If there’s a habit I’ve picked up from watching markets, it’s that when everyone is looking at the loudest trade, I start wondering what’s happening in the quiet corners.
The biggest clues aren’t always found in a soaring stock that’s already overvalued or a famous analyst calling for a breakout. Sometimes they’re buried somewhere else that investors never bother to open. I’d put this one in the last category.
The latest 13F filing from the Bill & Melinda Gates Foundation Trust shows a new $352.7 million position in The Home Depot (HD). At the same time, the trust cut its stake in Berkshire Hathaway by about $818 million.
That’s not pocket change, and it’s certainly not the kind of portfolio move I’d scroll past without asking why.
Why? This is big money moving from one of the market’s most iconic investments into a home-improvement giant. There must be a story hiding underneath the numbers. The trust just bought the shares while everyone else seems to be waiting for the housing market to come back to life.
The trust now holds 1 million shares of The Home Depot. That’s a meaningful opening position for a portfolio with $34.42 billion in managed 13F securities, according to WhaleWisdom.
And it arrives at a moment when The Home Depot just delivered its strongest comparable sales growth since 2022, despite what its own CFO describes as “frozen housing market conditions.”
Why Gates Trust trimmed Berkshire and opened The Home Depot
The Gates Foundation Trust’s portfolio is concentrated and deliberate. Its top five holdings include Berkshire Hathaway Class B (BRK.B), Caterpillar (CAT), Canadian National Railway (CNI), Waste Management (WM), and Deere & Company (DE), according to GuruFocus data.
These are long-duration bets on essential infrastructure, industrials, and American economic activity.
The Home Depot fits that same framework anyway. It’s the world’s largest home improvement retailer, tied directly to the American housing stock, The Home Depot reports.
More Retail:
The trust also opened a new position in FedEx Freight Holding Company (FDXF) worth approximately $180 million in the same quarter, according to the 13F filing. That’s another infrastructure-adjacent business that I’ll most likely cover next.
My understanding is that the trust is rotating toward companies that benefit from domestic economic activity and physical asset maintenance rather than purely financial holdings. Call me crazy, but that sounds like a pretty interesting investment thesis.
What The Home Depot’s Q2 results show about why this bet makes sense now
The Home Depot reported Q2 fiscal 2026 results on Aug. 18 that beat expectations across the board.
Net sales of $47.9 billion, up 5.7% year-over-year (YoY)
Comparable sales growth of 1.7% — the highest since 2022
Adjusted diluted EPS of $4.92, up from $4.68 in the prior year period
Net earnings of $4.8 billion, or $4.79 per diluted share
CFO Richard McPhail was candid about the environment in a CNBC interview.
“We continue to operate in what I call frozen housing market conditions,” he said. “But we also know that we’re taking share and that we’re serving our customers better every day.”
That phrase — taking share in a frozen market — is the crux of the investment case. The Home Depot’s comparable sales growth isn’t being driven by a housing recovery. It’s being driven by smaller, non-discretionary repair and maintenance projects that homeowners undertake regardless of whether they’re buying or selling.
When a roof leaks or a water heater fails, it gets replaced. Like it or not, The Home Depot captures that spending whether mortgage rates are at 3% or 7%.
The company also received $730 million in tariff refunds during Q2, using $685 million to reduce cost of goods sold, according to McPhail’s comments on the earnings call.
That pass-through to customers mirrors Walmart’s own approach to tariff refunds, as I noted in my previous coverage, highlighting a broader pattern among major retailers navigating the current trade environment.
BofA’s read on why the stock’s underperformance creates an opportunity
Bank of America analyst Christopher Nardone reiterated a Buy rating on The Home Depot and adjusted his price target to $407 from $412, according to a note shared with my colleague at TheStreet.
The modest target reduction reflects the cautious guidance The Home Depot reaffirmed rather than raised. But the Buy rating holds.
The Home Depot’s reaffirmed fiscal 2026 guidance calls for total sales growth of 2.5% to 4.5% and comparable sales growth of flat to 2.0%, according to The Home Depot. Gross margin is projected at approximately 33.1%, with operating margin between 12.4% and 12.6%.
McPhail described the customer as “a healthy cohort” who has “the means to spend” but remains hesitant as projects get larger, citing inflation, fuel costs, and general uncertainty, according to his CNBC interview.
That hesitancy is real, but it’s also temporary. The deferred maintenance and renovation spending building up in the U.S. housing stock doesn’t disappear. It accumulates.
The latest 13F filing from the Bill & Melinda Gates Foundation Trust shows a new $352.7 million position in The Home Depot (HD).David Paul Morris/Bloomberg via Getty Images
This is how The Home Depot has performed lately
HD shares were trading at $334.49 as of Aug. 20, down 1.41% year-to-date and 14.53% over the past year, according to Yahoo Finance. That’s roughly $18 down from where Gates opened their buy position.
My read is that the Gates Foundation is buying The Home Depot at a point of maximum pessimism about housing.
Bank of America’s $407 target implies roughly 22% upside from current levels. The Gates Foundation, apparently, agrees with the direction.
