The Bill & Melinda Gates Foundation Trust made a notable portfolio move in the second quarter, opening a new $352.7 million position in Home Depot (HD) while trimming its stake in Berkshire Hathaway by roughly $818 million. Berkshire stock has long been a cornerstone of the trust's portfolio, built up in part through Warren Buffett's annual gifts of Berkshire shares to the foundation.

The trust now holds 1 million shares of Home Depot. The position sits within a portfolio that manages $34.42 billion in 13F securities, making it a deliberate opening position rather than a casual add to an existing holding. HD was trading at $334.49 as of August 20, down 1.41% year-to-date and 14.53% over the past year. The details surfaced in the trust's quarterly 13F filing with the SEC, which institutional managers overseeing more than $100 million in US equities must file within 45 days of quarter-end; the filings list long positions only, as of a single quarter-end date, so holdings can change before they become public.

In the same quarter, the Gates Foundation trust also opened a new position in FedEx Freight Holding Company worth approximately $180 million, pointing to a broader tilt toward domestic infrastructure and physical asset businesses.

Q2 Earnings Beat

The move came just days after Home Depot, the largest home improvement retailer in the United States, posted its Q2 fiscal 2026 results on August 18. Net sales came in at $47.9 billion, up 5.7% year-over-year. Comparable sales growth hit 1.7%, the strongest reading since 2022. Adjusted diluted EPS of $4.92 beat the consensus estimate of $4.73 by $0.19.

"Frozen" Housing Market, Steady Demand

CFO Richard McPhail was direct about the environment on the earnings call. "We continue to operate in what I call frozen housing market conditions," he said, while noting the company is "taking share" and "serving customers better every day."

The comparable sales growth is not coming from a housing recovery. Instead, it is being driven by smaller, non-discretionary repairs and maintenance. When a roof leaks or a water heater fails, it gets fixed, regardless of mortgage rates. Big-ticket renovations have historically tracked housing turnover, since major projects often coincide with a move, which is why a frozen market tends to weigh on large-project demand even as urgent repairs continue.

Home Depot also received $730 million in tariff refunds during Q2. It used $685 million of that to reduce cost of goods sold, passing the savings through to customers in a move similar to Walmart's approach.

The company reaffirmed its fiscal 2026 guidance, calling for total sales growth of 2.5% to 4.5% and comparable sales growth of flat to 2.0%. Gross margin is projected at around 33.1%, with operating margin between 12.4% and 12.6%. The next scheduled reads come with Q3 results later in the fiscal year and the trust's Q3 13F filing, due within 45 days of the September quarter's end, which will show whether the Home Depot stake was held, added to, or cut.

What Analysts Are Saying

Bank of America analyst Christopher Nardone reiterated a Buy rating and trimmed his price target slightly to $407 from $412, implying roughly 22% upside from current levels. The reduction reflects the cautious guidance Home Depot held rather than raised.

Argus reaffirmed a Buy rating with a $400 target. UBS cut its target from $430 to $420 but kept a Buy rating. Sanford C. Bernstein held a Market Perform rating with a $354 target, and RBC lowered its target to $342.

Across 32 analysts, HD carries a consensus rating of "Moderate Buy" with an average target price of $375.54.

Dividend and Insider Activity

The board declared a quarterly dividend of $2.33 per share, payable September 17 to holders of record on September 3. That works out to a 2.8% annualized yield.

CFO Richard McPhail sold 5,989 shares on August 19 at an average price of $348.40, reducing his position by 11.07%. He still directly owns 48,104 shares worth approximately $16.76 million.

HD opened at $336.04 on Friday, with a 52-week range of $289.10 to $426.75.

Source: CoinCentral