| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 20.4% | -2.2% | 19.2% |
| 2025 |
|---|
| 19.2% |
The Bailard Technology Strategy generated a -2.21% net return in Q4 2025, underperforming benchmarks as the AI infrastructure cycle transitions from hardware build-out to software value realization. The strategy executed a measured repositioning, realizing gains from concentrated semiconductor holdings like Micron Technology, Lam Research, and KLA Corporation, while rotating capital toward software, IT services, and consumer technology. Despite positive fundamentals, software valuations faced pressure from fears that AI agents might disrupt legacy applications. However, the manager believes incumbents like Microsoft, Salesforce, and SAP can embed agents into existing systems, leveraging proprietary data and customer relationships. The semiconductor complex remains fundamentally strong with tight memory chip supply benefiting equipment manufacturers. Looking ahead, the strategy maintains an optimistic but cautious outlook, prioritizing companies with scale and data sovereignty to lead the transition from static tools to autonomous systems. The positioning balances participation in AI growth while mitigating late-cycle risks in hardware segments.
The AI infrastructure cycle is transitioning from building computational backbone to realizing value through software applications, creating selective opportunities in high-quality software companies trading at discounts due to AI agent disruption fears.
Optimistic but cautious outlook prioritizing companies with scale and data sovereignty to lead the transition from static tools to autonomous, agent-enabled systems. Expect semiconductor complex to remain fundamentally strong with potential acceleration in specific verticals, while software becomes the primary conduit for AI economic return as infrastructure spending normalizes.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 23 2026 | 2025 Q4 | ADBE, AMZN, CRM, DDOG, GOOGL, HUBS, KLAC, LRCX, META, MNDY, MSFT, MU, NOW, NTNX, NVDA, QCOM, SAP, TEAM, TSM, WD | AI, growth, infrastructure, positioning, semiconductors, software, technology | - | The AI infrastructure cycle has mirrored cloud computing build-out with hyperscalers aggressively financing GPU and data center deployments. The focus is shifting from building computational… |
| Oct 21 2025 | 2025 Q3 | APP, FI, INTU, LRCX, NVDA, SPOT | AI, Data centers, energy, semiconductors, software | - | Technology fundamentals strengthened as AI-driven investment and energy efficiency dominated sector dynamics. Nvidia, Applovin, and Lam Research led gains, while the strategy reduced exposure to… |
| Jul 18 2025 | 2025 Q2 | ANET, AVGO, GOOG, NVDA | innovation, productivity, semiconductors, software, technology | - | The commentary centers on long-term technology adoption despite short-term volatility driven by rates and macro uncertainty. The strategy focuses on software, semiconductors, and digital infrastructure… |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| Dec 31 2024 | 2024 Q4 | - | - | - | - |
| Sep 30 2024 | 2024 Q3 | - | - | - | - |
| Jun 30 2024 | 2024 Q2 | - | - | - | - |
| Dec 31 2023 | 2023 Q4 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
Data CentersEMCOR Group was initiated as a new position, viewed as a critical contractor enabling multi-year investment cycles across data centers, semiconductor fabrication, electrification, and broader infrastructure modernization. Its decentralized, cash-generative model, recurring service base, and exposure to structural growth drivers create a profile viewed as more durable than a typical cyclical contractor framework. |
Infrastructure Electrification Recurring Revenue Growth Drivers | |
Semiconductor CycleOngoing rotation from software into semiconductors, memory, and semicap equipment. SK Hynix has solidified its leadership in high-bandwidth memory (HBM), emerging as the exclusive HBM supplier for Microsoft's in-house AI accelerator and securing roughly two-thirds of NVIDIA's anticipated HBM4 demand at meaningfully higher price points and margins. |
Memory HBM NVIDIA Pricing Supply | |
Software |
||
| 2025 Q3 |
AIThe extended federal government shutdown added volatility during what was otherwise a risk-on environment, with a mid-quarter shift in market behavior for AI-related equities as the exuberant narrative evolved to one more balanced in assessing the technology's enormous potential against staggering capital spending plans and high expectations. The team initiated a position in Credo Technology as a more diversified way to gain exposure to strong trends in AI-connectivity. |
Connectivity Semiconductors Infrastructure Capital Spending |
