Investment Pitches

Pitch Summary:
Willdan Group, Inc. (WLDN) provides consulting, engineering and technical services to public and commercial clients in the infrastructure- and energy-services spaces. While Willdan released solid quarterly earnings results, forward guidance was a little lower than expected and investors appeared to use that as an excuse to realize gains after the stock's recent strong performance. We continue to view Willdan as positioned to experience strong long-term growth as utilities and commercial clients seek its expertise in designing and implementing projects that will help conserve energy. The market for its services should only increase as AI initiatives drive ever greater demand for power.

BSD Analysis:
The manager maintains a bullish long-term view on Willdan despite recent guidance disappointment and profit-taking pressure. The investment thesis centers on Willdan's specialized expertise in energy efficiency and infrastructure consulting serving utilities and commercial clients. The company is well-positioned to benefit from increasing focus on energy conservation and infrastructure modernization across both public and private sectors. The AI revolution is creating an unexpected tailwind as data centers and AI initiatives drive unprecedented power demand, requiring utilities to seek energy efficiency solutions. This structural demand shift should provide sustained growth opportunities for Willdan's consulting and engineering services. The recent stock weakness following guidance revision appears to be temporary profit-taking rather than fundamental deterioration. The manager's continued conviction reflects confidence in the long-term secular trends driving demand for energy efficiency expertise. Willdan's specialized capabilities and client relationships provide competitive advantages in a growing market.

Pitch Summary:
Vital Farms, Inc. (VITL), a provider of specialty eggs sourced from small farms and pasture-raised chickens, continued to sag in the most recent quarter. The company's eggs sell at a premium, and concerns around heightened consumer cost sensitivity have weighed on the stock. In addition, Vital Farms's recent expansion into a second large-scale egg-washing and packaging facility have raised market fears of excess capacity in an increasingly competitive industry. The company continues to experience strong growth, and the stock is now trading at a very attractive valuation. That said, we have trimmed the position and are closely monitoring the strength of Vital Farms's brand within the specialty-egg segment.

BSD Analysis:
The manager expresses a cautious neutral stance on Vital Farms, acknowledging both challenges and opportunities in the premium egg market. The investment faces headwinds from consumer cost sensitivity pressuring demand for premium-priced products during inflationary periods. Capacity expansion concerns have created market fears of oversupply in an increasingly competitive specialty egg segment. However, the company continues to deliver strong growth despite these challenges, suggesting underlying brand strength and market demand. The attractive valuation following recent stock weakness presents potential value opportunity for patient investors. The manager's position trimming and close monitoring approach reflects prudent risk management while maintaining exposure to potential upside. The key investment question centers on Vital Farms' ability to maintain brand premium and market share in a more competitive environment. This appears to be a quality company facing temporary headwinds rather than structural challenges.

Pitch Summary:
On the downside, shares of Red Violet, Inc. (RDVT), a main detractor from Fund performance compared to the benchmark, fell victim to the quarter's AI-driven selloff in software stocks despite reporting exceptional results. The company leverages proprietary technologies and advanced analytics to deliver identity intelligence solutions used by financial, retail and law-enforcement organizations to prevent fraud, acquire customers and mitigate risk. Red Violet provides its services through a cloud-native software platform that offers insights and security that we believe would be extremely difficult to replicate. In addition, the company's business model is highly scalable, as the costs associated with the data used for its background checks are fixed—and we expect Red Violet's margins to continue to improve as more customers utilize that data. We view Red Violet as relatively insulated from AI disruption given these advantages, and we added to the position on weakness.

BSD Analysis:
The manager maintains strong conviction in Red Violet despite recent underperformance, viewing the AI-driven selloff as a buying opportunity. The investment thesis centers on Red Violet's proprietary identity intelligence platform serving critical fraud prevention and risk mitigation needs across multiple industries. The company's competitive moat stems from difficult-to-replicate data assets and advanced analytics capabilities that provide unique insights and security solutions. The highly scalable business model benefits from fixed data costs, creating significant operating leverage as customer adoption increases. Management expects continued margin expansion as more clients utilize the platform, demonstrating strong unit economics. The manager's contrarian view positions Red Violet as AI-resistant rather than AI-vulnerable, differentiating it from other software companies facing disruption concerns. Adding to the position on weakness shows high conviction in the long-term value proposition despite short-term market sentiment.

