Kim Bolton, President and Portfolio Manager, Black Swan Dexteritas
Focus: Technology stocks
Top picks: Spotify, Roblox, Adobe
MARKET OUTLOOK:
In May 2025 and the first half of June, global financial markets posted strong gains, continuing the momentum from the second half of April. This rally was driven by progress and further developments in trade and tariff negotiations, which supported strong equity market performance. Technology led equity market gains on strong earnings and an overall improvement in risk sentiment. Robust consumer spending, resilient labour data, and disinflation trends supported the rally, while recession odds dropped sharply. The U.S. Federal Reserve is expected to hold rates steady through the summer, even as stock market earnings forecasts are being revised lower. Your BSD team has purchased some downside protection in the form of additional Nasdaq put options in case the Israel-Iran conflict escalates.
Our BSD Global Tech Hedge Fund currently has a four per cent cash position, and a stock portfolio that is 96 per cent invested across a couple dozen tech vendors and tech end users, together with a 30 per cent short equity induce hedge on the notional value of the invested stock portfolio that will incrementally grow (from the laddered Nasdaq put options strategy), if the stock market deteriorates.
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:
Spotify (SPOT NYSE)
The company was founded in April 2006 in Stockholm by Daniel Ek and Martin Lorentzon with headquarters in Luxembourg, operational offices in Stockholm and offices across 15+ countries. The user base includes 678 million monthly active users with 268 million Premium subscribers. Its streaming service offers over 100 million tracks, more than seven million podcast titles and audiobooks. It offers a free ad supported tier with limited features, and paid subscriptions for individuals, duos, families and students. It is investing in exclusive content such as uninterrupted video podcasts on premium. It has features like discover weekly, release radar, and “Wrapped” campaigns. The Market Reach is of 180 markets globally, with particularly strong presence in Europe and the Americas. It is the leading streaming app in U.S. and U.K., with 38 per cent in U.S. and 56 per cent U.K. as per a survey preference, ahead of YouTube and Apple Music. Highlights include the strongest first quarter subscriber growth since 2020. It has a record operating income and improved gross margins driven by pricing, cost controls, and reduced high-cost podcast deals. Ad supported revenue grew despite macroeconomic headwinds. It is continuing investment in podcasts and creator payouts.
Roblox (RBLX NYSE)
Roblox Corporation develops and operates an online entertainment platform. Roblox allows players to create their own games using its proprietary engine, Roblox Studio, which can then be played by other users. Revenue from purchases is split between the developer and the Roblox Corporation 30 to 70, in favour of Roblox Corp. The majority of games produced using Roblox Studio are developed by children, and a total of 20 million games a year are produced using it. It offers Roblox Client, an application that allows users to explore 3D digital worlds and Roblox Studio, a toolset that allows developers and creators to build, publish, and operate 3D experiences and other content.
The company also provides Roblox Cloud, a solution that offers services and infrastructure to power the human co-experience platform. Products include Roblox Corporation that offers a suite of tools and platforms designed to facilitate the creation and exploration of immersive 3D experiences. Key products include Roblox Studio, a free toolset for developers to build and publish 3D content.
Roblox Client, an application that allows users to explore these experiences and Roblox Cloud, which provides the necessary infrastructure and services to support the platform.
Roblox operates globally, with a strong presence in North America, Europe, and Asia-Pacific. The platform is particularly popular among audiences under the age of 18, driven by its community of developers and users who create and engage with the diverse content available on the platform.
Adobe (ADBE NASD)
Adobe is a one-stop shop for product design, content creation, marketing, and web/mobile commerce. Their individual offerings have competition from companies like Apple, however Adobe’s competitive advantage comes from their full-service suite, Adobe Creative Cloud, which includes all of Adobe’s creative apps plus extra services. Creative cloud has been downloaded over 449 million times, has 25 million active users, and 90 per cent of the world’s creative professionals use photoshop.
Adobe’s latest solutions enable brands to drive greater performance and meet business goals for customer engagement. New offerings across Adobe Experience Cloud will enable teams to personalize, test and measure AI-generated content. With Adobe Content Analytics, actionable insights will pinpoint specific content attributes that resonate most with target audiences, informing what teams create in the future. In Adobe Experience Manager, real-time experimentation capabilities on the web, a digital front door for many brands will direct visitors towards AI-generated variants that are driving the best conversion. With Adobe Journey Optimizer, brands can now instantly generate multiple variations of marketing content based on performance goals to automate testing and optimization.
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| SPOT NYSE | Y | Y | Y |
| RBLX NYSE | Y | Y | Y |
| ADBE NASD | Y | Y | Y |
PAST PICKS: JUNE 19, 2024
Infineon Technologies (IFNNY ADR)
Then: US$38.78
Now: US$39.23
Return: 1.16%
Total Return: 2%
Microchip Technology (MCHP NASD)
Then: US$93.45
Now: US$68.76
Return: -26%
Total Return: -24%
ON Semiconductor (ON NASD)
Then: US$70.73
Now: US$52.92
Return: -25%
Total Return: -25%
Total Return Average: -16%
| DISCLOSURE | PERSONAL | FAMILY | PORTFOLIO/FUND |
|---|---|---|---|
| IFNNY ADR | Y | Y | Y |
| MCHP NASD | N | N | N |
| ON NASD | N | N | N |
