Baron Technology ETF

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 and the adoption of enterprise AI through AWS—a large, fast-growing, and margin-accretive part of the business. 

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. The company's 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.

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.

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.

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 276 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 696 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.

Lumentum Holdings Inc.

Coherent Corp. (COHR) develops, manufactures, and markets advanced materials, lasers, and optical systems designed to generate, modulate, amplify, direct, and detect photons, the fundamental particles of light.
Coherent is positioned to benefit from secular communications tailwinds driven by AI data center buildouts, growing data center interconnect demand, increasing optical penetration within server racks, advances in optical switching, and the migration of traditional telecom networks to pluggable transceivers. In addition to these structural drivers, the company’s operational initiatives, including margin expansion, debt reduction, and diversification of its global supply chain, continue to support its improving financial profile.

Lam Research Corporation (LRCX) is a leading global supplier of wafer fabrication equipment and services to the semiconductor industry. Lam's products and services support leading memory, foundry, and integrated device manufacturer customers making products such as NAND, DRAM, and logic devices.
Lam is the market leader in plasma etch, thin-film deposition (metal and dielectric) platforms, photoresist strip systems, and single wafer wet/plasma-based cleaning products. While capital equipment spend should increase over time as the semiconductor industry grows, Lam's growth should outpace the market average, as its processes enable more complex manufacturing for logic node transitions and new transistor structures, DRAM node scaling, and 3D NAND increasing layer counts.

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