Baron Durable Advantage Fund

Investor Summary

Alex Umansky serves as the primary portfolio manager of the Baron Durable Advantage Fund since its inception on December 29, 2017. He brings over 33 years of research experience as Vice President & Portfolio Manager at both BAMCO, Inc. and Baron Capital Management, Inc. Umansky joined Baron Capital in 2011 after an 18-year tenure at Morgan Stanley, where he co-managed multiple funds including the Morgan Stanley Opportunity Fund, Global Opportunity Fund, International Opportunity and Advantage Funds, Information Fund, and Small Company Growth Fund. He led the Morgan Stanley Institutional Technology Strategy and Technology Fund from 1998 to 2004, demonstrating deep expertise in technology sector investing. His educational credentials include a Bachelor of Science in Finance, Information Systems, and Mathematics from New York University Stern School of Business, earned in 1993. He currently serves as a board member of Compute Express Link Consortium, Inc., further demonstrating his technology sector involvement and expertise.

Fund Strategy

The Baron Durable Advantage Fund employs a distinctive approach to large-cap core investing by focusing on high-quality, competitively advantaged companies rather than traditional value and growth stock categorization. The fund targets 100 to 200 basis points alpha annually by investing in long-term compounders—large-cap companies exhibiting durable growth, operational excellence, and prudent capital allocation. The investment strategy emphasizes companies with uniqueness, durable competitive advantages, exceptional management, recurring revenue models, diverse customer bases, and pricing power. The portfolio is concentrated with typically 25 to 35 stocks, featuring low turnover and a long-term perspective termed 'time arbitrage,' leveraging intrinsic value growth over market volatility. Risk is defined as the probability of permanent capital loss rather than volatility, with every portfolio built from the bottom up based on conviction about future growth prospects.

ANNUALIZED SINCE INCEPTION	QUARTERLY	YTD
15.56%	13.57%	3.26%

Executive Summary

Baron Durable Advantage Fund gained 13.6% in Q2 2026, trailing the S&P 500's 15.2% return, but delivered 3.4% year-to-date versus the index's 10.2%. The quarter saw recovery from Q1's 9.0% decline caused by the Iran war and $140 oil, with markets rallying as worst outcomes were avoided. AI infrastructure beneficiaries drove performance, with TSMC up 41.6%, Alphabet up 23.2%, and strong contributions from Monolithic Power Systems, NVIDIA, and Broadcom. The manager views current valuations as irrationally low, with NVIDIA trading at 14.5x forward P/E despite 113% earnings growth, and similar compression across TSMC, Broadcom, Alphabet, and Amazon. AI demand is proven with Alphabet's cloud revenue accelerating to 82% growth and backlog surging to $514 billion. The portfolio's weighted average multiple is 5.4% below its 5-year average, with over 100% of year-to-date returns driven by fundamental growth rather than multiple expansion. The manager initiated Arxis in aerospace components and added to Amphenol and Lam Research, while exiting Intuit and Thermo Fisher. Since inception in December 2017, the fund has generated 15.8% annualized returns, 110bps ahead of the index.

Core Thesis

Invest in large-cap companies with strong and durable competitive advantages, proven track records of successful capital allocation, high returns on invested capital, and high free-cash-flow generation, with a significant portion returned to shareholders through dividends or buybacks, at attractive valuations to earn excess risk-adjusted returns over the long term.

Forward Outlook

The manager remains focused on long-term fundamentals rather than short-term market noise, noting that business fundamentals have been revised higher while valuation multiples have compressed. The portfolio's weighted average multiple is 5.4% below its 5-year average and over 100% of year-to-date returns were driven by growth in fundamentals rather than multiple expansion. The manager views current valuations for AI infrastructure beneficiaries like NVIDIA, TSMC, Broadcom, Alphabet, and Amazon as irrationally low given their growth trajectories. While acknowledging uncertainty around AI economics and geopolitical risks, the manager maintains conviction in the quality of portfolio holdings and expects the process to generate excess risk-adjusted returns over full market cycles.

Date	Letter	Tickers	Keywords	Pitches	Quick Takes
Jun 30 2026	2026 Q2	AMZN, APH, AVGO, CME, GOOGL, INTU, LPLA, LRCX, META, MPWR, MSFT, NVDA, TSM, V	AI, Cloud, geopolitics, growth, large cap, Quality, semiconductors, technology	-	Baron Durable Advantage Fund gained 13.6% in Q2 2026 as markets recovered from Iran war volatility. AI infrastructure beneficiaries led performance with TSMC up 41.6% and Alphabet up 23.2% on accelerating cloud demand. The manager views valuations as irrationally compressed, with NVIDIA at 14.5x forward P/E despite 113% earnings growth. Portfolio fundamentals strengthened while multiples compressed 9.7% year-to-date, creating attractive entry points for long-term investors.
May 8 2026	2026 Q1	AMZN, CME, GOOGL, LRCX, META, MPS, MSCI, MSFT, NVDA, TSM, WELL	AI, Cloud, Data centers, growth, large cap, semiconductors, technology	-	Baron Durable Advantage Fund declined 9.0% in Q1 2026 due to geopolitical tensions and sector allocation, but the manager sees attractive opportunities with portfolio valuations 12.9% below five-year averages. AI adoption dramatically accelerated with companies like Anthropic adding $21 billion ARR in one quarter. The Fund focuses on companies with durable competitive advantages that remain defensible in the AI era.
Jan 30 2026	2025 Q4	AMZN, AVGO, BX, CME, COST, CSGP, DHR, GOOGL, LPLA, MA, META, MPWR, MSCI, MSFT, NVDA, PWR, TMO, TSM, V, WELL	AI, growth, large cap, Quality, semiconductors, technology	GOOG TSM AVGO PWR NVDA ACGL META CSGP MSFT MSCI DHR WELL	Baron Durable Advantage Fund delivered 16.6% returns in 2025, slightly trailing the S&P 500's 17.9% gain. Strong semiconductor performance from AI buildout drove results, with Alphabet recovering 65% as Gemini AI gained traction. The Fund maintains concentrated exposure to quality businesses with durable advantages while avoiding lower-quality legacy plays and narrative-driven stocks.
Nov 8 2025	2025 Q3	AMZN, APH, APO, AVGO, COST, DHR, GOOGL, INTU, LPLA, META, MPWR, MSFT, NVDA, SPGI, TDG, TMO, TSM, TXRH, V, WELL	AI, Cloud, growth, large cap, semiconductors, technology, Valuations	VRSK LOAR GOOGL NVDA TSM	Baron Durable Advantage Fund is positioned for the AI infrastructure boom with major holdings in NVIDIA, Alphabet, TSMC, and Broadcom. The manager sees current AI valuations as rational compared to dot-com bubble levels and expects continued market support from Fed rate cuts and accelerating AI investments. Strong long-term track record with disciplined focus on quality businesses at reasonable prices.
Aug 18 2025	2025 Q2	ACGL, ACN, AMZN, APH, AVGO, CME, DHR, GOOGL, LPLA, META, MPWR, MSFT, NVDA, SPGI, TMO, TSM, TXN, TXRH, UNH, V, WELL	AI, growth, large cap, Quality, semiconductors, technology	AVGO NVDA META UNH APH CME	Baron Durable Advantage Fund rebounded strongly in Q2 2025 with 15.6% returns, outperforming the S&P 500 by 469bps through superior stock selection in technology. The manager capitalized on market volatility to add to AI leaders NVIDIA and Broadcom while maintaining focus on high-quality, competitively advantaged businesses for long-term compounding returns.