Pitch Summary:
Cardinal Infrastructure Group, Inc. (CDNL) was another contributor to performance. The company is an installer of "wet utilities" such as water, sewer and stormwater systems. The services it provides require a skilled workforce and significant engineering expertise, and the company is being pulled into markets by national homebuilders who value Cardinal's ability to get essential work done on a timely basis. In this vein, during the quarter Cardinal expanded its footprint beyond the Carolinas into Georgia via an acquisition, a move that was well received by the market. The company has shown impressive revenue growth, has a strong order backlog that provides visibility into future earnings and has a long runway to expand geographically and via acquisitions.

BSD Analysis:
The manager presents a compelling growth story for Cardinal Infrastructure Group centered on specialized expertise and geographic expansion. The investment thesis highlights Cardinal's competitive moat in wet utilities installation, requiring skilled labor and engineering capabilities that create barriers to entry. National homebuilders are actively seeking Cardinal's services, demonstrating strong demand for reliable infrastructure contractors. The company's geographic expansion into Georgia through acquisition shows management's ability to execute growth strategies and scale the business model. Strong order backlog provides earnings visibility and reduces execution risk, while the fragmented market offers significant acquisition opportunities. The specialized nature of wet utilities work and Cardinal's proven execution capabilities position it well for continued market share gains. This appears to be a classic small-cap growth story with multiple expansion vectors and defensive characteristics through essential infrastructure services.

Pitch Summary:
EZCORP, Inc. (EZPW), another top contributor to Fund performance during the quarter, operates pawn shops in the U.S. and Latin America and offers consumers the ability to use personal items as collateral in order to access short-term loans without a credit check. The company makes money from interest payments on loans and the sale of collateralized items on failed loans. The stock moved higher in the quarter as EZCORP has benefited from rising demand, with consumers under stress from high prices for food, fuel and housing. In addition, given rising gold prices over much of 2025 and into early 2026, the company has seen higher earnings from jewelry scrapping. With gold prices easing off their recent highs during the quarter, we trimmed the position on strength.

BSD Analysis:
The manager presents a tactical bull case for EZCORP based on favorable macroeconomic conditions and commodity tailwinds. The investment thesis centers on consumer financial stress driving increased demand for pawn services as traditional credit becomes less accessible. High inflation in essential goods like food, fuel, and housing is forcing consumers to seek alternative financing through collateral-based lending. The company benefits from a dual revenue model of loan interest and merchandise sales from defaulted loans. Rising gold prices provided an additional earnings boost through jewelry scrapping operations, demonstrating the company's ability to capitalize on commodity cycles. The manager showed disciplined portfolio management by trimming the position as gold prices moderated, suggesting a tactical rather than long-term strategic holding. This reflects opportunistic investing in cyclical consumer finance trends.

Pitch Summary:
Leading positive contributors included a pair of for-profit education companies, Lincoln Educational Services Corp. (LINC) and Universal Technical Institute, Inc. (UTI). Both are viewed as AI beneficiaries, given rising demand for training in skilled areas of employment that don't require a college degree and that are less threatened by AI than many white-collar professions. In addition, the buildout of AI and cloud-services data centers has led to increased employment opportunities for skilled tradespeople and technicians. This positive demand backdrop is reflected in Lincoln's ongoing aggressive expansion of its footprint through the addition of new campuses.

BSD Analysis:
The manager views Universal Technical Institute as strategically positioned to benefit from AI-driven labor market shifts. The investment thesis rests on UTI's focus on technical education for careers that are AI-resistant, particularly automotive and diesel technology. As AI displaces white-collar jobs, demand for skilled technical training is expected to increase significantly. The AI infrastructure boom is creating additional employment opportunities for technicians, providing a dual tailwind for UTI's programs. The company's specialized focus on automotive and technical trades positions it well in sectors experiencing labor shortages. This contrarian positioning as an AI beneficiary rather than victim sets UTI apart from technology companies facing disruption fears. The manager's bullish stance reflects confidence in the structural demand shift toward technical education and skilled trades training.

Pitch Summary:
Leading positive contributors included a pair of for-profit education companies, Lincoln Educational Services Corp. (LINC) and Universal Technical Institute, Inc. (UTI). Both are viewed as AI beneficiaries, given rising demand for training in skilled areas of employment that don't require a college degree and that are less threatened by AI than many white-collar professions. In addition, the buildout of AI and cloud-services data centers has led to increased employment opportunities for skilled tradespeople and technicians. This positive demand backdrop is reflected in Lincoln's ongoing aggressive expansion of its footprint through the addition of new campuses.

