| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 10.82% | 27.01% | 15.65% |
Baron Opportunity Fund surged 27.07% in Q2 2026, outperforming the Russell 3000 Growth Index by 1,002 basis points, driven by exceptional stock picking across AI infrastructure, semiconductors, and secular growth leaders. SpaceX, the Fund's largest holding, completed the largest IPO in history at $1.77 trillion valuation, having evolved into an unparalleled technology powerhouse spanning launch, satellite broadband, and AI compute infrastructure. AI infrastructure spending by hyperscalers reached $700 billion in 2026, up 74%, with demand running ahead of supply as evidenced by $1.4 trillion in combined cloud backlogs. The composition of AI compute is shifting toward inference and agentic workloads, driving explosive token demand growth of over 300x in two years. Semiconductor investments including NVIDIA, Broadcom, and Micron contributed strongly as custom silicon accelerators approach parity with GPU volumes and memory becomes as critical as compute for AI performance. The Fund added positions in enhanced geothermal energy, senior housing REITs, and AI coding platforms while maintaining a high-conviction portfolio of 46 companies concentrated in transformative secular trends. The manager expects these innovation-driven themes to deliver solid long-term returns despite near-term macro uncertainty.
The Fund invests in powerful secular growth trends that disrupt industries and create sustained, profitable growth opportunities, with particular emphasis on AI infrastructure, semiconductors, cloud computing, space technology, and digital transformation across multiple sectors.
The manager maintains unwavering focus on powerful secular growth trends including AI, space technology, autonomous transportation, robotics, digital commerce, and advanced therapeutics that will shape the future and drive long-term investment returns. AI infrastructure demand continues to run ahead of supply with every major cloud provider describing itself as compute constrained, while the shift toward inference and agentic workloads is driving explosive token consumption growth. The AI IPO era is opening public markets to landmark offerings that will broaden the investable universe and replace speculation with evidence. The manager expects these transformative secular trends to deliver solid long-term returns for shareholders despite short-term geopolitical disruptions or sentiment swings.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 4 2026 | 2026 Q2 | AMZN, AVGO, CSGP, DDOG, GDS, GOOGL, GWRE, LLY, META, MU, NVDA, SPOT, TSLA, TSM, WELL | AI, Cloud, growth, infrastructure, innovation, semiconductors, Space, technology | - | Baron Opportunity Fund surged 27% in Q2 2026, crushing benchmarks through concentrated bets on AI infrastructure winners. SpaceX IPO'd at $1.77 trillion after deploying the world's largest AI compute cluster. Hyperscalers are spending $700 billion on AI infrastructure with $1.4 trillion in backlogs, while agentic workloads drive token demand up 300x. Semiconductor positions in NVIDIA, Broadcom, and Micron captured the custom silicon and memory inflection. Portfolio remains concentrated in 46 high-conviction secular growth leaders. |
| May 13 2026 | 2026 Q1 | AMZN, ANET, ASML, AVGO, COHR, CSGP, DDOG, GOOGL, IOT, LITE, LRCX, META, MSFT, NVDA, RBRK, SHOP, SPOT, TSLA, TSM | AI, Data centers, growth, infrastructure, semiconductors, software, Space, technology | - | Baron Opportunity Fund's Q1 decline reflected geopolitical tensions and AI-disruption fears, but manager sees compelling evidence of AI ROI inflection with frontier labs showing explosive revenue growth. Used software selloff to upgrade portfolio quality, maintaining conviction in secular growth trends. SpaceX largest holding, positioned across AI infrastructure from semiconductors to data centers for long-term transformation. |
| Feb 5 2026 | 2025 Q4 | ACLX, AMZN, ARGX, AXON, BRCM, CSGP, DUOL, EXAS, GOOGL, GTLB, HRTX, LLY, META, MSFT, NVDA, ONON, ORCL, SPOT, TSLA, TTD | AI, Cloud, growth, innovation, secular trends, semiconductors, Space, technology | - | Baron Opportunity Fund outperformed in Q4 2025 with 4.63% returns, led by SpaceX and AI investments. NVIDIA delivered 10x returns while Broadcom achieved 2.5x gains from explosive growth. The Fund maintains high conviction in secular trends including AI, space technology, and cloud computing, adding positions in public safety, athletic footwear, and medical diagnostics while exiting Oracle and Trade Desk. |
| Nov 8 2025 | 2025 Q3 | ANET, ARGX, AVGO, EXAS, GDS, GTLB, HRTX, IT, LLY, NVDA, PAR, SHOP, SMAR, SNPS, SPOT, TEAM, TSLA, TSM, TTD, VIA | AI, growth, infrastructure, innovation, large cap, semiconductors, technology |
NEE FFBC NVDA TSLA AVGO TTD IT PAR |
Baron Opportunity Fund underperformed in Q3 despite positive returns, hurt by stock selection and non-ownership of Apple/Alphabet. Core AI infrastructure thesis remains intact with NVIDIA, Tesla, and Broadcom driving performance. Manager maintains high conviction in secular growth trends including AI buildout, semiconductors, and digital transformation while staying disciplined on valuation and real versus speculative progress. |
| Aug 5 2025 | 2025 Q2 | AAPL, AMZN, ANET, ARGX, AVGO, DKNG, DUOL, EXAS, HUBS, LLY, META, MSFT, NET, NVDA, SPOT, TSLA, TSM, TTD, VRT, ZS | AI, Cloud, growth, innovation, large cap, semiconductors, technology | - | Baron Opportunity Fund gained 23.27% in Q2 2025, outperforming benchmarks through focused exposure to AI, semiconductors, and cloud computing. Strong stock selection in technology drove 90% of outperformance, led by NVIDIA, Broadcom, and Microsoft. AI adoption accelerated with massive infrastructure investments while Tesla launched Robotaxi service. Manager maintains conviction in transformative secular growth trends. |
| Mar 31 2025 | 2025 Q1 | AAPL, AMZN, ARGX, AVGO, CSGP, CYBR, LPLA, META, MPWR, MSFT, NARI, NVDA, NVMI, SNOW, SPOT, TEAM, TSLA, TTD, VRT, ZS | AI, growth, innovation, large cap, semiconductors, tariffs, technology, Trade Policy | - | Baron Opportunity Fund fell 11.97% in Q1 amid tariff uncertainty affecting AI leaders like NVIDIA and Tesla. Despite trade policy headwinds, the manager maintains conviction in secular growth trends, particularly AI as a transformative platform shift. The fund prioritizes companies with macroeconomic resilience while positioning for long-term technology-driven growth once current volatility subsides. |
| Dec 31 2024 | 2024 Q4 | AAPL, AMD, AMZN, ANET, ARGX, ASML, AVGO, CRWD, CYBR, GOOGL, INDI, LPLA, META, MPWR, MSFT, NARI, NVDA, PCVX, RCKT, SHOP, SPOT, TEAM, TSLA, TTD, VKTX, ZS | AI, growth, innovation, large cap, secular trends, technology |
TSLA NVDA ANET LPLA CYBR |
Baron Opportunity Fund gained 11.92% in Q4 and 40.25% for 2024, outperforming benchmarks through stock picking in innovation leaders. Key contributors included NVIDIA, Tesla, and SpaceX. The Fund maintains high conviction in secular technology trends including AI, electric vehicles, and cybersecurity while diversifying beyond the Magnificent Seven concentration that dominated market returns. |
