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2. Source: HSBC, Polar Capital. As at market close.
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2. Source: HSBC, Polar Capital. As at market close.
As artificial intelligence becomes mainstream, the pace of disruption is accelerating.
As one of the largest, most experienced technology investment teams in Europe, we have deep experience in identifying trends early. As these transformative innovations are rapidly adopted, we are embracing the opportunities this brings to the technology sector and the wider world.
Past performance is not a reliable indicator of future returns.
The breakthrough in Artificial Intelligence represents one of the most exciting developments in technology yet. We believe this is akin to the commercialisation of the internet; smartphones; and the launch of the cloud.
Technology has become a pervasive and integral force in our everyday lives and there are a number of secular trends driving long-term growth in the sector. PCT seeks to benefit from this by investing across several core, multi-decade technology themes:
Our approach aims to cut through the hype which often can be found within the technology sector, and lead to unjustified valuations and elevated levels of risk. We have a highly disciplined, conservative approach that – in a high growth sector – differentiates the portfolio from its peers.
We look for technology companies playing on structural, secular trends and that offer genuine long-term growth potential. These technology companies will be the primary beneficiaries as the sector continues to capture an ever-higher proportion of global GDP, disrupt industries, and transform business models.
Managed by an expert team of dedicated technology specialists, PCT has an impressive long-term track record, built on the managers ability to identify emerging technology trends and invest with conviction in those companies best placed to exploit them.
Cumulative performance (%) | 1 year | 3 years | 5 years | 10 years |
---|---|---|---|---|
Ordinary Share Price (TR) | 30.97 | 15.63 | 112.03 | 502.24 |
NAV per Share (TR) | 29.17 | 22.15 | 121.65 | 545.84 |
Benchmark | 30.90 | 38.47 | 155.71 | 567.56 |
Discrete performance (%) | 31.08.23 30.08.24 | 31.08.22 31.08.23 | 31.08.21 31.08.22 | 28.08.20 31.08.21 | 30.08.19 28.08.20 |
---|---|---|---|---|---|
Ordinary Share Price (TR) | 30.97 | 11.88 | ‑21.09 | 17.70 | 55.80 |
NAV per Share (TR) | 29.17 | 12.37 | ‑15.84 | 25.77 | 44.28 |
Benchmark | 30.90 | 19.23 | -11.27 | 28.68 | 43.51 |
Data as at 30 August 2024.
Past performance is not indicative or a guarantee of future results. Source: Bloomberg & HSBC Securities Services (UK) Limited, percentage growth, Net of Fees in GBP terms. Benchmark index used is the Dow Jones Global Technology Index (Total Return). More information on performance can be found in the Share Price & Performance tab.
Data as at 30 August 2024
Source: Bloomberg & HSBC Securities Services (UK) Limited, percentage growth, Net of Fees in GBP terms. Past performance is not indicative or a guarantee of future results. Benchmark index used is the Dow Jones Global Technology Index (Total Return). More information on performance can be found in the Share Price & Performance tab.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Performance/Investment Process/Risk: Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Factors affecting the Company’s performance may include changes in market conditions (including currency risk) and interest rates and in response to other economic, political, or financial developments. The Company’s investment policy allows for it to enter into derivatives contracts. Leverage may be generated through the use of such financial instruments and investors must be aware that the use of derivatives may expose the Company to greater risks, including, but not limited to, unanticipated market developments and risks of illiquidity, and is not suitable for all investors. Those in possession of this document must read the Company’s Investment Policy and Annual Report for further information on the use of derivatives. Past performance is not a guide to or indicative of future results. Future returns or income are not guaranteed and a loss of principal may occur. Investments are not insured by the FDIC (or any other state or federal agency), or guaranteed by any bank, and may lose value. No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Last updated {{time}} {{Date}}
2. Source: HSBC, Polar Capital. As at market close.
The global pandemic has shown the modern world is built on technology. Trends we have witnessed and written about for many years have accelerated during the crisis, and many will remain as the crisis recedes. Polar Capital Technology Trust plc provides investors access to this enormous, fast-evolving potential.
