Investment Pitches

Pitch Summary:
The founders of Toast recognized in 2012 that restaurants were operating on deeply outdated technology. Point-of-sale systems were often built on 15-year-old hardware, running legacy, on-premise software, with payment terminals that were not integrated into the core system. While much of the world was rapidly adopting cloud-based infrastructure, restaurants remained stuck with legacy, inefficient systems. This gap led Toast to build a cloud-native POS platform with fully integrated payments, purpose-built for restaurants. Fourteen years later, Toast has become the leading POS provider for SMB restaurants in the United States, with approximately 20% market share. Despite this leadership position, the company's growth runway remains substantial. In its most penetrated markets, roughly 70% of newly opened restaurants choose Toast, a clear indication that current share is far from a ceiling and that the company continues to win disproportionately as the market evolves. Beyond its core, Toast is expanding into multiple new vectors of growth, including international markets, enterprise restaurant customers, and adjacent verticals such as grocery, convenience, and liquor retail. While these initiatives currently represent only ~5% of ARR (annual recurring revenue), they are scaling quickly and significantly expand the company's long-term opportunity set. The economics of the business are compelling. In 2025, Toast generated approximately $2 billion in annual recurring revenue, growing 26% year over year, alongside roughly $600 million of free cash flow. This combination of strong growth and rising profitability is expected to persist, with the company targeting 20%+ annual revenue growth, a path to $10 billion in ARR over the next decade and continually expanding free cash flow margins. Recent fears around AI-driven disruption in software have driven a broad selloff across the sector, with Toast's share price declining roughly 50% over the past eight months. As a result, the company now trades at approximately 15x 2026 free cash flow, a level we view as highly attractive given our expectation for 30%+ free cash flow growth. Our five-year price target is $135, implying a ~365% return from the current price of $29 and an approximate 35% 5 year compounded annual return. This outlook is supported by our expectations for ~22% gross profit growth, ~27% free cash flow per share growth through 2031, and a 27x 2031 free cash flow per share multiple. In our view, Toast remains in the early stages of their growth journey. With a foundering management team, focused vertical strategy, and multiple durable growth levers, it fits squarely within the type of high-quality, compounder in disguise we seek to own.

BSD Analysis:
The manager presents Toast as a compelling new investment opportunity, capitalizing on AI-driven sector weakness to acquire a market-leading restaurant POS platform at attractive valuations. Toast's dominant 20% market share in SMB restaurants, with 70% of new restaurants choosing Toast in penetrated markets, demonstrates strong competitive positioning and market preference. The company's expansion into international markets, enterprise customers, and adjacent verticals like grocery and convenience retail provides multiple growth vectors beyond the core restaurant business. Strong financial metrics including $2 billion ARR growing 26% year-over-year and $600 million free cash flow generation showcase the business model's profitability. The manager's $135 five-year price target implies 365% upside from the current $29 price, supported by expectations for 22% gross profit growth and 27% free cash flow per share growth. Trading at 15x 2026 free cash flow with 30%+ expected growth represents an attractive entry point for a high-quality software compounder.

Pitch Summary:
Carvana – Carvana finished the year with another strong quarter. EBITDA came in modestly below our expectations, driven by elevated costs at a handful of reconditioning centers, but this does not change our view of the long-term earnings power of the business. Stepping back, the underlying momentum remains exceptional. Unit growth continues to exceed 35% year over year, while the company is delivering best-in-class profitability. Management expects the reconditioning cost pressures experienced in Q4 to be resolved by Q2 2026. With less than 2% share of the U.S. used car market, Carvana's growth runway remains measured in decades, not years. Carvana remains a top five holding, and we added to the position during Q1.

BSD Analysis:
The manager maintains strong conviction in Carvana despite temporary margin pressures from reconditioning center costs. The investment thesis is anchored on exceptional unit growth exceeding 35% year-over-year and best-in-class profitability metrics, indicating strong operational execution. Management's expectation that Q4 cost pressures will resolve by Q2 2026 provides a clear timeline for margin recovery. The massive market opportunity with Carvana holding less than 2% of the U.S. used car market suggests a multi-decade growth runway ahead. The manager's decision to add to the position during Q1 weakness and maintain it as a top five holding demonstrates high confidence in the long-term value creation potential. The combination of strong unit economics, market share gains, and vast addressable market positions Carvana for sustained growth.