| Sep 30 2024 | 2024 Q3 | AAPL, ACLX, AMD, AMZN, ARGX, AVGO, CRWD, DUOL, GDS, GWRE, INDIE, IT, MBLY, META, MSFT, NVDA, PAR, SPCE, TEAM, TSLA | AI, Data centers, growth, semiconductors, software, technology, Tesla | - | Baron Opportunity Fund outperformed in Q3 through AI infrastructure positioning, with Tesla and Meta leading gains. The fund maintains concentrated exposure to semiconductors and software, capitalizing on the AI arms race driving massive data center buildouts. Despite trimming NVIDIA and Microsoft, both remain top holdings alongside new positions in Broadcom and cloud beneficiaries. |
| Jun 30 2024 | 2024 Q2 | AAPL, AMD, AMZN, AVGO, CDNS, CRWD, CSGP, DAY, DDOG, EXAS, GWRE, IOT, META, MSFT, NVDA, RCKT, SPOT, TSLA, TSM, VKTX | AI, Cloud, growth, innovation, large cap, semiconductors, software, technology | - | Baron Opportunity Fund gained 4.43% in Q2, underperforming due to Apple underweight despite strong AI holdings performance. Manager views current period as AI infrastructure-build phase with hyperscalers investing $200 billion in capex. NVIDIA and Microsoft drove performance with explosive AI-driven growth. Fund maintains high conviction in secular AI, semiconductor, and cloud computing trends for multi-decade disruption opportunity. |
| Apr 15 2024 | 2024 Q1 | ACLX, AMD, AMZN, ASML, AVGO, CRWD, CSGP, INDI, LEGN, MBLY, META, MSFT, NVDA, RIVN, SPOT, SWAV, TSLA, TSM, TTD, VKTX | AI, Cloud, growth, innovation, large cap, semiconductors, technology | - | Baron Opportunity Fund gained 15.33% in Q1 2024, driven by AI and semiconductor investments led by NVIDIA and Microsoft. The manager positions the fund at the inflection point of generational AI adoption, expecting every digital interaction to become AI-powered. Despite trimming EV exposure due to near-term headwinds, secular growth conviction remains strong across technology-driven innovation themes. |
| Jan 27 2024 | 2023 Q4 | AMD, AMZN, ARGX, CDAY, CRWD, CSGP, DT, GOOGL, GTOS, GWRE, HUBS, ILMN, INDY, IT, LEGN, LRCX, META, MRVL, MSFT, NOW, NVDA, RIVN, SHOP, SWAV, TSLA, TTD, V, VKTX, WDAY | AI, Cloud, growth, innovation, semiconductors, software, technology |
AAPL|MSFT|NFLX|NVDA|UNH AMZN AAPL|MSFT|NFLX|NVDA|UNH LRCX |
Baron Opportunity Fund surged 50% in 2023, driven by concentrated bets on AI, cloud computing, and semiconductors. The manager views these as permanent technological shifts, not hype cycles, with companies like NVIDIA, Microsoft, and Amazon leading the transformation. Despite macro uncertainties, the fund maintains high conviction in innovation-driven secular growth trends that can deliver faster-for-longer growth. |
| Sep 30 2023 | 2023 Q3 | AMZN, ARGX, CRWD, CSGP, DDOG, DT, EA, GTLB, INDI, IT, LEGN, META, MSFT, NET, NOW, NVDA, RVAN, TKO, TSLA, V | AI, Biotechnology, Cloud, growth, innovation, large cap, secular trends, technology | - | Baron Opportunity Fund fell 5.03% in Q3 amid macro uncertainty but maintains high conviction in secular growth trends. Strong performance from Rivian and argenx offset Microsoft weakness. The fund continues investing in AI, cloud, electric vehicles, and biotechnology themes through companies with durable competitive advantages, emphasizing long-term value creation over short-term market volatility. |
| Dec 31 2022 | 2022 Q4 | AMD, AMZN, CRWD, INDI, IT, MA, MSFT, NVDA, RCKT, RIVN, TSLA, V, XFCH, ZI | - | - | |
| Sep 30 2022 | 2022 Q3 | ARGX, GOOG, INDI, ISRG, IT, MPWR, MSFT, NET, NOW, NVDA, RIVN, SHOP, TSLA, ZI | - | - | |
| Jun 30 2022 | 2022 Q2 | AMD, AMZN, ARGX, ASML, GOOG, MSFT, NET, NVDA, TSLA | - | - | |
| Mar 31 2022 | 2022 Q1 | ARWR, CDAY, CRWD, ILMN, MDB, MSFT, RIVN, SHOP, SWAV, TSLA, V | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIAI infrastructure spending by hyperscalers reached $700 billion in 2026, up 74% year-over-year, with demand running ahead of supply as evidenced by $1.4 trillion in combined cloud provider backlogs. The composition of AI compute is shifting toward inference and agentic workloads, which consume 5-30x more tokens than simple queries, driving explosive token demand growth of over 300x in two years. Measurable economic returns are emerging, with 40% of AI adopters citing quantifiable benefits and companies realizing approximately 11% net productivity improvements. |
Infrastructure Inference Agentic Hyperscalers Productivity |
SemiconductorsMemory and semiconductor demand is structurally constrained by AI inference bandwidth requirements, with memory capacity becoming as critical as compute performance. Long-term strategic supply agreements are dampening historical cyclicality, while next-generation memory solutions embedding controller logic are moving the industry away from commodity territory. Custom silicon accelerators are on pace to match GPU volumes by next year, creating a large and growing market for specialized chip architectures. |
Memory Custom Silicon Bandwidth AI Accelerators | |
CloudCloud infrastructure backlogs grew dramatically, with Google Cloud's backlog nearly doubling sequentially to over $460 billion and AWS growing 93% year-over-year to $364 billion. Every major cloud provider described itself as compute constrained, unable to build capacity fast enough to serve contracted demand. Google Cloud accelerated to 63% year-over-year revenue growth with operating margins expanding to 33%. |
Backlogs Compute Capacity Revenue Growth | |
SpaceSpaceX completed the largest IPO in history at a $1.77 trillion valuation, having evolved from 26 Falcon 9 launches in 2020 to over 170 launches in 2025. The Starlink constellation grew to more than 10,000 satellites serving 12 million subscribers, and the company deployed the world's largest AI compute cluster, generating over $26 billion in annualized AI revenue. Starship's operational maturity will enable gigawatt-scale orbital AI infrastructure deployment. |
Launch Starlink Orbital Infrastructure AI Compute | |
Data CentersA single gigawatt of AI compute capacity costs $35-60 billion all-in, with next-generation facilities potentially reaching $80-100 billion as memory and component shortages inflate costs. Roughly 60-70% of each gigawatt goes to compute and networking semiconductors, with the balance for powered shell, electrical distribution, cooling, and backup generation. Demand in Asia is building through significant bookings growth despite near-term timing delays. |
Gigawatt Infrastructure Cost Power Cooling | |
Energy TransitionEnhanced geothermal systems are unlocking new baseload power resources through horizontal drilling and hydraulic fracturing techniques adapted from oil and gas. Fervo Energy has 658 megawatts under power purchase agreements and access to at least 42 gigawatts of resource, with a clear path to drive costs to $3,000 per kilowatt, putting levelized electricity costs at or below competing alternatives. |
Geothermal Baseload Power Cost Reduction | |
Healthcare REITsSenior housing demand is supported by powerful demographic tailwinds, with the 80-plus population growing at 4-5% compound annual rate over the next five years, while supply remains structurally constrained by declining construction starts and five-plus year entitlement timelines. Proprietary operating platforms and data analytics capabilities are creating structural upside to operating margins and occupancy through enhanced asset management. |
Senior Housing Demographics Supply Constraints Operating Platform | |
StreamingSpotify was among the top relative performance laggards during the quarter despite the Fund maintaining its position. The letter does not provide detailed commentary on the streaming theme's outlook or fundamental drivers beyond noting it as a detractor. |