BSD Analysis:
The manager presents a compelling bull case for Lincoln Educational Services, positioning it as an AI beneficiary rather than victim. The thesis centers on increasing demand for skilled trades education as AI threatens white-collar jobs but creates opportunities for technicians and tradespeople. The AI and cloud infrastructure buildout is driving employment demand for skilled workers, creating a favorable tailwind for Lincoln's training programs. The company is capitalizing on this trend through aggressive campus expansion, demonstrating management's confidence in the growth opportunity. This positioning as an AI beneficiary in the education space differentiates Lincoln from traditional software companies facing AI disruption concerns. The investment appears well-timed to capture the structural shift toward skilled trades education. The manager's conviction is evident through the stock's inclusion as a leading positive contributor to fund performance.

Pitch Summary:
H World is the second largest hotel chain in China. The company has emerged as a dominant force in China's hotel industry, with a strong brand portfolio and deep operational expertise. H World is widely regarded as an industry innovator, with a strong focus on digital infrastructure and IT systems. These investments have helped it become a cost leader in the sector, while its membership programme has emerged as a key driver of organic traffic and customer retention. We believe H World has a long runway of growth as it taps into China's rising domestic travel demand, urbanisation and upgraded consumer preferences. H World's significantly larger economies of scale – and its pricing premium over the hotels in similar locations – should drive outsize drop off in the long run.

BSD Analysis:
Stewart Investors initiated a position in H World, China's second-largest hotel chain, emphasizing the company's dominant market position and operational excellence. The investment thesis is built on H World's strong brand portfolio, deep operational expertise, and industry-leading innovation in digital infrastructure and IT systems. These technological investments have established the company as a cost leader while its membership program drives organic traffic and customer retention. The fund sees a long growth runway driven by China's rising domestic travel demand, ongoing urbanization, and upgrading consumer preferences. H World's significant economies of scale advantage and pricing premium over competitors in similar locations should generate superior profitability over time. The company's focus on digital infrastructure differentiates it from traditional hotel operators and creates sustainable competitive advantages. The investment case combines secular growth trends in Chinese domestic travel with H World's operational excellence and technological leadership. The fund's bullish stance reflects confidence in the company's ability to capture market share and expand margins through scale advantages and premium positioning.

Pitch Summary:
Sony is a leading global enterprise in met business, with the #1 console gaming franchise (Playstation), leading music and film businesses, and image-sensing chips and consumer electronics. Its content has proven to be popular hits (for example, Netflix's K-Pop Demon Hunters and the Demon Slayer movie), and its Playstation pB to m helps to popularise third-party games. While the group is diverse, its business divisions operate synergistically, and the management is strongly committed to disciplined capital allocation and focused on returns and profitability. We took the opportunity to initiate a position on recent share price weakness.

BSD Analysis:
Stewart Investors initiated a new position in Sony, viewing it as a leading global entertainment enterprise with multiple competitive advantages. The investment thesis centers on Sony's #1 console gaming franchise PlayStation, leading music and film businesses, and image-sensing chip operations. The fund highlights Sony's content creation success with popular hits like Netflix's K-Pop Demon Hunters and the Demon Slayer movie, demonstrating the company's ability to create valuable intellectual property. PlayStation's platform helps popularize third-party games, creating a virtuous cycle of content and hardware sales. Despite business diversity, the fund appreciates the synergistic operations across divisions and management's disciplined capital allocation approach focused on returns and profitability. The timing of the investment reflects opportunistic buying during share price weakness. Sony's integrated entertainment ecosystem, from content creation to distribution platforms, provides multiple revenue streams and cross-selling opportunities. The investment case combines Sony's established market leadership positions with management's demonstrated commitment to shareholder value creation through disciplined capital allocation.

Pitch Summary:
Realtek is an integrated circular (IC) design company based in Taiwan which focuses on connectivity solutions such as WiFi, Ethernet and Bluetooth. While wireless technology is relatively mature and seemingly common, it is in the case of the network, which is a key component of the network. However, we have seen that the company has not yet been able to access the network. We believe the company is a key component of the network. We believe returns can improve and book value can compound at a mid-teens rate which is attractive in absolute terms. margins should improve due to the product mix. The company has a long history and good track record and should benefit from the broadening use of Al in on-device Al agents.