Pitch Summary:
Wayfair – Wayfair's Q4 results further validated the recovery we have been underwriting. Revenue grew 8% year over year (excluding the Germany exit) despite a still-muted category backdrop, while profitability continued to expand, with adjusted EBITDA margins reaching their highest levels in several years. In his February shareholder letter, Co-founder and CEO Niraj Shah highlighted two points that stand out. First, the company expects to accelerate revenue growth throughout the year, exiting 2026 in the double-digit range. Second, over time, Wayfair believes it can return to 20%+ organic growth. Both are well above current market expectations. Despite this fundamental progress, the share price has remained weak. We view this disconnect as an opportunity and added to the position during the quarter. Wayfair remains a top five holding.

BSD Analysis:
The manager views Wayfair as a compelling recovery story with Q4 results validating their investment thesis. Revenue growth of 8% year-over-year despite challenging category conditions demonstrates operational resilience, while EBITDA margins reaching multi-year highs indicates improving profitability. CEO Niraj Shah's guidance for accelerating growth throughout 2026, exiting in double-digit territory, and long-term potential for 20%+ organic growth significantly exceeds market expectations. The disconnect between strong fundamental progress and weak share price performance creates an attractive entry opportunity. The manager's decision to add to the position during the quarter's weakness and maintain it as a top five holding reflects high conviction in the recovery trajectory. The combination of margin expansion and accelerating growth positions Wayfair for substantial value creation as market sentiment improves.

Pitch Summary:
ThredUp – ThredUp's share price has been extremely weak over the past six months despite continued strength in the underlying business. Notably, recent financial performance has increased our confidence in our five-year target of $30+ per share. We view this disconnect between price and fundamentals as a compelling opportunity and added to the position during the quarter. Q4 results reinforced the accelerating momentum we highlighted last quarter. Revenue grew ~18% year over year, while new buyer growth accelerated to +57%. The company guided to 13% revenue growth and 160 basis points of EBITDA margin expansion in 2026, both ahead of consensus expectations. We view this as a conservative starting point. For context, the company entered 2025 guiding to 6% growth and ultimately delivered 18%. Taken together, these results support our view that ThredUp remains in the early stages of a multi-year inflection, where growth and profitability scale in tandem. We believe the company's long-term earnings power remains materially underappreciated. ThredUp continues to be a top holding.

BSD Analysis:
The manager maintains a strong bullish stance on ThredUp despite significant share price weakness, viewing the disconnect between fundamentals and valuation as an opportunity. The investment thesis centers on an accelerating business inflection with revenue growth of 18% and new buyer growth of 57%, significantly outpacing guidance. Management's conservative 2026 guidance of 13% revenue growth and 160 basis points of EBITDA margin expansion provides a solid foundation, especially given the company's track record of beating guidance. The manager's $30+ five-year price target suggests substantial upside potential from current levels. The combination of accelerating growth and improving profitability supports the view that ThredUp is in the early stages of a multi-year value creation cycle. The position remains a top holding with recent additions during the quarter's weakness.

Pitch Summary:
Kingsway is positioned as an early-stage compounder with a strong management team and advisory board, including notable figures from Danaher. The company aims to emulate Danaher's operating philosophy within a search fund acquisition platform. Despite recent margin pressures in its Extended Warranty business, Kingsway is transitioning towards a higher-quality, acquisition-driven platform. The company benefits from strong NOL tax shields from its previous insurance operations. The bull case is supported by its potential to grow through disciplined acquisitions and the application of the Kingsway Business System, which is inspired by Danaher's successful model.

BSD Analysis:
Kingsway's unique approach as the only publicly traded US company using the Search Fund model positions it well to capitalize on the upcoming 'Silver Tsunami' of retiring Baby Boomer business owners. The company's focus on acquiring small businesses with strong cash generation potential, combined with its decentralized M&A framework, provides a solid foundation for growth. The involvement of experienced figures like William Thorndike and Tom Joyce enhances its credibility and strategic direction. However, the company faces challenges related to its current unprofitability and reliance on debt and equity financing. Investors are optimistic about management's ability to drive growth and improve margins, but the current valuation may not fully reflect these future prospects.