Music Content | |
| 2026 Q1 |
AIAI infrastructure buildout continues with hyperscalers guiding $650-700B capex in 2026. ROI inflection underway with Anthropic revenue surging from $9B to $30B annualized. Manager sees compelling evidence of sustained AI demand across training and inference workloads. |
Infrastructure Training Inference Hyperscalers ROI |
SemiconductorsMultiple AI scaling laws remain intact driving insatiable demand for advanced chips. NVIDIA maintains dominance while custom silicon accelerates. Manager positioned across NVIDIA, Broadcom, and equipment providers for multi-architecture evolution. |
NVIDIA Custom Silicon Equipment Foundries Memory | |
SpaceSpaceX is largest holding generating significant value through Starlink expansion and launch services. Space emerging as potential frontier for AI infrastructure with constant sunlight and vacuum physics advantages for large-scale compute. |
SpaceX Starlink Launch Infrastructure Compute | |
Data CentersHistoric infrastructure buildout driven by AI demand. Energy and cooling capacity emerging as binding constraints. Electrical distribution equipment remains key bottleneck with strong positioning in specialized providers. |
Infrastructure Energy Cooling Electrical Capacity | |
CloudHyperscalers collectively guiding massive capex increases with vast majority directed at AI data centers. Amazon's custom chip business reached $20B revenue run rate growing at triple-digit rates. |
Hyperscalers Capex Custom Chips Amazon Infrastructure | |
CybersecurityRansomware attacks growing in frequency and sophistication with adversaries leveraging AI. Zero-trust, immutable architecture purpose-built for threat environment driving market share gains from legacy vendors. |
Ransomware Zero-trust AI Threats Data Protection Recovery | |
| 2025 Q4 |
AIAI emergence has created market hysteria and broad software sell-offs despite limited real-world adoption. Manager believes incumbent software firms with domain expertise and proprietary data are better positioned than AI-native startups to capture long-term benefits from AI integration. |
Artificial Intelligence Software Automation Technology |
SoftwareSoftware sector treated as monolith awaiting AI disruption, but manager sees meaningful distinctions between companies. Dominant vertical software platforms that successfully integrate AI can thrive and fend off new entrants, particularly those with mission-critical systems and proprietary data. |
Enterprise Software SaaS Technology Vertical Software | |
ValueManager describes being caught between cutting-edge technologies and traditional value industries during a broadening market. Software holdings are ironically cheaper than traditional value industrial exposure, creating opportunity for value-oriented investors. |
Value Investing Valuation Contrarian | |
HotelsChoice Hotels represents asset-light, high-margin hotel franchisor trading at distressed multiples due to cyclical headwinds. Company shifting toward higher-revenue segments like Extended Stay and international markets, with potential for significant cash unlock and share buybacks. |
Hospitality Franchising Real Estate | |
| 2025 Q3 |
AIThe market has absorbed a surge of AI infrastructure buildouts with OpenAI announcing partnerships for tens of gigawatts of compute capacity. NVIDIA CEO Jensen Huang proclaimed global AI infrastructure spending could total $3 trillion to $5 trillion by 2030. The fund conducts intensive research to separate signal from noise in AI developments, examining parallels to past technology paradigm shifts while quantifying AI addressable markets across sectors. |
Infrastructure Compute Models Agents Commerce |
SemiconductorsNVIDIA has captured a dominant position in AI infrastructure with comprehensive portfolio spanning semiconductor accelerators, networking solutions, and software. The company reported 56% total and data center revenue growth with near-term visibility of tens of gigawatts in AI buildouts. Broadcom continues to demonstrate leadership in networking silicon from cloud era into AI era as the most reliable silicon partner for AI foundational model builders. |
Accelerators Networking Foundries Memory Equipment | |
CloudCloud infrastructure remains critical as AI infrastructure buildouts accelerate. OpenAI committed more than 5 gigawatts to Oracle for cloud infrastructure as part of the Stargate project. The fund sees cloud as foundational to AI deployment and continues to invest in companies positioned to benefit from this infrastructure expansion. |
Infrastructure Data Centers Computing Storage Services | |
Electric VehiclesTesla announced record third quarter results for both vehicle deliveries and energy storage deployment. The company's Austin robotaxi network expanded from 20 to over 170 square miles in two months after June 2025 launch. Tesla's AI initiatives continue advancing rapidly with FSD Version 14 anticipated to be critical step toward broader autonomous capabilities and humanoid robot expected to transition to volume production next year. |
Autonomous Batteries Charging Manufacturing Software | |
E-commerceThe global e-commerce market is estimated to hit $6.4 trillion this year, representing about 20.5% of global retail sales. The fund finds itself on the edge of the first holiday season where consumers will put AI commerce to the test with features like OpenAI's Instant Checkout. AI should influence and monetize a growing share of this massive consumer market over the remainder of the decade. |
Platforms Payments Logistics Marketplaces Software | |
AdvertisingThe global digital advertising market is projected to approach $850 billion this year and should continue to see share shifts as AI reshapes consumer engagement. The Trade Desk remains the product leader in the DSP space despite competitive pressures from Amazon's competing platform. The company is well positioned to benefit from strengthening brand advertising trends. |
Digital Programmatic Platforms Targeting Analytics | |
| 2025 Q2 |
AIAI adoption and revenue growth accelerating with ChatGPT reaching 800 million weekly active users by April 2025. Multiple AI scaling laws remain intact including pre-training, post-training, and test-time compute. Companies investing massive amounts in AI infrastructure with NVIDIA CEO stating no technology has ever had opportunity to address larger part of world's GDP than AI. |
Artificial Intelligence Machine Learning Large Language Models AI Infrastructure Compute |
SemiconductorsNVIDIA maintaining leadership in AI infrastructure with comprehensive portfolio spanning accelerators, networking, and software. Blackwell chip achieving fastest ramp in company history with $11 billion revenue. AI cluster buildouts extending into 2026 with multiple scaling laws driving continued growth in compute requirements. |
GPUs AI Chips Data Center Compute Infrastructure Networking | |
CloudMicrosoft Azure accelerating 400 basis points to 35% constant-currency growth, well ahead of expectations. Management expects to be AI constrained past June as planned demand growing faster than supply. Cloud infrastructure critical for AI training and inference workloads. |
Cloud Computing Azure Infrastructure SaaS Hyperscale | |