Date

Letter

Tickers

Keywords

Pitches

Quick Takes

Jun 30 2026

2026 Q2

AMZN, APH, AVGO, CME, GOOGL, INTU, LPLA, LRCX, META, MPWR, MSFT, NVDA, TSM, V

AI, Cloud, geopolitics, growth, large cap, Quality, semiconductors, technology

Baron Durable Advantage Fund gained 13.6% in Q2 2026 as markets recovered from Iran war volatility. AI infrastructure beneficiaries led performance with TSMC up 41.6% and Alphabet up 23.2% on accelerating cloud demand. The manager views valuations as irrationally compressed, with NVIDIA at 14.5x forward P/E despite 113% earnings growth. Portfolio fundamentals strengthened while multiples compressed 9.7% year-to-date, creating attractive entry points for long-term investors.

May 8 2026

2026 Q1

AMZN, CME, GOOGL, LRCX, META, MPS, MSCI, MSFT, NVDA, TSM, WELL

AI, Cloud, Data centers, growth, large cap, semiconductors, technology

Baron Durable Advantage Fund declined 9.0% in Q1 2026 due to geopolitical tensions and sector allocation, but the manager sees attractive opportunities with portfolio valuations 12.9% below five-year averages. AI adoption dramatically accelerated with companies like Anthropic adding $21 billion ARR in one quarter. The Fund focuses on companies with durable competitive advantages that remain defensible in the AI era.

Jan 30 2026

2025 Q4

AMZN, AVGO, BX, CME, COST, CSGP, DHR, GOOGL, LPLA, MA, META, MPWR, MSCI, MSFT, NVDA, PWR, TMO, TSM, V, WELL

AI, growth, large cap, Quality, semiconductors, technology

GOOG
TSM
AVGO
PWR
NVDA
ACGL
META
CSGP
MSFT
MSCI
DHR
WELL

Baron Durable Advantage Fund delivered 16.6% returns in 2025, slightly trailing the S&P 500's 17.9% gain. Strong semiconductor performance from AI buildout drove results, with Alphabet recovering 65% as Gemini AI gained traction. The Fund maintains concentrated exposure to quality businesses with durable advantages while avoiding lower-quality legacy plays and narrative-driven stocks.

Nov 8 2025

2025 Q3

AMZN, APH, APO, AVGO, COST, DHR, GOOGL, INTU, LPLA, META, MPWR, MSFT, NVDA, SPGI, TDG, TMO, TSM, TXRH, V, WELL

AI, Cloud, growth, large cap, semiconductors, technology, Valuations

VRSK
LOAR
GOOGL
NVDA
TSM

Baron Durable Advantage Fund is positioned for the AI infrastructure boom with major holdings in NVIDIA, Alphabet, TSMC, and Broadcom. The manager sees current AI valuations as rational compared to dot-com bubble levels and expects continued market support from Fed rate cuts and accelerating AI investments. Strong long-term track record with disciplined focus on quality businesses at reasonable prices.

Aug 18 2025

2025 Q2

ACGL, ACN, AMZN, APH, AVGO, CME, DHR, GOOGL, LPLA, META, MPWR, MSFT, NVDA, SPGI, TMO, TSM, TXN, TXRH, UNH, V, WELL

AI, growth, large cap, Quality, semiconductors, technology

AVGO
NVDA
META
UNH
APH
CME

Baron Durable Advantage Fund rebounded strongly in Q2 2025 with 15.6% returns, outperforming the S&P 500 by 469bps through superior stock selection in technology. The manager capitalized on market volatility to add to AI leaders NVIDIA and Broadcom while maintaining focus on high-quality, competitively advantaged businesses for long-term compounding returns.

