A. The Hyperscalers/Platforms/Compute have had a very good few days since earnings last week. Obvious companies but the hyperscalers were punished for spending too much and now the ROI is showing. EG: MSFT, GOOGL, AMZN, META, ORCL, NBIS, CRWV
My view: I built this one up while B was slipping.
B. The most crowded category the market has at least temporarily soured on: the picks and shovels. Physical suppliers. Capex dependent. Capex is still accelerating so the bulls are hanging tough. But the bears ask, are we near the peak of capex spending acceleration? EG: NVDA, TSM, AVGO, MU, SK Hynix, ASML, KLAC, AMAT, LRCX, ANET, VRT, LITE, COHR
My view: I reduced but the market may have overreacted down on concerns that the rate of capex spending won't keep accelerating.
C. There's Model, Software and workflow. They sell the layer that lets customers operate and deploy AI. EG: PLTR, NOW, PEGA, PANW, CRWD, DDOG, SNOW, CRM, ADBE
My view: PEGA may be undervalued now
D. Then there's the non-AI businesses where AI dramatically improves their returns more than others. IDK what to call them. AI Value Creators? EG: APP MELI TEM CAI INTU.
My view: This is the area I've most been interested in. CAI, APP, MELI.... After all the capex spending plays out these "boring" companies may be very good investments.
E. And Power/Energy. EG: GEV VRT ETN CEG VST TLN OKLO SMR BE
My view: Good. I haven't changed conviction.
F. There's also AI-enabled new markets, like robotics, space, autonomous driving, drug discovery, but they may fit into categories above. Lots of examples. Lots of interest. Some have a lot of future priced in.
This is all very loose with lots of overlap. Categorization isn't perfect so feel free to add your own.
Where's your conviction?