GLP1GLP-1 drugs representing transformative opportunity with estimated 32 million type 2 diabetics and 105 million obese patients qualifying in US alone. Lilly leading with most effective approved drugs and strong pipeline including once-daily oral orforglipron. Market expected to become at least $150 billion category. |
Diabetes Obesity Weight Loss Pharmaceuticals Therapeutics | |
Electric VehiclesTesla launching Robotaxi service in Austin marking significant step toward fully autonomous ride-hailing network. Fleet scaled to 7.5 million vehicles with over 3.5 billion cumulative miles of Full Self Driving data. Company completed first fully autonomous vehicle delivery from factory to customer. |
Autonomous Driving Robotaxi Self-Driving Transportation Mobility | |
StreamingSpotify demonstrating durability in unpredictable macro environment with continued path to structurally increase gross margins. High-margin artist promotions marketplace, profitable podcasts, and higher-margin audiobooks driving improvement. Paid users growing at double-digit pace despite price hikes. |
Music Streaming Digital Media Subscription Audio Entertainment | |
| 2025 Q1 |
AIAI remains the most powerful technology platform shift and secular growth driver since the internet. Despite tariff uncertainty affecting valuations of AI leaders like NVIDIA and Broadcom, robust AI capital investment plans continue through 2025-2026. The manager believes AI will drive productivity-driven digital transformation, with tech spending potentially doubling from 5% to 10% of global GDP. |
Artificial Intelligence GPUs Data Centers Machine Learning Semiconductors |
Trade PolicyTariffs and trade restrictions have dominated market narrative, creating volatility reminiscent of historic market upheavals. The Trump administration's reciprocal tariffs and subsequent 90-day pause have kept uncertainty elevated. The manager is rigorously assessing portfolio company resilience against tariffs and trade barriers while prioritizing companies with macroeconomic resilience. |
Tariffs Trade War China Export Controls Geopolitical | |
SemiconductorsSemiconductor companies face headwinds from trade restrictions, particularly NVIDIA's H20 chip ban to China. However, the manager remains confident in long-term AI semiconductor demand, with TSMC reporting robust AI-related demand and revenue from AI accelerators expected to double in 2025. Custom AI accelerator development continues with multiple partners. |
Chips Foundries AI Accelerators Manufacturing Export Controls | |
CloudCloud computing remains a core secular megatrend driving portfolio positioning. Companies like Snowflake are capitalizing on the data intelligence market within an AI-centric ecosystem, with accelerated product innovation enabling better AI use case addressing. The cloud infrastructure supports the broader AI transformation across enterprises. |
Data Analytics SaaS Infrastructure Enterprise Software Digital Transformation | |
Electric VehiclesTesla faces near-term headwinds from Model Y refresh timing and regulatory changes, but the manager remains confident in long-term growth driven by EV adoption trends. Tesla's AI ambitions including robotaxi service and Optimus humanoid program hold promise for transforming the growth story, with Elon Musk predicting Optimus will become the overwhelming value of the company. |
EVs Autonomous Driving Robotics Energy Storage Manufacturing | |
AdvertisingDigital advertising platforms like The Trade Desk face near-term macro headwinds but maintain structural advantages in programmatic advertising. The shift from linear TV to streaming creates secular tailwinds in connected TV advertising, with Trade Desk positioned to benefit from partnerships with Netflix, Spotify, and Pinterest opening inventory to programmatic buying. |
Programmatic Connected TV Digital Marketing Ad Tech Streaming | |
| 2024 Q4 |
AIAI infrastructure demand continues to drive robust performance across compute, networking, and systems. NVIDIA maintains unmatched leadership spanning GPUs, systems, software and networking solutions. The advent of reasoning models requiring multiple passes through models is expected to significantly increase compute intensity in both training and inference. |
Compute Infrastructure Training Inference GPUs |
Electric VehiclesTesla remains the innovation leader in real-world, physical AI with growing investor confidence in promising AI initiatives, stabilizing financials, and highly anticipated new vehicle models. The company is channeling funds into AI developments including autonomous-driving technologies and humanoid robots. |
Autonomous Robotics Innovation Physical AI | |
CloudMicrosoft continues building its $150 billion run-rate cloud business including Azure cloud infrastructure service. Azure growth is expected to reaccelerate in the second half of fiscal year as supply constraints ease, with AI application business benefiting from Microsoft 365 adoption. |
Infrastructure SaaS Azure Supply | |
CybersecurityIncreasing frequency and severity of ransomware attacks, heightening geopolitical tension, and stricter regulatory disclosure requirements have made privileged access management a higher priority IT spend category. CyberArk leads the PAM sector with over 25% market share. |
Ransomware Privileged Access Identity Regulatory | |
SemiconductorsAI infrastructure buildout is significantly more network-intensive than conventional data centers, creating massive opportunities for networking solutions. The shift toward Ethernet-based networking from InfiniBand creates new competitive dynamics in the semiconductor space. |
Networking Ethernet Infrastructure Compute | |
Capital MarketsLPL Financial benefits from secular growth in demand for financial advice and a shift among financial advisors away from large banks toward independent models. As the largest independent broker-dealer, LPL is well positioned to continue taking market share. |
Independent Advisors Broker-dealer Technology | |
BiotechnologyViking Therapeutics has a best-in-class GLP-1/GIP in development for obesity treatment with strong oral data disclosed. The VTE treatment space with Inari Medical is in early days of converting to device-based interventions, attacking a large unpenetrated addressable opportunity. |
GLP-1 Obesity Medical Devices Gene Therapy | |
SpaceSpaceX is generating significant value with rapid expansion of Starlink broadband service, deploying vast constellation of satellites and regularly deploying new efficient hardware technology. The company has established itself as a leading launch provider with highly reliable and cost-effective launches. |
Satellites Broadband Launch Starlink | |
| 2024 Q3 |
AIThe fund views AI as an arms race to develop foundational models and achieve artificial general intelligence. Scaling laws drive massive infrastructure investments, with hyperscalers building data centers at unprecedented scale. New inference architectures like OpenAI's chain of thought models require exponentially more compute power. |
Infrastructure Compute Models Inference Scaling |
SemiconductorsAI infrastructure demand is driving unprecedented semiconductor requirements, with hyperscalers planning data centers with 100,000 AI accelerator chips each. The fund sees both general-purpose GPU demand and custom accelerator chip opportunities as key growth drivers. |
GPUs Accelerators Custom Foundries Equipment | |
