Investment Pitches

Pitch Summary:
Deere was a contributor during the quarter. Despite the strong stock performance, the company's fundamentals are weak due to the trough in the farm cycle. We are encouraged that the management team continues to invest aggressively in the business during this downturn, which can help increase the company's advantages over peers. While it is impossible to precisely predict when the upturn will occur, when it does we believe that Deere will earn over $30 in EPS. At less than 15x our estimate of normal earnings, we believe the stock remains attractive.

BSD Analysis:
Harris Associates maintains a contrarian bullish position on Deere despite acknowledging weak current fundamentals due to the cyclical trough in agricultural markets. The fund appreciates management's counter-cyclical investment strategy, viewing aggressive business investments during the downturn as a competitive advantage builder that will strengthen Deere's market position when the cycle recovers. Harris demonstrates conviction in the cyclical nature of agricultural equipment demand, expecting a meaningful earnings recovery when farm conditions improve. The fund's $30+ EPS target for normalized earnings suggests significant upside potential from current levels. At less than 15x estimated normal earnings, Harris views the valuation as attractive for a market-leading agricultural equipment manufacturer. The investment thesis relies on Deere's ability to emerge from the current cycle with enhanced competitive advantages and stronger market positioning. Harris's patience with cyclical timing reflects confidence in Deere's long-term franchise value and management's strategic investments during challenging periods.

Pitch Summary:
Microsoft (MSFT) shares rebounded in calendar Q2 following a strong fiscal Q3 2025 (March quarter), driven by accelerating demand for AI-related Azure services. Robust second-half momentum, coupled with strong bookings as reflected in the Remaining Performance Obligation exceeding $300 billion (+33% year over year), helped ease investor concerns around enterprise IT spending and the long-term return potential of Microsoft's substantial AI infrastructure investments. We continue to believe Microsoft is well-positioned to gain market share as organizations increasingly embrace a digital-first strategy and adopt generative AI solutions. With deep enterprise penetration and a comprehensive portfolio spanning Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS), Microsoft remains the preeminent mission-critical IT provider across industries. The company is executing effectively against a large and growing market opportunity by enabling digital transformation and delivering cutting-edge AI tools like ChatGPT that enhance productivity and lower costs. As a result, we expect Microsoft's offerings to remain resilient, even in a challenging macroeconomic environment, supporting low double-digit intrinsic value growth over our investment horizon.

BSD Analysis:
Mar Vista maintains a strong bull thesis on Microsoft, emphasizing the company's leadership in AI-driven cloud services and enterprise digital transformation. The manager highlights accelerating Azure AI demand and robust bookings with Remaining Performance Obligations exceeding $300 billion, growing 33% year-over-year. Microsoft's comprehensive cloud portfolio spanning IaaS, PaaS, and SaaS positions it as the dominant enterprise IT provider. The integration of generative AI tools like ChatGPT into Microsoft's ecosystem creates compelling productivity and cost advantages for customers. Mar Vista expects the company's mission-critical nature to provide resilience during economic uncertainty. The digital transformation mega-trend and AI adoption support the manager's expectation of low double-digit intrinsic value growth. Microsoft's deep enterprise penetration and execution capabilities reinforce its competitive moat in the evolving technology landscape.

Pitch Summary:
Intercontinental Exchange (ICE) was a contributor during the quarter. The U.S.-headquartered financial exchange and data company's stock price rose during the quarter as it reported solid fourth quarter 2024 results led by 16% growth in its Energy Futures business. After a couple years of using cash flow to pay down debt from its two major mortgage acquisitions Ellie Mae and Black Knight, management resumed share repurchase in the first quarter of 2025. We believe share repurchases are an attractive capital allocation opportunity for ICE today. We continue to view ICE as a well-managed, high-quality business with a bright future ahead.

BSD Analysis:
Harris Associates maintains a bullish stance on ICE, highlighting the company's strong operational performance with 16% growth in Energy Futures driving solid Q4 2024 results. The fund appreciates management's disciplined capital allocation approach, having used cash flow to deleverage following major mortgage acquisitions of Ellie Mae and Black Knight before resuming shareholder returns. The resumption of share repurchases in Q1 2025 signals management's confidence in the business and provides attractive capital allocation opportunities at current valuations. Harris views ICE as a high-quality, well-managed franchise with strong competitive positioning in financial exchanges and data services. The fund's positive outlook is supported by the company's diversified revenue streams and bright long-term prospects. ICE's ability to generate strong cash flows while maintaining operational excellence reinforces the investment thesis. The combination of operational growth, disciplined capital allocation, and quality management team supports Harris's continued conviction in the position.

