Summary: Long DB/event-stream/monitoring infrastructure layer, short per-seat UI/SaaS layer on AI agent adoption compressing seats but multiplying API calls.

AI software infra layer: MongoDB, Datadog, Snowflake, HubSpot, Cloudflare

While I think the current "AI eats software" concerns are overblown, here is an interesting angle to consider:

The companies that provide a license per seat are at risk. If an AI agent can do the work, you technically don't need a license for that seat. Even though no one is going to vibe code an alternative, either through layoffs or improved efficiency, your business now faces a seat-compression risk.

But companies responsible for DBs, event streams, and monitoring stand to benefit, as the agent will generate exponentially more API calls than a human ever could.

Just considering that you have to log all AI actions will increase the usage for these companies.

Ultimately, the best AI x software trade might be long infrastructure layer and short UI layer.


Per-seat UI/SaaS names: Salesforce, Workday, ServiceNow, Atlassian, Zoom


Summary: Seat-based SaaS (Slack) faces revenue compression as AI cuts headcount; usage-based models like Cloudflare are insulated and continue to grow.

structural marker; pre-classified as canonical yfinance ticker

The seat compression risk is there.

Let's take a simple example of Slack, which charges $12/seat. Amazon just laid off 20K employees due to "AI efficiency". What happens to the $12*20K recurring revenue that Slack used to get?

Now take the example of Cloudflare -- Irrespective of the number of people in Amazon, as long as the company is getting (and growing traffic), Cloudflare will still get paid.

Again, a simple example, but you get the drift.

In a lot of cases, the company wont be able to proportionally increase their per seat pricing.

@rebound_capital @rosedotai “If an AI agent can do the work, you technically don't need a license for that seat.” << flawed assumption.

An Agent accesses a product through its API. The company can and will charge for API usage. Since agents are knowledge heavy the result will likely be more fees. Not less


Summary: Bearish RACE: Ferrari's EV push will repeat Porsche/Taycan's mistake — alienating core buyers, cratering resale value, and losing to Tesla/BYD on EV turf.

Ferrari $RACE stock will go the same way as Porsche.

After Porsche launched Taycan, it did well initially, with the company selling 20,000 Taycans in 2020 and more than 40,000 in 2023.

But the company could never get the early adopters to convert into the cult-like following it had for the 911. The car was missing the “soul,” aka the sound that had made Porsche famous.

Add to the fact that Taycan's were unreliable, A $200K Taycan was only worth $50K to $70K after just 3 years. The cars were impossible to resell, and sales of Taycan cratered by 50% in 2024.

If I were a legacy carmaker like Ferrari building a performance car, I would be competing with other luxury brands like Lamborghini, and McLaren.

But the moment I build an electric car, then I am competing with arguably more advanced competitors like Tesla or BYD, who just built a 1,300 HP car that can jump over potholes.

Porsche spent billions trying to convince sports car enthusiasts that electric cars were better. They went on to make arguably one of the most advanced EV sports cars. But they never stopped to think if that’s what their customers wanted.

Ferrari is now going the same route.

To be fair to management, there is a 2035 ban on the sale of new combustion-engine cars in the European Union which might have led this aggressive push into EVs.

As Jeremy Clarkson so aptly put it, the manufacturers are so busy building cars for the government that they forgot to make cars for the people buying them.

Ferrari has revealed the interior of its first EV! And it's been designed by the man who created the iPhone 👀 https://t.co/a8xN3M0Aw6 https://t.co/rJz1WWuDhG


Summary: Highest-conviction long AMD into 2026-27 on 80% AI GPU CAGR, 60% data-center growth, OpenAI/Meta contracts, and server CPU sold-out demand.

AMD is one of our highest conviction picks for 2026.

$AMD CEO, Lisa Su, is known for giving conservative guidance.

But, based on AMD’s latest guidance:

1. 80% CAGR in AI GPU revenue and 35% CAGR in total revenue growth over the next 3-5 years.