Data CentersMassive data center buildouts are underway to support AI workloads, with companies like Tesla expanding compute capacity six-fold in one year. The fund sees sustained pricing power due to power constraints and strong demand from cloud adoption and AI applications. |
Power Capacity Infrastructure Hyperscale Colocation | |
CloudCloud migration continues as a secular trend, particularly in Asia where adoption lags the US. The fund sees cloud as the foundation for AI applications and expects continued growth in cloud infrastructure and software-as-a-service offerings. |
Migration SaaS Infrastructure Platform Services | |
Electric VehiclesTesla is positioned as both an EV manufacturer and AI leader, leveraging its fleet data for autonomous driving development. The fund sees Tesla's unique dataset from billions of miles driven and massive compute investments as competitive advantages in the autonomous vehicle market. |
Autonomous Fleet Data FSD Robotaxi | |
RoboticsTesla's Optimus humanoid robot represents a potential market opportunity larger than automotive and robotaxi combined. The company is leveraging automotive technologies like actuators, batteries, and production capabilities to enter the robotics market. |
Humanoid Automation Manufacturing Optimus Industrial | |
| 2024 Q2 |
AIManager believes AI is the most significant technological platform shift since the internet, driving explosive growth in infrastructure investments. Currently in the AI infrastructure-build phase with hyperscalers investing $200 billion in capex. Early AI applications showing measurable ROI with 30-60% developer productivity improvements and 15-30% customer service cost savings. |
Machine Learning GPUs Data Centers Cloud Computing Automation |
SemiconductorsNVIDIA leading unprecedented growth with quarterly revenues of $26 billion up 262% year-over-year. New Blackwell architecture provides 4x faster training and 30x faster inference. Semiconductor performance has seen widest discrepancy versus software in 20 years, with accelerated computing improving 1,000x over eight years. |
GPUs Chip Design Foundries Memory Processing Power | |
CloudHyperscalers building AI factories with massive infrastructure investments. Microsoft Azure accelerating to 31% growth with Azure OpenAI used by 65% of Fortune 100. Cloud infrastructure essential for AI deployment with companies needing to invest now or risk being disrupted. |
Infrastructure SaaS Data Centers Scalability Computing | |
Enterprise SoftwareSoftware experiencing longer sales cycles as customers become more strategic in vendor selection for AI initiatives. Winners will have differentiated data, distribution advantages, and ability to deliver AI services better than build-your-own tools. Some applications already showing productivity gains while others still in proof-of-concept stage. |
SaaS Productivity Automation Integration Workflows | |
| 2024 Q1 |
AIAI is described as the most significant advancement impacting the digital world since the internet itself. The fund is positioned just past the first upward inflection in a generational S-curve for AI adoption and economic impact. Every digital interaction will eventually be AI powered, making humans more productive across various activities. |
Artificial Intelligence Machine Learning Generative AI AI Platform AI Software |
SemiconductorsSemiconductors power every digital or electronic device and are central to the AI revolution. The fund holds leading semiconductor companies including NVIDIA, which disclosed 40% of its data center business was from AI inferencing. New chip architectures and manufacturing advances continue to drive performance improvements. |
Chips Foundries GPU Data Center Computing | |
CloudCloud computing remains a real and intact secular trend. Microsoft has built a $135 billion run-rate cloud business including Azure infrastructure and Office 365 applications. The shift of workloads to the cloud continues with Microsoft expected to gain incremental IT budget share. |
Cloud Infrastructure SaaS Azure Cloud Computing Digital Transformation | |
Electric VehiclesThe fund maintains long-term conviction in the interconnected triangle of disruptions impacting global transportation: electric battery propulsion, autonomous driving, and shared mobility. However, current EV adoption has paused due to product launch gaps and the fund reduced exposure due to weak near-term trends. |
EV Battery Autonomous Driving Transportation Tesla | |
BiotechnologyThe pharmaceutical industry is shifting back to lower-priced, higher-volume primary care medications led by obesity treatments. Viking Therapeutics has potential in the exceptionally large obesity market with its GLP-1/GIP combination weight loss medication that appears more efficacious than competitors. |
GLP1 Obesity Pharmaceuticals Clinical Trials Drug Development | |
CybersecurityCybersecurity investments are capitalizing on the AI inflection, with companies like CrowdStrike Holdings among the contributors to fund performance during the quarter. |
Security Data Protection Enterprise Security Threat Detection AI Security | |
| 2023 Q4 |
AIAI is described as real and transformative, not hype, with the fund positioned across the AI stack from semiconductors to cloud services to applications. The manager emphasizes they have been investing in AI for years, predicting it will forever change human-computer interaction through natural language processing. |
Artificial Intelligence Machine Learning Natural Language Generative AI Computer Vision |
CloudCloud computing adoption is accelerating with CIOs reporting significant increases in public cloud workloads. Microsoft Azure and Amazon AWS remain the clear leaders, with the fund positioned to benefit from the ongoing shift of enterprise workloads to the cloud infrastructure. |
Cloud Infrastructure Public Cloud SaaS Azure AWS | |
SemiconductorsThe semiconductor industry is experiencing unprecedented demand driven by AI workloads and data center transformation. NVIDIA is seeing extraordinary growth with data center revenues expected to triple, while the fund also invests in semiconductor equipment companies positioned for technology transitions. |
Chips Data Centers GPU Memory Foundries | |
Electric VehiclesElectric vehicles represent a real and growing trend with the fund maintaining exposure through Tesla and adding positions in companies like Rivian. The manager views EVs as part of the broader autonomous driving and transportation transformation. |
EVs Autonomous Driving Battery Technology Transportation Clean Energy | |
CybersecurityCybersecurity remains a defensive IT priority for CIOs with strong demand for security software solutions. The fund maintains positions in leading cybersecurity companies while trimming some positions after strong performance in 2023. |
Security Software Threat Detection Identity Management Data Protection Compliance | |
BiotechnologyThe fund is investing in innovative biotechnology companies including those developing oral GLP-1 drugs for diabetes and obesity treatment. Structure Therapeutics represents a potential leader in oral options that could expand access to these large addressable markets. |
Drug Development Clinical Trials Diabetes Treatment Obesity Therapeutics | |
| 2023 Q3 |
