Portfolio Review: July 31, 2026
The Semiconductor Portfolio has experienced a volatile month, with the majority of holdings posting negative returns. The broader semiconductor complex is grappling with inventory digestion, softening consumer demand, and valuation recalibration, despite robust long-term secular drivers in AI, 5G, and electrification.
Performance Overview
As of July 31, 2026, the portfolio’s open positions show a mixed picture. Notable gainers include Soitec SA (+12.2%), Alchip Technologies (SIFY) (+4.5%), and Silicon Labs (+3.7%). Conversely, significant laggards include Camtek (-31.5%), Lasertec (-18.7%), and indie Semiconductor (-15.7%). The dispersion underscores the importance of stock selection within the theme.
Key Drivers and Risks
The primary driver of recent weakness is the cyclical downturn in memory and consumer electronics, which has pressured equipment and specialty chip names. However, AI infrastructure spending remains robust, benefiting companies like NVIDIA and Credo Technology. Risks include geopolitical tensions affecting supply chains, potential export controls, and the pace of recovery in end-markets.
Portfolio Actions
We have decided to close two positions due to thesis breaks and deteriorating fundamentals:
- Lasertec (LSRCY): Despite its leading position in EUV inspection, the company faces slowing order momentum and increased competition. The -18.7% return and weakening outlook do not justify continued holding.
- indie Semiconductor (INDI): The automotive semiconductor market is under pressure, and indie’s lack of differentiation and margin challenges have led to a -15.7% return. We see better opportunities elsewhere.
These closures are not based on short-term price movements but on a reassessment of their long-term growth prospects and fit within the portfolio.
What to Watch
Investors should monitor upcoming earnings reports from key holdings, particularly NVIDIA and KLA, for guidance on AI demand and capital equipment spending. Also, watch for any policy changes regarding semiconductor export controls and the trajectory of global manufacturing PMIs.
Risk Disclaimer: This article is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future results. Investing in securities involves risk, including the potential loss of principal. Always conduct your own research or consult a financial advisor before making investment decisions.