Pitch Summary:
Broadcom (AVGO) shares rebounded from their calendar Q1 decline as investor concerns surrounding Trump-era trade tensions and the risk of suboptimal returns on large-scale AI capex by hyperscalers proved to be overstated. The company delivered a solid fiscal Q2 2025 (April quarter) and guided for accelerating AI semiconductor revenue growth through FY2026. Broadcom remains the leading provider of custom AI ASICs and continues to diversify its customer base beyond its initial anchor client, Alphabet. It now has three hyperscaler customers in volume production and disclosed that four additional customers are currently designing custom ASICs based on Broadcom's technology. Management is optimistic that these new design wins will transition to volume production in the coming years. Interest in custom ASICs remains high among hyperscalers, as these chips offer compelling cost and performance advantages over general-purpose GPUs from providers like Nvidia, particularly for specialized compute workloads.

BSD Analysis:
Mar Vista presents a compelling bull case for Broadcom centered on its dominant position in custom AI ASICs for hyperscale customers. The manager highlights the company's successful diversification beyond Alphabet to three hyperscaler customers in volume production, with four additional design wins in development. The investment thesis rests on Broadcom's competitive advantage in providing cost and performance benefits over general-purpose GPUs for specialized AI workloads. Management's guidance for accelerating AI semiconductor revenue growth through FY2026 supports the growth narrative. The rebound from Q1 concerns demonstrates the market's recognition of Broadcom's strong fundamentals. The expanding customer base and design win pipeline suggest sustainable revenue growth in the high-margin custom ASIC business. Mar Vista views the earlier trade tension concerns as overstated, positioning Broadcom to capitalize on the ongoing AI infrastructure buildout.

Pitch Summary:
Louis Vuitton Moët Hennessy (LVMH) is the world's largest luxury goods company with a portfolio of 75 brands, including prestigious houses Louis Vuitton and Christian Dior. Importantly, the company is focused on fashion and leather goods. This is one of the more attractive subcategories within the sector and where Vuitton has high brand desirability and scale, which drive industry leading profitability. The business is run by Bernard Arnault, who we consider to be one of the best CEOs in Europe, and who is fully aligned with shareholders given his family's 41% ownership. The opportunity exists because of the recent fears around tariffs and the macro environment (initially in China and increasingly in the U.S.). We view this as a rare opportunity to purchase shares in LVMH at a discounted valuation to its peers and the company's own trading history. We expect that the industry will recover over the medium term, that recent innovations will help sustain attractive revenue growth and that self-help will serve to reaccelerate earnings growth.

BSD Analysis:
Harris Associates views LVMH as a rare opportunity to acquire the world's premier luxury goods company at a discounted valuation due to temporary macro concerns. The manager emphasizes LVMH's dominant market position with 75 luxury brands including prestigious houses Louis Vuitton and Christian Dior, focused on the attractive fashion and leather goods subcategory. High brand desirability and scale advantages drive industry-leading profitability and sustainable competitive moats. Leadership under Bernard Arnault, considered one of Europe's best CEOs, provides exceptional management quality with strong shareholder alignment through 41% family ownership. Recent fears around tariffs and macro headwinds in China and the U.S. have created a temporary valuation discount relative to peers and historical trading multiples. The manager expects medium-term industry recovery supported by recent innovations that should sustain attractive revenue growth. Self-help initiatives should drive earnings growth acceleration as macro concerns subside. This combination of premium brand portfolio, exceptional leadership, and temporary valuation discount creates an attractive entry point for long-term value creation.

Pitch Summary:
Mitsubishi Estate is the largest owner of real estate in Tokyo's Marunouchi neighborhood. Marunouchi is the prime business district in Tokyo where office rental space has historically been characterized by low vacancy rates and rising rents, even in deflationary environments. In our view, Japan's shift to an inflationary environment will provide additional tailwinds to Mitsubishi's growing rental income in Marunouchi. We also like that the company has been strategically monetizing assets in other regions and returning funds to shareholders through buybacks and dividends, helping to boost the company's return on equity. We were happy to recently purchase shares at a discount to our estimate of net asset value and private market comparable transactions. We believe the gap between share price and intrinsic value should narrow as capital is returned to shareholders.