EnergyEnergy plays a central role in the manager's analysis, both as a historical lesson from 2014-15 oil collapse and as a current constraint on AI infrastructure. Data centers have become massive electricity consumers with economics highly sensitive to power pricing and grid reliability. Rising electricity prices in data-center-heavy regions and utility challenges in expanding capacity create physical constraints that complicate AI scalability assumptions. |
Data Centers Grid Utilities Power Infrastructure | |
SemiconductorsMACOM Technology Solutions rose nearly +40% as the company experienced broad-based demand, similar to many semiconductor companies in 2025. The team exited Astera Labs following industry conference presentations that suggested emerging competitive risks and concerns over single customer concentration, while initiating a position in Credo Technology for AI-connectivity exposure. |
Demand Competition Connectivity Customer Concentration | |
| 2025 Q2 |
Technology |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| ADBE | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| AMZN | This quarter, we took profits in our hyperscaler portfolio companies (Amazon and Google) and increased our position in NVIDIA. |
| CRM | By looking at their Rnancials, FactSet, PayPal, Adobe, and Salesforce seem to be doing Rne. The market, however, is reading subdued revenue growth as a sign of increased competition on their core oSerings. These companies' outlooks look more di'cult than their past. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| HUBS | HubSpot Inc., a cloud-based customer relationship management platform provider, dropped by -14%. The company delivered a beat-and-raise quarter, but elevated expectations following its September Analyst Day—where it disclosed 25% year-on-year growth in net new annualized recurring revenues for the first half of 2025—led investors to anticipate near-term revenue acceleration. This improvement is expected to materialize gradually rather than immediately. In our subsequent meeting with the company, their CEO expressed confidence in sustained core growth levers, including platform consolidation, multi-hub adoption, and strong upmarket momentum. |
| KLAC | KLA Corporation (KLAC) is a leading global semiconductor production equipment manufacturer, specializing in process control tools that detect and reduce defects in advanced chip manufacturing. The share price advance in 2025 reflects growing investor recognition of KLA's pricing power, structural growth, and mission-critical role in advanced semiconductor fabrication. We reduced the position during the year in order to capture strong gains, but the company remains a core portfolio holding. |
| LRCX | we believe it is well positioned to become an approved vendor for Lam Research (a supplier of wafer-fabrication equipment) as well |
| META | On January 9, Meta Platforms unveiled a new agreement with Vistra—the largest generator of competitive electricity in the United States—as well as with TerraPower and Oklo. The announcement builds on Meta's agreement last year with Constellation Energy and positions the company to become one of the largest corporate purchasers of nuclear-generated electricity in the United States. |
| MNDY | Monday.com detracted from relative quarterly performance |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| MU | Core gains were led by investments in the Technology sector including Micron |
| NOW | In the case of ServiceNow, the stock weakened following reports of a potential large acquisition while the company has also been challenged by bearish sentiment across the software as a service or SAAS segment. |
| NTNX | Another underperformer was Nutanix. The company reported solid operating results but was weaker following revenue recognition delays. Nutanix is taking market share from VMWare, but new customers require flexible license start dates that align with their migration onto Nutanix's platform, resulting in a natural timing delay on software revenue recognition from the hardware OEMs. Demand remains solid, and the company continues to seek new partnerships, potentially resulting in larger contracts. |
| NVDA | Capital spending from Google, Microsoft, Amazon, Meta, OpenAI, and more have led to Nvidia becoming the Rrst 5 trillion market cap company. |
| QCOM | I remember like yesterday when Qualcomm was the top performing stock in 1999 rising a spectacular 2,619%; it then dropped over 85% by 2002. |
| SAP | We trimmed SAP SE. |
| TEAM | We sold Atlassian, which produces collaboration software, as we reduced our overweight exposure to software because we feel that AI has widened the range of outcomes for predominantly seat-based revenue models. |
| TSM | ASML, TSMC, and Arista Networks are key players in the AI build out supply chain. |
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