Our simple classification system for disruptive technology stocks uses three labels. Either we’re holding a stock (holding), we’d consider holding a stock (liking), or we wouldn’t consider holding it (avoiding). When it comes to basic financials, one metric cannot be absent – revenue growth. Revenues are a proxy for disruption. If your revenues aren’t growing, you’re not disrupting anything.
So when there’s a $35 billion SaaS company with strong double-digit revenue growth and 70% gross margins, why would we possibly be avoiding it?
That’s a really good question, and we’re going to answer that today.
The Thesis in a Nutshell
Back in 2022, we published a piece titled Investing in the Explosive Growth of Unstructured Data that’s largely still relevant today. The introduction alone is worth a read as the author expressed concern that the media was entirely ignoring AlphaFold’s incredible accomplishments. To quote:
It’s great Rihanna looks “