Performance, Commentary & Portfolio

Fund Manager’s Review

Portfolio overview

Allianz Technology Trust’s Net Asset Value (NAV) total return was -0.99% in February, compared to the Dow Jones World Technology Index return of -0.78% in GBP

February was a turbulent month for global equity markets, with stocks advancing after the U.S. Supreme Court overturned the Trump administration’s emergency tariffs, while an evolving situation in the Middle East buffeted sentiment. There was a significant market rotation within technology which saw capital concentrate in artificial intelligence (AI)-driven hardware and semiconductors while software and cybersecurity equities faced a “proof-of-value” phase and valuation pressures. Communications equipment and technology hardware stocks advanced, while IT services, interactive media and services as well as software stocks declined.

Monthly relative performance was aided by an active overweight allocation in electronic equipment and positive stockpicking in semiconductors and communications equipment industries. This was offset by a below-benchmark weight in technology hardware as well as exposure to capital markets and short-term stockpicking in software.

Contributors

Our position in Lumentum Holdings Inc., a designer of optical and photonic components used in telecom networks and high-speed data centre interconnects, contributed meaningfully to results thanks to accelerating AI-driven data centre optics demand, strong earnings, and improved forward guidance tied to next-generation optical deployments.

An active overweight allocation to Taiwan Semiconductor Manufacturing Co. Ltd., the world’s largest pure-play semiconductor foundry, manufacturing advanced chips for leading AI, mobile, and high-performance computing customers, also favourably impacted results as the stock benefited from AI chip demand tailwinds and expectations of sustained growth.

Shares of KLA Corp., a provider of process control, inspection, and metrology tools that are essential for advanced semiconductor manufacturing and packaging, were higher following earnings that beat expectations and optimism around rising fab and advanced-packaging investment driven by AI workloads.

Our structural below-benchmark allocation to compute and networking semiconductor giant Nvidia Corp. aided performance as the company’s share price moved lower following earnings results, while an active overweight in hard-disk drives and enterprise storage solutions provider Western Digital Corp. contributed to results thanks to tightening hard‑disk drives (HDD) supply, improving margins, and stronger demand visibility tied to AI-driven data-storage growth. 

Detractors

Our below-benchmark weight in South Korean semiconductor and consumer conglomerate Samsung Electronics Co., Ltd. offset results as shares advanced as semiconductor and memory demand expectations improved alongside favourable macro trends, particularly from AI and data centre demand. The stock was added to the portfolio during the month as we felt it had an attractive risk versus reward profile for the portfolio.

Our structural underweight allocation to iPhone and personal computer giant Apple, Inc., given its double-digit benchmark weight, detracted from results as the stock advanced due in part to its lower risk profile, accelerated global iPhone demand and expectations of potentially improved AI-related applications.

An active position in retail brokerage and crypto trading platform Robinhood Markets, Inc. offset performance as the company’s share price was impacted by crypto currency price volatility, moderating trading volumes and lower-than-expected securities lending revenue. We made the decision to exit the stock during the month to invest in companies with better near-term catalysts.

Our avoidance of South Korean semiconductor and electronics components maker SK hynix, Inc., in favour of other companies within the industry, offset results given the stock’s double-digit advance and moderate benchmark weight, while an active overweight in infrastructure solutions provider Snowflake, Inc. detracted from performance given the overall headwinds in software.

New buys and sells 

Turnover in February was undertaken at a regular cadence and we performed trades to incrementally adjust the risk versus reward profile of the portfolio. We newly purchased shares of the aforementioned Samsung Electronics Co. Ltd., given the company’s diversified business model and durable demand drivers, as well as providing exposure to stocks outside of the United States. We also bought shares of Ciena Corp., a designer and supplier of optical networking systems and software that enable high-capacity fiber-optic communications for carriers and large enterprises, due to its attractive momentum as the “second wave” of AI investment. Similarly, we bought shares of infrastructure provider Akamai Technologies, Inc. due to its attractive underlying fundamental factors and increasingly bullish growth expectations related to security and cloud computing segments. These new buys were funded in part via the sale of the aforementioned Robinhood Markets Inc., as well as Coinbase Global Inc., as cryptocurrency prices pulled back, retail trading activity cooled after a strong prior run, and investors rotated out of high-beta fintech exposure amid rising volatility and profit-taking. We sold our stake in enterprise applications and infrastructure solutions giant Oracle Corp. due to valuation concerns, questions around the pace and profitability of its cloud infrastructure expansion, and headwinds in growth-oriented software companies. We fully exited our position in social networking platform Reddit Inc. due to lower conviction amid slowing user growth. We fully exited two other software names: infrastructure and solutions maker SailPoint Inc. and data analytics and open-source monitor solutions provider Elastic N.V. given our continued rotation out of software and into companies with better near-term visibility.

Market Outlook 

We continue to view the technology sector favourably, underpinned by durable structural growth drivers led by AI and the broadening adoption of AI across enterprise, consumer, and industrial applications. Capital continued to concentrate in AI infrastructure segments of the market, benefiting hardware and data centre components, while software, including cybersecurity, has entered a “proof of value” phase. We view this divergence as a timing and positioning dynamic, not a fundamental one, as cybersecurity remains a non-discretionary enterprise priority, although market sentiment is likely to remain muted in the near-term. As macro conditions stabilise, easing inflation and growing confidence in policy rate cuts should provide a more supportive backdrop for valuation and capital spending. Corporate fundamental factors remain solid, with many technology companies demonstrating resilient margins and strengthening forward guidance. While episodic volatility may persist, particularly around geopolitics and policy, we expect technology to remain a key driver of earnings growth. Looking ahead, we believe high-quality market leaders with scale, strong balance sheets, and proven execution are well positioned to outperform as AI-driven demand continues to compound across the sector.

Our focus remains on building the portfolio from a bottom-up perspective with a macro-overview. Technology remains a key enabler across almost every vertical industry and we will continue to seek stocks which solve difficult problems and can be long-term outperformers. Despite shortterm periods of higher volatility, earnings growth ultimately drives stock prices over the long term, and in our view, we are still early in the spending trend supporting this dynamic segment.

Mike Seidenberg
13 March 2026

This is no recommendation or solicitation to buy or sell any particular security. Any security mentioned above will not necessarily be comprised in the portfolio by the time this document is disclosed or at any other subsequent date.

Awards & Ratings

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