Pitch Summary:
MercadoLibre is an e-commerce and FinTech leader in Latin America, holding dominant positions in its core markets. The company benefits from powerful network effects and switching costs, making its business model difficult to replicate. Despite a 32% drop in share price over the past year, MercadoLibre continues to deliver exceptional growth, with a 49% YoY revenue increase in Q1 2026. The company is aggressively investing in growth opportunities, particularly in underpenetrated markets, which is expected to drive long-term value. MercadoLibre's strategic focus on expanding its credit offerings and advertising business further strengthens its competitive position. The current valuation disconnect presents a compelling opportunity for long-term investors.

BSD Analysis:
MercadoLibre's strategic investments in its 1P business and advertising are reminiscent of Amazon's early strategies, positioning it for significant long-term growth. The company's ability to leverage its existing customer base for credit offerings provides a unique advantage in the underbanked Latin American market. Despite short-term profitability challenges due to increased investments, MercadoLibre's focus on capturing market share and building a robust ecosystem is likely to yield substantial returns. The company's strong financials, coupled with its dominant market position, suggest that it is well-positioned to capitalize on the ongoing digitalization trends in Latin America. Investors should consider the long-term growth potential and the company's proven track record of executing its strategic vision.

Pitch Summary:
Intertek has rejected multiple cash offers from EQT, indicating that the company believes its intrinsic value is higher than the offers suggest. The company is considering selling its Energy & Infrastructure division, which could unlock shareholder value. With activist investor involvement and ongoing strategic reviews, the current share price appears undervalued given the potential for corporate actions.

BSD Analysis:
Intertek's rejection of EQT's offers suggests confidence in its valuation and strategic direction. The potential sale of the Energy & Infrastructure division could act as a catalyst for re-rating the stock, especially with activist investors pushing for change. The company's strong market position in testing and inspection services provides a solid foundation, while strategic divestments could enhance shareholder returns. Investors should watch for further developments, as the company's actions could lead to significant value creation.

Pitch Summary:
Datavault AI is considering spinning off its Acoustic Sciences division into a separate NASDAQ-listed company, API Media. This move aims to allow Datavault to focus on its core data-monetization platform while giving the acoustic unit its own valuation. The division is backed by patents and recent technology wins, though the overall strategy appears unconventional.

BSD Analysis:
The spin-off of the Acoustic Sciences division could provide clarity and focus for Datavault AI's core operations, potentially leading to improved market valuation. However, the unconventional nature of the strategy and the lack of clear financial metrics make it a speculative play. Investors should approach with caution, considering the potential for both upside and downside as the company navigates this transition. The success of the spin-off will largely depend on the market's reception of API Media's standalone prospects.

Pitch Summary:
Tovis is spinning off its fast-growing automotive display unit, Neoview, which is expected to enhance the valuation of both the parent company and the new entity. The remaining industrial monitor business is stable and high-return, while Neoview offers significant growth potential. The company's governance and share buybacks further support the investment case.

BSD Analysis:
The spin-off of Neoview allows Tovis to unlock value by separating its high-growth automotive display unit from its stable industrial monitor business. This strategic move could lead to a re-rating of both entities as the market recognizes their distinct growth profiles. The company's strong governance and history of share buybacks provide additional confidence in management's ability to execute the spin-off successfully. Investors should consider the potential for enhanced shareholder value through improved market perception and financial performance.

Pitch Summary:
Enviri is evaluating strategic alternatives for its Clean Earth business, including a potential sale, to address the gap between its market valuation and sum-of-the-parts value. The recent approval of a $3bn sale of Clean Earth to Veolia is a significant step towards this goal. The company plans to spin off its Environmental and Rail businesses into New Enviri, which is expected to generate substantial revenue and EBITDA, providing room for earnings and cash-flow improvement.

BSD Analysis:
The sale of Clean Earth and the subsequent spin-off of New Enviri could significantly enhance shareholder value by focusing on core operations and improving financial metrics. The transaction with Veolia highlights management's commitment to unlocking value and addressing valuation discrepancies. As end markets recover and legacy contracts roll off, New Enviri is well-positioned for growth, offering a compelling investment opportunity with a protected downside. Investors should consider the potential for improved market perception and financial performance post-restructuring.