BSD Analysis:
Harris Associates views Mitsubishi Estate as an undervalued real estate play with prime Tokyo exposure and attractive capital allocation. The manager emphasizes the company's dominant position as the largest owner in Tokyo's Marunouchi district, the city's premier business area with historically low vacancy rates and rising rents even during deflationary periods. Japan's transition to an inflationary environment should provide additional tailwinds for rental income growth in this prime location. Strategic asset monetization in other regions demonstrates management's focus on optimizing the portfolio and returning capital to shareholders through buybacks and dividends. This capital return strategy helps boost return on equity and creates shareholder value. The manager was able to purchase shares at a discount to estimated net asset value and private market comparable transactions, suggesting significant upside potential. The combination of prime real estate exposure, favorable macro trends, and disciplined capital allocation should help narrow the gap between current share price and intrinsic value.

Pitch Summary:
Idex (Industrials, Water Distribution & Infrastructure) underperformed during the period, given market concerns around the company's challenges in achieving organic growth, particularly around industrial production weakness and an insufficient uplift from a health science recovery.

BSD Analysis:
The fund manager expresses a bearish near-term view on IDEX Corporation, highlighting significant operational challenges that led to underperformance during the quarter. The primary concern centers on the company's struggles to achieve organic growth, which is particularly problematic given IDEX's premium valuation typically commands a growth premium. Industrial production weakness represents a cyclical headwind affecting IDEX's core markets, while the insufficient recovery in health sciences suggests broader end-market challenges. The fund categorizes IDEX within Water Distribution & Infrastructure, indicating exposure to water treatment and distribution technologies that align with environmental infrastructure themes. However, the company's inability to capitalize on what should be a recovering health science market raises questions about competitive positioning or execution. The organic growth challenges suggest IDEX may be losing market share or facing structural headwinds in its key end markets. The manager's concerns about insufficient uplift from health science recovery indicate that even favorable market conditions are not translating into expected performance improvements for the company.

Pitch Summary:
Rentokil Initial PLC is the largest pest control company globally. We think pest control is a good business that grows GDP+ with low volatility, earns attractive margins, and has low capital intensity with strong cash flow generation. As a market leader, Rentokil additionally benefits from scale advantages that drive lower procurement and customer acquisition costs, and greater customer monetization, thanks to the breadth of products and services the company can offer at a premium price. Due to industry fragmentation, Rentokil also has a strong pipeline of acquisitions with attractive economics. While most of Rentokil's mergers and acquisitions are bolt-ons, they have occasionally done large deals. Their most recent large deal, the acquisition of Terminix, has gone poorly to-date and resulted in a share price decline in excess of the deal value. While Terminix's integration will take several quarters to complete, we believe they will ultimately succeed and that the resulting business will be a stronger and more profitable one that can deliver growth in line with the industry's average. This should drive a re-rating in the shares towards peer and private market multiples. We believe the market has overly discounted the business's future prospects.

BSD Analysis:
Harris Associates views Rentokil Initial as an attractive defensive growth business trading at a significant discount due to temporary integration challenges. The manager highlights pest control as a high-quality business model with GDP+ growth, low volatility, attractive margins, and strong cash flow generation with minimal capital requirements. Rentokil's global market leadership provides sustainable competitive advantages through scale benefits including lower procurement costs, reduced customer acquisition expenses, and enhanced customer monetization through cross-selling. The fragmented industry structure creates abundant acquisition opportunities with attractive economics for the market leader. While the Terminix acquisition has created near-term challenges and share price weakness, the manager expects successful integration over several quarters. The combined entity should emerge as a stronger, more profitable business capable of delivering industry-average growth rates. Current valuation appears overly discounted relative to the business's defensive characteristics and long-term prospects, creating potential for re-rating toward peer and private market multiples.

Pitch Summary:
Zoetis (Health Care, Sustainable Agriculture), a holding initiated during the quarter, modestly detracted from performance, as concerns around slowing revenue and competitive pressures led to analyst downgrades. Despite short-term price weakness, the investment team believes Zoetis remains a high-quality business trading at a compelling valuation. The company generates attractive returns on invested capital, high free cash flow generation, and strong R&D spending to support future product innovation.

