Liontrust Global Technology Fund

The Liontrust Global Technology Fund continues to invest in global leaders and disruptors within the technology sector that are well positioned to benefit from the new AI-driven technology cycle.

•  March Top contributors: Apple (underweight), CoreWeave, Credo Detractors: Doximity, Pinduoduo, Onto Innovation
• A more constructive market backdrop is shifting focus back to company fundamentals
• Continue to remain active to capture dislocation opportunities

Performance overview

The Liontrust Global Technology Fund returned 13.3% in May, placing it in the 1^st quartile of peers ahead of the IA Technology & Telecommunications sector average return of 8.9% and the MSCI World IT Index return of 9.4% (both comparator benchmarks).

Longer term performance remains strong, the Fund having returned 63.5% since manager inception (08.02.2023), in the 1st quartile of peers ahead of both the IA Technology & Telecommunications sector average return of 42.5% and the MSCI World IT Index return of 58.4%.

Fund commentary

Following months of extreme volatility, May proved much more positive for equities. Key was a de-escalation in trade tensions between the US and China, with Washington and Beijing agreeing to slash reciprocal tariff rates – from 145% to 30% and 125% to 10% for the US and China respectively for 90 days as talks continue. While talks are ongoing and trade relations remain dynamic, this removed – or at least significantly reduced – the single-biggest macro overhang.

This improved macro sentiment allowed investor focus to shift back to company fundamentals, with markets rallying throughout the month as companies continued to report throughout the Q1 earnings season. Indeed, the MSCI world index rose nearly 6% (in dollar terms) in May, finishing the month up over 4% year-to-date - a swift recovery given the index was down 12% year-to-date in early April.

During sharp market sell‐offs or resets, the best‐performing stocks from the preceding period often suffer the steepest declines – a phenomenon we witnessed in recent months, with a number of innovative global leaders selling down sharply in March and April. However, as we have discussed in the past, the reason for these companies’ outperformance was because their fundamentals continued to run ahead of their share prices. This continues to be the case, now to an even wider degree as evidenced by persistently strong earnings updates. As such, we have remained highly active in the portfolio over the past few months, initiating or adding to positions in companies hardest hit to take advantage of this dislocation opportunity.

This approach was validated in May. With broader market sentiment improving, these same companies have been among the first to see their share prices recover, driving strong performance across the fund. For example, shares in Credo – a top contributor to fund performance for the month – finished May up 41%, having recovered over 80% from it’s early-April low. Similarly Tesla, a position we have been particularly active in managing in recent months and another top contributor to fund performance in May, saw its shares rally 22% by month-end, up c56% from its early-April low.

While uncertainties remain over the ultimate path of trade policies, tariff-related inflation, and long-term treasury yields, we remain confident in the earnings power of our global innovators going forward – supported by secular growth dynamics, expanding moats, and improving fundamentals.

Strong fundamentals

With Q1 earnings season well underway, evidence of improving fundamentals was on full display throughout May.

