WS Amati Global Innovation Fund on MKS Inc.
Thesis
MKS was caught in the broader sell-off linked to concerns about the sustainability of AI capital expenditure. The fund believes that weakness was indiscriminate. Demand for the company's semiconductor and electronics equipment systems remains high. More than half of gross profit comes from recurring business, which the fund believes reduces the company's cyclical risk, and it added to the position.
“MKS’s semiconductor and electronics equipment systems are in high demand and its recurring business contributes more than half of its gross profits”
Key risks
- Investor concern that the AI capital-expenditure cycle is unsustainable
- Cyclical risk in semiconductor and electronics equipment demand