April 2022 Monthly update

The good news is that the technology continues to deliver strong results during the first quarter and that the market becomes more forgiving of weakness. The main focus on the market is still macro, even though the reporting season is now in full swing.

Elon Musk and the Twitter story continues, now according to the NY Post, Thomas Bravo can join him in the bid on Twitter. We have no Netflix shares, but the headlines that Netflix is starting to lose users have shaken the entire technology sector.

Our very optimistic view of Semicapital equipment names still stands out. According to KLA, the industry will grow by 20 % this year. But given that the heavy investments in volumes, with nodes 3 and 2nm coming, we see strong growth until at least 2025. However, will a slower economy hit the semiconductor volumes? Yes, but not investments because companies will invest long-term and will try to stay away from the "Intel trap".

Shares in social media bounce on the results, but the underlying trends are not good and we have further changes underway such as fingerprinting. We also believe that consumers have declined somewhat in spending given higher energy prices and the effects of higher interest rates during the second quarter. However, we have not seen any decline in companies' IT expenses. The company stated that they have not seen any signs of slower demand, not even in Europe. We continue to see a tough environment in 2022 and early 2023.

Gaming on all platforms has been weak during 1Q due to the fact that some major games like Activision Call of Duty have had a disappointing annual release. In March 2022, consumer spending on video, hardware, and video game accessories decreased by 15 % in the United States. Elden Ring has been a clear winner during the quarter, which clearly shows the demand for strong releases.

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