| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | 19.9% | 19.9% |
NZS Capital's Growth strategy returned 16% in Q1 2023, outperforming the benchmark's 7.11% return, driven primarily by technology holdings including Salesforce, Cadence Design, and Workday. The firm's underweight in traditional banks proved beneficial amid financial sector concerns, while maintaining exposure to digital payment companies. The portfolio combines resilient businesses with optionality positions focused on the analog-to-digital economic transition. Generative AI emerged as a key theme, with ChatGPT reaching 100M users faster than any app in history, prompting portfolio adjustments to favor AI beneficiaries and infrastructure providers. The firm expects semiconductor companies to benefit from increased AI spending, with AI servers requiring significantly more memory content. While acknowledging risks from interest rate policies and potential financial contagion, management believes they are closer to the end of valuation compression and expects markets to shift from macro-focused to company-centric environments. The strategy maintains its complexity investing approach, seeking companies that maximize non-zero-sum outcomes across all stakeholders.
NZS Capital focuses on companies leading the analog-to-digital transition of the global economy, combining resilient businesses with optionality positions to navigate increasing change and capitalize on AI-driven disruption.
The firm expects continued focus on interest rates, recession fears, and financial contagion risks, but believes they are closer to the end of valuation compression. They anticipate a shift from macro-focused markets to company-centric environments, with AI driving continued disruption and opportunity in semiconductor infrastructure.
| 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 holdings, particularly benefiting from early AI adoption themes. The firm positioned for the analog-to-digital transition while avoiding traditional banking exposure during sector stress. Management sees AI as accelerating disruption across sectors and adjusted portfolio toward infrastructure beneficiaries, expecting semiconductor demand growth from increased AI server requirements. |
| Mar 2 2023 | 2022 Q4 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2023 Q1 |
AIGenerative AI is accelerating innovation and disruption across sectors, with ChatGPT reaching 100M users in two months. Enterprise SaaS companies need 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 SaaS 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 Foundries GPUs | |
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 and semiconductors remain attractive opportunities. |
Digital Transition Reshoring Infrastructure Deflation |
| 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. |
| BALL | The materials sector also contributed positively to performance, with gains in Ball Corp, Linde plc, and Constellium. |
| LIN | The materials sector also contributed positively to performance, with gains in Ball Corp, Linde plc, and Constellium. |
| CSTM | The materials sector also contributed positively to performance, with gains in Ball Corp, Linde plc, and Constellium. |
| 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. |
| ASML | An AI future is going to require a lot of memory, which in turn should set up a healthy backdrop for semiconductor equipment companies, such as ASML and Lam Research, as their markets recover from the current downcycle. |
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