2. 60% growth in Data Centre revenue in 2026.

3. >$10B Data Centre revenue for 2027.

While everyone’s looking at $NVDA, AMD has a long-term contract with OpenAI and co-developed the Helios rack with Meta ($125B 2026 capex).

Another tailwind is the rise of Agentic AI (Clawdbot, Claude Cowork, etc.), which is driving CPU demand; both Intel and AMD server CPUs are sold out for 2026.

Agents that will run 24×7 will increase CPU requirements, with projections that AMD’s server business might double in 2026.


might have just turned the corner… If Microsoft can execute well… it can overtake all other players as it owns distribution at scale

Summary: Cautiously bullish MSFT on Copilot/Agent 365 AI push; if execution delivers, could shed AI-laggard tag like GOOG did post-I/O.

Microsoft $MSFT, which has been on our watchlist for a while (down 25%), might have just turned the corner.

They just announced Copilot Cowork and Agent 365, which can now execute a multi-step plan across Office apps (Similar to Claude Cowork).

This might play out like Google I/O 2025, when they launched DeepThink and Gemini models, removing the AI laggard tag — $GOOG is up 97% since May 2025.

If Microsoft can execute well (we will only get product hands-on in the next few months), it can overtake all other players as it owns distribution at scale.

What do you think?


Summary: Potential buy-the-dip on HOOD: down 36% YTD but headwinds seen as cyclical, not structural; youngest customer base with long runway.

Robinhood $HOOD is now down 36% this year, making it one of the worst-performing stocks in the S&P 500.

Here’s what’s driving the decline:

1. Overall equity and options trading volume are down (MoM Feb’26).

2. The prediction market business is also down (29% Feb’26).

3. With crypto in a bear market, speculative trading has also dried up.

This might be a good buy-the-dip opportunity, as none of these factors seems structural, and the company has the youngest customer base with a long runway (people rarely change their trading platform!).

What do you think?


$NBIS might be an interesting rebound trade... Looks like the market is selling off on the dilutive fears which are unfounded

Summary: Bullish NBIS rebound: post-$4B convertible selloff overdone; Meta deal validates expansion, notes priced at 57% premium = dilution fears unfounded.

industry='Internet Content & Information'

$NBIS might be an interesting rebound trade.

The company is down 10% after they announced a $4B convertible offering to fund data center expansion.

What’s interesting is that the announcement came right after their $27B deal with Meta. So a hyper-scaler customer is ready and willing to buy into the expansion. Plus the convertible notes are at 57% premium to where the stock is trading now.

Looks like the market is selling off on the dilutive fears which are unfounded. If you look at the deal, it’s pretty investor friendly.


We may actually be early in the AI buildout! Agentic AI inflection... Sovereign AI will be a massive market

Summary: Bullish NVDA: bear fears of CapEx peak are overblown; agentic AI, sovereign AI, and enterprise adoption suggest the buildout is still early.

NVIDIA is in a ~20% drawdown.

The bears are worried about NVIDIA’s growth rates slowing beyond 2027 and whether ‘big tech’ can sustain its current level of CapEx (on ROI concerns).

The Opportunity
If we look at the surge in token usage, GPU rental pricing, or the exploding use cases for agentic AI and Copilots (especially in enterprises), a different picture emerges.

We may actually be early in the AI buildout!

- Agentic AI inflection: The adoption of AI agents in enterprises will be a defining shift in 2026
- Software transition: Software companies will need to transition to becoming token-driven or agentic AI-driven companies in 2026-2027.
- Sovereign AI will be a massive market: each country will want its own AI foundation models.

Is the market right to fear a CapEx peak, or is it just underestimating the scale of the AI buildout?


Summary: Bullish on memory sector long-term: HBM commoditization fading, AI enterprise demand sustaining pricing, oligopoly forming; Micron favored as only US-based supplier.