Managed by a team of dedicated technology specialists, PCT is a leading investment trust with a multi-year track record – a result of the managers’ active approach and their ability to not only identify developing technology trends early on but to invest with conviction in those companies best placed to exploit them.
Past performance is not a reliable indicator of future returns.
The Company aims to maximise long-term capital growth through investing in a diversified portfolio of technology companies around the world.
At the Annual General Meeting in 2012 shareholder approval was obtained for a simplified investment policy. This did not change the investment objective but provides a clear and appropriate set of up to date investment restrictions in line with the Financial Conduct Authority and HM Revenue and Customs current requirements. The portfolio was managed under and in accordance with the old policy and restrictions in the year to 30 April 2012 and up to 4 September 2012 when the change was approved by shareholders.
Asset allocation
Technology may be defined as the application of scientific knowledge for practical purposes and technology companies are defined accordingly. While this offers a very broad and dynamic investing universe and covers many different companies, the portfolio of the Company (the “Portfolio”) is focused on companies which use technology or which develop and supply technological solutions as a core part of their business models. This includes areas as diverse as information, media, communications, environmental, healthcare, finance, e-commerce and renewable energy, as well as the more obvious applications such as computing and associated industries.
The Board has agreed a set of parameters which seek to ensure that investment risk is spread and diversified. The Board believes that this provides the necessary flexibility for the Investment Manager to pursue the investment objective, given the dynamic and rapid changes in the field of technology, while maintaining a spread of investments.
The Company uses the Dow Jones Global Technology Index (total return, Sterling adjusted, with the removal of relevant withholding taxes) as the Benchmark against which Net Asset Value (NAV) performance is measured for the purpose of assessing performance fees. From 1 May 2013 the benchmark was calculated using a net basis which adjusts the Benchmark income element to reflect withholding taxes which would be suffered by a UK based investor.
However, the Benchmark is neither a target nor an ideal investment strategy. The purpose of the Benchmark is to set a reasonable return for shareholders of PCT above which the Investment Manager is entitled to a share of the extra performance it has delivered.
Risk diversification
PCT will at all times invest and manage its assets in a manner that is consistent with spreading investment risk and invests in a Portfolio comprised primarily of international quoted equities which is diversified across both regions and sectors. PCT will satisfy the following investment restrictions:
In addition to the restrictions set out above, PCT is subject to Chapter 15 of the UK Listing Authority’s Listing Rules which apply to closed-ended investment companies with a premium listing on the Official List of the London Stock Exchange. In order to comply with the current Listing Rules, PCT will not invest more than 10 per cent. of its total assets at the time of acquisition in other listed closed-ended investment funds, whether managed by the Investment Manager or not. This restriction does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15 per cent. of their total assets in other listed closed-ended investment funds. However, PCT will not in any case invest more than 15 per cent. of its total assets in other closed-ended investment funds. PCT must not conduct any trading activity which is significant in the context of its group as a whole.
Borrowing, Cash and Derivatives
The Company may borrow money to invest in the Portfolio over both the long and short-term. Any commitment to borrow funds is agreed by the Board and the AIFM.
The Company’s Articles of Association permit borrowings up to the amount of its paid up share capital plus capital and revenue reserves but any net borrowings in excess of 20% of the Company’s net assets at the time of drawdown will only be made with the approval of the Board.
The Investment Manager may also use from time to time derivative instruments as approved by the Board such as financial futures, options, contracts-for-difference and currency hedges. These are used for the purpose of efficient portfolio management. Any such use of derivatives will be made in accordance with PCT’s policies on spreading investment risk as set out in this investment policy and any leverage resulting from the use of such derivatives will be subject to the restrictions on borrowings set out above.
Changes to investment policy
Any material change to the investment policy will require the approval of the Shareholders by way of an ordinary resolution at a general meeting. PCT will promptly issue an announcement to inform Shareholders and the public of any change of its investment policy.
The Board monitors the portfolio’s exposure to different geographical markets, sub-sectors within technology and the spread of investments across different market capitalisations. Cyclical changes in markets and new technologies will bring certain sub-sectors or companies of a particular size or market capitalisation into or out of favour.