BSD Analysis:
The fund manager maintains a bullish long-term view on Zoetis despite recent share price weakness and analyst downgrades. The team initiated a new position during the quarter, demonstrating conviction in the company's fundamental value proposition. While acknowledging near-term headwinds including slowing revenue growth and competitive pressures, the manager emphasizes Zoetis' high-quality business characteristics. The company's attractive returns on invested capital indicate efficient capital allocation and strong competitive positioning in animal health markets. High free cash flow generation provides financial flexibility and supports the company's ability to invest in R&D for future product innovation. The fund categorizes Zoetis under Sustainable Agriculture, aligning with their environmental markets focus and the growing importance of animal health in sustainable food production. The manager views the current valuation as compelling, suggesting the market has overreacted to short-term challenges. The strong R&D spending mentioned indicates Zoetis' commitment to maintaining its innovation pipeline and competitive moat in animal pharmaceuticals.

Pitch Summary:
Flutter Entertainment is the world's largest online gambling company, boasting a portfolio of premier online sports betting and casino brands including FanDuel, Sportsbet, Pokerstars and Paddy Power. The company commands the No. 1 market position across the vast majority of its revenue base driven by its best-in-class product. We appreciate that online gambling favors scaled players and believe that management has Flutter well-positioned to capitalize on strong secular growth tailwinds as the penetration of online gambling continues to increase. A recent sell-off in the share price provided the opportunity to buy shares in a company led by a management team that is renowned for top-notch execution and capital allocation.

BSD Analysis:
Harris Associates views Flutter Entertainment as the dominant global leader in online gambling with significant competitive advantages and secular growth tailwinds. The manager emphasizes Flutter's market-leading position across its revenue base, driven by best-in-class products and premier brand portfolio including FanDuel, Sportsbet, PokerStars, and Paddy Power. The online gambling industry's natural tendency to favor scaled players creates sustainable competitive moats that benefit market leaders like Flutter. Management's reputation for exceptional execution and capital allocation provides confidence in the company's ability to capitalize on growth opportunities. The secular trend toward increased online gambling penetration creates a multi-year growth runway that should benefit the market leader disproportionately. A recent share price sell-off provided an attractive entry point for this high-quality business with strong competitive positioning. The combination of market leadership, secular growth tailwinds, and proven management execution creates a compelling investment opportunity in the expanding online gambling market.

Pitch Summary:
Waters (Health Care, Environmental Testing & Monitoring) moved lower during the quarter, driven by increasing attention on the US Administration's attempt to moderate drug pricing in the US. If successful, this could have a negative downstream effect on life science tools companies such as Waters. The stock also traded down on its Q1 earnings release. Whilst the results were solid, they were below elevated investor expectations.

BSD Analysis:
The fund manager expresses a cautious to bearish near-term view on Waters Corporation, citing multiple headwinds affecting the stock's performance. The primary concern centers on the US Administration's drug pricing moderation efforts, which could create negative downstream effects for life sciences tools companies like Waters. This regulatory pressure represents a structural headwind that could impact pharmaceutical R&D spending and demand for Waters' analytical instruments. Additionally, the company's Q1 earnings, while solid in absolute terms, failed to meet elevated investor expectations, leading to share price weakness. The fund categorizes Waters within Environmental Testing & Monitoring, suggesting its instruments serve environmental compliance and testing applications beyond traditional pharmaceutical uses. Despite the near-term challenges, the manager's description of results as "solid" implies the underlying business fundamentals remain intact. The fund appears to be maintaining its position while acknowledging the regulatory and sentiment headwinds facing the life sciences tools sector.

Pitch Summary:
Asahi Group Holdings is a leading global beverage company and Japan's largest beer company. In our view, the Japanese beer market will see tailwinds over the coming years as a result of liquor tax reform and price increases following years of decline. With a strong CEO in Atsushi Katsuki and the country's best-selling beer brand, we believe the company is uniquely positioned to capitalize on these tailwinds and expand domestic profits over the medium term. In addition, we like that Asahi commands attractive market positions in Australia and Central Europe, which support high margins and revenue growth. Lastly, after years of deleveraging following large acquisitions, we expect management to increase shareholder returns while continuing to realize the benefits of the company's global procurement initiatives. Despite this compelling setup, we were able to purchase shares in this above-average business at a below-average valuation, in our view.

