This year hasn’t been easy for Anheuser-Busch (NYSE:BUD) stock.
Since the leading beer conglomerate partnered with transgender influencer Dylan Mulvaney for a Bud Light ad, BUD stock has struggled amid declining sales. Shares are down 6% in 2023. But one captain of industry is still highly bullish on BUD stock.
Microsoft (NASDAQ:MSFT) founder and leading philanthropist Bill Gates recently made a bet of almost $100 million on the brewing company. This news has sent shares up today, but more importantly, it could signal the turning point that Anheuser-Busch needs.
What’s Happening with BUD Stock
BUD stock is finally on the rebound, closing up 0.6%. Since the Mulvaney ad ignited a social media firestorm, the company has struggled to demonstrate stability. The fact that it announced layoffs in late July didn’t help on that front. But now it may have received the endorsement it needs to finally shake off this summer’s drama. As Fortune reports:
“According to a recent filing with the Securities and Exchange Commission (SEC), the Bill & Melinda Gates Foundation Trust revealed it had bought 1.7 million AB InBev shares in the second quarter, which had a value of almost $96.6 million.
The Foundation Trust is a separate entity to the Bill & Melinda Gates Foundation, and was set up to manage the charity’s endowment funds. While the former couple act as the organization’s trustees, its assets are managed by Cascade Management Company.”
Gates has claimed to not be a “big beer drinker” but that hasn’t stopped him from investing in the industry before. Earlier this year, he acquired a 3.76% stake in Dutch brewer Heineken (OTCMKTS:HKHHY). Now he’s betting big on a company closer to home that he clearly sees as an opportunity.
His bullish thesis may be well-founded. According to a recent study by Deutsche Bank, Americans are slowly abandoning their anti-Bud Light stance and returning to drinking the beloved beer. But BUD stock has been fighting hard to rally for months.
Why It Matters
There’s an important lesson in this for investors. It’s hard to keep a company with strong brand value down and Bud Light is a brand with plenty of strength. While the social media outcry led to a boycott, it was never realistic to think it would last forever. Gates clearly recognized this and seized on the opportunity to bet on a winning stock before it rebounds.
BUD stock will likely have a slow rise back to the top. But Gates is backing it and other institutional investors will likely follow. If this trend continues, Anheuser-Busch will resume its place at the top of the industry and Gates will come out ahead of the reactionaries who claimed the company was finished.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
