Group 1 - Nvidia is currently experiencing a decline in stock performance despite strong financial results, with shares dropping over 2% in the last three months while the S&P 500 rose more than 3% [5][7] - The company's recent quarterly earnings showed record revenue of $57 billion, a 62% year-over-year increase, and net income of $31.9 billion, with guidance for Q4 revenue of $65 billion, indicating a 65% year-over-year increase [6][7] - Concerns regarding an "AI bubble" and competition from Alphabet's TPU processors are overshadowing Nvidia's impressive financial performance [7] Group 2 - Nvidia is the largest company in the world with a market cap of $4.5 trillion and has seen its stock rise 1,270% over the past five years [4] - The company's current price-to-earnings (P/E) ratio is 46, close to its five-year low of 32 and well below its five-year average of 76, suggesting it may be reasonably valued [9] - The forward P/E ratio stands at 39.6, indicating potential for growth if AI spending increases more than expected in the coming year [9]

Core Insights - The NZS Growth Equity strategy reported a gross return of +4.09% and a net return of +3.93% for Q3, underperforming the Morningstar Global Target Market Exposure Index which had a return of +7.60% during the same period [2][3][4] - Year-to-date, the strategy achieved a gross return of +20.18% and a net return of +19.60%, slightly outperforming the Index's +18.26% [2][3] Performance Review - The equity market rally from Q2 2025 continued into Q3, leading to positive returns for the strategy, although it lagged behind the index [4] - Key contributors to returns included Information Technology, Communication Services, and Industrials, with Alphabet (GOOG) benefiting from a favorable antitrust ruling and increased AI market appreciation [5] - Detractors included Financials, Health Care, and Consumer Discretionary, notably Constellation Software (CNSWF) due to CEO transition and Fiserv (FI) lowering growth outlook [6] Portfolio Positioning - The portfolio saw elevated name turnover, with additions like Workday and Gartner, while exiting positions in NVIDIA and several other stocks [8][9] - The strategy's resilient weight increased to ~59%, with a modest decline in IT overweight due to active decisions [9] Focus Position: SailPoint, Inc. (SAIL) - SailPoint is positioned in identity governance and administration, crucial for zero-trust security, especially with the rise of AI vulnerabilities [14][15] - The total addressable market (TAM) for identity governance is expanding significantly due to the increasing prevalence of machine identities in AI environments [18] - SailPoint's growth potential is supported by its recent monetization framework for non-human identities, with expectations for margin improvement [19]