AIThe fund emphasizes artificial intelligence as a generational shift driving demand for data center chips and accelerated computing. NVIDIA is positioned at the epicenter of this new computing era, with the transition from general purpose to accelerated computing creating tremendous demand across industries. The fund views AI as part of a broader technology stack from semiconductors to applications. |
Accelerated Computing Data Centers Generative AI Computing Platform Machine Learning |
CloudCloud computing represents a core secular trend with Microsoft building a $60+ billion cloud business including Azure infrastructure and Office 365. The fund sees continued growth as customers expand digital applications and cloud footprints, with companies consolidating spending onto platforms like Dynatrace for IT monitoring and application performance. |
Azure SaaS Digital Transformation Infrastructure Platform Consolidation | |
Electric VehiclesThe fund maintains conviction in electric vehicle adoption through Rivian, which is hitting execution milestones in production ramping and cost reduction. Management expects improving unit economics as production scales and new technologies like Enduro motors and LFP batteries reduce costs. The upcoming R2 model represents a key catalyst for broader market penetration. |
Production Scaling Battery Technology Cost Reduction Vehicle Manufacturing EV Adoption | |
BiotechnologyThe fund focuses on differentiated antibody-based therapies and cellular treatments for autoimmune diseases and cancer. Argenx's Vyvgart launch for myasthenia gravis has tripled consensus expectations, while Legend Biotech's Carvykti offers potential curative treatment for multiple myeloma with significant revenue opportunity reaching $10-20 billion. |
Autoimmune Diseases Cellular Therapy Oncology Antibody Therapies Rare Diseases | |
CybersecurityCybersecurity remains a critical secular trend with companies like CrowdStrike and Dynatrace providing essential protection and monitoring capabilities. The fund sees continued demand as enterprises expand their digital footprints and require comprehensive visibility into IT systems to predict issues and reduce downtime. |
IT Security Application Monitoring Threat Detection Enterprise Protection Digital Infrastructure |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | NEE | NextEra Energy, Inc. | Utilities | Electric Utilities | Bull | NYSE | Demographics, dividends, ratebase, Regulation, renewables, Solar, utilities, Wind | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | FFBC | First Financial Bancorp. | Financials | Regional Banks | Bull | NASDAQ | Banks, Credit, M&A, profitability, Regionals, Roa, Rotce, valuation | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | NVDA | NVIDIA Corporation | Information Technology | Graphics & AI processors | Bull | NASDAQ | Artificial Intelligence, competitive moat, data centers, Free Cash Flow, GPUs, hyperscalers, semiconductors, valuation | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | TSLA | Tesla, Inc. | Consumer Discretionary | Electric vehicles & energy storage | Bull | NASDAQ | Autonomy, Electric Vehicles, energy storage, growth, Margins, Software, valuation, vertical integration | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | AVGO | Broadcom Inc. | Information Technology | Data center & networking semiconductors | Bull | NASDAQ | AI infrastructure, ASICs, buybacks, capital allocation, data centers, dividends, Free Cash Flow, semiconductors | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | TTD | The Trade Desk, Inc. | Communication Services | Programmatic advertising platforms | Bull | NASDAQ | Competitive Advantage, Connected tv, digital advertising, Free Cash Flow, Identity, operating leverage, Programmatic | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | IT | Gartner, Inc. | Information Technology | Technology research & advisory | Bull | NYSE | competitive moat, Free Cash Flow, generative AI, Pricing power, recurring revenue, research, subscription revenue | Login |
| Nov 8, 2025 | Fund Letters | Michael A. Lippert | PAR | PAR Technology Corporation | Information Technology | Restaurant POS software | Bull | NYSE | ARR growth, Free Cash Flow, operating leverage, Point of Sale, recurring revenue, Restaurant technology, Vertical SaaS | Login |
| Dec 31, 2024 | Fund Letters | Baron Opportunity Fund | TSLA | Tesla, Inc. | Consumer Discretionary | Automobile Manufacturers | Bull | NASDAQ | AI, autonomous driving, Electric Vehicles, energy storage, growth, innovation, robotics, Software | Login |
| Dec 31, 2024 | Fund Letters | Baron Opportunity Fund | NVDA | NVIDIA Corporation | Information Technology | Semiconductors | Bull | NASDAQ | AI, data center, GPUs, growth, Networking, semiconductors, Software, Systems | Login |
| Dec 31, 2024 | Fund Letters | Baron Opportunity Fund | ANET | Arista Networks, Inc. | Information Technology | Communications Equipment | Bull | NYSE | AI infrastructure, Cloud computing, data center, enterprise, Ethernet, growth, Networking, Software | Login |
| Dec 31, 2024 | Fund Letters | Baron Opportunity Fund | LPLA | LPL Financial Holdings Inc. | Financials | Investment Banking & Brokerage | Bull | NASDAQ | Capital-light, financial services, Independent Broker-Dealer, market share, secular growth, technology platform, wealth management | Login |
| Dec 31, 2024 | Fund Letters | Baron Opportunity Fund | CYBR | CyberArk Software Ltd. | Information Technology | Systems Software | Bull | NASDAQ | cybersecurity, Identity Security, margin expansion, market leader, Privileged Access Management, Ransomware Protection, Software | Login |
| Dec 31, 2023 | Fund Letters | Baron Opportunity Fund | AAPL|MSFT|NFLX|NVDA|UNH | Microsoft Corporation | Software & Services | Systems Software | Bull | NASDAQ | AI, Azure, Cloud computing, growth, SaaS, Software, technology | Login |
| Dec 31, 2023 | Fund Letters | Baron Opportunity Fund | AMZN | Amazon.com, Inc. | Consumer Discretionary | Internet & Direct Marketing Retail | Bull | NASDAQ | advertising, AI, AWS, Cloud computing, e-commerce, retail, technology | Login |
| Dec 31, 2023 | Fund Letters | Baron Opportunity Fund | AAPL|MSFT|NFLX|NVDA|UNH | NVIDIA Corporation | Information Technology | Semiconductors | Bull | NASDAQ | Accelerated Computing, AI, data centers, GPUs, growth, semiconductors, technology | Login |
| Dec 31, 2023 | Fund Letters | Baron Opportunity Fund | LRCX | Lam Research Corporation | Information Technology | Semiconductor Equipment | Bull | NASDAQ | Deposition, DRAM, Etch, Nand, semiconductor equipment, technology, WFE | Login |
| Dec 31, 2023 | Fund Letters | Baron Opportunity Fund | - | Structure Therapeutics Inc. | Health Care | Biotechnology | Bull | NASDAQ | biotechnology, Clinical, Diabetes, GLP-1, Obesity, Oral Drug, Phase 2 | Login |
| TICKER | COMMENTARY |
|---|---|
