Baron Technology Fund

NVIDIA Corporation (NVDA) sells semiconductors, systems, and software for accelerated computing, gaming, and generative AI.
Computing demand has been doubling every one to two years, driven by electrification, digitization, and recent advancements in AI, yet supply growth has decelerated dramatically due to the slowdown in Moore's law. NVIDIA’s accelerated computing architecture enables continued growth in computing capacity through parallelization. We are at the tipping point of a new era in computing, with NVIDIA at its epicenter as generative AI adoption grows. With leading market share in gaming, data centers, and autonomous machines, we think NVIDIA is well positioned for long-term growth.

Broadcom Inc. (AVGO) designs, develops, and supplies a wide range of semiconductor and infrastructure software solutions. Its semiconductor devices serve broadband, networking, wireless, storage, and industrial markets, while its software offerings focus on operational efficiency tools for large enterprises.
Broadcom’s semiconductor portfolio is reaching an inflection point, driven by its AI solutions in networking and custom compute. We expect Broadcom to tap into most of the $75 billion serviceable addressable market in AI across its three largest customers by 2027 and to grow VMware at a high-teens rate over the next few years. The rest of Broadcom’s semiconductor business is recovering, and we expect other software segments to grow at a mid-single-digit rate. The company has best-in-class margins and cash flow, which it returns to shareholders.

Amazon.com, Inc. (AMZN) is an e-commerce pioneer, innovator, and market share leader with a relentless focus on providing value and convenience to its customers. Amazon also operates the industry-leading cloud infrastructure business Amazon Web Services (AWS).
Amazon's market share of U.S. online retail sales is around 40%, while its share of global retail sales is less than 5%. Amazon has many avenues for revenue growth, including consumer staples, international expansion, digital media offerings, private label, pharmacy and health care services, advertising, and a better shopping experience powered by generative AI. Amazon also represents an opportunity to invest in the secular growth of cloud computing through AWS—a large, fast-growing, and margin-accretive part of the business.

Spotify Technology S.A. (SPOT) is the world's leading music streaming service, with approximately 40% market share. The company monetizes through several tiers of subscriptions, advertising, and miscellaneous a la carte pricing. 
With over 268 million paying subscribers, Spotify has created a two-sided marketplace where creators can monetize their work and consumers can stream music. Longer term, we expect the company to grow to over 1 billion subscribers (from 678 million today) and improve margins materially through advertising, its artist promotions marketplace, audiobooks, and improved cost discipline. We expect Spotify to continually improve its value proposition through additional features like video, and monetize this value through more optimized pricing tiers like Super Premium.

Taiwan Semiconductor Manufacturing Company Limited (TSM), known as TSMC, is the world's largest independent semiconductor foundry, manufacturing chips on behalf of other companies.
TSMC is the dominant force in leading-edge semiconductor foundry manufacturing, as it benefits from economies of scale and a superior cost structure. Its successful track record of deploying new technology faster than competitors helps it maintain market share and pricing power. We believe TSMC’s investments in advanced nodes will strengthen its market leadership and support long-term profitability.

Microsoft Corporation (MSFT) is a software company traditionally known for its Windows and Office products. Over the last five years, the company has built a $160 billion-plus annual cloud business, including Office 365, CRM product Dynamics 365, and infrastructure-as-a-service product Azure.
Over the past decade, Microsoft has transformed itself, refocusing the business on cloud computing and AI. Microsoft's commercial cloud business now represents over 60% of revenue and is growing around 25% year over year. The company's moat is built on the wide reach of its sales channel, diverse platform of software offerings, hybrid cloud capabilities, and the high costs of switching away from its solutions, which tend to be mission critical for customers. We believe Microsoft will benefit from the growing adoption of cloud for years to come.

Tesla, Inc. (TSLA) manufactures electric vehicles, including a sedan, CUV, pickup truck, and semi-truck. The company is also ramping up internal battery cell production, energy solutions, robotics offerings such as full self-driving and humanoids, and renewable energy generation and storage solutions.
We expect Tesla will continue to grow its automotive business as it benefits from the secular adoption of electric vehicles, its vertical integration, technological innovation, and cost advantage. Tesla is also leveraging its core automotive technologies to address the rapidly growing energy storage segment. In addition, Tesla's software and AI expertise is broadening the industrial opportunity to large and profitable revenue avenues that were previously locked in the legacy vehicle architecture, such as autonomous driving, robotics, insurance, and other AI use cases.

The Trade Desk (TTD) is a software company that enables advertising agencies to purchase ads more efficiently and effectively. It provides the leading independent self-serve, demand-side platform enabling data-driven digital advertising.
The Trade Desk's visionary founder and CEO Jeff Green has built a unique culture of excellence and customer focus, in our view. As advertising becomes increasingly digital, automated, and biddable, we expect The Trade Desk to remain the key vendor to ad agencies engaged in such efforts, notably in the rapidly growing connected TV segment. We remain positive on The Trade Desk given its technology, scale, and estimated 10% share in the $100 billion programmatic advertising market, a small and growing subset of the $700 billion global advertising market.

Apple Inc. (AAPL) designs, manufactures, and markets consumer electronics, computer software, and online services. Its products include the iPhone, iPad, Mac personal computer, Apple smartwatch, Apple TV, and HomePod. It also offers advertising and app discovery services through its App Store. 
As the creator and owner of one of the largest and most popular consumer electronics platforms, Apple, in our view, is well positioned to benefit from the network effect that typically accrues to platform companies. It has a large and growing ecosystem, a trusted brand, and positive optionality through leveraging its large installed base to expand into additional consumer and enterprise services. We believe Apple trades at a discount to our estimate of its intrinsic value, with capital return and growth alleviating near-term trade and iPhone demand uncertainty.

Zscaler, Inc. (ZS) delivers cloud-based security, enabling secure, direct access to web and network resources from anywhere while reducing the need to backhaul traffic from branch offices to headquarters. A global network of 150-plus data centers ensures high availability, low latency, and zero trust.
We expect strong secular trends to drive continued demand for Zscaler’s cloud-native architecture. In addition to helping customers accelerate their cloud transitions and securely access cloud applications at the branch level, Zscaler’s innovation engine should continue to support strong dollar-based net retention in the 115% to 125% range, as customers expand usage and adopt new products. The COVID-19 pandemic marked an inflection point, as enterprises turned to Zscaler to leverage its cloud elasticity and rapidly deploy security capabilities that legacy solutions lacked.