QUARTER	THEMES	TAGS
2026 Q2	AI AI demand is proven and accelerating across hyperscalers, with cloud revenue growth at Amazon, Meta, and Alphabet reaching 63-82% year-over-year. The manager views AI infrastructure beneficiaries like NVIDIA, Broadcom, and TSMC as trading at irrationally low multiples (14.5x-20.9x P/E) despite 100%+ earnings growth. The debate has shifted from demand validation to return on capital, with compute costs expected to decline 95% by decade-end.	Cloud Data Centers Semiconductors GPUs Infrastructure
	Semiconductors TSMC reported 35% revenue growth and 58% EPS growth with 66% gross margins, driven by AI accelerator demand consuming leading-edge capacity. Lam Research is gaining share as 3D chip architectures increase etch and deposition intensity. Memory pricing is recovering due to agentic AI demand, with the industry undersupplied across advanced foundry and packaging.	Foundries Semi Equipment Memory Advanced Packaging Chip Designers
	Cloud Alphabet's cloud revenue accelerated to 82% growth from 63% last quarter at $100 billion scale, with 47% incremental EBIT margins. Backlog increased $52 billion to $514 billion with accelerating conversion. Over 500 customers processed over 1 trillion tokens each in the last 12 months, demonstrating broad-based enterprise adoption.	Cloud Infrastructure Enterprise Software Data Centers SaaS
	Aerospace The manager initiated a position in Arxis, a designer and manufacturer of proprietary mission-critical components for defense, space, industrial technology, and commercial aerospace. The company has 90% proprietary product revenue across 5,000 customers and 600 platforms, with sticky design wins lasting decades. The EDGE business system drives market share gains and supports a decentralized M&A strategy with 34 acquisitions since 2019.	Defense Components Aerospace Components Space Defense
	Electrical Equipment Amphenol reported 33% year-over-year organic growth with record $9.4 billion orders and book-to-bill well above 1.0x. The company is benefiting from electrification trends and AI infrastructure buildout. Management's decentralized culture and acquisition of CommScope's optical business increases optionality as optical connectivity potentially accelerates. Margins are at all-time highs with further expansion expected.	Connectivity Data Centers Industrial Automation
	Payments All 11 holdings classified as Financials, including Visa and Mastercard, detracted from relative returns during the quarter despite positive absolute performance. The manager views these as digital railroads with durable competitive advantages but experienced unusual underperformance as the market favored traditional banks.	FinTech Credit Cards Merchant Acquiring
	Wealth Management LPL Financial declined 6.1% on concerns that automated cash management from frontier AI models could erode client sweep balances. However, the business posted 30% year-over-year AUM growth and 20% adjusted EBITDA growth, with improving recruiting momentum. The manager views cash balances as actively managed by advisors with little excess cash to optimize, making the weakness a sentiment overhang rather than fundamental deterioration.	RIA Platforms Asset Managers WealthTech
	Geopolitics The Iran war and $140 oil caused a 9.0% decline in Q1 2026, similar to the tariff tantrum in Q1 2025. A Memorandum of Understanding allowed ships to resume transiting the Strait of Hormuz and oil pulled back to $70, with the worst outcomes avoided. The manager notes that past geopolitical events have had minimal lasting impact on equity markets, consistent with Russia-Ukraine and Israel-Middle East-Iran precedents.	Iran Oil Middle East Sanctions
2026 Q1	AI AI adoption has dramatically accelerated with companies like Anthropic adding $21 billion in ARR in one quarter. Amazon AI is at $15 billion revenue run rate. The manager sees AI as creating both opportunities and challenges for competitive moats, favoring companies with structural advantages like network effects and proprietary data.	Artificial Intelligence Machine Learning Data Centers Cloud Enterprise
	Semiconductors TSMC dominates advanced semiconductor manufacturing with 90% market share in leading-edge nodes. The manager emphasizes manufacturing complexity and accumulated knowhow as durable moats. Semiconductor equipment companies like Lam Research benefit from increasing chip complexity and layer requirements.	Chips Foundries Manufacturing Equipment Advanced Nodes
	Data Centers AI is driving exponential growth in data center power needs and forcing fundamental rethinks in power distribution. The buildout requires grid modernization solutions and creates massive infrastructure investment opportunities.	Infrastructure Power Cloud Capacity Buildout
	Cloud AWS continues to be capacity constrained with growth that would be higher if they could serve demand. Amazon's custom chips business is at $20 billion ARR growing triple-digit percentages. Microsoft Azure grew 38% despite capacity constraints.	Infrastructure Computing Capacity Growth Services
	Energy Transition The manager discusses grid modernization solutions needed for data center buildout and mentions automotive electrification as a secular trend benefiting power management companies like MPS.	Grid Electrification Power Infrastructure Automotive
2025 Q4	AI AI was a dominant market driver of U.S. stocks and continues to influence market leadership. The AI-driven rally led to historic levels of market concentration with just five stocks accounting for nearly 45% of the S&P 500's total return in 2025. Strong AI-related investment was the backbone of U.S. growth in 2025.	Artificial Intelligence Technology Market Concentration Growth Innovation
	Rates The Federal Reserve has cut interest rates 1.75% since 2024, easing financial conditions and supporting markets. The Fed resumed rate cuts in September and markets expect further easing into 2026, albeit at a slower pace. Historically, equities have responded favorably following the restart of easing cycles.	Federal Reserve Interest Rates Monetary Policy Easing Financial Conditions
	Inflation The inflation storm that dominated recent years appeared to be easing, at least in the short term. November and December inflation surprised to the downside, easing investor concerns about persistent inflation pressures. However, inflation is likely to remain above target near term.	Consumer Prices Federal Reserve Monetary Policy Economic Data
	Dollar The U.S. dollar fell more than 9% during 2025, pressured by a high starting valuation and mounting concerns about global investor concentration in U.S. assets. With the Federal Reserve still focused on easing policy, narrowing interest rate differentials may drive a further decline in the dollar.	Currency Exchange Rates Federal Reserve International
2025 Q3	AI The fund views AI as a massive infrastructure buildout opportunity, with Oracle reporting $455 billion in AI bookings and NVIDIA announcing a $100 billion investment into OpenAI. The manager believes we are still early in the AI cycle, comparing it to 1996-1997 rather than the 2000 bubble peak, with more rational valuations today.	Infrastructure Buildout OpenAI Compute GPUs
	Cloud Cloud hyperscalers Amazon AWS, Microsoft Azure, and Alphabet GCP are positioned as key infrastructure providers benefiting from AI demand. Google Cloud revenue growth accelerated 32% year-over-year driven by demand for AI cloud services.	Hyperscalers Infrastructure Growth Services
	Semiconductors NVIDIA, Broadcom, and TSMC are viewed as key infrastructure players driving AI buildout at scale. TSMC benefits from robust demand for AI chips with 90% market share in leading-edge manufacturing and pricing power. The manager sees TSMC as the ultimate picks and shovels supplier to AI regardless of market share splits.	Infrastructure Manufacturing Demand Leadership
2025 Q2	AI AI infrastructure buildout is proving durable with NVIDIA maintaining leadership position. The company disclosed line of sight to projects requiring tens of gigawatts of AI infrastructure, with every gigawatt representing $40-50 billion opportunity. Scaling laws have expanded beyond pre-training to post-training and time-test scaling, all driving GPU demand.	GPUs Data Centers Infrastructure Scaling Compute
	Semiconductors Broadcom is strategically positioned at intersection of high-performance AI compute and networking infrastructure. The company is well positioned to capture majority share of $60-90 billion serviceable addressable market by 2027 with its AI business. Non-AI semiconductor segment appears to have bottomed and poised for recovery.	Fabless Networking Infrastructure Recovery Market Share
	Cloud Microsoft processed over 100 trillion tokens this quarter, up 5x year-over-year, including record 50 trillion tokens last month alone. Meta is seeing solid returns on AI investments across core business with improved content recommendations and enhanced ad targeting delivering higher conversion rates.	Infrastructure Processing Advertising Recommendations Targeting
	Life Science Tools Danaher and Thermo Fisher face cyclical headwinds from constrained biotechnology funding and NIH grant cancellations. However, 75% of Danaher's bioprocessing business is in Phase 3 trials or commercial, less tied to funding-sensitive areas. Both companies expected to benefit from wave of biosimilars entering market after key patents expire.	Bioprocessing Funding Biosimilars Research Instruments

QUARTER

THEMES

AI

AI demand is proven and accelerating across hyperscalers, with cloud revenue growth at Amazon, Meta, and Alphabet reaching 63-82% year-over-year. The manager views AI infrastructure beneficiaries like NVIDIA, Broadcom, and TSMC as trading at irrationally low multiples (14.5x-20.9x P/E) despite 100%+ earnings growth. The debate has shifted from demand validation to return on capital, with compute costs expected to decline 95% by decade-end.