For example, our recently initiated position in CoreWeave – a top contributor to fund performance in the month – continues to demonstrate exceptional growth. CoreWeave is a next-gen cloud provider purpose-built for generative AI, delivering high-performance, GPU-accelerated infrastructure that meets the growing demand for specialised compute. Unlike legacy cloud vendors, CoreWeave has architected its platform from the ground up for AI workloads – offering low-latency, elastic compute capacity at a lower cost. The company originally pivoted from crypto mining and moved early to secure access to cutting-edge GPUs, establishing a deep relationship with Nvidia and emerging as a preferred partner for emerging AI leaders including OpenAI and Mistral. As evidenced in its inaugural earnings update post-IPO, this strategy is clearly working: Q1 revenues of $982 million grew a whopping 420% year-on-year, while adjusted operating income of $163 million grew by 550% – well ahead of consensus. Forward prospects remain strong as demand for inference and fine-tuning workloads accelerates, CoreWeave securing multiple new enterprise and hyperscaler clients while growing its revenue backlog to $25.9 billion (up 63% year-on-year) driven by major long-term contracts including a five-year, $11.9 billion deal with OpenAI. The company also completed the acquisition of developer platform Weights & Biases, adding 1,400 top AI labs and enterprises to its client base. Management is investing aggressively to serve this ramping demand, with $20+ billion of CAPEX guided for the full year to expand its footprint. The first company to deploy Nvidia GB200 Grace Blackwell systems at scale for leading AI developers, CoreWeave continues to capitalise on its deep relationships, first-mover advantage in AI-dedicated infrastructure, differentiated architecture, and highly flexible deployment model to take share from incumbents as AI demand ramps. With full year revenues guided to $5 billion, management expect operating leverage to emerge as they scale, adjusted operating margins forecast to reach 27-28% by 2027 – up from c.17% today. Given an accelerating topline underpinned by AI scaling laws, strong competitive positioning, and margins expanding, CoreWeave appears incredibly well positioned for ramping earnings growth ahead. Nonetheless, in line with our valuation discipline and capitalising on recent strength, we have been tactically trimming our position to maintain our target weight.

Elsewhere, Klaviyo delivered another strong quarter, with Q1 revenues up 33% year-on-year while management raised full-year guidance despite macro headwinds. The marketing automation platform continues to demonstrate the power of being architected from the ground up for the AI era – unlike most enterprise software companies, Klaviyo was built first as a data layer, with its application and messaging infrastructure stacked on top. This vertical integration means the company owns and can act on customer data in real-time, creating a powerful foundation for AI-driven marketing automation. The platform's unique architecture positions it squarely on the right side of AI where data becomes the primary asset. A further advantage lies in Klaviyo’s integration capabilities - now boasting over 400 integrations, Klaviyo has expanded its partner ecosystem to include Meta and TikTok, allowing brands to convert walled-garden reach into valuable first-party data. Klaviyo integrates better with Salesforce Commerce Cloud than Salesforce itself – highlighting the company's focus on data portability that's essential for successful AI deployment. This operational excellence translates directly into customer value creation. Direct-to-consumer brand Cara Cara consolidated its tech stack onto Klaviyo's platform and achieved 170x ROI in just three months. Such compelling returns explain why customers have stated that Klaviyo would be among the last software offerings they'd switch off during budget cuts – demonstrating true customer stickiness. With accelerating platform momentum and AI-native architecture driving exceptional customer ROI, Klaviyo is emerging alongside Shopify as essential infrastructure underpinning the future of e-commerce.

Klaviyo’s platform flywheel and integration capabilities support rapid innovation and growth

Source: Klaviyo (2025)

Palantir also delivered an exceptional quarter that underscored the company's positioning at the forefront of enterprise AI deployment. Revenue accelerated to 39% year-on-year with US Commercial surging 71%, while operating margins expanded to an impressive 44% and free cash flow reached 42% of revenues. Management raised both revenue and operating income guidance for 2025, reflecting confidence in the accelerating demand for AI-powered solutions. The company's AIP platform is proving that AI productivity gains are both real and enormous, with clients achieving transformational results at scale: Walgreens rolled out AIP workflows across 4k stores, automating 384 billion daily decisions through plug-and-play AI-powered end-to-end processes; insurance giant AIG expects to double its five-year growth rate by leveraging Palantir's platform, with management noting that traditional underwriting methods – even with unlimited time – cannot match the data processing efficiency and insights delivered through Palantir's ontology-anchored system. The company’s demand runway remains long, with total remaining deal value up 45% and marquee wins including NATO's adoption of the Maven Smart System demonstrating Palantir's expanding reach across both commercial and government sectors. Having moved first in enterprise AI deployment, Palantir is now enabling organizations to deploy AI at scale while building competitive moats that compound over time. The company's unique combination of hyper-growth, strong cash generation, and differentiated data infrastructure built over 20 years justifies sets the company up well for elevated growth ahead, while justifying a premium to traditional software peers.