Great report on Micron. Here's how we are thinking about memory in the coming years:

1) We know for sure that in the coming years, HBM and memory in general will be less of a commodity than in the past. This means higher gross margins even during the cycle trough (vs. past cycles). Depending on how one models it, the intrinsic value of Micron, SK Hynix, will differ. We are not sure how to model this yet.

2) AI's enterprise use cases (Claude Copilot/Cowork and Agentic systems) have materially inflected since the last quarter of 2025. This is a massive tailwind for memory: hence, pricing may sustain for much longer than expected.

3) long-term: I see no reason for them to overinvest in capex and kill a multi $100 billion in profit 'golden goose'. The industry may soon tend towards a stable oligopoly - long term agreements with customers are the first step towards this.

Micron, being the only US-based supplier, may have its own advantages. We are still thinking it through (maybe cheaper energy access vs. competitors in Korea and Japan, due to the war?).

$MU: Top Pick at Cantor, updates from road.
Supply tightness remains, GMs/buybacks/CapEx addressed: https://t.co/7WXjzPjxCX


The intrinsic value of Micron, SK Hynix, will differ. We are not sure how to model this yet


Summary: Bearish NKE: 30x P/E leaves no margin for error on a turnaround that seldom succeeds.

'Turnarounds seldom turn' is a classic for a reason.

When you're paying 30x P/E for a turnaround (like $NKE), there is zero margin for error. Every single assumption has to hit perfectly just to tread water.

$NKE is a good lesson to trust your real life instincts.

- If you see everyone wearing Oncloud / new balance shoes instead of Nike

- You see everyone wearing vuori or lululemon shorts instead of Nike

- Even Uniqlo / GU for casual/athletic wear instead of Nike

Then the only https://t.co/JN6TXkCXbY


Summary: Endorses DRAM ETF as a solid vehicle for memory stock exposure.

A pretty good ETF if anyone's looking for exposure to memory stocks.

Note: Rebound Capital has no relation or contact with those releasing the ETF.

If you want exposure to memory, $DRAM is a genuinely great ETF.

I normally don't praise ETFs, but this is solid.

1. $MU - 24.63%
2. Samsung - 24.11%
3. SK Hynix - 23.08%
4. $SNDK  - 4.9%
5. Kioxia - 4.86%
6. $WDC - 4.77%
7. Nanya - 3.89%
8. Winbond - 2.4%

Disclosure: Friends https://t.co/w4AP4tQTsF


Summary: Bullish GOOGL: valuable stakes in SpaceX (~$150B at $2T IPO), Anthropic, and Waymo make it a diversified play on major tech trends.

- $GOOG owns ~7.5% of SpaceX. This implies that its stake in SpaceX will be worth ~$150B if it IPOs at the expected $2T valuation (SpaceTech).

- Google also owns ~14% in Anthropic (Frontier LLMs).

- Google also owns a majority stake in Waymo (self-driving cars).

Google has a stake in almost every significant technological evolution happening currently.

SpaceX has officially filed for an IPO targeting a $1.75T valuation.

Who currently owns SpaceX:

• Elon Musk: 42%
• Founders Fund (founded by Peter Thiel): 10.4%
• $GOOGL Ventures: 7.4%
• Others: 30% https://t.co/xfGdrij5R5


Summary: Bearish MELI: moat weakening from Shopee/Amazon/Temu pressure in Brazil, margin squeeze, rising defaults, and 30x forward earnings too rich for a business under siege.