BSD Analysis:
Harris Associates initiated a position in Asahi Group Holdings, viewing it as an above-average business trading at below-average valuation with multiple catalysts for value creation. The manager expects the Japanese beer market to benefit from structural tailwinds including liquor tax reform and price increases after years of market decline. Strong leadership under CEO Atsushi Katsuki combined with Japan's best-selling beer brand positions Asahi to capitalize on these favorable market dynamics and expand domestic profitability. International diversification through attractive market positions in Australia and Central Europe provides high-margin revenue growth and reduces dependence on the domestic market. The company's balance sheet strength following years of deleveraging post-acquisitions enables increased shareholder returns through dividends and buybacks. Global procurement initiatives should continue delivering cost synergies and margin expansion. The combination of market recovery, pricing power, international diversification, and capital return potential creates multiple value drivers for the investment thesis.

Pitch Summary:
Qualcomm, a leading wireless communications technology company, was a leading contributor for the quarter. After a period of weaker global demand for smartphones (driven by a slowdown in China) and elevated channel inventory, demand from Chinese handset manufacturers accelerated 40% year-over-year. More importantly, in our opinion, Qualcomm continues to execute on a previously identified catalyst of shifting its business mix beyond smartphones. The company announced increased progress for its automotive and Internet of Things (IoT) solutions. Within auto, the increase in vehicle content has resulted in 35% year-over-year revenue growth, with a design win pipeline of about $45 billion, keeping the company on track to achieving about $4 billion in auto-related revenues by 2026. In recent years, despite persistent threats of insourcing from large clients (most notably Apple), Qualcomm has been able to retain its high market share in handsets while simultaneously expanding in non-smartphone devices. We believe this progress is a testament to Qualcomm's history of high (and productive) R&D spending, resulting in technological superiority. We believe Qualcomm's technologies will continue to benefit as the world stays on a path toward a proliferation of connectivity between varying devices and as AI applications extend from the cloud to on-device.

BSD Analysis:
The manager's bullish case for Qualcomm emphasizes successful diversification beyond smartphones while maintaining core market leadership. The 40% year-over-year acceleration in Chinese handset demand demonstrates cyclical recovery, while the strategic shift toward automotive and IoT represents sustainable growth drivers. Automotive revenue growth of 35% and a $45 billion design win pipeline targeting $4 billion in auto revenues by 2026 validates the diversification strategy. Despite persistent insourcing threats from major clients like Apple, Qualcomm has retained high handset market share through technological superiority driven by substantial R&D investment. The company's positioning in connectivity proliferation and the transition from cloud-based to on-device AI applications creates multiple growth vectors. Qualcomm's technological moat in wireless communications, combined with expanding addressable markets in automotive and IoT, supports long-term revenue diversification and margin expansion. The convergence of 5G, AI, and automotive electrification trends positions Qualcomm favorably for sustained growth beyond traditional smartphone cycles.

Pitch Summary:
Amphenol (Information Technology, Advanced Road Vehicles & Devices) moved sharply higher following the release of Q1 earnings. Data centre-related sequential growth led to a substantial earnings-per-share (EPS) beat while Q2 guidance came in materially above consensus expectations.

BSD Analysis:
The fund manager maintains a bullish stance on Amphenol, highlighting the company's exceptional Q1 earnings performance that significantly exceeded expectations. The substantial EPS beat was driven by strong sequential growth in data center-related business, demonstrating Amphenol's exposure to the expanding AI and cloud infrastructure buildout. The company's Q2 guidance came in materially above consensus, indicating management's confidence in sustained demand momentum. This guidance beat suggests Amphenol is well-positioned to benefit from continued data center expansion and the increasing connectivity requirements of AI infrastructure. The fund categorizes Amphenol under Advanced Road Vehicles & Devices, reflecting its diversified exposure to both automotive electrification and data center connectivity solutions. The sharp share price appreciation following earnings validates the company's execution and market positioning. Amphenol's strong performance aligns with the fund's thesis on companies enabling digital infrastructure and sustainable technology transitions.

