Generation Investment Management, an investment management firm, released its “Global Equity Strategy” second quarter 2023 investor letter. A copy of the same can be downloaded here. In the second quarter of 2023, portfolio revenues increased by 10% YoY. In a challenging environment, the median company in the portfolio had a modest operating income growth. This has increased already strong conviction in the portfolio. The companies are well-managed and of high quality. In addition, you can check the top 5 holdings of the fund to know its best picks in 2023.
Generation Investment Management highlighted stocks like Applied Materials, Inc. (NASDAQ:AMAT) in the second quarter 2023 investor letter. Headquartered in Santa Clara, California, Applied Materials, Inc. (NASDAQ:AMAT) provides material engineering solutions for semiconductors, display, and related industries. On September 6, 2023, Applied Materials, Inc. (NASDAQ:AMAT) stock closed at $153.18 per share. One-month return of Applied Materials, Inc. (NASDAQ:AMAT) was 5.52%, and its shares gained 66.61% of their value over the last 52 weeks. Applied Materials, Inc. (NASDAQ:AMAT) has a market capitalization of $128.14 billion.
Generation Investment Management made the following comment about Applied Materials, Inc. (NASDAQ:AMAT) in its Q2 2023 investor letter:
Applied Materials, Inc. (NASDAQ:AMAT): Semiconductor revenue has grown 6% per year since 2010, driven by increasing demand for smartphones, datacentres and electronic content in vehicles and industrial settings.4 Through work spanning six roadmaps covering many sub-themes within semiconductors (including industry consolidation, capital equipment and generative AI), we are confident that these trends will continue or even accelerate in the coming decades. The rise of generative AI in particular will require high-performing semiconductors, such as Nvidia’s GPUs, in datacentres.
Traditionally the industry relied on semiconductor manufacturers to deliver steady advances in semiconductor performance while reducing costs. This phenomenon is known as Moore’s Law, which was identified by Intel founder Gordon Moore. Traditionally, Moore’s Law relied on shrinking the light source used to expose photosensitive material on a silicon wafer to make smaller semiconductors, which in turn led to falling costs.
In recent years, however, Moore’s Law has slowed. Manufacturing has run up against the limits of physics. Making semiconductors smaller more cheaply has therefore become difficult. The latest generation of lithography machines that create this light source are marvels of modern science, but they are also expensive to produce, not to mention power-hungry. Delivering performance improvements in the most advanced semiconductors is now becoming costlier. This presents a risk, both to generative AI and a net zero world.
All is not lost, however. The semiconductor industry attracts some of the best minds in the world, many of whom are looking at alternative ways to continue to deliver more power-efficient and cheaper semiconductors. A key area of focus is around developing new materials used in manufacturing semiconductors, and new ways of applying (‘deposition’) and selectively removing (‘etch’) these materials to create the desired semiconductor. Applied Materials is one of the companies in the vanguard of these developments…” (Click here to read the full text)
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Applied Materials, Inc. (NASDAQ:AMAT) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 72 hedge fund portfolios held Applied Materials, Inc. (NASDAQ:AMAT) at the end of second quarter which was 84 in the previous quarter.
We discussed Applied Materials, Inc. (NASDAQ:AMAT) in another article and shared the list of biggest technology companies. In addition, please check out our hedge fund investor letters Q2 2023 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.