Cloud Data Centers Semiconductors GPUs Infrastructure

Semiconductors

TSMC reported 35% revenue growth and 58% EPS growth with 66% gross margins, driven by AI accelerator demand consuming leading-edge capacity. Lam Research is gaining share as 3D chip architectures increase etch and deposition intensity. Memory pricing is recovering due to agentic AI demand, with the industry undersupplied across advanced foundry and packaging.

Foundries Semi Equipment Memory Advanced Packaging Chip Designers

Cloud

Alphabet's cloud revenue accelerated to 82% growth from 63% last quarter at $100 billion scale, with 47% incremental EBIT margins. Backlog increased $52 billion to $514 billion with accelerating conversion. Over 500 customers processed over 1 trillion tokens each in the last 12 months, demonstrating broad-based enterprise adoption.

Cloud Infrastructure Enterprise Software Data Centers SaaS

Aerospace

The manager initiated a position in Arxis, a designer and manufacturer of proprietary mission-critical components for defense, space, industrial technology, and commercial aerospace. The company has 90% proprietary product revenue across 5,000 customers and 600 platforms, with sticky design wins lasting decades. The EDGE business system drives market share gains and supports a decentralized M&A strategy with 34 acquisitions since 2019.

Defense Components Aerospace Components Space Defense

Electrical Equipment

Amphenol reported 33% year-over-year organic growth with record $9.4 billion orders and book-to-bill well above 1.0x. The company is benefiting from electrification trends and AI infrastructure buildout. Management's decentralized culture and acquisition of CommScope's optical business increases optionality as optical connectivity potentially accelerates. Margins are at all-time highs with further expansion expected.

Connectivity Data Centers Industrial Automation

Payments

All 11 holdings classified as Financials, including Visa and Mastercard, detracted from relative returns during the quarter despite positive absolute performance. The manager views these as digital railroads with durable competitive advantages but experienced unusual underperformance as the market favored traditional banks.

FinTech Credit Cards Merchant Acquiring

Wealth Management

LPL Financial declined 6.1% on concerns that automated cash management from frontier AI models could erode client sweep balances. However, the business posted 30% year-over-year AUM growth and 20% adjusted EBITDA growth, with improving recruiting momentum. The manager views cash balances as actively managed by advisors with little excess cash to optimize, making the weakness a sentiment overhang rather than fundamental deterioration.

RIA Platforms Asset Managers WealthTech

Geopolitics

The Iran war and $140 oil caused a 9.0% decline in Q1 2026, similar to the tariff tantrum in Q1 2025. A Memorandum of Understanding allowed ships to resume transiting the Strait of Hormuz and oil pulled back to $70, with the worst outcomes avoided. The manager notes that past geopolitical events have had minimal lasting impact on equity markets, consistent with Russia-Ukraine and Israel-Middle East-Iran precedents.

Iran Oil Middle East Sanctions

2026 Q1

AI

AI adoption has dramatically accelerated with companies like Anthropic adding $21 billion in ARR in one quarter. Amazon AI is at $15 billion revenue run rate. The manager sees AI as creating both opportunities and challenges for competitive moats, favoring companies with structural advantages like network effects and proprietary data.

Artificial Intelligence Machine Learning Data Centers Cloud Enterprise

Semiconductors

TSMC dominates advanced semiconductor manufacturing with 90% market share in leading-edge nodes. The manager emphasizes manufacturing complexity and accumulated knowhow as durable moats. Semiconductor equipment companies like Lam Research benefit from increasing chip complexity and layer requirements.

Chips Foundries Manufacturing Equipment Advanced Nodes

Data Centers

AI is driving exponential growth in data center power needs and forcing fundamental rethinks in power distribution. The buildout requires grid modernization solutions and creates massive infrastructure investment opportunities.

Infrastructure Power Cloud Capacity Buildout

Cloud

AWS continues to be capacity constrained with growth that would be higher if they could serve demand. Amazon's custom chips business is at $20 billion ARR growing triple-digit percentages. Microsoft Azure grew 38% despite capacity constraints.

Infrastructure Computing Capacity Growth Services

Energy Transition

The manager discusses grid modernization solutions needed for data center buildout and mentions automotive electrification as a secular trend benefiting power management companies like MPS.

Grid Electrification Power Infrastructure Automotive

2025 Q4

AI

AI was a dominant market driver of U.S. stocks and continues to influence market leadership. The AI-driven rally led to historic levels of market concentration with just five stocks accounting for nearly 45% of the S&P 500's total return in 2025. Strong AI-related investment was the backbone of U.S. growth in 2025.

Artificial Intelligence Technology Market Concentration Growth Innovation

Rates

The Federal Reserve has cut interest rates 1.75% since 2024, easing financial conditions and supporting markets. The Fed resumed rate cuts in September and markets expect further easing into 2026, albeit at a slower pace. Historically, equities have responded favorably following the restart of easing cycles.

Federal Reserve Interest Rates Monetary Policy Easing Financial Conditions

Inflation

The inflation storm that dominated recent years appeared to be easing, at least in the short term. November and December inflation surprised to the downside, easing investor concerns about persistent inflation pressures. However, inflation is likely to remain above target near term.

Consumer Prices Federal Reserve Monetary Policy Economic Data

Dollar

The U.S. dollar fell more than 9% during 2025, pressured by a high starting valuation and mounting concerns about global investor concentration in U.S. assets. With the Federal Reserve still focused on easing policy, narrowing interest rate differentials may drive a further decline in the dollar.

Currency Exchange Rates Federal Reserve International

2025 Q3

AI

The fund views AI as a massive infrastructure buildout opportunity, with Oracle reporting $455 billion in AI bookings and NVIDIA announcing a $100 billion investment into OpenAI. The manager believes we are still early in the AI cycle, comparing it to 1996-1997 rather than the 2000 bubble peak, with more rational valuations today.

Infrastructure Buildout OpenAI Compute GPUs

Cloud

Cloud hyperscalers Amazon AWS, Microsoft Azure, and Alphabet GCP are positioned as key infrastructure providers benefiting from AI demand. Google Cloud revenue growth accelerated 32% year-over-year driven by demand for AI cloud services.

Hyperscalers Infrastructure Growth Services

Semiconductors

NVIDIA, Broadcom, and TSMC are viewed as key infrastructure players driving AI buildout at scale. TSMC benefits from robust demand for AI chips with 90% market share in leading-edge manufacturing and pricing power. The manager sees TSMC as the ultimate picks and shovels supplier to AI regardless of market share splits.