Mercado Libre's ($MELI) moat is weakening:

While MELI looks attractive on first glance (stock down 35% but strong 45% YoY revenue growth), the competitive pressure is intensifying:

- Squeezed from both sides in Brazil: In MELI’s largest market (~50% of revenue), Shopee is attacking their value-conscious buyers, while Amazon competes for the convenience-focused urban buyer (the most valuable e-commerce shoppers)

- The price war is hurting margins: MELI lowered its shipping fees to take on Shopee, but Shopee products are still cheaper on average, with lower seller fees. Temu’s entry has further increased competition for the value-focused buyers

- Logistics arms race: Huge investments by Amazon and MELI in logistics to compete with each other in Brazil. It’s not a winner-take-all market anymore

- Fintech is a double-edged sword: the credit/lending business is riskier than core ecommerce. Rising defaults can severely hurt the whole platform

The stock reflects this. From its July 2025 all-time high of $2,645, MELI has shed ~35%, now trading near $1,718. Q4 EPS declined 12.5% despite 45% revenue growth. You're still paying ~30x forward earnings for a business under siege.

We may be watching the medium-term economics of the industry deteriorate.


Summary: Despite the Medicare rate beat, political risk from bipartisan healthcare cost-cutting remains a headwind for UNH as the dominant private insurer.

CMS sets the 2027 Medicare annual increase at 2.5% vs the 1% expected and the near 0% increase first suggested.

This was expected - the 0% increase initially floated seemed like an aggressive negotiating tactic by the CMS.

But the political risk remains for UNH - both parties will try to reduce healthcare costs, and their plans might hurt the incumbent leader in private insurance.

BREAKING: UnitedHealth stock, $UNH, surges over +11% after US Medicare  and Medicaid Services finalizes plans and payment policies, seeing a +2.5% annual increase for private insurers.

This was well ahead of the expected +1.0% increase. https://t.co/b5hUOlgUuu


Summary: Bearish UNH: regulatory overhang structural as both parties target healthcare costs; today's Medicare rate beat only negates near-term bear thesis, not the long-run risk.

$UNH: UnitedHealth is up 7%. The reason:

- 2.5% vs 1% expected Medicare annual increase in ‘27: The CMS has set the 2027 annual increase in Medicare Advantage for private insurers at 2.5% vs. the 1% increase expected (and 0% previously floated).

- This negates the near term bear thesis for UNH: that the US government will squeeze insurers to keep medical costs low, even at the expense of people losing their private insurance (if companies decide to let go of business due to low reimbursement)

We think the regulatory overhang on UNH will be structural. Both parties will want to lower healthcare costs in America (for good reason), and UNH may stand to lose as an incumbent in the current system.


At ~75x revenue, PLTR is priced for permanent irreplaceability. Even a partial erosion of the integration moat justifies significant multiple compression. I don't see how Palantir can compete with AI-native companies like Anthropic and OpenAI.

Summary: Bearish PLTR: AI-native rivals (Anthropic, OpenAI) commoditize its integration moat, justifying significant multiple compression from ~75x revenue.

Will AI-native companies (like Anthropic) disrupt Palantir?

- $PLTR's premium is based on its AI platform (AIP) being irreplaceable. That companies’ disparate datasets need Palantir’s operating system to enable AI. It seems AI agents can now handle at least some of that!

- Palantir's bull case rests on the premise that integrating LLMs with messy enterprise data requires its proprietary stack and an army of Palantir’s forward-deployed engineers.
Anthropic is now building a new enterprise model. ‘Computer Use’ and ‘Claude for Enterprise’ are products that may not need Palantir’s integration layer in a few years. Anthropic’s agents are commoditizing exactly what PLTR charges a premium for. The forward-deployed model ages poorly as agentic AI handles orchestration, stripping out the pricing power of expensive human deployments. CIOs under cost pressure will increasingly choose lightweight, API-first solutions over a rigid proprietary OS.

- At ~75x revenue, PLTR is priced for permanent irreplaceability. Even a partial erosion of the integration moat justifies significant multiple compression. I don’t see how Palantir can compete with AI-native companies like Anthropic and OpenAI. It does not have the resources to create its own LLM-based agents. I am sure it’s easier for Anthropic to partner with a consulting firm and deploy its agents than for Palantir to build its own models.

Palantir is valued at ~$330B for $5B in revenue. It will need to grow its revenue to at least $30B to justify this valuation. To do so while its moat is weakening will be extremely tough.