BSD Analysis:
Stewart Investors initiated a new position in Realtek, a Taiwan-based integrated circuit design company specializing in connectivity solutions including WiFi, Ethernet, and Bluetooth technologies. Despite wireless technology appearing mature and commoditized, the fund sees Realtek as a key component provider in network infrastructure. The investment thesis anticipates margin improvement driven by favorable product mix shifts and expects returns to improve with book value compounding at mid-teens rates. The company's long operating history and strong track record provide confidence in management execution. A key catalyst is the broadening adoption of AI in on-device AI agents, which should drive demand for Realtek's connectivity solutions. The fund's bullish stance reflects belief in the company's positioning to benefit from the AI infrastructure buildout at the edge computing level. While the connectivity semiconductor market faces competitive pressures, Realtek's established market position and product portfolio should enable it to capture value from emerging AI applications requiring robust connectivity solutions.

Pitch Summary:
The third largest detractor was HDFC Bank, as the bank continued to face a challenging operating environment and improved in net interest margin has been slower than expected. The resignation of the chairman also led to concerns. However, we have spoken with the management and joined a call with the new interim chairman Keki Mistry, who we respect. We feel comfortable about the government and the quality of its franchise – in particular, its deposit franchise and underwriting culture/capability remain solid and a standout amongst banks. Valuation has been declined to levels not seen before, even during the Global Financial Crisis or the Covid-19 pandemic, and we find this to be very attractive, given HDFC's leading deposit franchise and pristine balance sheet. We believe returns can improve and book value can compound at a mid-teens rate which is attractive in absolute terms.

BSD Analysis:
Stewart Investors maintains a bullish stance on HDFC Bank despite it being the third-largest detractor, viewing current challenges as temporary headwinds. The bank faces a difficult operating environment with slower-than-expected net interest margin improvement and leadership uncertainty following the chairman's resignation. However, the fund's conviction remains strong after direct management engagement, including discussions with respected interim chairman Keki Mistry. The investment thesis centers on HDFC's exceptional franchise quality, particularly its leading deposit franchise and superior underwriting culture that stands out among Indian banks. Valuations have declined to unprecedented levels, below those seen during the Global Financial Crisis or COVID-19 pandemic, creating an attractive entry point. The manager expects returns to improve with book value compounding at mid-teens rates, which is attractive in absolute terms. The fund's contrarian positioning reflects confidence in the bank's fundamental competitive advantages and pristine balance sheet quality. This represents a high-conviction value opportunity in India's leading private sector bank.

Pitch Summary:
The second largest detractor was Tencent, the biggest social media network and online gaming company in China, which declined after an non-icing it would reduce its share buybacks to support accelerated investment in Al. We recently met the company to discuss its Al strategy, and came away with our convictions trengthened. Tencent has been hiring experts in the field and is developing an in-house LLM. Over the longer term, we believe Tencent should benefit from Al thanks to its unique advantages: a massive user base across WeChat, games and payments; rich first-party data; and integrated advertising and content systems. We have been using the recent weakness to build up a meaningful position in the company.

BSD Analysis:
Stewart Investors maintains a bullish stance on Tencent despite it being the second-largest detractor from performance. The stock declined after management announced reduced share buybacks to fund accelerated AI investment, which the market initially viewed negatively. However, the fund's conviction strengthened following direct management meetings discussing AI strategy. Tencent's competitive advantages in AI include a massive user base across WeChat, gaming, and payments platforms, rich first-party data, and integrated advertising and content systems. The company is actively hiring AI experts and developing an in-house large language model. The manager views the recent weakness as an opportunity to build a meaningful position, demonstrating contrarian conviction. The investment thesis centers on Tencent's unique ecosystem advantages that should enable it to monetize AI capabilities effectively across multiple business lines. The fund's decision to increase exposure during weakness reflects confidence in management's long-term strategic vision and the company's competitive moat in the Chinese digital ecosystem.

Pitch Summary:
On the negative side, Monota ro was the largest detector from performance. Monota ro's sales surged late last year after a ransomware attack on rival firm Askul caused it to shut down its services, and customers switched over to Monotaro. Monota ro's valuation multiple related due to higher monthly sales growth but has since fallen back after Askul resumed operations in January 2026.

BSD Analysis:
Stewart Investors experienced Monotaro as their largest detractor from performance, highlighting the temporary nature of the company's recent sales surge. The investment case was complicated by extraordinary circumstances when competitor Askul suffered a ransomware attack, forcing customers to switch to Monotaro's platform. This resulted in inflated sales growth and valuation multiples that proved unsustainable once Askul resumed operations in January 2026. The manager's neutral stance reflects recognition that the competitive advantage was temporary rather than structural. While Monotaro operates in the attractive MRO e-commerce market in Japan, the recent performance demonstrates the importance of distinguishing between temporary market share gains and sustainable competitive advantages. The company's fundamentals remain intact, but the valuation correction suggests the market had overestimated the permanence of customer switching. This represents a lesson in the cyclical nature of competitive dynamics in e-commerce platforms.

