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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Bailard Technology delivered 41% in Q2 by aggressively positioning into AI infrastructure hardware and semiconductors while rotating out of application software. Memory, semicap equipment, cybersecurity, and observability drove outperformance as AI deployment accelerated."
The Bailard Technology Strategy delivered a 41.17% net return in Q2 2026, outperforming benchmarks by capitalizing on the AI infrastructure buildout. The team significantly increased exposure to semiconductors and technology hardware, positioning directly in front of data center demand that continues to broaden beyond GPUs into optics, networking, and power infrastructure. Hardware remains the cleanest way to express AI demand given visible spending and capacity constraints. Middle-of-stack companies in cybersecurity, observability, and infrastructure software benefited as AI deployment increased security and monitoring requirements. Palo Alto Networks and Datadog were major contributors, while memory and semicap equipment holdings delivered exceptional returns. The strategy exited underperforming application software positions, reallocating capital toward consumption-based infrastructure businesses better positioned for AI adoption. Application software faces headwinds from pricing pressure and competition from AI-native startups. The portfolio maintains meaningful AI infrastructure exposure while remaining selective in software, favoring companies where AI increases complexity rather than compresses value. Cash levels remain minimal at 0.04% with 38 total holdings concentrated in semiconductors and software.
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