Pitch Summary:
Flex is planning to spin off its cloud and power infrastructure business, which includes a rapidly growing AI-focused segment. The separation could highlight the value of this high-growth business, similar to the success of its previous spin-off, Nextpower, which saw significant appreciation. The company's strong 2027 outlook further supports the potential for future growth and value creation.

BSD Analysis:
The spin-off of Flex's cloud and power infrastructure business could unlock significant value by allowing the market to better appreciate the growth potential of its AI-focused operations. The previous success of Nextpower suggests that Flex has a track record of successful spin-offs, which could bode well for this new initiative. Investors should consider the potential for a re-rating of Flex's stock as the market recognizes the value of its high-growth segments. The company's positive outlook for 2027 adds further confidence to the investment thesis.

Pitch Summary:
Essity is considering a spin-off of its Consumer Tissue unit, which has been a drag on the company's overall performance due to its low growth and below-average operating margins. The separation has been long-discussed and could unlock value by removing this underperforming segment. Insider purchases suggest confidence in the company's future prospects post-separation.

BSD Analysis:
The potential spin-off of the Consumer Tissue unit could lead to a re-rating of Essity's stock as the company focuses on its more profitable segments. The tissue business has been a significant drag on margins, and its removal could improve the company's financial metrics. Additionally, insider buying indicates management's belief in the upside potential of the remaining business. Investors should monitor the situation closely as the spin-off could act as a catalyst for share price appreciation.

Pitch Summary:
Software-related stocks in the portfolio have been hit hard due to the threat of margin compression from artificial intelligence. Microsoft's 21.9% drop in the quarter was the worst decline since the 2008 financial crisis. They are spending $190 billion on AI-related capital expenditures in 2026 yet their AI Copilot product has failed to scale, with less than 15 million total paid seats. Google Gemini has successfully integrated their AI and captured the largest share of casual AI users with 2 billion people interacting with "Gemini-powered AI overviews" in Google Search every month. Microsoft has a large installed base with Fortune 500 companies. They have over $88 billion in cash on the balance sheet which is a huge competitive advantage. It is hard to bet against CEO Satya Nadella who took over in February 2014 and has a great record with the stock up over elevenfold.

BSD Analysis:
Despite Microsoft's significant Q1 decline of 21.9% - the worst since 2008 - Auxier maintains conviction in the long-term investment thesis. The fund acknowledges near-term challenges with AI Copilot's slow adoption at only 15 million paid seats and competitive pressure from Google's Gemini, which has captured 2 billion monthly users. However, Microsoft's massive $190 billion AI capital expenditure commitment in 2026 demonstrates their strategic commitment to maintaining leadership in enterprise AI. The company's entrenched position with Fortune 500 customers provides a significant competitive moat and distribution advantage for AI products. Microsoft's balance sheet strength with over $88 billion in cash offers substantial financial flexibility to invest through the AI transition. Auxier's confidence ultimately rests on CEO Satya Nadella's proven track record, having delivered an elevenfold stock return since taking over in 2014. The fund views the current AI disruption fears as creating an attractive entry point for a dominant technology franchise.

Pitch Summary:
UnitedHealth has been a major laggard for the past quarter and year. However, since CEO Stephen Hemsley's return last May operating performance has been improving. We made over a fivefold return under his previous tenure from 2006-2017 and are confident that he can navigate a successful turnaround going forward. The recent medical cost ratio (MCR) of 83.9% is the lowest in two years and combined with a 2.48% CMS rate increase this spring has been a big boost. The lower amount spent on patient medical claims follows the company's late 2025 shift to focus on higher margin patients over aggressive membership growth. Total membership has fallen by about 700,000 since the end of 2025. Management cited their higher margins as the reason for raising their full year adjusted earnings per share guidance to over $18.25, up from their previous guidance of $17.75 in January and consensus estimates of $17.86. Going forward, management also announced at least $1.5 billion in spending on artificial intelligence technology in 2026. This technology will be focused on areas like helping members understand their coverage and automating some administrative tasks and claims processing.