| NVDA | NVIDIA is a semiconductor and systems company specializing in compute and networking platforms for accelerated computing. The company's dominant position in AI infrastructure—spanning AI accelerator chips (graphics processing units, or GPUs), systems, software, and high-performance networking solutions—continues to underpin strong fundamentals and robust financial results. The company delivered another strong earnings report and raised its forward outlook meaningfully above prior expectations. Demand for NVIDIA's products remains exceptional—as CEO Jensen Huang remarked on the first quarter earnings call, demand has gone parabolic. In the company's April quarter, data center revenue grew 92% year-over-year to $75.2 billion, with total revenue of $81.6 billion, up 85%; for its July quarter, the company guided for total revenue to grow at least another $9.5 billion sequentially. The company's offerings retain strong differentiation as the AI compute paradigm evolves from model training to inference to the emerging agentic era, in which AI agents autonomously plan and execute complex tasks. This was particularly evident in the company's disclosure that it is poised to become one of the world's largest CPU (central processing units) providers — a product category that has historically been outside its core focus. The company's next-generation platform, Vera Rubin, remains on track for second-half delivery despite earlier rumors of delays. We retain conviction in NVIDIA as a core long-term holding, viewing its full-stack platform, software moat, and visibility into sustained hyperscaler capital spending as durable advantages supporting a multiyear growth trajectory. |
| AVGO | Broadcom Inc. is a global designer and supplier of semiconductor and infrastructure software solutions at the core of modern computing and networking. The company is a leader in high-performance digital and mixed-signal technologies spanning networking, connectivity, storage, and custom silicon accelerators. Through its acquisition of VMware, Broadcom also owns critical software layers used to virtualize and manage large-scale compute environments. Shares contributed to performance during the quarter as the company's key customer, Alphabet (Google), signaled higher and more durable capital expenditures over the coming years than previously anticipated. Broadcom's multi-year agreement with Google, extending through 2031, validates its entrenched position within the Google silicon ecosystem and establishes it as a primary beneficiary of Google's AI-related infrastructure spending. Beyond Google, several other customers showed incrementally positive signs in their custom silicon adoption journeys. Anthropic, following its recent commercial success, is planning for significantly larger compute requirements, which should translate into a growing custom silicon base over the next several years. OpenAI, working with Broadcom, taped out its first inference chip—codenamed Jalapeno—in a record nine months, and appears set to build 10 gigawatts of AI infrastructure using custom silicon this decade. Meta continues to hold a constructive view on AI investment and the associated infrastructure buildout. Additionally, Apple signed a multi-year agreement with Broadcom spanning multiple product lines—encompassing not only conventional radio frequency components and next-generation wireless connectivity technologies, but also custom silicon across multiple generations of Apple products. As CEO Hock Tan has noted, custom silicon accelerators are on pace to match GPU units in volume by next year, and Broadcom, as the category leader, is well positioned to be the primary beneficiary of this transition. We maintain our conviction in Broadcom. The company is uniquely positioned to capture a dominant share of the custom silicon market and faces no credible terminal risk to its custom silicon franchise over the foreseeable future. We continue to hold the stock and believe Broadcom is on a path to becoming one of the largest technology companies in the world. |
| DDOG | We trimmed our Datadog, Inc. position to a lower portfolio weight after the stock rose 121% in the second quarter. We retain conviction in Datadog's long-term growth opportunity, durable competitive advantages, and innovative and disciplined management team. |
| TSM | Taiwan Semiconductor Manufacturing Company Limited (the world's advanced-semiconductor manufacturing champion) was among several AI-infrastructure and semiconductor investments that contributed to absolute and relative performance during the quarter. |
| MU | Micron Technology, Inc. is an industry leader in memory and storage solutions that are increasingly central to the advancement of AI. The core investment thesis begins with a structural bottleneck: AI inference applications are architecturally constrained by memory bandwidth, and the scaling laws that have historically governed compute performance have expanded to encompass memory capacity as well—meaning material gains in AI performance can be captured by deploying larger, faster memory. This has created what we believe is a durable, multi-year demand tailwind that will continue to outstrip supply, supported by the incremental returns on memory investment remaining exceptionally high. Near-term supply constraints and the resulting price increases are constructive for Micron's financials, but what interests us more is the structural evolution of the business itself. Memory players, and Micron specifically, are entering into long-term strategic supply agreements with customers that lock in visible demand and meaningfully dampen the cyclicality that has historically characterized the industry. Meanwhile, each successive generation of memory technology moves Micron further from commodity territory: while high-bandwidth memory co-packaged with AI accelerators has already added stickiness and differentiation, the next generation of solutions will embed controller logic within the memory itself—an architectural shift that makes memory a far more proprietary and defensible product than in prior cycles. We believe Micron is a fundamentally different business than it was even a few years ago: one positioned not only to grow earnings significantly, but to command a higher valuation multiple as the market comes to appreciate the durability and strategic importance of its competitive position. |
| SPOT | Spotify Technology S.A. (global streaming music and content leader) was among the top relative performance laggards during the quarter. |
| GDS | Despite solid operating results, shares of GDS Holdings Limited declined during the second quarter. Weighing on sentiment were management's communications regarding full-year guidance, a material step-up in capital expenditures over the next several years, and a slight delay in the expected timing of the company's growth inflection. GDS develops and leases data center space to leading global technology companies—including Alibaba, Tencent, ByteDance, Microsoft, Google, and Oracle—under long-term arrangements. We recently hosted CEO and founder William Huang and CFO Daniel Newman at our offices and continue to believe the best days for the company lie ahead, supported by powerful secular tailwinds: the early stages of cloud adoption in Asia, continued data growth, rising AI demand, and global power constraints that are sustaining pricing power. Rather than focusing on the precise quarterly timing of the growth inflection, we remain focused on the long term and see increasing evidence of a building AI wave in China through significant bookings growth. We also see material and underappreciated value in GDS's stake in its spun-out international subsidiary, DayOne, which we expect to list publicly at a significantly higher valuation than its most recent private capital raise, supported by continued bookings and cash flow momentum and highly visible take-or-pay revenue ramp timelines. |