Pitch Summary:
Thyssenkrupp was a contributor during the quarter. The Germany-headquartered industrial conglomerate's stock price rose throughout the quarter driven in part by solid first-quarter results and also by government action. Following the February general election, the newly elected German government voted to increase spending with a particular focus on defense. While all segments could potentially benefit, we believe Thyssen's Marine Systems segment should see significantly increased demand and orders going forward. In addition, management was already planning to spin off Marine Systems and this help to unlock further value within the conglomerate. We believe management is taking significant structural and operational action to improve the business and that the shares remain undervalued.

BSD Analysis:
Harris Associates views thyssenkrupp as an undervalued industrial conglomerate positioned to benefit from both operational improvements and favorable government policy changes. The manager highlights solid Q1 results as evidence of underlying business momentum across the diversified industrial platform. The newly elected German government's decision to increase defense spending creates a significant tailwind for Thyssen's Marine Systems segment, which should see substantially increased demand and order flow. The planned spin-off of Marine Systems represents a key value unlock catalyst that should help realize the conglomerate's sum-of-the-parts value. Management's structural and operational initiatives demonstrate commitment to business improvement and shareholder value creation. The combination of government defense spending increases and strategic portfolio optimization provides multiple value creation pathways. Despite recent share price appreciation, the manager maintains conviction that shares remain undervalued relative to intrinsic value and improvement potential.

Pitch Summary:
Cameco, one of the world's largest publicly traded uranium producers, was the top contributor during the period. Support from governments and policymakers for nuclear energy has continued to increase in 2024 as countries realize it can play a crucial role in both promoting energy security and lowering dependence on fossil fuels to meet environmental goals. With higher demand for uranium across the world, Cameco's production was up more than 25% year-over-year, and its long-term supply contracts have increased (annual commitments now standing at 28 million pounds per year through 2028). We view these fundamental improvements as further proof Cameco is making progress on our catalyst of increasing its uranium volume sold at higher prices, all while lowering production costs through scale and its access to some of the highest-grade ore on the planet. In addition, we believe the company's continued integration of Westinghouse Electric Company's market-leading downstream capabilities will allow it to offer a highly competitive nuclear-fuel solution. In our opinion, this puts Cameco on track to enjoy higher levels of free cash flow and the ability to de-risk its balance sheet as it meets global energy needs.

BSD Analysis:
The manager's bullish thesis on Cameco centers on the accelerating global shift toward nuclear energy driven by energy security concerns and environmental goals. Production growth of over 25% year-over-year demonstrates operational execution, while long-term supply contracts totaling 28 million pounds annually through 2028 provide revenue visibility and pricing power. The company benefits from access to some of the world's highest-grade uranium ore, enabling cost advantages through scale and superior resource quality. The integration of Westinghouse Electric's downstream capabilities creates a vertically integrated nuclear fuel solution, enhancing competitive positioning and margin potential. Government and policymaker support for nuclear energy as a clean baseload power source strengthens long-term demand fundamentals. Cameco's ability to increase uranium volumes at higher prices while reducing production costs through operational leverage positions the company for significant free cash flow generation. The combination of supply-demand dynamics, operational improvements, and strategic integration supports strong balance sheet de-risking and shareholder value creation.

Pitch Summary:
Alibaba Group was a contributor during the quarter. The China-headquartered consumer discretionary company's stock price rose throughout the period as it delivered strong third-quarter 2024 results, driven by accelerating growth in its E-commerce and Cloud businesses. Top-line growth in E-commerce improved meaningfully following the introduction of new fees and monetization tools for merchants. Cloud revenue grew due to strong demand for cloud services and AI demand. Over the past few years Alibaba has aggressively invested in AI and, as a result, is one of the early leaders in China today. Alibaba is unique in that they are a leader in both cloud computing services (similar to AWS) and large language models (similar to ChatGPT). Even with the share price appreciation in 1Q, we believe the company continues to offer attractive upside.

BSD Analysis:
Harris Associates maintains a bullish outlook on Alibaba despite recent share price appreciation, citing strong Q3 2024 results driven by accelerating growth across core business segments. The manager highlights meaningful improvement in e-commerce top-line growth following the introduction of new merchant fees and monetization tools, demonstrating pricing power and platform optimization. Cloud revenue growth reflects strong demand for both traditional cloud services and AI capabilities, positioning Alibaba to capitalize on the AI revolution in China. The fund emphasizes Alibaba's unique dual leadership position in cloud computing services (comparable to AWS) and large language models (similar to ChatGPT), creating a differentiated competitive moat. Years of aggressive AI investment have established Alibaba as an early leader in China's AI landscape. The manager's conviction remains strong despite recent gains, suggesting significant remaining upside potential. This dual-platform leadership in cloud and AI provides multiple growth vectors and defensive positioning.