Pitch Summary:
The third largest contributor to performance was Silegry, as the management offered a more positive outlook for the second half of 2026, driven by stronger growth, a better pricing environment and relatively stable foundry costs. Recent earnings results indicated that demand was better than expected in the fourth quarter of 2025, especially in areas such as solid-state drives, energy storage and semiconducting equipment, and gross profit margins improved over the previous quarter – a sign that the cycle is turning positive for Silegry's business.

BSD Analysis:
Stewart Investors highlights Silegry as the third-largest performance contributor, with management providing an optimistic outlook for the second half of 2026. The investment thesis is built on improving fundamentals including stronger growth prospects, better pricing environment, and stable foundry costs. Fourth quarter 2025 results exceeded expectations, particularly in solid-state drives, energy storage, and semiconductor equipment segments. The improvement in gross profit margins quarter-over-quarter signals a positive cyclical turn for the business. The fund's bullish stance reflects confidence in the company's positioning across multiple growth areas including storage solutions and energy applications. Management's positive guidance suggests operational improvements and market share gains. Like other semiconductor holdings, the position has been trimmed due to AI-driven valuation expansion. The investment case centers on Silegry's exposure to secular growth trends in data storage and energy infrastructure, combined with improving operational metrics and cyclical recovery.

Pitch Summary:
The second largest contributor was Taiwan Semiconductor Manufacturing (TSMC), the leading semiconductor for undry, as recent earnings results were stronger than expected. With Al demand driving higher profits and strong guidance for the year ahead, the company announced new capital expenditure plans to try and narrow the gap between its supply of advanced nodes and customer demand.

BSD Analysis:
Stewart Investors positions TSMC as the second-largest performance contributor, emphasizing the company's leadership in semiconductor foundry services. The investment thesis is anchored on stronger-than-expected earnings results driven by AI demand, which has generated higher profits and positive guidance for the year ahead. TSMC's announcement of new capital expenditure plans demonstrates management's commitment to addressing the supply-demand imbalance in advanced nodes, a critical competitive advantage in the AI chip manufacturing landscape. The fund's bullish stance reflects confidence in TSMC's ability to capitalize on the AI infrastructure buildout and maintain its technological leadership. However, like Samsung, the manager has trimmed the position due to expensive valuations from AI-driven demand. The investment case centers on TSMC's dominant market position, technological moat in advanced node manufacturing, and strong execution in meeting customer demand. This represents a high-conviction holding despite valuation concerns.

Pitch Summary:
The largest contributor to performance over the period was Samsung Electronics, a leading manufacturer of memory and semiconductors. The company posted record profits thanks to soaring Al-related demand and tight supply for its high-bandwidth memory chips. Samsung started shipping its next-generation HBM 4 chip in February – having reportedly agreed higher prices compared with the previous model – positioning the company to capture a larger share of fast-growing Al server demand. On the other hand, high DRAM and NAND prices look less sustainable in the medium-term as it is already causing demand destruction in consumer electronics products.

BSD Analysis:
Stewart Investors highlights Samsung Electronics as their largest contributor to performance, driven by record profits from AI-related demand and tight supply conditions for high-bandwidth memory chips. The company has successfully launched its next-generation HBM 4 chip with higher pricing, positioning it to capture increased market share in the rapidly growing AI server market. However, the manager acknowledges potential headwinds from unsustainable DRAM and NAND pricing levels that are already causing demand destruction in consumer electronics. Despite the strong performance, the fund has trimmed positions due to expensive valuations driven by AI demand. The investment thesis centers on Samsung's leadership position in memory and semiconductors, particularly benefiting from the AI infrastructure buildout. The manager's decision to reduce exposure suggests a disciplined approach to valuation despite strong fundamentals. This reflects a balanced view recognizing both the company's competitive advantages and potential cyclical risks in memory pricing.

Pitch Summary:
Tyler Technologies, which we added in the quarter, provides software for government administrative purposes, including public administration, property appraisal, tax assessment, court management, and public safety. We'd argue that Tyler's software acts as mission critical SoR whose value is much more than just the code; yet, their product usually represents only a fraction of a percent of a customer's operating budget. Even setting aside the risk-averse nature of municipal government customers, such high levels of NZS seem quite unlikely to be internally vibe coded or ripped and replaced for an "AI-native" startup with no track record. Despite this positive outlook, Tyler's stock has fallen >40% in the past year. Ultimately, we think the most likely outcome is that AI agents will interact with the existing high-NZS SoR rather than replace them.

