Company: BSTZ
Filing Date: 2025-03-07
Form Type: N-CSR
Source: 0001193125-25-049659
Chunk: 35

Company: BlackRock Science & Technology Term Trust
Filing Date: 2025-03-07
Form: N-CSR
Chunk 35
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 competitors in the AI data center market. An underweight position in Microsoft Corp., which came under pressure due to questions about the pace and scale of the firm’s capital expenditures on generative AI, was an additional contributor. At the sector level, security selection in the software sub-sector and an out-of-benchmark allocation to the internet sub-sector were the largest detractors from relative performance. An out-of-benchmark position in the private data processing company Voltron Data, whose valuation declined at a time of underperformance for comparable publicly traded companies, was the largest individual detractor. An underweight in the semiconductor giant NVIDIA Corp., one of the top performing stocks in the global markets during 2024, was an additional detractor. The shares rose due to a series of earnings beats and expectations that the company will be a top beneficiary of the growth in AI. An overweight position in MongoDB, Inc. was an additional detractor of note. The infrastructure software company reported weak earnings and lowered its guidance due to a lack of momentum in enterprise IT spending. The Trust used an options overlay strategy in which calls were written on a portion of the portfolio’s holdings. The Trust’s options overlay strategy detracted from relative performance. The Trust’s practice of maintaining a speciﬁed level of monthly distributions to shareholders did not have a material impact on the Trust’s investment strategy. The distribution policy resulted in return of capital for the period. Refer to the financial highlights and income tax information sections in this report for further information about the distributions. Describe recent portfolio activity. The Trust rotated its position in the semiconductors sub-sector throughout the course of the year. It added to companies that stood to benefit from increased AI-related capital expenditures, and it reduced holdings in those vulnerable to weakness in their end markets, including autos. The Trust also added to the software sub-sector to position the portfolio for a broadening of the AI rally beyond companies benefiting from demand from AI data centers. It trimmed select holdings in the internet sector, as advertising demand remained muted. From a regional perspective, the Trust further reduced its allocation to China based on caution about the pace of the country’s economic recovery. The Trust added to Japanese stocks where it identified both attractive fundamentals and near-term catalysts. The Trust also added two new investments in private technology companies. Describe portfolio positioning at period end. The Trust held 33% of net asset value in semiconductors, 29% in software, 15% in hardware, 14% in internet, 6% in services,