| 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 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
Data CentersComfort Systems USA benefited from robust demand for data centers and AI-related infrastructure, with the company reporting stronger-than-expected revenue driven by this demand. |
Infrastructure Technology Construction AI Revenue | |
Semiconductor CycleGlobal chip shortage driven by accelerating AI demand has caused memory chip prices to triple in 2025. Intel and AMD are flagging logic chip supply constraints while leading foundries like TSMC and SK Hynix announced double-digit capex increases, pointing to significant equipment demand. |
Shortage Equipment Memory Foundries Capex | |
Software |
||
| 2025 Q3 |
AIAI has become a dominant theme across major equity indices, with Nvidia leading the S&P 500, ASML dominating MSCI EAFE, and TSMC leading emerging markets. The fund benefited from AI-related dynamics, particularly through Samsung's memory products experiencing substantial price increases due to DRAM shortages driven by AI demand. |
Semiconductors Memory DRAM Technology Nvidia |
EnergyDiversified Energy Company provides natural gas exposure positioned for data center energy needs and LNG growth. PetroTal offers oil production exposure at significant discount to NAV despite operational challenges. Energy transition themes present across multiple holdings. |
Natural Gas Oil LNG Energy Transition | |
SemiconductorsTaiwan Semiconductor represents the dominant manufacturer for leading fabless chip designers including NVIDIA, Apple, and Broadcom. The global arms race to develop artificial general intelligence will support multiple years of robust growth for foundries with leading-edge capabilities. |
Foundries Advanced Process AI Chips Manufacturing Technology Leadership | |
| 2025 Q2 |
Technology |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| ADBE | Later in the quarter we initiated Adobe, a stock we have held before, where we believe AI is more likely to enhance the product suite than disrupt it. |
| AMZN | We added to our holdings in Amazon.com Inc. |
| CRM | We trimmed Salesforce Inc. |
| GOOGL | I'm willing to go bankrupt rather than lose this race. Larry Page, co-founder of Google |
| 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 | Meta was cited as a larger position that contributed little despite what I thought was positive operating progress, representing opportunity cost in the portfolio. |
| MNDY | In the quarter, we exited Fiserv, Chipotle, and monday.com. |
| MSFT | OpenAI's well-documented 'circular' funding with its business partners (NVIDIA, Microsoft, among others) is additional cause for concern. |
| MU | We took a position in Micron Technology early in the quarter to gain exposure to high-bandwidth memory, a clear bottleneck in chip development. The position was later sold for a solid gain. |
| 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 | Nvidia sits at the top of the S&P 500 as the designer in the AI ecosystem. |
| 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 | TSMC leads the MSCI Emerging Markets Index as the manufacturer in the AI ecosystem. |
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