Infrastructure Manufacturing Demand Leadership

2025 Q2

AI

AI infrastructure buildout is proving durable with NVIDIA maintaining leadership position. The company disclosed line of sight to projects requiring tens of gigawatts of AI infrastructure, with every gigawatt representing $40-50 billion opportunity. Scaling laws have expanded beyond pre-training to post-training and time-test scaling, all driving GPU demand.

GPUs Data Centers Infrastructure Scaling Compute

Semiconductors

Broadcom is strategically positioned at intersection of high-performance AI compute and networking infrastructure. The company is well positioned to capture majority share of $60-90 billion serviceable addressable market by 2027 with its AI business. Non-AI semiconductor segment appears to have bottomed and poised for recovery.

Fabless Networking Infrastructure Recovery Market Share

Cloud

Microsoft processed over 100 trillion tokens this quarter, up 5x year-over-year, including record 50 trillion tokens last month alone. Meta is seeing solid returns on AI investments across core business with improved content recommendations and enhanced ad targeting delivering higher conversion rates.

Infrastructure Processing Advertising Recommendations Targeting

Life Science Tools

Danaher and Thermo Fisher face cyclical headwinds from constrained biotechnology funding and NIH grant cancellations. However, 75% of Danaher's bioprocessing business is in Phase 3 trials or commercial, less tied to funding-sensitive areas. Both companies expected to benefit from wave of biosimilars entering market after key patents expire.

Bioprocessing Funding Biosimilars Research Instruments

Date	Pitch Type	Author	Ticker	Company	Industry	Sub Industry	Bull / Bear	Exchange	Keywords	Action
Jan 30, 2026	Fund Letters	Alex Umansky	GOOG	Alphabet Inc.	Communication Services	Interactive Media & Services	Bull	NASDAQ	advertising, AI, cloud, monetization, Search	Login
Jan 30, 2026	Fund Letters	Alex Umansky	TSM	Taiwan Semiconductor Manufacturing Company Limited	Information Technology	Semiconductors	Bull	New York Stock Exchange	AI, Foundry, Pricing, scale, semiconductors	Login
Jan 30, 2026	Fund Letters	Alex Umansky	AVGO	Broadcom Inc.	Information Technology	Semiconductors	Bull	NASDAQ	AI, backlog, Margins, Networking, semiconductors	Login
Jan 30, 2026	Fund Letters	Alex Umansky	PWR	Quanta Services, Inc.	Industrials	Engineering & Construction	Bull	New York Stock Exchange	CapEx, Electrification, Execution, Grid, infrastructure	Login
Jan 30, 2026	Fund Letters	Alex Umansky	NVDA	NVIDIA Corporation	Information Technology	Semiconductors	Bull	NASDAQ	AI, data centers, Ecosystem, GPUs, innovation	Login
Jan 30, 2026	Fund Letters	Alex Umansky	ACGL	Arch Capital Group Ltd.	Financials	Property & Casualty Insurance	Bull	NASDAQ	capital allocation, Cyclicality, Discipline, Insurance, underwriting	Login
Jan 30, 2026	Fund Letters	Alex Umansky	META	Meta Platforms, Inc.	Communication Services	Interactive Media & Services	Bull	NASDAQ	advertising, AI, Engagement, Margins, social media	Login
Jan 30, 2026	Fund Letters	Alex Umansky	CSGP	CoStar Group, Inc.	Real Estate	Real Estate Services	Bull	NASDAQ	Data, Marketplaces, Platforms, Real Estate, Reinvestment	Login
Jan 30, 2026	Fund Letters	Alex Umansky	MSFT	Microsoft Corporation	Information Technology	System Software	Bull	NASDAQ	AI, cloud, enterprise, Margins, Software	Login
Jan 30, 2026	Fund Letters	Alex Umansky	MSCI	MSCI Inc.	Financials	Financial Exchanges & Data	Bull	New York Stock Exchange	AI, buybacks, Data, Indexes, Subscriptions	Login
Jan 30, 2026	Fund Letters	Alex Umansky	DHR	Danaher Corporation	Health Care	Life Sciences Tools & Services	Bull	New York Stock Exchange	Bioprocessing, Cyclicality, diagnostics, life sciences, Margins	Login
Jan 30, 2026	Fund Letters	Alex Umansky	WELL	Welltower Inc.	Real Estate	Health Care REITs	Bull	New York Stock Exchange	Alignment, cashflow, Demographics, REITs, senior housing	Login
Nov 8, 2025	Fund Letters	Alex Umansky	VRSK	Verisk Analytics, Inc.	Industrials	Data Analytics	Bull	NASDAQ	acquisition, analytics, Insurance, Margins, Recurring	Login
Nov 8, 2025	Fund Letters	Alex Umansky	LOAR	Loar Holdings Inc.	Industrials	Aerospace & Defense	Bull	NYSE	Aerospace, aftermarket, compounding, M&A, Pricingpower	Login
Nov 8, 2025	Fund Letters	Alex Umansky	GOOGL	Alphabet Inc.	Communication Services	Interactive Media & Services	Bull	NASDAQ	advertising, AI, buybacks, cloud, Platforms	Login
Nov 8, 2025	Fund Letters	Alex Umansky	NVDA	NVIDIA Corporation	Information Technology	Semiconductors	Bull	NASDAQ	datacenters, GPUs, growth, Moats, TAM	Login
Nov 8, 2025	Fund Letters	Alex Umansky	TSM	Taiwan Semiconductor Manufacturing Company Limited	Information Technology	Semiconductors	Bull	NYSE	AI, Foundry, Geopolitics, Pricingpower, Wafers	Login
Jun 30, 2025	Fund Letters	Baron Durable Advantage Fund	AVGO	Broadcom Inc.	Information Technology	Semiconductors & Semiconductor Equipment	Bull	NASDAQ	AI infrastructure, data center, Enterprise software, fabless, hyperscale, Networking, semiconductors, Vmware	Login
Jun 30, 2025	Fund Letters	Baron Durable Advantage Fund	NVDA	NVIDIA Corporation	Information Technology	Semiconductors & Semiconductor Equipment	Bull	NASDAQ	Accelerated Computing, AI infrastructure, data centers, fabless, Full-stack, GPUs, large language models, semiconductors	Login
Jun 30, 2025	Fund Letters	Baron Durable Advantage Fund	META	Meta Platforms, Inc.	Communication Services	Interactive Media & Services	Bull	NASDAQ	Ad Targeting, AI integration, generative AI, Mobile Advertising, monetization, Platform Scale, social media, user engagement	Login
Jun 30, 2025	Fund Letters	Baron Durable Advantage Fund	UNH	UnitedHealth Group Incorporated	Health Care	Health Care Providers & Services	Bear	NYSE	exit, health insurance, Healthcare services, Medical costs, Medicare Advantage, Pharmacy Benefits, Regulatory, Risk Coding	Login
Jun 30, 2025	Fund Letters	Baron Durable Advantage Fund	APH	Amphenol Corporation	Information Technology	Electronic Equipment, Instruments & Components	Bull	NYSE	Acquisitions, AI data centers, Decentralized, Diversified, Electrification, Interconnect, manufacturing, Sensors	Login
Jun 30, 2025	Fund Letters	Baron Durable Advantage Fund	CME	CME Group, Inc.	Financials	Capital Markets	Bull	NASDAQ	Capital markets, Clearing, Derivatives, Financial Exchanges, Liquidity, risk management, trading volumes, Volatility	Login

Date

Pitch Type

Author

Ticker

Company

Industry

Sub Industry

Bull / Bear

Exchange

Keywords

Action

Jan 30, 2026

Fund Letters

Alex Umansky

GOOG

Alphabet Inc.