Market parameters
Notwithstanding the ability to invest up to 100% of the portfolio in any one market, with current and foreseeable investment conditions the Portfolio will be invested in accordance with the objective across worldwide markets within the following geographical and market parameters:
The Board has set specific upper exposure limits for certain countries where they believe there may be an elevated risk.
Cash
PCT may hold cash or cash equivalents if the Investment Manager feels that these will, at a particular time or over a period, enhance the performance of the Portfolio. The Board has agreed that management of cash may be achieved through the purchase of appropriate government bonds, money market funds or bank deposits depending on the Investment Manager’s view of the investment opportunities and the benefits of diversification.
Gearing
On 30 September 2020, the Company had drawn down the two, two-year fixed rate, term loans of JPY 3.8bn and USD 36m from ING Bank N.V. Both loans fall due for repayment on 30 September 2022. The JPY loan has been fixed at an all-in rate of 0.90% pa and the USD loan has been fixed at an all-in rate of 1.1% pa. The Company has repaid the two, two-year loan facilities with ING Bank N.V of USD 23.3m and JPY 5.2bn dated 2 October 2018.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
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Source: London Stock Exchange. Delayed by at least 15 minutes.
Invalid Dates
Update chart1 month | 3 month | YTD | 1 year | 3 years | 5 years | 10 years | |
---|---|---|---|---|---|---|---|
Ordinary Share Price (TR) | -4.05 | -1.00 | 14.07 | 30.97 | 15.63 | 112.03 | 502.24 |
NAV per share | -0.89 | 1.46 | 17.14 | 29.17 | 22.15 | 121.65 | 545.84 |
Benchmark | -1.06 | 3.49 | 20.21 | 30.90 | 38.47 | 155.71 | 567.56 |
Source: Bloomberg & HSBC Securities Services (UK) Limited, percentage growth, Net of Fees in GBP terms. Past performance is not indicative or a guarantee of future results.
Financial YTD | 31.08.23 30.08.24 | 31.08.22 31.08.23 | 31.08.21 31.08.22 | 28.08.20 31.08.21 | 30.08.19 28.08.20 | |
---|---|---|---|---|---|---|
Ordinary Share Price (TR) | 1.37 | 30.97 | 11.88 | -21.09 | 17.70 | 55.80 |
NAV per share | 6.87 | 29.17 | 12.37 | -15.84 | 25.77 | 44.28 |
Benchmark | 9.65 | 30.90 | 19.23 | -11.27 | 28.68 | 43.51 |
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Performance/Investment Process/Risk: Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Factors affecting the Company’s performance may include changes in market conditions (including currency risk) and interest rates and in response to other economic, political, or financial developments. The Company’s investment policy allows for it to enter into derivatives contracts. Leverage may be generated through the use of such financial instruments and investors must be aware that the use of derivatives may expose the Company to greater risks, including, but not limited to, unanticipated market developments and risks of illiquidity, and is not suitable for all investors. Those in possession of this document must read the Company’s Investment Policy and Annual Report for further information on the use of derivatives. Past performance is not a guide to or indicative of future results. Future returns or income are not guaranteed and a loss of principal may occur. Investments are not insured by the FDIC (or any other state or federal agency), or guaranteed by any bank, and may lose value. No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
NVIDIA | 10.9 | |
Microsoft | 7.9 | |
Apple | 7.8 | |
Meta Platforms | 5.9 | |
Alphabet | 5.4 | |
TSMC | 4.7 | |
Broadcom | 4.0 | |
Advanced Micro Devices | 2.5 | |
Arista Networks | 2.2 | |
ASML Holding | 2.2 | |
Top 10 Holdings | 53.4 | |
Rest of Portfolio | 46.6 |
Total Number of Positions 95
Semiconductors & Semiconductor Equipment | 37.4 | |
Software | 18.0 | |
Interactive Media & Services | 12.3 | |
Technology Hardware, Storage & Peripherals | 8.4 | |
Electronic Equipment, Instruments & Components | 4.6 | |
IT Services | 3.1 | |
Entertainment | 3.0 | |
Communications Equipment | 2.2 | |
Broadline Retail | 1.5 | |
Aerospace & Defense | 1.1 | |
Media | 1.0 | |
Automobiles | 0.9 | |
Healthcare Equipment & Supplies | 0.7 | |
Machinery | 0.6 | |
Other | 1.9 | |
Cash | 3.2 | |
Note: Totals may not sum due to rounding.
