Company: BSTZ
Filing Date: 2025-03-07
Form Type: N-CSR
Source: 0001193125-25-049659
Chunk: 13

Company: BlackRock Science & Technology Term Trust
Filing Date: 2025-03-07
Form: N-CSR
Chunk 13
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 the Trust’s historical performance can be found in the “Closed End Funds” section of blackrock.com . The following discussion relates to the Trust’s relative performance based on NAV: What factors influenced performance? In sector terms, positive contributions to relative performance were led by stock selection within energy. An underweight to materials and a lack of exposure to real estate also contributed. In terms of individual positions, Taiwan Semiconductor Manufacturing Company Limited (“TSMC”) was the top contributor to relative performance. TSMC’s strong position has been made even clearer by the weakness of fellow chipmakers Samsung and Intel. TSMC Management struck a confident tone to the effect that, while the company is seeing strong growth driven by artificial intelligence (“AI”), it expects 2025 to see a broader recovery in end markets. TSMC’s dominant industry position makes it one of the strategy’s highest conviction holdings entering the new year. Williams Companies Inc., a leading U.S.-based energy infrastructure firm, saw its stock price buoyed as it posted strong second-quarter results and provided an optimistic outlook for the remainder of 2024. Additionally, the stock was boosted by the results of the U.S. presidential election which led to an outlook for a more “pro-energy” operating environment. Markets are anticipating President Trump to advocate for deregulation which may enable companies like Williams to expand their existing gas pipeline networks with fewer environmental controls. Software company Oracle Corp. also contributed as the company’s cloud business, a crucial segment, continued to report strong revenue growth driven by rising demand related to supporting AI efforts. In addition, the announcement of new partnerships aimed at enhancing Oracle’s cloud offerings further fueled investor enthusiasm. Stock selection weighed most heavily on relative performance within consumer staples. Stock selection in consumer discretionary and an underweight to and selection in communication services also detracted. In terms of individual companies, a lack of exposure to semiconductor company Nvidia Corp. detracted the most. While Nvidia has so far been the market winner from AI, the current stock valuation appears overly reliant on pricing and volume trends which will be challenging to sustain. The focus of end markets is likely to shift from training models (which benefits GPU manufacturers like Nvidia) to deploying models where greater efficiency and application-specific chips are more relevant. Multinational confectioner Mondelez International Inc. reported a decline in revenue, largely attributed to soaring cocoa costs driven by supply tightness from poor harvests in major producing countries such as Ivory Coast and Ghana. This situation has resulted in a global cocoa deficit, pushing prices to record highs and