Communication Services

Interactive Media & Services

Bull

NASDAQ

advertising, AI, cloud, monetization, Search

Jan 30, 2026

Fund Letters

Alex Umansky

TSM

Taiwan Semiconductor Manufacturing Company Limited

Information Technology

Semiconductors

Bull

New York Stock Exchange

AI, Foundry, Pricing, scale, semiconductors

Jan 30, 2026

Fund Letters

Alex Umansky

AVGO

Broadcom Inc.

Information Technology

Semiconductors

Bull

NASDAQ

AI, backlog, Margins, Networking, semiconductors

Jan 30, 2026

Fund Letters

Alex Umansky

PWR

Quanta Services, Inc.

Industrials

Engineering & Construction

Bull

New York Stock Exchange

CapEx, Electrification, Execution, Grid, infrastructure

Jan 30, 2026

Fund Letters

Alex Umansky

NVDA

NVIDIA Corporation

Information Technology

Semiconductors

Bull

NASDAQ

AI, data centers, Ecosystem, GPUs, innovation

Jan 30, 2026

Fund Letters

Alex Umansky

ACGL

Arch Capital Group Ltd.

Financials

Property & Casualty Insurance

Bull

NASDAQ

capital allocation, Cyclicality, Discipline, Insurance, underwriting

Jan 30, 2026

Fund Letters

Alex Umansky

TICKER	COMMENTARY
TSM	Taiwan Semiconductor Manufacturing Company Limited is the world's largest contract chipmaker and the leading manufacturer of advanced logic semiconductors used in modern AI accelerators. Shares rose 41.6% during the quarter as the company continued reporting stellar financial results underpinned by AI demand with revenue growth of 35% year-on-year and EPS growth of 58%, with 66% gross margins and 58% operating margins. High-performance computing now represents the majority of TSMC's business. AI demand is consuming so much leading-edge capacity that smartphone and PC production is increasingly shifting to older technology nodes, reversing a dynamic that defined the foundry industry for much of the past decade. Management also raised its full-year outlook and increased capital spending to support demand that remains well above available supply. We retain long-term conviction in TSMC and view its leading-edge manufacturing monopoly, pricing power, and technology roadmap as durable advantages that support a long duration of growth.
GOOGL	Alphabet Inc., the parent company of Google, contributed to performance with the stock up 23.2% as the market increasingly recognized its unique position vis-à-vis AI. Alphabet is the industry's most vertically integrated AI player, with ownership across every layer of the stack, including custom TPU silicon, global cloud infrastructure, the Gemini foundation models, and distribution across 13 products with more than 1 billion users each. This full-stack ownership is translating into strong demand. Google Cloud revenue grew 63% year-over-year and backlog surged nearly 300% to roughly $460 billion, prompting management to raise 2026 capital expenditure guidance and signal a significant further increase in 2027. Search revenue grew 19% year-over-year as AI features drove record query volumes, demonstrating that generative AI is expanding, rather than eroding, the core franchise. Capital access has itself become a competitive moat, allowing Alphabet to fund supply aggressively and outbid peers for scarce compute. We maintain strong conviction, viewing Alphabet's vertical integration and balance sheet strength as durable advantages in a multi-year build cycle. Cloud revenue growth accelerated to 82% from 63% last quarter (at $100 billion scale), with 36% EBIT margins and an astonishing 47% incremental EBIT margin quarter over quarter. Backlog increased $52 billion to $514 billion with accelerating conversion - $257 billion will convert over the next eight quarters. Gemini Enterprise is now used by 90 Fortune 100 companies in some capacity. The breadth of growth has improved significantly with new customer acquisitions more than doubling year on year. Over 500 customers processed over 1 trillion tokens each over the last 12 months.
MPWR	Monolithic Power Systems, Inc. is a semiconductor company that designs power management chips that regulate and distribute power within electronic systems. Shares rose 26.6% during the quarter as the company continues to benefit from the AI buildout. As AI accelerators draw more power at higher densities, delivering that power efficiently has become increasingly valuable, driving higher dollar content for MPS' products within AI servers. The company's AI server power business nearly doubled, and because its solutions are deeply integrated into server platforms, they are difficult to displace mid-cycle, creating a durable competitive position that we believe remains underappreciated by investors. We retain long-term conviction in MPS and view its rising power content per AI server, sticky design wins, and expanding capacity as key drivers of multi-year earnings power.
NVDA	NVIDIA has been a stellar, truly unicorn-like performer as its revenues grew from $61 billion in 2023 to $130 billion in 2024, and to $216 billion in 2025, with revenues expected to almost double again this year to $424 billion. With stellar profit margins, consensus earnings per share and free cash flow are expected to grow 113% and 116% this year, respectively. Yet, the stock is trading at a 14.5 times P/E on next year's estimate and at a 6.3% free cash flow yield, a 25% to 30% discount to the S&P 500 Index. The current price of NVIDIA's stock implies a terminal growth rate of 3% (GDP or less?), assuming weighted average cost of capital of 10%, starting next year. In other words, from 100%-plus growth this year, to 3% growth next year. We think not!
AVGO	Broadcom trades at 19.2x multiples that seem irrationally low to us. All of these companies are being lumped together as part of the 'AI trade' but they are somewhat on opposite sides of it. While Amazon, Alphabet, and Meta are ramping up their CapEx in what has clearly become the most expensive technology-led arms race in history, NVIDIA, Broadcom, and TSMC are the beneficiaries of the spend.
AMZN	Amazon trades at 22.8x multiples that seem irrationally low to us. While Amazon, Alphabet, and Meta are ramping up their CapEx in what has clearly become the most expensive technology-led arms race in history, NVIDIA, Broadcom, and TSMC are the beneficiaries of the spend. In the first quarter letter, we have covered the dramatic acceleration in AI adoption and usage that led to staggering annualized recurring revenue (ARR) growth at the leading frontier companies Anthropic and OpenAI, as well as direct quotes from Amazon's Andy Jassy.
META	Meta (16.5x) trades at multiples that seem irrationally low to us. All of these companies are being lumped together as part of the 'AI trade' but they are somewhat on opposite sides of it. While Amazon, Alphabet, and Meta are ramping up their CapEx in what has clearly become the most expensive technology-led arms race in history, NVIDIA, Broadcom, and TSMC are the beneficiaries of the spend. Direct quotes from Meta's Mark Zuckerberg on how the industry remains supply constrained with demand far exceeding supply and continuing to accelerate.
V	All 11 of our holdings classified as Financials, including Visa and Mastercard, which we view as digital railroads, and MSCI, Moody's, and S&P Global, which we view as business services, detracted from our relative returns during the quarter.