BSD Analysis:
Auxier maintains a bullish stance on UnitedHealth despite recent underperformance, citing CEO Stephen Hemsley's successful return and operational improvements. The fund's confidence stems from their previous fivefold return under Hemsley's leadership from 2006-2017, believing he can execute another successful turnaround. Key operational metrics are improving, with the medical cost ratio declining to 83.9% - the lowest in two years - indicating better claims management. The strategic shift from aggressive membership growth to focusing on higher-margin patients is paying off, despite membership declining by 700,000. This margin improvement, combined with a 2.48% CMS rate increase, enabled management to raise full-year EPS guidance to over $18.25 from $17.75. The company's $1.5 billion AI investment in 2026 targets member services and administrative automation, potentially driving further operational efficiencies. Auxier views the current weakness as a temporary setback in a long-term value creation story.

Pitch Summary:
Bank of New York Mellon reached all-time highs following their first quarter earnings report of a 42% increase in year-over-year earnings per share along with an 18% increase in interest income resulting from higher yields. Assets under management grew 12% to a record $59.4 trillion. AI initiatives have been paying off as AI agents led to 20% faster client onboarding and 80% faster settlement inquiry investigation; agents are now writing 40% of all code. They returned $1.4 billion through repurchases and dividends and authorized a new $10 billion share repurchase program. CEO Robin Vince has done an exceptional job since taking over four years ago. Major US banks as a whole are aggressively retiring stock in 2026 due to recent deregulation, with a record $33 billion bought back in the first quarter alone—up 35% from the prior year quarter. This is the type of "double play" return we seek; an undervalued, vital, dull business with inspired management improving operating results leading to a sixfold return on our investment.

BSD Analysis:
Auxier presents a compelling bull case for Bank of New York Mellon based on exceptional operational performance and capital allocation. The fund highlights BK's impressive Q1 results with 42% EPS growth and 18% interest income increase, driven by higher yields in the current rate environment. The bank's record $59.4 trillion in assets under management represents 12% growth, demonstrating strong client retention and new business wins. Management's AI implementation is delivering tangible operational improvements with 20% faster client onboarding and 80% faster settlement processing, while AI agents now write 40% of code. The $10 billion share repurchase authorization and $1.4 billion returned to shareholders reflects strong capital generation. CEO Robin Vince's leadership over four years has transformed the business, with Auxier achieving a sixfold return on their investment. The fund views BK as an ideal "double play" - an undervalued, essential financial services business with excellent management driving operational improvements.

Pitch Summary:
HASI is a purpose-built investment vehicle for the energy transition, deploying capital across utility-scale solar, wind, battery storage, distributed generation, clean transportation, and ecological restoration. With over $16 billion in managed assets and strategic partnerships with developers like Clearway Energy, AES, Sunrun, and Invenergy, HASI provides flexible capital solutions—from senior debt to structured equity—that accelerate clean energy deployment at scale. Its $2 billion strategic partnership with KKR (CarbonCount Holdings 1) expands its capacity to invest in the most compelling sustainable infrastructure opportunities. HASI's portfolio generates long-term, recurring cash flows from contracted clean energy assets with predominantly investment-grade counterparties and weighted average contract lives exceeding a decade. Post-OBBBA, U.S. utility-scale renewable and storage capacity is still forecast to grow over 600 GW from 2026 to 2035, representing more than $450 billion in new investment. With rising electricity rates, surging data center power demand, and the declining cost of solar and batteries continuing to improve the economic case for distributed energy, HASI's addressable market is expanding across every dimension—grid-connected, behind-the-meter, and beyond.

BSD Analysis:
Green Alpha presents a compelling bull case for HASI as a specialized financing vehicle positioned to capitalize on the massive energy transition investment opportunity. The fund emphasizes HASI's purpose-built structure for sustainable infrastructure financing, with over $16 billion in managed assets and strategic partnerships with leading developers including Clearway Energy, AES, Sunrun, and Invenergy. The manager highlights the company's flexible capital solutions spanning senior debt to structured equity, enabling acceleration of clean energy deployment at scale. The $2 billion strategic partnership with KKR through CarbonCount Holdings 1 significantly expands HASI's investment capacity in high-quality opportunities. Green Alpha values the portfolio's stable cash flow profile from contracted assets with investment-grade counterparties and contract lives exceeding a decade. The investment thesis is supported by massive market opportunity, with U.S. utility-scale renewable and storage capacity forecast to grow over 600 GW from 2026 to 2035, representing more than $450 billion in new investment. The fund sees multiple tailwinds including rising electricity rates, surging data center power demand, and improving economics of solar and battery storage expanding HASI's addressable market across grid-connected, behind-the-meter, and distributed energy applications.