Key | GBP | |
Total Net Assets | £4022.9m | |
AIC Gearing Ratio | n/a | |
AIC Net Cash Ratio | 3.26% | |
Large Cap (>US$10bn) | 90.6 | |
Mid Cap (US$1 - 10bn) | 9.2 | |
Small Cap (<US$1bn) | 0.3 | |
Cash | 3.2 |
US & Canada | 70.9 | |
Asia Pac (ex-Japan) | 10.5 | |
Europe (ex UK) | 6.1 | |
Japan | 5.0 | |
Middle East & Africa | 2.6 | |
UK | 1.4 | |
Cash | 3.2 | |
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Holdings: Portfolio data is “as at” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company. The holdings may represent only a small percentage of the aggregate portfolio holdings, are subject to change without notice, and may not represent current or future portfolio composition. Information on particular holdings may be withheld if it is in the Company’s best interest to do so. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. This document is not a recommendation to purchase or sell any particular security. It is designed to provide updated information to professional investors to enable them to monitor the Company.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Allocations: The strategy allocation percentages set forth in this webpage are estimates and actual percentages may vary from time-to-time. The types of investments presented herein will not always have the same comparable risks and returns. Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith. Please note that the Company may elect to invest assets in different investment sectors from those depicted herein, which may entail additional and/or different risks. Performance of the Company is dependent on the Investment Manager’s ability to identify and access appropriate investments, and balance assets to maximize return to the Company while minimizing its risk. The actual investments in the Company may or may not be the same or in the same proportion as those shown herein.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Statements/Opinions/Views: All opinions and estimates constitute the best judgment of Polar Capital as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Polar Capital. This material does not constitute legal or accounting advice; readers should contact their legal and accounting professionals for such information. All sources are Polar Capital unless otherwise stated.
Third-party Data: Some information contained herein has been obtained from third party sources and has not been independently verified by Polar Capital. Neither Polar Capital nor any other party involved in or related to compiling, computing or creating the data makes any express or implied warranties or representations with respect to such data (or the results to be obtained by the use thereof), and all such parties hereby expressly disclaim all warranties of originality, accuracy, completeness, merchantability or fitness for a particular purpose with respect to any data contained herein.
Holdings: Portfolio data is “as at” the date indicated and should not be relied upon as a complete or current listing of the holdings (or top holdings) of the Company. The holdings may represent only a small percentage of the aggregate portfolio holdings, are subject to change without notice, and may not represent current or future portfolio composition. Information on particular holdings may be withheld if it is in the Company’s best interest to do so. It should not be assumed that recommendations made in future will be profitable or will equal performance of the securities in this document. A list of all recommendations made within the immediately preceding 12 months is available upon request. This document is not a recommendation to purchase or sell any particular security. It is designed to provide updated information to professional investors to enable them to monitor the Company.
Benchmarks: The following benchmark index is used: Dow Jones Global Technology Index (Total Return). This benchmark is generally considered to be representative of the Technology Equity universe. This benchmark is a broad-based index which is used for comparative/illustrative purposes only and has been selected as it is well known and is easily recognizable by investors. Please refer to www.djindexes.com for further information on this index. Comparisons to benchmarks have limitations as benchmarks volatility and other material characteristics that may differ from the Company. Security holdings, industry weightings and asset allocation made for the Company may differ significantly from the benchmark. Accordingly, investment results and volatility of the Company may differ from those of the benchmark. The indices noted in this document are unmanaged, are unavailable for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the Company may incur. The performance of the indices reflects reinvestment of dividends and, where applicable, capital gain distributions. Therefore, investors should carefully consider these limitations and differences when evaluating the comparative benchmark data performance. Information regarding indices is included merely to show general trends in the periods indicated, it is not intended to imply that the Fund was similar to the indices in composition or risk. The benchmark used to calculate the performance fee is provided by an administrator on the ESMA register of benchmarks which includes details of all authorised, registered, recognised and endorsed EU and third country benchmark administrators together with their national competent authorities.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Forecasts: References to future returns are not promises or estimates of actual returns Polar Capital may achieve. Forecasts contained herein are for illustrative purposes only and does not constitute advice or a recommendation. Forecasts are based upon subjective estimates and assumptions about circumstances and events that have not and may not take place.