| GWRE | Shares of property and casualty insurance software vendor Guidewire Software, Inc. declined during the quarter as a small number of deals slipped from its fiscal third quarter into its fiscal fourth quarter, coinciding with broader fears of AI-driven disruption that pressured valuation multiples across the application software sub-industry. We believe the deal slippage was purely a timing issue and that all affected deals have since closed. Guidewire's InsuranceSuite platform serves as the core system of record for insurance carriers—the single source of truth for policies written, claims processed, premiums collected, and payments made. The complexity of insurance policies, their highly regulated nature, and the fact that they exist exclusively within Guidewire rather than in physical form makes this system of record particularly critical and therefore highly valuable. We believe the core system opportunity alone represents nearly $20 billion of annual recurring revenue, or approximately 20 times Guidewire's current scale. We also believe AI will be a significant tailwind for the company, meaningfully expanding this opportunity by enabling automation and intelligence layered on top of the core system of record. We are already seeing Guidewire bring new AI-enabled capabilities to market and sign customers, and we expect adoption to accelerate over the coming year. Finally, we expect Guidewire to benefit from the same internal productivity enhancements that AI is delivering across industries, helping the company support faster growth at lower cost and, ultimately, better profitability. |
| GOOGL | During the quarter, we added to our position in Alphabet Inc., the parent company of Google—the world's largest search and digital advertising franchise—as well as YouTube and Google Cloud Platform, one of the three leading hyperscale cloud infrastructure businesses globally. Alphabet also owns DeepMind, one of the premier AI research organizations in the world. Alphabet generates approximately $174 billion in trailing operating cash flow, a funding advantage that becomes increasingly important as the AI race enters a phase of high capital intensity. Our conviction deepened this quarter as several developments reinforced our view that Alphabet is one of the most strategically advantaged businesses in the AI era. At Google I/O 2026, management disclosed that Alphabet now processes 3.2 quadrillion tokens monthly—seven times increase year over year—with the Gemini app surpassing 900 million monthly active users, more than doubling in a year. AI is proving additive rather than cannibalistic to core search. Search revenue grew 19% year-over-year in the first quarter, and CEO Sundar Pichai noted that AI features are driving more search usage, not less. Google Cloud accelerated to 63% year-over-year revenue growth—a five-year high—with operating margins expanding to 33% and the cloud backlog nearly doubling sequentially to approximately $462 billion, anchored in part by a landmark multi-year tensor processing unit (TPU) commitment from Anthropic, affirming that Alphabet's custom silicon is winning the confidence of the most demanding AI infrastructure customers. What distinguishes Alphabet from every other competitor in the AI landscape is the breadth of its vertical integration: custom eighth-generation TPUs optimized for both training and inference, frontier Gemini models, the Antigravity enterprise agentic coding platform, and consumer distribution across 13 products with more than 1 billion monthly active users each—including five with more than 3 billion. No pure-play AI lab or cloud competitor replicates this stack, and we believe the cost and distribution advantages it confers widen over time. We see a long runway for growth as Google Cloud accelerates, Gemini monetization deepens across search and subscriptions, and this full-stack advantage compounds—a combination we believe bodes well for long-term shareholders. |
| META | Meta Platforms, Inc. raised its 2026 capital expenditure range to $125–$145 billion as part of the hyperscaler AI infrastructure buildout. Meta continues to hold a constructive view on AI investment and the associated infrastructure buildout. |
| AMZN | Amazon.com, Inc. reaffirmed approximately $200 billion in capital expenditures for 2026. Amazon Web Services' backlog grew 93% year-over-year to $364 billion, excluding a new $100 billion OpenAI commitment announced after the period. Amazon's Bedrock service processed more tokens in the first quarter than in all prior periods combined. |
| TSLA | Tesla, Inc. was the Fund's fifth-largest holding at quarter end, representing 4.7% of net assets with a market capitalization of $1.58 trillion. |
| LLY | Eli Lilly and Company was the Fund's seventh-largest holding at quarter end, representing 3.4% of net assets with a market capitalization of $1.13 trillion. |
| WELL | During the quarter, we added to our position in Welltower Inc., which owns and operates senior housing communities in the U.S. and internationally. While Welltower screens as a real estate business, we view it as the intersection of hardware, real estate, and software—its proprietary operating platform and data analytics capabilities. Rolling out this software layer creates meaningful structural upside to both operating margins and occupancy through enhanced asset management, proprietary analytics, and new initiatives such as amenity-based pricing. We recently hosted the entire Welltower executive team in our offices and came away more encouraged by the multi-dimensional growth opportunity ahead—particularly the early monetization of its proprietary data analytics platform and the continued rollout of the Welltower Business System. The company has deliberately recruited senior talent from both technology and real estate to drive this transformation, and we believe CEO Shankh Mitra and his management team are disciplined capital allocators focused on driving accretive value per share. The broader industry backdrop is among the most favorable in years: demand is supported by powerful demographic tailwinds, with the 80-plus population growing at a 4% to 5% compound annual rate over the next five years, well above the 2% rate that followed the global financial crisis, while supply remains structurally constrained by declining construction starts, unattractive developer economics, and a five-plus year entitlement and build timeline. The constrained financing environment for senior housing should continue to generate an active external growth pipeline at an attractive basis. Putting it all together, we see a path for earnings to more than double over the next five years, creating attractive long-term return prospects for the Fund. |
| CSGP | We elected to exit our position in real estate information and marketing services provider CoStar Group, Inc. after a successful multi-decade investment. Performance has been challenged over the past several years as the company has invested aggressively to build out its Homes.com residential real estate marketing platform. Revenue traction for Homes.com has been slow to materialize, and we are concerned that recent shifts in market structure will make it incrementally more difficult for CoStar to grow a residential business commensurate with its level of investment. Shares have also been pressured by the sector-wide AI disruption concerns weighing on the broader software and information services ecosystem. |
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