CME	CME Group, Inc. operates the world's largest and most diversified derivatives marketplace. Shares fell 24.8% due to a slowdown in trading activity, reflecting tough comparisons against the prior year and easing market volatility following the onset of the U.S.-Iran war in March. This cyclical softening was exacerbated by concerns over emerging competition from crypto-native 'perpetual futures' and uncertainty triggered by the announcement that long-time CEO Terry Duffy will step down next year. We continue to own the stock because we believe that CME enjoys significant competitive advantages and should benefit from increasing adoption of exchange-traded derivatives and episodic volatility spikes.
INTU	Intuit Inc. is the leading provider of accounting software for small businesses and tax preparation software for individuals and tax professionals. Shares fell 36.5% due to modest underperformance in the TurboTax segment where revenue growth of 7% missed expectations for 8% growth. Management acknowledged volume loss from lower income filers who traded down to cheaper alternatives, fueling investor anxiety about competition and potential AI-driven disruption. The negative sentiment was further compounded by a 17% workforce reduction, which some investors interpreted as a defensive move to protect margins and an indicator of demand challenges. We decided to reallocate to other ideas.
LPLA	Shares of LPL Financial Holdings Inc., the largest independent broker-dealer in the U.S., declined 6.1% during the quarter due largely to market-driven concerns. With continued improvement in frontier AI models, investors worry that automated cash management could erode the client sweep balances that generate spread income, a meaningful contributor to LPL's revenue and margins. This narrative weighed on the stock even as the underlying business continued to perform well. LPL posted better-than-expected first quarter results with a 30% year-on-year AUM growth and a 20% year-on-year adjusted EBITDA growth, guided to improving recruiting momentum, and made progress integrating Commonwealth Financial Network, which it acquired in 2025. LPL's cash balances are actively managed by advisors, meaning there is little excess cash left for an AI tool to optimize. Cash held in client accounts is primarily used for trading, taxes, and fees. The company has also communicated that it is exploring options to reduce its reliance on sweep cash revenue, and we expect a change in the model over the next 12 to 18 months. Consequently, we view the recent weakness as a sentiment overhang rather than a deterioration in the company's long-term earnings power. We remain shareholders.
APH	We added to our investment in Amphenol Corporation, a leading provider of mission critical interconnect, sensor, and antenna solutions to a diverse set of end markets – industrial, automotive, mobile devices, IT datacom, communications networks, defense, and commercial aerospace. As the world electrifies, Amphenol's content opportunity continues to grow. The hallmark of the company is its unique, decentralized 'Amphenolian' culture of agility and accountability, in which over 140 general managers each have autonomy over their individual business units. This leads to a highly agile organization that can quickly respond to changes in market dynamics with best-in-class products delivered on a global scale. This culture has enabled the company to compound growth in revenue and cash flow over many years through both above-market organic growth and successful M&A. Long-time CEO Adam Norwhitt commented on many occasions that his number one priority is to preserve and scale the unique Amphenolian culture. He has been a great capital allocator over his more than 15-year tenure in which Amphenol's market cap increased more than 50 times! The stock continues to be volatile, driven by changing investor perceptions regarding the extent to which copper will continue to play a role in future generations of AI chips. We continue to believe that the market underestimates Amphenol's ability to innovate and adapt over many years and across many cycles and end markets, with the recent acquisition of CommScope's optical business, further increasing optionality for the company in case optical gathers steam faster than expected. Fundamentally, the company reported great first quarter results, reflecting continued momentum with strong 33% year-on-year organic growth and record $9.4 billion of orders, which suggest a clear growth trajectory ahead given a book to bill ratio that is well in excess of 1.0x. While we expect the data center segment to continue to lead growth for the company, the rest of the business is also delivering outstanding results having finished 2025 with a 10% organic growth rate despite a weak global industrial spend environment, once again reflecting the unique franchises throughout the company. Margins are also at all-time highs and are expected to continue to expand as sales volume grows over time.
LRCX	Lam Research Corporation is a leading global supplier of semiconductor wafer fabrication equipment (WFE), specializing in etch, deposition, and clean technologies used in the manufacturing of semiconductors. We invested in Lam as we expect it to benefit from several robust secular tailwinds – from the AI buildout which is driving broad demand for semiconductors, to the increasing complexity and verticalization of chips over time, which raises the number of etch and deposition steps, increasing the demand for Lam's tools. Lam reported strong quarterly results for its March 2026 quarter with 24% year-on-year revenue growth and 35% operating margins (both above expectations), benefiting from the broad strength in WFE while also gaining market share thanks to its strong positioning in NAND, which has begun recovering from its cyclical downturn, as a result of significant growth in demand due to agentic AI. In a recent BofA conference, CFO Douglas Bettinger discussed the industry's strong outlook: 'The industry is undersupplied right now. You're seeing it in memory pricing, absolutely in profitability. Advanced foundry is constrained, advanced packaging is super tight... But what I will tell you is this bodes pretty well for what WFE is going to be next year... as projects become more available into '27. I think it's going to be a pretty darn good year in '27 and maybe beyond that.' And on Lam's unique positioning, which enables it to gain market share: 'You look across the totality of advanced process nodes in foundry, in logic, in DRAM, in NAND, things are inflecting in the third dimension... When things inflect in the third dimension, etch and deposition intensity grows. That's all we do... In early '25... $0.32 of every dollar spent on WFE was spent on etch and deposition... As we sit here today, it's in the mid-30s... This is going to continue... . That's the unique story about Lam Research. Everybody in equipment is going to do well over the next few years. We're going to do even better. We outperformed WFE last year. We're going to outperform it this year. We're going to outperform it for the next several years based on what I see.'