Performance/Investment Process/Risk: Performance is shown net of fees and expenses and includes the reinvestment of dividends and capital gain distributions. Factors affecting the Company’s performance may include changes in market conditions (including currency risk) and interest rates and in response to other economic, political, or financial developments. The Company’s investment policy allows for it to enter into derivatives contracts. Leverage may be generated through the use of such financial instruments and investors must be aware that the use of derivatives may expose the Company to greater risks, including, but not limited to, unanticipated market developments and risks of illiquidity, and is not suitable for all investors. Those in possession of this document must read the Company’s Investment Policy and Annual Report for further information on the use of derivatives. Past performance is not a guide to or indicative of future results. Future returns or income are not guaranteed and a loss of principal may occur. Investments are not insured by the FDIC (or any other state or federal agency), or guaranteed by any bank, and may lose value. No investment process or strategy is free of risk and there is no guarantee that the investment process or strategy described herein will be profitable.
Allocations: The strategy allocation percentages set forth in this webpage are estimates and actual percentages may vary from time-to-time. The types of investments presented herein will not always have the same comparable risks and returns. Please see the private placement memorandum or prospectus for a description of the investment allocations as well as the risks associated therewith. Please note that the Company may elect to invest assets in different investment sectors from those depicted herein, which may entail additional and/or different risks. Performance of the Company is dependent on the Investment Manager’s ability to identify and access appropriate investments, and balance assets to maximize return to the Company while minimizing its risk. The actual investments in the Company may or may not be the same or in the same proportion as those shown herein.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Ordinary shares | |
ISIN | GB00BR3YV268 |
SEDOL | BR3YV26 |
London Stock Exchange | PCT |
LEI | 549300TN1O5392UC4K19 |
LEI Polar Capital LLP | 4YW3JKTZ3K1II2GVCK15 |
£0 - £2bn | 0.80% |
£2bn - £3.5bn | 0.70% |
Over £3.5bn | 0.60% |
Performance | 10% over Benchmark |
Ongoing Charges | 0.80% |
The performance fee is subject to a highwater mark and cap. Further details can be found under Corporate Documents. Ongoing charges are calculated at the latest published year end date, and exclude any performance fees.
Important Information: This website is provided for the sole use of the intended recipient and is not a financial promotion. It shall not and does not constitute an offer or solicitation of an offer to make an investment into any Fund or Company managed by Polar Capital. It may not be reproduced in any form without the express permission of Polar Capital. The law restricts distribution of this document in certain jurisdictions; therefore, it is the responsibility of the reader to inform themselves about and observe any such restrictions. It is the responsibility of any person/s in possession of this document to inform themselves of, and to observe, all applicable laws and regulations of any relevant jurisdiction. Polar Capital Technology Trust plc is an investment company with investment trust status and as such its ordinary and subscription shares are excluded from the FCA’s (Financial Conduct Authority’s) restrictions which apply to non-mainstream investment products. The Company conducts its affairs and intends to continue to do so for the foreseeable future so that the exclusion continues to apply. Subscription shares will have a dilutive effect on ordinary shares when the net asset value (NAV) is greater than the conversion price.
It is not designed to contain information material to an investor’s decision to invest in Polar Capital Technology Trust plc, an Alternative Investment Fund under the Alternative Investment Fund Managers Directive 2011/61/EU (“AIFMD”) managed by Polar Capital LLP the appointed Alternative Investment Manager. In relation to each member state of the EEA (each a “Member State”) which has implemented the AIFMD, this document may only be distributed and shares may only be offered or placed in a Member State to the extent that (1) the Fund is permitted to be marketed to professional investors in the relevant Member State in accordance with AIFMD; or (2) this document may otherwise be lawfully distributed and the shares may otherwise be lawfully offered or placed in that Member State (including at the initiative of the investor). As at the date of this document,the Company has not been approved, notified or registered in accordance with the AIFMD for marketing to professional investors in any member state of the EEA. However, such approval may be sought or such notification or registration may be made in the future. Therefore this website is only transmitted to an investor in an EEA Member State at such investor’s own initiative. SUCH INFORMATION, INCLUDING RELEVANT RISK FACTORS, IS CONTAINED IN THE COMPANY’S OFFER DOCUMENT WHICH MUST BE READ BY ANY PROSPECTIVE INVESTOR.