Pitch Summary:
Nvidia (Information Technology, Cloud Computing) experienced a share price bounce during the period, as strong Q1 results (revenue exceeding estimates, stronger than expected client capex, and improving policy sentiment) provided evidence of their attractive position to benefit from growth in AI infrastructure, and the need for higher efficiencies.

BSD Analysis:
The fund manager expresses a bullish view on NVIDIA, emphasizing the company's strong Q1 performance that exceeded revenue estimates and demonstrated robust client capital expenditure trends. The manager highlights NVIDIA's strategic positioning to capitalize on AI infrastructure growth and the increasing demand for computational efficiency. The company's results provided clear evidence of its dominant market position in AI-enabling semiconductors and data center acceleration. NVIDIA's ability to exceed expectations while maintaining strong client spending patterns indicates sustained demand for its GPU technology across AI applications. The fund views NVIDIA as well-positioned to benefit from the secular trend toward AI infrastructure investment and the need for higher computational efficiencies. The improving policy sentiment mentioned suggests reduced regulatory headwinds, which could further support the company's growth trajectory. NVIDIA represents 3.1% of the portfolio, reflecting the fund's conviction in the AI infrastructure theme.

Pitch Summary:
Oshkosh, a manufacturer of purpose-built vehicles worldwide, was a main detractor during the quarter. Despite a decline in share price, the company has seen fundamental improvements and strong demand for its vehicles, including an increasing backlog of orders for fire trucks. As such, revenue for Oshkosh's Vocational segment was up over 35% year-over-year. We believe this segment should be able to expand its margins, particularly as the company was awarded a contract to produce the "Next Generation Delivery Vehicle" for the U.S. Postal Service, which should begin to ramp up at the beginning of next year. This contract could generate in excess of $6 billion in revenue for the company. Furthermore, we continue to believe that Oshkosh is a high-quality business that should be able to create innovative equipment and gain market share across segments. This includes its aerial work platforms as global safety standards increase around the world.

BSD Analysis:
The manager maintains conviction in Oshkosh despite recent share price weakness, highlighting strong fundamental improvements including 35% year-over-year revenue growth in the Vocational segment. The increasing backlog of fire truck orders demonstrates robust demand for the company's specialized vehicles. The transformational U.S. Postal Service contract for Next Generation Delivery Vehicles represents a significant catalyst, potentially generating over $6 billion in revenue starting next year. This contract validates Oshkosh's competitive positioning in purpose-built vehicles and should drive meaningful margin expansion. The manager emphasizes Oshkosh's innovation capabilities and market share growth potential across multiple segments, particularly in aerial work platforms where global safety standards are tightening. The combination of strong order backlogs, major contract wins, and expanding addressable markets supports the investment thesis. Oshkosh's specialized manufacturing expertise and diversified end markets position it well for sustained growth despite short-term market volatility.

Pitch Summary:
BNP Paribas was the top contributor during the quarter. The France-headquartered bank's stock price rose throughout the period as it posted strong fiscal-year 2024 results. Performance was driven by strength in the Corporate and Institutional Banking (CIB) and Personal Finance segments. The company also demonstrated improved efficiency, with revenue growth outpacing cost growth. Given BNP's strong underlying profitability and highly diversified business, we believe the bank is well-positioned for sustained capital generation and long-term growth.

BSD Analysis:
Harris Associates maintains a bullish stance on BNP Paribas following strong fiscal 2024 results that demonstrated operational excellence across key business segments. The manager highlights the bank's improved efficiency metrics, with revenue growth outpacing cost growth, indicating effective management execution. The strength in Corporate and Institutional Banking alongside Personal Finance segments suggests diversified revenue streams that reduce concentration risk. The fund emphasizes BNP's strong underlying profitability and highly diversified business model as key competitive advantages. This diversification provides stability and multiple growth vectors for sustained capital generation. The manager's confidence in long-term growth prospects reflects their view that BNP is well-positioned to capitalize on favorable banking sector dynamics. The combination of operational efficiency improvements and diversified revenue streams supports the bullish investment thesis.