What am I missing?


Summary: Long AMZN: Anthropic ARR signals AWS cloud dominance + ROI justification; in-house silicon lowers costs, demand for inference to skyrocket with agentic AI.

Anthropic’s results show why we are bullish on Amazon

Amazon’s stock dropped due to fears that AI Capex may not deliver the necessary ROI. We think that’s the wrong read:

- We are at the beginning of AI reshaping developed world economies
- We are massively compute-constrained and will remain so. Demand for inference will skyrocket with the use of agentic AI

Look at the meteoric rise of Anthropic’s ARR (see image attached). As the primary partner for AWS, Anthropic’s ARR is a leading indicator for AWS’s cloud dominance (and sufficient ROI). As Anthropic continues to win in the enterprise, AWS revenue should accelerate (justifying its large capex announcement).

Also, AWS’s business running on its own chips has now exceeded a $20B run rate. Its ability to lower computing costs (through its in-house silicon business) is a key competitive advantage.


Mastercard is not pricing in any stablecoin risk. It's still trading at 30x PE... AI will only help these 2 businesses. The risk is regulatory.

Summary: Bullish MA: stablecoin risk overblown, AI is a tailwind, only real risk is regulatory; valuation still reasonable at 30x PE.

Hey Aria. Mastercard is not pricing in any stablecoin risk. It's still trading at 30x PE. What's being priced in is:
- Antitrust regulations risk in the USA
- Foreign countries see Visa/Mastercard as a core part of de-risking from US technology (as these can be replaced much easier than Big Tech)

AI will only help these 2 businesses. The risk is regulatory.

Please explain to me STEP BY STEP how stable-coins will disrupt $MA

Like are we being serious here?


Summary: Long LVMH: holding position, cheap at ~20x PE, expect organic growth recovery in 2026 as luxury sector turns around.

LVMH Revenue Update Review:

LVMH released its Q1 2026 revenue numbers.

I think this was a decent print (not enough to rerate the stock, though), with 1% organic growth, which would have been 2% excluding the war.
Reported numbers were weaker due to currency movements, which should even out in the longer term.

Key highlights:
1) 1% organic growth with Fashion and Leather at -2% organic growth (the biggest disappointment in the report)

2) Geographic performance: its 2 largest regions (~55% of revenue) did well, with the USA growth at 3% organic growth and Asia ex Japan growing at 7%. Europe and Japan had -3% organic growth due to weaker tourist spending.

3) Segment performance: All segments were either flat (Perfumes and Cosmetics) or showed growth (Wines +5%, Selective Retail +4%, Watches & Jewellery +7%). Only Fashion and Leather posted negative organic growth of -2%, attributed to regional instability and leadership transitions at top brands. We think this will turn around as well in 2026.

In total, the results were as expected, and hence the stock was down just -3%. The recovery is indeed more delayed than we expected at RC. But at ~20x PE ratio and with positive catalysts upcoming in 2026 (organic growth recovery), we are happy to hold onto our position for the long term.
Valuations are cheap, and the stock will recover as the luxury sector turns around.

We will look to add to our position in LVMH if:
1) It becomes too cheap: <17 PE due to a market fall. We will increase our position then.
2) In case the broader sector's commentary starts pointing towards a recovery, as the war and trade wars wind down.


Summary: Amazon is their largest portfolio position; thesis playing out on AWS neutral AI cloud differentiation, Trainium chips, $20B chip run rate, and capex backed by customer commitments.

We spent months researching and made Amazon our largest portfolio position at the beginning of 2026.

Now, our thesis is playing out, and the stock is up 17% over the last month.

- AWS is the only neutral AI cloud provider: both Google and Microsoft are competitors (or will compete) with the AI Labs - Anthropic and OpenAI. This is a huge differentiator.

- Anthropic’s models were trained on Amazon’s Trainium chips.