Pitch Summary:
IBM has published the industry's first reference architecture for quantum-centric supercomputing, a blueprint that integrates quantum processors alongside GPUs and CPUs into a unified computing environment for tackling problems in chemistry, materials science, and optimization that no classical approach can solve alone. The company states 2026 will mark the first time a quantum computer outperforms all classical-only methods on a real scientific problem. Paired with a new 10-year research collaboration with ETH Zurich on next-generation AI and quantum algorithms, IBM is building the foundational infrastructure for the next era of computing. IBM's hybrid cloud and AI platform, anchored by Red Hat OpenShift, continues to serve as the enterprise backbone for thousands of government and corporate entities in financial services, telecom, and healthcare. The recent ~$11 billion acquisition of Confluent strengthens real-time enterprise data streaming, while expanded collaborations with NVIDIA and ARM deepen IBM's AI infrastructure capabilities. The company is systematically positioning itself at the intersection of quantum computing, high-performance AI, and enterprise hybrid cloud—the architectural layer where next-generation scientific and commercial breakthroughs will be orchestrated.

BSD Analysis:
Green Alpha presents a forward-looking bull thesis for IBM based on the company's leadership in quantum computing and strategic positioning for next-generation computing architectures. The fund highlights IBM's groundbreaking quantum-centric supercomputing reference architecture, which integrates quantum processors with traditional computing infrastructure to solve previously intractable problems in chemistry, materials science, and optimization. The manager emphasizes the potential inflection point in 2026 when quantum computers are expected to outperform classical methods on real scientific problems for the first time. IBM's 10-year research collaboration with ETH Zurich on AI and quantum algorithms demonstrates long-term commitment to technological leadership. Green Alpha also recognizes IBM's established enterprise franchise through Red Hat OpenShift, serving thousands of clients across critical sectors including financial services, telecom, and healthcare. The approximately $11 billion Confluent acquisition strengthens real-time data streaming capabilities, while partnerships with NVIDIA and ARM enhance AI infrastructure offerings. The fund positions IBM as uniquely situated at the convergence of quantum computing, high-performance AI, and enterprise hybrid cloud, representing the foundational layer for future scientific and commercial breakthroughs.

Pitch Summary:
Brookfield Renewable operates one of the world's largest clean energy portfolios at 47 GW with a 227 GW development pipeline, and has secured landmark power purchase agreements with Microsoft (10.5 GW—the largest renewable energy deal in history) and Google (3 GW of hydroelectric power—the largest hydro PPA ever). These deals directly connect Brookfield's asset base to the AI data center buildout, converting clean energy infrastructure into essential AI infrastructure. The company delivered record 8 GW of new capacity in 2025, a 20% increase year-over-year. The business model is a compounding machine: 10%+ annual FFO per share growth, 5-9% annual dividend increases (raised again for 2026), and $10 billion in planned growth capital over five years across hydro, wind, solar, storage, and nuclear services (via its Westinghouse stake). As data center power demand surges and electrification accelerates globally, Brookfield's diversified, multi-technology, multi-geography platform is uniquely positioned to supply clean power at the scale and reliability that hyperscalers require.

BSD Analysis:
Green Alpha presents a compelling bull case for Brookfield Renewable centered on the company's strategic positioning at the intersection of clean energy and AI infrastructure demand. The fund highlights Brookfield's massive scale with 47 GW of operating capacity and a 227 GW development pipeline, providing significant competitive advantages in securing large-scale power purchase agreements. The investment thesis is anchored on landmark deals with Microsoft (10.5 GW) and Google (3 GW), representing the largest renewable energy contracts in history and directly linking Brookfield to the AI data center buildout. The manager emphasizes the company's impressive operational execution with record 8 GW of new capacity additions in 2025, representing 20% year-over-year growth. Green Alpha views Brookfield's business model as a "compounding machine" with consistent 10%+ annual FFO per share growth and 5-9% annual dividend increases. The $10 billion planned growth capital deployment across multiple technologies and geographies positions the company to capitalize on surging data center power demand and global electrification trends. The fund sees Brookfield's diversified platform as uniquely capable of supplying clean power at the scale and reliability required by hyperscale technology companies.