Information Subject to Change: The information contained herein is subject to change, without notice, at the discretion of Polar Capital and Polar Capital does not undertake to revise or update this information in any way.
Country Specific disclaimers: The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act") and the holders of its shares will not be entitled to the benefits of the Investment Company Act. In addition, the offer and sale of the Securities have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"). No Securities may be offered or sold or otherwise transacted within the United States or to, or for the account or benefit of U.S. Persons (as defined in Regulation S of the Securities Act). In connection with the transaction referred to in this document the shares of the Fund will be offered and sold only outside the United States to, and for the account or benefit of non U.S. Persons in "offshore- transactions" within the meaning of, and in reliance on the exemption from registration provided by Regulation S under the Securities Act. No money, securities or other consideration is being solicited and, if sent in response to the information contained herein, will not be accepted. Any failure to comply with the above restrictions may constitute a violation of such securities laws.
Fund Manager Commentary As at 30 August 2024
Key points
Market review
Global equity markets ended August in positive territory, the MSCI All Country World Net Total Return Index returning +0.3%, while the S&P 500 and DJ Euro Stoxx 600 indices returned +0.2% and +1.6% respectively (all returns in sterling terms).
Solid headline index returns belied unusual market volatility early in the month, following weak US labour market data and significant yen strength after the Bank of Japan (BoJ) hiked its policy rate by 0.25% and announced plans to halve its purchases of Japanese government bonds. This prompted a sharp unwind of the yen carry trade (where investors borrow ‘cheaply’ in yen – as Japanese interest rates are lower – to buy other assets/currencies). Markets rebounded rapidly; however benign US macroeconomic data suggested further economic stability rather than a sharp slowdown, while a more dovish BoJ stance helped contain yen strength.
The early August volatility followed the Bureau of Labor Statistics report that the US economy added only 114,000 jobs in July, below forecasts of 179,000. In addition, the US Consumer Price Index (CPI) annual inflation rate moderated to +2.9% year on year (y/y) in July (below forecasts of +3%), down from +3% y/y in June, and the weakest monthly reading since March 2021. The combination of a softening labour market and tempering inflation trends solidified expectations for a September interest rate cut.
The minutes of the Federal Reserve’s (Fed) late July policy meeting showed broad agreement between committee members that “it would likely be appropriate to ease policy at the next meeting” in September, and came ahead of softer employment and inflation data in August. Towards month end, Fed Chair Jerome Powell delivered a speech at Jackson Hole that signalled US interest rate cuts were imminent. Although “the economy continues to grow at a solid pace”, Powell noted the Fed does not “seek or welcome further labour market cooling”, which explained why “the time has come for [monetary] policy to adjust”.
Technology review
The technology sector underperformed the broader equity market in August, with the Dow Jones Global Technology Net Total Return Index (W1TECN) returning -1.1%. Large-cap technology stocks outperformed their small and mid-cap peers; the Russell 1000 Technology Index (large cap) and Russell 2000 Technology Index (small cap) returning -1.1% and -4.7% respectively. The Philadelphia Semiconductor Index (SOX) returned -3.5%, while the NASDAQ Internet Index and Bloomberg Americas Software Index returned +0.7% and -1.1% respectively.
Despite a less certain macro backdrop, earnings reports have remained robust, albeit with cyclical weakness in some areas offset by continued AI strength. This is underpinned by robust capital spending on key infrastructure builds by the hyperscalers (the largest cloud service providers).
In the semiconductor sector, NVIDIA once again exceeded market expectations as its core data centre GPU (graphics processing units) business grew a remarkable +154% y/y. More importantly, CEO Jensen Huang also allayed investor concerns about further delays to the company’s next-generation Blackwell chip, with the company expecting “several billion dollars of Blackwell revenue” towards the end of the year, while also seeing increased demand for existing Hopper GPUs in the interim. In addition, NVIDIA raised its expectation of revenue from sovereign AI customers to low double-digit billions, up from high single-digit billions, as countries make strategic investments to control their own AI destinies.
