Waste Management, Inc. (WM) — A “Year of Harvest” Could Drive a Cash Flow Inflection
Waste Management (WM) is not a flashy stock. It is not tied to AI capex cycles or consumer trends. It is a heavy-asset operator with contracted revenue, built-in price escalators, and infrastructure that simply cannot be replicated. You are not permitting new landfills in America. That scarcity matters.
Through the Bill & Melinda Gates Foundation Trust, Bill Gates owns about 28.9 million shares of WM, roughly 7% of the company. That makes the Trust the single largest individual shareholder. It is a notable pairing. Microsoft represents global software and enterprise spending leverage. Waste Management is the opposite: predictable, regulated, asset-heavy, and low-obsolescence.
The numbers support the thesis. WM generates more than $20 billion in annual revenue, over $5 billion in EBITDA, and approximately $2 billion in free cash flow. It has increased its dividend for more than 20 consecutive years. This is a durable compounder with real cash returns.
Over the last several years, management deliberately suppressed free cash flow to fund a multiyear reinvestment cycle. From fiscal 2022 through fiscal 2025, the company deployed roughly $11.6 billion in what management has called its “planting years.”
The largest piece was the $7.5 billion acquisition of Stericycle, which created a Healthcare Solutions segment focused on medical waste collection and disposal. In its first full year under WM ownership, that segment generated $2 billion in revenue at 16% profit margins.
Beyond M&A, WM invested about $1.8 billion into infrastructure, including seven landfill gas-to-energy plants now producing pipeline-quality natural gas. Another $1.2 billion went into modernizing the recycling network, adding robotics and AI across nine facilities. The company also accelerated fleet modernization, spending $420 million above normal levels on automated side-loader trucks, plus an additional $800 million in technology and bolt-on acquisitions in fiscal 2024 alone.
All of that spending weighed on free cash flow. That was intentional.
Now the cycle is turning. Management has referred to 2026 as the “year of harvest.” Capex is expected to fall sharply from $950 million in fiscal 2024 to about $200 million in fiscal 2026. As those projects shift from consuming capital to generating returns, free cash flow is projected to grow 29% year over year at the midpoint. That would represent the largest FCF jump since the Covid period.
CEO Jim Fish said in December that 2026 will be the year the company “harvest[s] a lot of the cash from these and return[s] it to shareholders.” CFO David Reed reinforced that message in January, describing 2026 as a year of harvest with a balanced capital allocation program. The investments have been made. Now the cash begins to show up.
Technically, the stock is constructive. WM trades within about 5% of its 52-week highs and is consolidating just beneath prior resistance in the $238 to $240 area. The recent pullback has been controlled and has occurred above rising 50-day and 200-day moving averages. A decisive move through $240 would put the stock into fresh highs. Risk is well defined. A failure below the 200-day near $222 would negate the near-term breakout attempt.
This is not a turnaround. It is not a speculative growth bet. It is a dominant operator coming out of a heavy investment phase with expanding margins, falling capex, and accelerating free cash flow. If the “harvest” plays out the way management expects, the market will likely reward the improved cash profile.