Meanwhile, Arm’s early-May results confirmed the Cambridge-based architect of modern computing is becoming the default choice for AI workloads. We re-established our position after the Q3 2024 selloff below $100 per share, and recent performance validates this timing. Arm now powers up to half of the new hyperscale AI server chips expected this year, thanks to the Arm v9 core which delivers approximately 65% better price-performance than current-generation x86 alternatives. Royalty growth is proving broad-based across strong structural growth markets including data-centre, automotive, smartphone and internet-of-things, underpinned by partners' demand for custom, energy-efficient silicon. Smartphone royalties jumped 30% year-on-year on only 2% unit growth, demonstrating that value per device is rising rapidly as AI capabilities expand. At the edge, Arm's dominance is equally entrenched with more than 22 million developers now building on the platform and its Kleidi AI software stack surpassing eight billion cumulative installs. The cloud opportunity is equally compelling, with Arm joining Microsoft, Nvidia, Oracle and OpenAI in January's $500 billion Stargate project, cementing its role at the heart of large-scale AI training and inference. Data-centre chips that shipped with eight cores in 2016 now feature almost two hundred cores, with Arm's share of that complexity – and therefore its royalty pool – expanding with every design win. The combination of lighter language models, AI agents and stricter power budgets is tilting every original equipment manufacturer towards Arm's highly efficient cores. With three key growth vectors driving upside – more complexity per chip, more chips shipped, and more Arm per device as AI proliferates – the company sits at the centre of a multi-year runway for outsized royalty and licensing growth as semiconductor revenues are forecast to grow at an 8% CAGR

We remain active

During periods of macro-driven volatility, we strategically increase our positions in the hardest-hit investments across the fund. Accordingly, over the past couple of months we have been highly active in raising our positions in companies across various sectors where upside opportunity has best emerged. While markets generally improved since April, we have continued to see pockets of opportunity to top up positions where share prices dislocated from underlying fundamentals.

In May this included Doximity – the LinkedIn for healthcare professionals, operating the largest professional network and telehealth platform for healthcare professionals in the US, with over 80% of US doctors and 50% of nurse practitioners and physician assistants as verified members. Its platform provides digital tools for clinicians including secure HIPAA-compliant messaging, telehealth, electronic faxing, scheduling, and AI-powered workflow solutions; the company monetises this by leveraging its vast data and AI capabilities to offer highly targeted pharmaceutical advertising and medical hiring solutions, as well as subscription-based services for certain digital tools. The company continues to demonstrate strong underlying business momentum, evident in a robust Q4 earnings update mid-May. The company saw record engagement, 17% revenue growth, and EPS of $0.38 – up over 50% year-on-year, beating expectations by over 40%. However, a marginally soft FY26 guide saw shares fall post-update, leading the stock to be a key detractor to fund performance for the month. Management appear to be taking a conservative approach, however, factoring in a macro-related spend growth deceleration despite seeing no impact in their business today. With sticky network effects, c90% gross margins, and a highly scalable platform the company remains well positioned to generate strong cash flows and earnings growth as it scales in the coming years. As such, we opted to top up our position throughout the month

We also continued to establish new positions in companies that have long been on our watchlist, and which we have been patiently awaiting suitable market dislocation to initiate positions. In May this included building new positions in FICO, Intuit, and Cloudflare.