BSD Analysis:
NZS Capital initiated a position in Tyler Technologies during Q1 2026, viewing it as a compelling opportunity created by AI disruption fears that drove the stock down over 40% in the past year. The fund's thesis centers on Tyler's role as a mission-critical system of record for government entities, providing software for property appraisal, tax assessment, court management, and public safety functions. Management argues that Tyler's value proposition extends far beyond just code, encompassing institutional trust, regulatory compliance, and deep workflow integration that would be extremely difficult for AI-native startups to replicate. The company benefits from serving risk-averse municipal government customers who are unlikely to replace established systems, while Tyler's products typically represent only a fraction of a percent of customer operating budgets, demonstrating high non-zero-sum characteristics. NZS believes AI agents will more likely interact with existing high-value systems of record rather than replace them entirely. The fund views this as an asymmetric opportunity where market fears have created an attractive entry point for a defensible vertical software business.

Pitch Summary:
Everus Construction Group, Inc. (ECG) was another top contributor. The company provides electrical and mechanical contracting services, as well as power transmission and distribution construction. The stock rose following the company's reporting of fourth-quarter and full-year 2025 results, which included a record year-end backlog and profit and revenue growth that exceeded consensus expectations. Management highlighted strong demand and bidding activity across data centers, high-tech, hospitality and utility markets. Looking ahead, we believe demand for the services Everus provides will remain strong, particularly as data centers require increasing energy capacity to support the expansion of AI.

BSD Analysis:
The manager maintains a bullish outlook on Everus Construction Group, driven by strong fundamental performance and favorable end-market dynamics. The company delivered record year-end backlog alongside profit and revenue growth that exceeded consensus expectations, demonstrating operational execution. Management highlighted robust demand across key verticals including data centers, high-tech, hospitality, and utilities, providing diversified revenue streams. The investment thesis centers on the AI infrastructure buildout, particularly data centers requiring increased energy capacity to support AI expansion. The fund sees this as a multi-year secular tailwind that should sustain strong demand for Everus's electrical and mechanical contracting services. The combination of strong current fundamentals and favorable long-term trends supports the manager's conviction in continued outperformance.

Pitch Summary:
Nova Ltd. (NVMI) and Camtek Ltd. (CAMT) were two of the largest contributors to performance during the quarter. Both companies provide equipment used in semiconductor manufacturing to improve chip performance and reduce defects. AI-driven semiconductor demand contributed to strong returns for both companies during the quarter, extending the momentum seen over the past year.

BSD Analysis:
The manager holds a bullish stance on Camtek Ltd., capitalizing on the AI-driven semiconductor equipment demand that has generated strong returns over multiple quarters. Like Nova, Camtek provides critical equipment for semiconductor manufacturing focused on improving chip performance and reducing defects, essential capabilities in the AI era. The company has benefited from the sustained momentum in AI infrastructure investment, with semiconductor manufacturers requiring increasingly sophisticated equipment to meet performance standards. The fund has successfully positioned in this secular growth trend, with Camtek delivering among the strongest contributions to portfolio performance. The manager appears confident in the durability of AI-driven demand for advanced semiconductor manufacturing equipment. This represents effective exposure to the AI infrastructure buildout through specialized equipment providers.

Pitch Summary:
Nova Ltd. (NVMI) and Camtek Ltd. (CAMT) were two of the largest contributors to performance during the quarter. Both companies provide equipment used in semiconductor manufacturing to improve chip performance and reduce defects. AI-driven semiconductor demand contributed to strong returns for both companies during the quarter, extending the momentum seen over the past year.

BSD Analysis:
The manager maintains a bullish view on Nova Ltd., benefiting from the AI-driven semiconductor boom that has sustained momentum over the past year. The company's equipment plays a critical role in semiconductor manufacturing by improving chip performance and reducing defects, positioning it well in the current AI infrastructure buildout. The fund has captured significant gains as AI demand drives increased semiconductor production and quality requirements. Nova's specialized equipment becomes increasingly valuable as chip manufacturers face growing performance and reliability demands from AI applications. The manager appears confident in the continued strength of this secular trend, with AI infrastructure requirements supporting sustained demand for Nova's solutions. This represents a successful positioning in the AI infrastructure theme through semiconductor equipment exposure.