| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 15.6% | 15.6% |
NZS Capital's Growth strategy returned 16% in Q1 2023, outperforming the benchmark's 7.11% return, driven primarily by technology sector gains of 26%. The firm welcomed Brett Larson to the investment team and crossed $2B in assets under management. Technology leaders Salesforce, Cadence Design, and Workday were top contributors, along with consumer discretionary names Amazon, MercadoLibre, and Airbnb. The portfolio's underweight in traditional banks proved beneficial amid financial sector concerns. The firm adjusted positioning to capitalize on AI opportunities, viewing semiconductors as crucial infrastructure for an AI-enabled future. TSMC, Nvidia, and Micron are positioned to benefit from increased AI server demand requiring significantly more memory content. While markets remain focused on interest rates and recession fears, NZS believes valuation compression may be nearing an end, favoring a shift toward company-specific fundamentals. The firm maintains its focus on companies leading the analog-to-digital economic transition through their Resilient and Optionality framework.
NZS Capital focuses on companies leading the analog-to-digital transition of the global economy, combining Resilient businesses with narrow outcome ranges and Optionality businesses with wider ranges of outcomes, believing this approach is well-suited for navigating the increasing pace of technological change.
The firm expects the market will remain focused on interest rates, recession fears, and financial contagion risk, but believes they are likely closer to the end of interest-rate-driven valuation compression. They anticipate a shift from macro-focused markets to more company-centric environment, remaining focused on building a portfolio balancing Resilient and Optionality positions in companies leading the analog-to-digital transition.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 28 2023 | 2023 Q1 | ABNB, AMZN, ASML, BALL, CDNS, CRM, CSGP, CSTM, DHR, GOOGL, LIN, MELI, MRNA, MU, NEE, NTDOY, NVDA, ORSTED.CO, TSM, WDAY | AI, Digital Transition, growth, innovation, semiconductors, technology | - | NZS Capital delivered strong Q1 performance driven by technology and consumer discretionary holdings, while benefiting from underweight traditional banking exposure. The firm repositioned for AI opportunities, emphasizing semiconductor infrastructure providers like TSMC and Nvidia. Despite ongoing macro uncertainties, NZS believes interest-rate-driven valuation compression is nearing an end, favoring their analog-to-digital transition thesis. |
| Mar 2 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2023 Q1 |
AIGenerative AI is accelerating innovation and disruption across sectors, with ChatGPT reaching 100M users faster than any app in history. Enterprise SaaS companies must adopt AI strategies or risk being displaced by new entrants. The firm adjusted portfolio positioning to favor early AI beneficiaries and infrastructure providers. |
Generative AI ChatGPT Enterprise Infrastructure Disruption |
SemiconductorsSemiconductors are crucial to an AI-enabled future, with the broader supply chain expected to benefit from robust AI model spending. AI servers require significantly more memory content, setting up a healthy backdrop for semiconductor equipment companies as markets recover from the current downcycle. |
AI Infrastructure Memory Equipment Recovery Supply Chain | |
Energy TransitionThe analog-to-digital transition continues across the global economy, with inflationary pressures adding fuel to the digital shift which provides deflation. Reshoring and massive investment in high-tech infrastructure remain attractive opportunities. |
Digital Transition Infrastructure Reshoring Technology |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| CRM | The largest contributors to performance in the technology sector were Salesforce, Cadence Design, and Workday. |
| CDNS | The largest contributors to performance in the technology sector were Salesforce, Cadence Design, and Workday. |
| WDAY | The largest contributors to performance in the technology sector were Salesforce, Cadence Design, and Workday. |
| AMZN | Consumer discretionary investments were also strong contributors to performance, led by Amazon, MercadoLibre, and AirbnB. |
| MELI | Consumer discretionary investments were also strong contributors to performance, led by Amazon, MercadoLibre, and AirbnB. |
| ABNB | Consumer discretionary investments were also strong contributors to performance, led by Amazon, MercadoLibre, and AirbnB. |
| NEE | NextEra declined because of scrutiny around campaign finance issues in its operating utility, Florida Power & Light. |
| DHR | Danaher saw weakness as its customer base digested inventory in bioprocessing following the wind down of pandemic spending. |
| TSM | TSMC will manufacture the key processors for training AI models, such as Nvidia's GPUs or Alphabet's internally developed Tensor Processing Units. |
| NVDA | TSMC will manufacture the key processors for training AI models, such as Nvidia's GPUs or Alphabet's internally developed Tensor Processing Units. |
| GOOGL | TSMC will manufacture the key processors for training AI models, such as Nvidia's GPUs or Alphabet's internally developed Tensor Processing Units. |
| MU | Micron recently stated that AI servers have as much as eight times the DRAM content and three times the NAND content compared to servers running more traditional workloads. |
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