Beth Kindig is a technology analyst with over a decade of experience in the private markets. She’s the CEO of I/O fund, which helps individuals gain an edge investing in tech growth stocks, using the hands-on experience she has gained over the years working for and analysing tech companies involved in disruptive micro-trends.
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Beth Kindig isn’t one to be won over by a tech company’s sky-high valuation at its initial public offering (IPO). “The least accurate opinion is what a company opens for, because they're just hoping to get this sky-high price,” she told Opto Sessions in June 2021.
When it comes to the most disruptive trends in tech — and therefore the companies which are likely to truly command the highest valuations in the future — “optimal innovation is going to come from private markets”, Kindig says. And any big tech companies boasting those technologies will have to acquire the smaller ones that have developed those capabilities first.
Of trends she expects to gain traction over the next five to 10 years, she thinks “the one to zero in on is artificial intelligence (AI)”.
“Optimal innovation is going to come from private markets.”
She makes that recommendation with a caveat, though, suggesting that investors closely examine companies claiming to provide AI services. While many companies venture into AI, not all of them use it significantly enough for it to make an impact on their performance. For that reason, I/O Fund focuses on pure-play companies.
The AI opportunity in semiconductors
This emphasis has allowed I/O Fund to stay the course in difficult times. The firm remained faithful to Nvidia [NVDA] when crypto issues filled investors with doubt in 2018. The company’s focus on AI accelerator chips, hardware that accelerates machine learning and AI, led I/O Fund to believe it “was the best choice” for that technology.
The global chip shortage that has been plaguing markets since 2020 has been mischaracterised, according to Kindig. The world isn’t facing a chip supply shortage, she says, but a surge in demand that isn’t likely to let up soon. Every industry will eventually require more chips, just as they all became dependent on data storage and moved to the cloud. Given that likelihood, she wouldn’t be surprised to see semiconductors continue a “hot streak” into 2030.
Widespread potential of chips
“From a budget perspective, there is no reason every company won't eventually go into automation”, says Kindig, stressing the importance that companies are increasing placing on cost savings. One of the greatest appeals of AI is its ability to automate processes that have traditionally required intensive human effort. “You have automation that can run over the weekends, on holidays, never takes bathroom breaks [and] rarely makes mistakes.”
The potential for chips is wide ranging. She doesn’t think an intelligent robot will ever be able to perform surgery, but AI tools could provide immediate data to a human surgeon, enhancing their performance and decision-making in the moment. “It's more [a question of] how can we augment every single industry with more intelligence quicker [and] faster to have better outcomes.”
In the past 52 weeks, the SPDR S&P Semiconductors ETF [XSD] is down 27%. The ProShares Ultra Semiconductors ETF [USD] is down 65.9% over the same period. It holds Nvidia at 15.14%.
Through April of 2022, Kindig’s I/O beat top Wall Street funds over four audit periods, and had cumulative returns of 141%.
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