Bill Gates pulls $818M from Berkshire to buy this giant

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. 

Related: Home Depot is making a big bet on cautious consumers

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.

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.

Related: Home Depot faces uphill battle amid a growing customer problem

This story was originally published by TheStreet on Aug 22, 2026, where it first appeared in the Investing section. Add TheStreet as a Preferred Source by clicking here.