Other semiconductor names posted strong results driven by AI infrastructure spending. Taiwanese server maker Quanta Computer delivered a solid beat of previous guidance with better than expected margins, and the company expects full-year AI server sales to increase by triple digits y/y. Server rail kit provider King Slide Works beat analyst expectations as demand for high-end AI server rails ballooned, seeing the company grow revenue 30% quarter on quarter (q/q) with gross margins close to 70%. Monolithic Power Systems’ Enterprise Data segment, which produces chips to power advanced GPUs, grew +290% y/y and the company also saw strength and a return to growth in more cyclical areas such as Storage and Computing. However, memory-related semiconductor firms including Disco, Micron Technology and Samsung Electronics were weak on memory pricing and customer inventory concerns. Intel* was especially weak following a dividend cut and a significant restructuring plan.
In semiconductor capital equipment, Advantest delivered strong operating profit to beat consensus expectations by 50%, as sales of system-on-chip (SoC) testers for AI applications reached new highs, while high-bandwidth memory (HBM) tester strength remained robust. Kokusai Electric also beat on sales and operating profit but failed to raise its full-year guidance.
In the internet sector, Meta Platforms (Facebook) delivered a strong set of results, growing 22% y/y with a 23% y/y increase in advertising revenue driven both by both price and impression growth; Q3 revenue guidance of +16% y/y implies continued sequential momentum. The company raised the low end of its capital expenditure (capex) guide from $35-40bn to $37-40bn, largely driven by AI infrastructure spend, and CEO Mark Zuckerberg expects the company’s generative AI (GenAI) assistant will become the most widely used in the market by year end. Trade Desk posted above consensus results, as connected TV outpaced all other formats as recent partnerships with companies such as Netflix, Disney* and Roku* begin to bear fruit.
Amazon saw growth in its cloud computing business, AWS, reaccelerate to +19% y/y and reach 35.5% operating margins, but backlog growth of +19% was somewhat disappointing. Amazon’s retail sales were only in line with expectations and profitability below, raising questions about the path of margin expansion. In contrast, Shopify delivered strong results as revenue grew +25% y/y (excluding the sale of its logistics business) and group operating margins reached 14.6%, c2% above consensus expectations. The Q3 guidance for low to mid-20% growth was also ahead of expectations.
Cybersecurity results remained a bright spot. Cloudflare revenue growth of +30% y/y was strong as the company benefitted from more customer additions, particularly customers >$100k. CyberArk Software also beat across all metrics and raised its full-year expectations to +24.5% y/y at the midpoint. Management’s tone was constructive, with deal velocity accelerating across all verticals and geographies despite a more challenging economic backdrop.
The broader software sector remains more challenging, in part because of uncertainty about the role of GenAI in reshaping the application landscape and perhaps some budget reallocation. We remain cautious on many software stocks. That said, HubSpot reported in line with expectations as various issues seen last quarter appear to be stabilising. The company’s multi-hub motion is gaining momentum and has AI features in customers’ hands at scale today. Elastic also reported a solid quarter, but reduced guidance due to deal slippage amid a sales reorganisation. More positively, search accelerated, driven by GenAI applications, and consumption patterns remain robust.
In hardware, Apple delivered a well-received quarter slightly ahead of expectations, growing +5% y/y on iPad and Services strength despite iPhone revenue being down -1% y/y. Our focus remains on the recent iPhone launch (9 September) and the rollout/take-up of Apple Intelligence. Apple has partnered with OpenAI to deliver the new feature set, but whether this drives a significant refresh cycle in Apple hardware remains unknown.
Elsewhere, Pure Storage delivered a steady quarter and reiterated its full-year guidance. However, the company is seeing some elongation of sales cycles, specifically for larger deals in certain product lines, and there were limited updates on the company’s hyperscaler opportunity. Public safety company Axon Enterprise reported another strong quarter, above consensus, driven by all product lines, growing +35% y/y – its 10th consecutive quarter growing above 25%. The company’s AI product, Draft One, has already generated more than $100m of pipeline, the fastest of any of the company’s software products to date.
