"The model is largely misunderstood." An $8.7 billion tech fund manager reveals what investors are missing about one of the world's biggest companies as he lays out 5 key stock picks.

In the midst of a huge style rotation away from growth, it was difficult for fund manager Adam Benjamin to take over the Fidelity Select Technology portfolio.

He remembers a time when things were very unpredictable. There was a lot of non-fundamentally driven sales going on. I took a more conservative approach to my tech funds against that.

Apple, Microsoft and Cisco are all in his top 10 holdings.

His thesis on Apple has changed over the years. It has become a staple for so many people.

The model is often misconstrued. The release of the new iPhone every September has made it less dependent on hitting. It is stickier and consistent, which has led to an expanding multiple that is still not expensive when compared to the broader tech sector.

He says that Apple is his largest holding and that he wishes he had bought more of the stock.

The company's M1 and M2 chips are giving it a new point of difference as "everyone from Amazon, Microsoft and SAMSUNG to GOOGLE and Facebook have been trying to develop Silicon"

They've done it for a while in their phones and tablets but it's now giving them a cost and performance advantage over their competitors. Better product differentiation, better performance, better power consumption, and ultimately a lower bill of materials, which converts into higher margins, can be achieved by being able to do everything from software through to Silicon.

Much of the software-as-a-service segment was less compelling due to the high valuations of late last year. Microsoft is not the same as other animals. The rapidly growing cloud business gave me confidence that the business would continue to grow at a large rate.

As the world moved into a rising rate environment, he decided to keep the company in his portfolio. He wanted a stock that was cheap.

It was a bit late to the cloud party but has been catching up and is only a small part of the business. The areas that were hit hardest during Covid were the server enterprise and service provider enterprise.

After a two-year spending hiatus, businesses will be looking to upgrade their infrastructure as people return to the office.

Benjamin's specialty is the Semiconductor space. He specialized in this area in order to gain exposure to the broader tech themes he follows.

It went through a period of evolution, with improved fundamentals taking away from its one-time highly cyclical nature.

He says the sector underwent a lot of consolidation, improved profitability, gross margin and operating margins, and accessed some major secular themes in certain end markets.

NXP Semiconductors is a core holding and serves as a strategic partner to many original equipment manufacturers in the auto sector.

From battery management systems for electric vehicles, leading radar capabilities used in ADAS, as the shift from internal combustion engines to EV continues, the level of overall Semiconductor content is doubling.

A full re-architecture of its electronics will be required if a car becomes more like a phone. It's happening already, and will take time to fully roll out, but that's another area that is very strong for the company.

Artificial intelligence is the biggest theme of the next decade according to Benjamin. A potential future winner of that opportunity set is using its full-stack solution to help companies more easily deploy deep learning technology.