Pitch Summary:
Lam Research is the main supplier of the etch and deposition tools required to build AI's physical infrastructure. As chips go three-dimensional—through HBM memory stacking and Gate-All-Around transistor architectures—the number of manufacturing steps per wafer explodes, and Lam's share of those steps grows disproportionately. Revenue from HBM-related tools grew over 50% year-over-year, and the company's cryogenic etch technology won the 2025 SEMI Award for North America for enabling the 3D NAND density gains that underpin AI data storage. The structural beauty of Lam's business is that every node shrink makes customers more dependent on its equipment, not less. At 28nm, a wafer required ~500 process steps; at 3nm, it requires 1,500+, with Lam's etch and deposition steps growing from ~25% to nearly 50% of the total. With projected industry-wide wafer fab equipment spending of $135 billion in 2026 (up 23% YoY), and Lam now added to the S&P 100, the company has transformed from a cyclical equipment vendor into a structural tax on the physics of chip manufacturing

BSD Analysis:
Green Alpha presents a strong bull thesis for Lam Research based on the company's critical role in AI infrastructure development and semiconductor manufacturing complexity. The fund emphasizes Lam's dominant position as the primary supplier of etch and deposition tools essential for advanced chip production. The investment case is anchored on the structural shift toward three-dimensional chip architectures, including HBM memory stacking and Gate-All-Around transistors, which dramatically increases manufacturing complexity and Lam's content per wafer. The manager highlights impressive 50%+ year-over-year growth in HBM-related tool revenue and recognition through the 2025 SEMI Award for cryogenic etch technology. Green Alpha's key insight is that technological advancement paradoxically increases customer dependence on Lam's equipment, with the company's share of manufacturing steps growing from 25% to nearly 50% as nodes shrink from 28nm to 3nm. The thesis is supported by robust industry fundamentals, with wafer fab equipment spending projected at $135 billion in 2026, up 23% year-over-year. The fund positions Lam as having evolved from a cyclical equipment vendor to an essential infrastructure provider that benefits structurally from the physics of advanced semiconductor manufacturing.

Pitch Summary:
TSMC has commenced mass production of 2nm chips using nanosheet Gate-All-Around transistors—the most significant architectural leap in a decade—with initial yields already reaching 70-80%, well ahead of any competitor. The N2 node delivers a 15% performance boost at the same power or a 25-30% reduction in power consumption versus 3nm, and TSMC expects to reach 100,000 wafers per month of 2nm capacity by year-end 2026. Apple, NVIDIA, AMD, and Google have all secured capacity, and 2nm revenue is projected to surpass 3nm and 5nm combined by Q3 2026. TSMC is effectively the world's sole manufacturer of bleeding-edge silicon at scale, with 38% of the $320 billion global foundry market and a technology lead that Samsung and Intel cannot close in the near term. With $56 billion in planned 2026 capex and pricing power to raise wafer prices 5-10% across all sub-5nm nodes, TSMC's competitive moat is widening, not narrowing. As AI workloads demand ever more advanced process nodes and advanced packaging (CoWoS capacity expanding 70%+ annually), TSMC sits at the absolute center of the AI compute supply chain.

BSD Analysis:
Green Alpha presents a compelling bull case for TSMC centered on the company's technological dominance in advanced semiconductor manufacturing. The fund highlights TSMC's successful mass production of 2nm chips with impressive 70-80% yields, representing a significant competitive advantage over rivals Samsung and Intel. The manager emphasizes TSMC's monopolistic position in bleeding-edge silicon manufacturing, controlling 38% of the global foundry market with an insurmountable technology lead. The investment thesis is strengthened by strong customer demand from tech giants Apple, NVIDIA, AMD, and Google, with 2nm revenue projected to exceed 3nm and 5nm combined by Q3 2026. TSMC's pricing power allows for 5-10% wafer price increases across sub-5nm nodes, while $56 billion in planned capex demonstrates commitment to maintaining technological leadership. The AI infrastructure buildout provides structural tailwinds, with CoWoS advanced packaging capacity expanding 70%+ annually. Green Alpha positions TSMC as the essential infrastructure provider for the AI revolution, benefiting from both technological superiority and increasing demand for advanced semiconductors.