We added a position in FICO mid-month after shares fell by over 30% post-earnings – their lowest point in two years, providing an attractive entry point in this high-quality global innovator which has compounded earnings at an above-20% annualised rate over the past decade. Best known for its crown-jewel FICO Score – the industry-standard measure of consumer credit risk in the USA – FICO is a global leading data analytics company, developing software and tools that help organisations across sectors to make better decisions, manage risk, fight fraud, optimise operations, and comply with regulations. Its solutions leverage big data, AI/ML, and cloud computing, and extend across a range of sectors including financial services, insurance, healthcare, retail, and more. The company’s May update appeared strong, beating consensus expectations as revenue grew 15%, operating margins expanded 5%, and EPS grew 27% year-on-year. However, shares sold off due to the combination of muted software growth, acknowledged macroeconomic uncertainty (which could delay deal closures and slow usage-based revenue), and regulatory scrutiny over the company’s dominant 90% B2B credit scoring market share which may slow pricing growth. Whilst this creates a degree of overhang, the company’s recent FICO World event showcased continued strong innovation in the software space, with a number of new products with strong commercial potential as the company increasingly commercialises its considerable internal AI knowledge base. With management reiterating full-year guide for 15% revenue and 20% EPS growth and launching a $1 billion buyback program, we remain confident in FICO’s durable competitive advantages and long-term growth trajectory. 

We also opted to re-initiate a position in Intuit – the global leader in consumer and small-business financial software – ahead of a strong late-May beat-and-raise earnings update. Revenues rose 15% and EPS 18% year-on-year in Q1, driven by a particularly strong Consumer Group division where TurboTax Live saw a breakthrough 24% increase in customer adoption. With data from 100 million customers across its platform, Intuit is reaping the benefits of years of investment in AI and data management which it is using to improve internal operating efficiency (lifting expert filing productivity double digit %s) while improving offerings for customers (tax filing times significantly reduced). This is benefiting the firm in a multitude of ways, such as freeing up advisor time to focus on customer onboarding, improving cross-selling opportunities, and reducing customer churn – lowering customer acquisition costs and improving cohort economics as management shifts focus to disrupting the advisor market. AI is also improving targeting, with Credit Karma revenues surging 31% year-on-year thanks to stronger credit-card and loan matching driven by the company’s AI-driven “Lightbox” engine. Elsewhere, the group’s global business solutions division continues to strengthen through accelerating product innovation– the company has seen an 8-fold increase in development velocity since 2020 – which is facilitating mid-market share gains as products such as such QuickBooks Online Advanced and Intuit Enterprise Suite resonate with customers (revenues up 40% year-on-year). As the company prepares to launch new AI agents for customer service, payments, project-management, and finance & accounting in the coming weeks, management is confident that Intuit remains well-placed to win in the era of AI-defined software which is driving enterprise software consolidation. This confidence is reflected in a raised full-year guide, management now expecting revenue growth of 15% and adjust EPS growth of 19%.

We also initiated a position in Cloudflare, a global cloud platform that operates a single, software-defined network spanning over 330 cities worldwide, placing 95% of the internet-connected population within 50 milliseconds of its edge. This massive network infrastructure allows Cloudflare to deliver a comprehensive suite of services including web security, performance optimization, cybersecurity solutions, and its Workers serverless developer platform to millions of websites, processing and blocking c247 billion cyber threats daily. This network scale is translating into financial momentum: in Q1 Cloudflare posted its 14^th straight quarter of accelerating revenue growth, with sales up 27% year-on-year to $479 million. Profitability continues to improve as the company scales, free cash flow growing 49% year-on-year. Enterprise traction remains strong: customers spending more than $100k annually grew 23% year-on-year (now 69% of group revenue), helped by the largest deal in Cloudflare’s history – a multi-year, >$100 million Workers contract, its longest-term SASE agreement to date. Net retention held steady at 111%, and management guided to 25% revenue growth and a 13% non-GAAP operating margin for FY25. With scale-driven cost advantages, a sticky land-and-expand model, and a rapid product cadence that is pushing the platform deeper into AI, edge computing, and secure connectivity, Cloudflare’s unified architecture gives it a durable competitive edge and positions the company well to capitalise on the ongoing digital transformation and growing enterprise demand for secure, high-performance internet infrastructure that can support next-generation applications and AI workloads, leaving management confident in delivering sustained double-digit revenue and earnings growth ahead.

