Kim Bolton President and Portfolio Manager, Black Swan Dexteritas

Focus: Technology stocks

Top picks: Apple, Cisco Systems, Texas Instruments

MARKET OUTLOOK:

In May, June and the first half of July, global financial markets advanced, supported by progress in trade tariff negotiations, expectations of improved economic growth, and eased inflationary pressures. Investor sentiment was also influenced by heightened geopolitical tensions in the Middle East. Equities registered broad-based gains across both developed and emerging markets. Interest rates declined as inflationary pressures eased, and the U.S. dollar weakened against most major currencies. In commodities, oil surged to lead gains, while platinum, silver, and natural gas also gained.

The AI ecosystem has become a crowded trade and share with pricing reflects this enthusiasm. One segment of the AI ecosystem that still exhibits a lucrative runway is Edge AI. Artificial Intelligence is shifting from centralized data centers directly to the network’s edge, empowering devices and systems to process data locally. This evolution brings significant advantages, including real-time responsiveness, reduced latency, improved security, and enhanced privacy.

The theme highlights three critical layers: edge AI hardware and infrastructure, which focuses on specialized chips, sensors, and embedded computing optimized for local processing, edge AI software platforms and frameworks, encompassing lightweight AI models, middleware, and edge-specific development tools and industry-specific edge AI applications, where tailored edge AI solutions revolutionize sectors such as autonomous driving, healthcare, retail, manufacturing, and smart cities.

Collectively, these layers illustrate how edge AI is reshaping digital infrastructure and enabling smarter, faster, and more efficient decision-making across industries.

We will continue to trim those securities that are achieving their respective intrinsic values, and buy those technology growth stocks that exhibit longer, more lucrative investment runways.

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TOP PICKS:

Apple (AAPL NASD)

Apple Inc. designs, manufactures, and markets a wide range of consumer electronics, software, and services. Founded in 1976 and headquartered in Cupertino, Calif., Apple is known for its innovative technology and sleek product designs. The company caters to consumers, small and mid-sized businesses, and the education, enterprise, and government markets.

Cisco Systems (CSCO NASD)

Cisco provides infrastructure platforms, including networking technologies of switching, routing, wireless, and data center products that are designed to work together to deliver networking capabilities, and transport and/or store data. The company was founded in 1984 with operations in over 100 countries.

Texas Instruments (TXN NASD)

Texas Instruments Incorporated designs, manufactures, and sells semiconductors to electronics designers and manufacturers worldwide. It operates in two segments, analog, and embedded processing. Texas Instruments has the largest customer list in the semiconductor industry, whose chips go into everything from home appliances to missiles.

PAST PICKS: JULY 24, 2024

Oshkosh (OSK NYSE)

Then: US$107.88

Now: US$122.69

Return: 14%

Total Return: 16%

L3Harris Technologies (LHX NYSE)

Then: US$237.15

Now: US$262.71

Return: 11%

Total Return: 13%

SentinelOne (S NYSE)

Then: US$23.41

Now: US$17.58

Return: -25%

Total Return: -25%

Total Return Average: 1%