META

Meta (16.5x) trades at multiples that seem irrationally low to us. All of these companies are being lumped together as part of the 'AI trade' but they are somewhat on opposite sides of it. While Amazon, Alphabet, and Meta are ramping up their CapEx in what has clearly become the most expensive technology-led arms race in history, NVIDIA, Broadcom, and TSMC are the beneficiaries of the spend. Direct quotes from Meta's Mark Zuckerberg on how the industry remains supply constrained with demand far exceeding supply and continuing to accelerate.

All 11 of our holdings classified as Financials, including Visa and Mastercard, which we view as digital railroads, and MSCI, Moody's, and S&P Global, which we view as business services, detracted from our relative returns during the quarter.

CME

CME Group, Inc. operates the world's largest and most diversified derivatives marketplace. Shares fell 24.8% due to a slowdown in trading activity, reflecting tough comparisons against the prior year and easing market volatility following the onset of the U.S.-Iran war in March. This cyclical softening was exacerbated by concerns over emerging competition from crypto-native 'perpetual futures' and uncertainty triggered by the announcement that long-time CEO Terry Duffy will step down next year. We continue to own the stock because we believe that CME enjoys significant competitive advantages and should benefit from increasing adoption of exchange-traded derivatives and episodic volatility spikes.

INTU

Intuit Inc. is the leading provider of accounting software for small businesses and tax preparation software for individuals and tax professionals. Shares fell 36.5% due to modest underperformance in the TurboTax segment where revenue growth of 7% missed expectations for 8% growth. Management acknowledged volume loss from lower income filers who traded down to cheaper alternatives, fueling investor anxiety about competition and potential AI-driven disruption. The negative sentiment was further compounded by a 17% workforce reduction, which some investors interpreted as a defensive move to protect margins and an indicator of demand challenges. We decided to reallocate to other ideas.

LPLA

Shares of LPL Financial Holdings Inc., the largest independent broker-dealer in the U.S., declined 6.1% during the quarter due largely to market-driven concerns. With continued improvement in frontier AI models, investors worry that automated cash management could erode the client sweep balances that generate spread income, a meaningful contributor to LPL's revenue and margins. This narrative weighed on the stock even as the underlying business continued to perform well. LPL posted better-than-expected first quarter results with a 30% year-on-year AUM growth and a 20% year-on-year adjusted EBITDA growth, guided to improving recruiting momentum, and made progress integrating Commonwealth Financial Network, which it acquired in 2025. LPL's cash balances are actively managed by advisors, meaning there is little excess cash left for an AI tool to optimize. Cash held in client accounts is primarily used for trading, taxes, and fees. The company has also communicated that it is exploring options to reduce its reliance on sweep cash revenue, and we expect a change in the model over the next 12 to 18 months. Consequently, we view the recent weakness as a sentiment overhang rather than a deterioration in the company's long-term earnings power. We remain shareholders.

APH

We added to our investment in Amphenol Corporation, a leading provider of mission critical interconnect, sensor, and antenna solutions to a diverse set of end markets – industrial, automotive, mobile devices, IT datacom, communications networks, defense, and commercial aerospace. As the world electrifies, Amphenol's content opportunity continues to grow. The hallmark of the company is its unique, decentralized 'Amphenolian' culture of agility and accountability, in which over 140 general managers each have autonomy over their individual business units. This leads to a highly agile organization that can quickly respond to changes in market dynamics with best-in-class products delivered on a global scale. This culture has enabled the company to compound growth in revenue and cash flow over many years through both above-market organic growth and successful M&A. Long-time CEO Adam Norwhitt commented on many occasions that his number one priority is to preserve and scale the unique Amphenolian culture. He has been a great capital allocator over his more than 15-year tenure in which Amphenol's market cap increased more than 50 times! The stock continues to be volatile, driven by changing investor perceptions regarding the extent to which copper will continue to play a role in future generations of AI chips. We continue to believe that the market underestimates Amphenol's ability to innovate and adapt over many years and across many cycles and end markets, with the recent acquisition of CommScope's optical business, further increasing optionality for the company in case optical gathers steam faster than expected. Fundamentally, the company reported great first quarter results, reflecting continued momentum with strong 33% year-on-year organic growth and record $9.4 billion of orders, which suggest a clear growth trajectory ahead given a book to bill ratio that is well in excess of 1.0x. While we expect the data center segment to continue to lead growth for the company, the rest of the business is also delivering outstanding results having finished 2025 with a 10% organic growth rate despite a weak global industrial spend environment, once again reflecting the unique franchises throughout the company. Margins are also at all-time highs and are expected to continue to expand as sales volume grows over time.

LRCX

Lam Research Corporation is a leading global supplier of semiconductor wafer fabrication equipment (WFE), specializing in etch, deposition, and clean technologies used in the manufacturing of semiconductors. We invested in Lam as we expect it to benefit from several robust secular tailwinds – from the AI buildout which is driving broad demand for semiconductors, to the increasing complexity and verticalization of chips over time, which raises the number of etch and deposition steps, increasing the demand for Lam's tools. Lam reported strong quarterly results for its March 2026 quarter with 24% year-on-year revenue growth and 35% operating margins (both above expectations), benefiting from the broad strength in WFE while also gaining market share thanks to its strong positioning in NAND, which has begun recovering from its cyclical downturn, as a result of significant growth in demand due to agentic AI. In a recent BofA conference, CFO Douglas Bettinger discussed the industry's strong outlook: 'The industry is undersupplied right now. You're seeing it in memory pricing, absolutely in profitability. Advanced foundry is constrained, advanced packaging is super tight... But what I will tell you is this bodes pretty well for what WFE is going to be next year... as projects become more available into '27. I think it's going to be a pretty darn good year in '27 and maybe beyond that.' And on Lam's unique positioning, which enables it to gain market share: 'You look across the totality of advanced process nodes in foundry, in logic, in DRAM, in NAND, things are inflecting in the third dimension... When things inflect in the third dimension, etch and deposition intensity grows. That's all we do... In early '25... $0.32 of every dollar spent on WFE was spent on etch and deposition... As we sit here today, it's in the mid-30s... This is going to continue... . That's the unique story about Lam Research. Everybody in equipment is going to do well over the next few years. We're going to do even better. We outperformed WFE last year. We're going to outperform it this year. We're going to outperform it for the next several years based on what I see.'

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Investment Summary

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FUND PERFORMANCE AS OF 30th June 2026

Investor Letters

Latest Executive Summary:

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AI

Semiconductors

Cloud

Aerospace

Electrical Equipment

Payments

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Geopolitics

AI

Semiconductors

Data Centers

Cloud

Energy Transition

AI

Rates

Inflation

Dollar

AI

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Current Portfolio as of ( 30th June 2026 )

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