Baillie Gifford is an Edinburgh investment partnership founded in 1908, famous for ultra-long-horizon, high-conviction growth investing — its early stakes in Amazon, Tesla and NIO are classics. Its "actual investors" philosophy holds world-changing companies on 5-10 year views; AUM is around $120bn. The Insights column carries its managers' investment views and thematic research.
This piece says two companies—Alnylam and Lam Research—have built hard-to-copy advantages through decades of accumulated expertise. The author (Baillie Gifford fund) is optimistic, believing the market underestimates their long-term potential. Alnylam, a gene-silencing drugmaker, has a clinical success rate over 50% (industry average 10%) and is investing $250 million to expand capacity, aiming to treat hypertension (1.4 billion patients). Lam Research makes chip-making equipment; once its machines are embedded in a customer's factory, they're tough to replace, and AI-driven demand for 3D chips could sustain strong growth longer than expected.
One-sentence summary: The author argues that the specialized knowledge accumulated over time forms a moat for Alnylam and Lam Research that is difficult to replicate, and long-term investors should leverage their time advantage to position for their undervalued, sustained growth potential. [Optimistic]
The report argues that Alnylam Pharmaceuticals and Lam Research, two new additions to Baillie Gifford’s Long-Term Global Growth (LTGG) portfolio, operate in vastly different businesses yet share a common advantage: decades of accumulated expertise that competitors find difficult to replicate. The author emphasizes that time is not only an ally for long-term investment teams but also a moat-builder for the companies themselves.
The report opens with its core thesis: “Lam and Alnylam illustrate something different: how time can create an advantage for the companies themselves.”
Alnylam is the leader in RNA interference (RNAi) technology, with a clinical success rate exceeding 50%—far above the industry average of 10%—thanks to over two decades of deep organizational knowledge. The company already has six approved drugs and is expanding from rare diseases into larger patient populations.
The report notes that Alnylam’s existing drugs will dominate its financial performance for the next few years, while evidence of a broader RNAi platform may not emerge until the early 2030s. Baillie Gifford’s patience allows it to look further ahead.
Lam Research specializes in deposition and etching equipment needed to manufacture three-dimensional chips. Its ability to collaborate with customers seven to eight years ahead of technology inflection points gives it a head start in the AI-driven wave of chip demand. As Moore’s Law yields diminishing returns in shrinking transistor sizes, the chip industry is shifting to “building upwards,” directly benefiting Lam’s business.
The core investment logic of the report is to seek companies with deep moats built through time accumulation, and to use the time advantage of long-term investing to position before the market fully recognizes their potential. Readers should note that this is a perspective from the holder’s standpoint. The report highlights the strengths of Alnylam and Lam but does not address competitive risks or the possibility of technological failure.
The report argues that Lam Research’s expertise in NAND is gaining broader application as DRAM and logic chips transition to three-dimensional architectures, and that time itself constitutes its moat. The author notes that NAND began stacking layers upward years ago to increase capacity, and Lam invested early to establish a leading position. Now that DRAM and logic chips are also moving toward verticalization, Lam can apply its NAND expertise to these new directions. The author’s original statement is: "Time reinforces that advantage. Once a Lam Research machine is embedded in a customer’s production process, it is difficult to dislodge." This means: "Time reinforces this advantage. Once Lam Research’s equipment is embedded in a customer’s manufacturing process, it is difficult to replace." A single machine can serve in a factory for over a decade, generating ongoing revenue from maintenance, spare parts, and upgrades. Meanwhile, Lam can learn alongside the customer during this period and feed that experience back into the next generation of equipment, thereby solidifying its technological leadership.
The author believes that consensus forecasts predict Lam’s revenue growth will slow sharply after a recent surge, but a longer time horizon may reveal more enduring opportunities. The report points out that AI is driving higher semiconductor investment, three-dimensional architectures are channeling more spending toward processes where Lam excels, and Lam itself is expected to gain market share and improve margins. The author states: "AI is expanding the semiconductor market just as the industry becomes more dependent on manufacturing capabilities Lam began investing in years ago. We think that could sustain strong growth for considerably longer than current expectations imply." This means: "AI is expanding the semiconductor market at a time when the entire industry is becoming more reliant on manufacturing capabilities that Lam began investing in years ago. We believe this could sustain strong growth for a period far longer than current expectations suggest."
The report uses Lam Research and Alnylam as examples to emphasize that long-accumulated expertise is a difficult-to-replicate competitive advantage, with the potential to be applied to opportunities larger than ever before. The author notes that Alnylam is attempting to expand RNAi technology from the liver to other organs, while Lam is applying its NAND experience to increasingly three-dimensional DRAM and logic chips. Both companies benefit from years of accumulated, hard-to-replicate expertise and are poised to apply it to markets larger than in the past.
The report implies that the market may be overly pessimistic in pricing the sustainability of Lam Research’s growth, and Baillie Gifford’s long-term perspective allows it to capture this underestimated persistence opportunity. Readers should note that this is a perspective from a position holder. The author uses the time advantage argument to justify the position, but does not provide a specific timeline or quantitative evidence to support the claim of "more sustained growth."
| Ticker | Direction | Author's One-Sentence View | Key Data |
|---|---|---|---|
| Alnylam Pharmaceuticals | New Position | Built a position after long-term tracking and taking advantage of share price weakness, bullish on the potential of its RNAi platform expanding from the liver to other organs | Clinical success rate >50% (industry average 10%); investing $250 million to expand production; Zilebesiran targeting 1.4 billion hypertension patients |
| Lam Research | New Position | Early positioning in 3D chip equipment; AI demand will drive growth to consistently exceed market expectations | Collaborates with clients seven to eight years in advance; equipment service life exceeds ten years, generating recurring maintenance and upgrade revenue |