Data infrastructure provider Western Digital (WDC, Financial) reduced the Fund’s return by 58 basis points, as its stock fell from $71.17 to $56.44 for a total return of negative 20.7%. Investors grew concerned that the semiconductor cycle has peaked, as recent pricing trends have turned down due to supply-chain bottlenecks constraining demand in some of Western Digital’s key end markets. This is a cyclical business, but we’re holding onto our position because we believe the longer-term secular trends are as strong as ever, as the amount of data being created, stored and analyzed is increasing exponentially. Once the short-term bottlenecks are cleared, we expect the uptrend in semi-conductors to continue.
From the Parnassus Endeavor Fund (Trades, Portfolio)'s third-quarter 2021 letter.