Outlook
After the surprisingly soft jobs report at the start of August, macro data has subsequently been solid. The inflation picture continues to improve which has changed the balance of risks for many central banks (including the Fed). As a result, focus has shifted from managing the risk of higher/sticky inflation to supporting economic growth and the labour market which has prompted many to shift into interest rate-cutting mode. We expect the speed and size of interest rate cuts to be determined by incoming macroeconomic data, with any signs of more pronounced labour market weakness likely to be met with steeper cuts.
Absent a US recession, rate-cutting cycles have been supportive of positive equity market returns. However, we are cognisant of challenging seasonality (encapsulating a Q3 pre-announcement season) and heightened geopolitical risk, particularly in light of a close-run US presidential election.
Turning to technology, we remain highly constructive largely because of the powerful secular tailwind from GenAI which we consider the next GPT (general purpose technology), as well as a rare example of discontinuous technology progress. While we understand fears that AI excitement will fade, we believe the opposite is true and that the longer-term potential of this highly disruptive technology will become much more visible as 2025 progresses.
In our view, GenAI will reshape every industry and we believe an understanding of technology-enabled change (and deep AI knowledge) will be critical to navigating the considerable disruption ahead and unlocking the broader AI opportunity.
In contrast with stock weakness, AI-related news flow has been overwhelmingly positive. Alongside strong results, Walmart* announced it “used Generative AI to improve our product catalog…to accurately create or improve over 850 million pieces of data and the catalog. Without the use of generative AI, this work would have required nearly 100 times the current headcount to complete and the same amount of time”.
An AI-powered natural language query engine built to sit in front of the International Monetary Fund’s massive body of economic data has delivered a 50% increase in research productivity and a 35% increase in research accuracy. Amazon CEO Andy Jassy also discussed how Amazon’s use of GenAI to help with Java upgrades “has saved us the equivalent of 4,500 developer-years of work” and $260m in annualised efficiency gains”.
These remarkable statistics point to the considerable productivity benefits we expect AI to deliver once it is more widely adopted. Another high-level way to think about the opportunity is that, given AI is a substitute (and potential replacement) for human knowledge work, AI changes the addressable market for technology from ‘technology spend’ (c3-6% of overall enterprise revenues) to a large portion of total ‘operational expenditure’ (c30-80% of revenues). We believe this transformation explains why leading technology companies are investing as aggressively as they are today.
Recent AI commentary suggests demand remains strong, corroborated by monthly sales data from the Asia supply chain. That said, material upside to expectations could be constrained ahead of NVIDIA’s Blackwell ramp up (starting in Q4), but we believe the focus should be on Q4 outlook and guidance on Q3 earnings calls. We expect strong demand associated with Blackwell to drive further strength in AI infrastructure spending through H1 2025 which we expect to reignite interest in AI stocks. Additionally, significant developments in large language model capabilities are expected with Open AI’s GPT 5.0 anticipated in the next six months.
Near term, market gyration could persist for several more weeks, largely explained by normal seasonal factors, exacerbated by pre-election jitters, and increased volatility typical of early phases of a new technology cycle (in this instance triggered by NVIDIA’s Blackwell delay). While the macro backdrop is somewhat softer, we still believe it remains supportive of sustained strong Al investment. Recent off-quarter earnings and company meetings (many of the team have attended technology conferences this month) also support this view. As such, we see this period as an opportunity to accumulate Al exposure and refocus portfolios on the Al winners of 2025 and beyond.
* not held
Ben Rogoff
Ben joined Polar Capital in May 2003. He is lead manager of Polar Capital Technology Trust plc and is a Fund Manager of the Polar Capital Global Technology Fund and Polar Capital Artificial Intelligence Fund.
Alastair Unwin
Alastair joined Polar Capital in June 2019 as a Fund Manager. Prior to joining Polar Capital, Alastair co-managed the Arbrook American Equities Fund. Between 2014 and 2018 he launched and then managed the Neptune Global Technology Fund and managed the Neptune US Opportunities Fund. Prior to Neptune, Alastair was a technology analyst at Herald Investment Management.
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