipRanks
Schrodinger’s future prospects hinge on two unequal factors. While the company has seen modest success in licensing its drug discovery platform through a SaaS model, which saw a 3.7% revenue increase last quarter, in the long term, drug discovery is the potential catalyst for outsized gains. Be that as it may, Wall Street remains cautiously optimistic — of the 7 analysts covering the stock, 5 rate it a ‘buy,’ and only 2 rate it a ‘hold,’ with notably no ‘sell’ ratings.
However, SDGR has been in dire straits as of late — the company saw a staggering 44% decline in YoY revenue, coupled with a 13% increase in operating expenses. Accordingly, the stock’s share price dropped by 40.17% YTD.
SDGR stock YTD price chart. Source: Finbold
Although it might be a risky play, there is still a case to be made for SDGR. The company maintains a robust financial position, strong margins in its software department, and its two phase-1 clinical studies remain on track, with an additional one expected to begin by the end of the year.
At press time, the stock was trading at $21.02, having lost 1.61% over the day, reducing the 6.87% gain made over the week and the 10.52% gain accrued over the last month.
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