‘Nvidia is the Hermès' of the chip industry, says Baillie Gifford, while doubling down on TSMC and ASML

Baillie Gifford partner Mark Urquhart reiterated the firm’s long-term, high-conviction approach (average holding 8–10 years), highlighting core positions in Nvidia, TSMC and ASML alongside consumer/luxury names such as Moncler, Moutai and Netflix. He praised Nvidia’s management and track record — noting revenues have doubled year-over-year for the past three years — and said the company is focused on multi‑year horizons (2030–2035) even as investors watch upcoming Q3 results; he warned of rising Asian competition (citing the “DeepSeek” moment) but expects a middle‑ground compromise over China access. Urquhart called TSMC and ASML effectively irreplaceable incumbents given their execution and scientific moats at the top of the lithography/supply chain, and said select luxury and streaming brands retain durable, hard‑to‑replicate franchise value.

Analysis

Mark Urquhart of Baillie Gifford reiterated the firm's long-term, high-conviction approach—average holding 8–10 years—and confirmed Nvidia as one of its largest, decade-old positions. He highlighted management quality under Jensen Huang and cited Nvidia's exceptional growth, noting the company "has now, in the last three years, doubled revenues every year," while the team focuses on 2030–2035 horizons rather than the upcoming Q3 print.

Urquhart flagged rising Asian competition, referencing the "DeepSeek" episode where Chinese model-makers claimed AI on lower-spec chips, and described the US–China chip rivalry as a source of uncertainty while expecting a negotiated compromise on China access. Provided market signals show a moderately positive tone (sentiment_score 0.45) with strong per-ticker sentiment for NVDA (0.8) and a modest market impact score (0.3), implying bullish conviction tempered by geopolitical risk.

The firm also identifies TSMC and ASML as structurally advantaged supply-chain winners—TSMC for execution (engineers moved to its Arizona fab) and ASML for lithography leadership—and pairs these with durable-consumer franchises such as Moncler, Moutai and Netflix. This combination reflects a concentrated, multi-year allocation to companies with management teams that "think in decades," privileging durable moats over short-term earnings noise.

Key Decisions for Investors

• Maintain or consider modestly adding to NVDA for investors with multi-year horizons given the firm’s conviction and the company’s cited three-year revenue doubling, while using size discipline because of recent sector volatility and the upcoming Q3 report
• Increase long-duration exposure to TSMC and ASML as structural supply-chain plays given their described irreplaceable positions and execution advantages
• Monitor China access developments and DeepSeek competitive progress closely as potential downside catalysts and use position hedges or caps if regulatory or access risks escalate
• Consider selective exposure to luxury/consumer franchises like Moncler, Moutai and Netflix for portfolio diversification into durable brand moats, but keep these allocations smaller relative to core semiconductor holdings