John Deere expects price realisation to be positive this year despite volumes falling year-on-year – rare in a cyclical industry. They have targets for 10 per cent of revenue to be recurring by 2030 which would be a big lift to the multiple because of the lower cyclicality and high-margin nature of software/data revenue. While we are conscious the industry is currently working through a downcycle, we see reasons to be constructive when the next agriculture cycle begins.
Utility, not novelty, will create AI winners
An important characteristic of the approach behind the Polar Capital Artificial Intelligence Fund is to invest in the applications and beneficiaries of AI across all sectors, not just AI-enabling companies themselves. This strategy sets us apart from peers which, we believe, could miss the opportunity for tremendous AI value creation beyond the technology sector.
The Fund’s ability to invest away from headline AI enablers and into sectors beyond the remit of technology-focused funds allows us to explore these opportunities for long-term AI value creation. Not only does this allow us to stay nimble, investing in the burgeoning industries AI has yet to create, but it also gives the strategy a broader global equity footprint – again providing a differentiating characteristic compared with more traditional technology funds.
By Xuesong Zhao, Lead Fund Manager of the Polar Capital Artificial Intelligence Fund
Discover more about the Polar Capital Artificial Intelligence Fund
- Leading the Tech Revolution to Feed & Build A Growing World | John Deere CES 2023 Keynote Address (youtube.com)
- Agricultural facts: Summary - GOV.UK (www.gov.uk)
- USDA ERS - Farming and Farm Income
- Brazil - Global yield gap atlas
- Farm Production Expenditures 2022 Summary 07/28/2023 (cornell.edu)
This is a marketing communication. For investment professionals only. For information purposes only. This material is not intended to provide advice of any kind. Issued by Polar Capital LLP and Polar Capital (Europe) SAS. Polar Capital LLP is authorised and regulated by the United Kingdom’s Financial Conduct Authority (“FCA”) and the United States’ Securities and Exchange Commission (“SEC”). Registered address: 16 Palace Street, London SW1E 5JD. Polar Capital (Europe) SAS is authorised and regulated by France’s Autorité des marchés financiers (AMF). Registered address: 18 Rue de Londres, Paris 75009, France. Some information contained herein has been obtained from third party source and has not been independently verified by Polar Capital. All opinions and estimates constitute the best judgement of Polar Capital as of the date hereof, but are subject to change without notice, and do not necessarily represent the views of Polar Capital, and may not be achieved.