To finance these purchases, we reduced a number holdings of which have performed well, and exited certain companies whose upside potential is no longer sufficient. In May this included trimming our Chinese holdings Tencent and Alibaba – both of which had very strong runs year-to-date. We also opted to exit our position in Onto Innovation and Ultra Clean Holdings as we saw better opportunities emerge on our watchlist. These companies move back to the watchlist where we will continue to monitor them for potential attractive entry points in the future.

Innovators remain well positioned for a new cycle

While macro volatility and tariff uncertainty ultimately weighed on shares of companies across a range of different sub-sectors – including the likes of Meituan, Micron, and Nvidia (key fund detractors for the month) – the evidence we have seen so far this earnings season has reinforced our confidence in the outlook for innovators across the industry spectrum. These companies remain well‐positioned to benefit from the significant opportunities ahead. As sentiment, rather than fundamentals, has primarily driven the recent sell‐off, it has created an attractive entry point for those seeking to establish or expand positions, underscoring the importance of active management and valuation discipline during periods of volatility.

During such protracted periods of uncertainty it is critical to remain focused on the business fundamentals which underpin longer-term growth potential. We look to the ongoing earnings season and further research trips month ahead where we expect to see further evidence of innovative companies proving their resilience and adaptability, strengthening their competitive positioning against a difficult market backdrop. As always we will continue to maintain our valuation discipline, taking advantage of further market dislocations to invest in innovative companies at attractive prices.

Discrete years' performance (%) to previous quarter-end:

*Source: FE Analytics, as at 31.03.25, primary share class, total return, net of fees and income reinvested. Fund inception 15.12.15; current fund managers’ inception date is 08.02.23.

Key Risks

Past performance does not predict future returns. You may get back less than you originally invested.

We recommend this fund is held long term (minimum period of 5 years). We recommend that you hold this fund as part of a diversified portfolio of investments

■ Overseas investments may carry a higher currency risk. They are valued by reference to their local currency which may move up or down when compared to the currency of the Fund.
■ This Fund may have a concentrated portfolio, i.e. hold a limited number of investments. If one of these investments falls in value this can have a greater impact on the Fund's value than if it held a larger number of investments.
■ The Fund may encounter liquidity constraints from time to time. The spread between the price you buy and sell shares will reflect the less liquid nature of the underlying holdings.
■ Outside of normal conditions, the Fund may hold higher levels of cash which may be deposited with several credit counterparties
(e.g. International banks). A credit risk arises should one or more of these counterparties be unable to return the deposited cash.
■ Counterparty Risk: any derivative contract, including FX hedging, may be at risk if the counterparty fails. 

The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term.

Disclaimer

This material is issued by Liontrust Investment Partners LLP (2 Savoy Court, London WC2R 0EZ), authorised and regulated in the UK by the Financial Conduct Authority (FRN 518552) to undertake regulated investment business.

It should not be construed as advice for investment in any product or security mentioned, an offer to buy or sell units/shares of Funds mentioned, or a solicitation to purchase securities in any company or investment product. Examples of stocks are provided for general information only to demonstrate our investment philosophy. The investment being promoted is for units in a fund, not directly in the underlying assets.

This information and analysis is believed to be accurate at the time of publication, but is subject to change without notice. Whilst care has been taken in compiling the content, no representation or warranty is given, whether express or implied, by Liontrust as to its accuracy or completeness, including for external sources (which may have been used) which have not been verified.

This is a marketing communication. Before making an investment, you should read the relevant Prospectus and the Key Investor Information Document (KIID) and/or PRIIP/KID, which provide full product details including investment charges and risks. These documents can be obtained, free of charge, from www.liontrust.co.uk or direct from Liontrust. If you are not a professional investor please consult a regulated financial adviser regarding the suitability of such an investment for you and your personal circumstances.