- Chip division is now at an annual run rate of $20bn. In fact, as a standalone company, the chips business would have been at a $50bn run rate!

- AWS AI revenue is at a $15B run rate after 3 years (which is 260x larger than AWS's $58m run rate after 3 years).

- 1M+ robots are now deployed across fulfillment.

- The $200 Billion in capex is backed by customer commitments. In fact, demand is so high that some customers asked to buy all of AWS’s Graviton chips, which AWS had to turn down.

Amazon’s move to design its own silicon is proving to be a critical moat.

Check out our original deep dive on Amazon on Substack - https://t.co/UlOy3LfZSM


Summary: ASML is expensive at ~40x forward PE despite raised guidance; implied cautious/bearish valuation stance.

industry='Semiconductor Equipment & Materials'

Here’s our recap of the latest ASML Q1’26 earnings report:

- Q1 results: Q1 total net sales of €8.8 billion, a gross margin of 53.0%.

- Full Year 2026 Guide (raised): ASML now expects total net sales of €36 billion to €40 billion, with a gross margin of 51% to 53%. This is a meaningful rise from the prior guidance of €34–39 billion. This includes potential export controls and bans by the USA. ASML’s revenue is now derisked from bans.

- Demand exceeds supply: demand at ASML’s customers is supported by long-term commitment from their own customers.

- Better geographic mix: Demand from Chinese customers is expected to be significantly lower in 2026 than in 2025. In Q1’26, revenue from China was 19% (vs. 36% last quarter). Revenue from Korea surged.

Stock is expensive at ~40x forward PE ratio.


we viewed Netflix as a risky investment in January… Market saturation… Pricing power may soon hit a ceiling… Engagement is declining… Valuation is stretched: 38x PE for 10–15% growth is hard to justify given the headwinds

Summary: Bearish NFLX: market saturation, pricing ceiling, declining engagement, big-tech competition, and stretched 38x PE all cap upside.

Netflix is down -10% post earnings. Here’s why we viewed Netflix as a risky investment in January:

- Market saturation: 80%+ of US and European households (the highest paying subs) already pay for at least one streaming service. These markets are largely saturated.

- Pricing power may soon hit a ceiling: Hard to justify $30–40/month (for the highest tier) when free AI-generated content on TikTok, YouTube, and Instagram keeps improving. Netflix can’t increase prices in the next 5 years at the same rate it has done in the last 5 years.

- Engagement is declining: Hours watched per subscriber per day is in a persistent downtrend (as estimated by us).

- Two front competition: Tech giants (Amazon, Apple) are increasing content costs via sports rights etc.; while UGC (user generated content) platforms like YouTube and Instagram are offering infinite free content.

- Valuation is stretched: 38x PE for 10–15% growth is hard to justify given the headwinds

https://t.co/dr0y8O66dJ


Summary: Despite Q1 beat, UNH faces persistent political/regulatory overhangs preventing re-rating to prior highs; sell on rallies.

UNH Q1’26 earnings (Stock up +8% premarket) - UNH may be past its worst slump in years.

UnitedHealth's Q1 2026 results landed well ahead of expectations (conference call not out yet, though).

- Adjusted EPS of $7.23 vs. $6.57 estimate.
- Revenue at $111.7B vs. $109.6B, with both UnitedHealthcare and Optum beating.
- The medical care ratio (MCR) of 83.9% vs. analyst expectations of 85.5% (84.8% in Q1’25). For an insurer, this is the single most watched number: it tells you how much of every premium dollar goes out in claims. This may be a signal that these costs are coming under control.
- Management raised FY26 adj. EPS guidance from >$17.75 to >$18.25, above the Street consensus of $17.86.

The worst of the business downturn (seen over the last 2+ years) may be over for UNH. I expect to see short covering and a potential for the rally to continue in the coming days.

But the key concern is that UNH may not be re-rated back to the highs it enjoyed in the last decade, as political and regulatory risks will continue to chill any re-rating. UNH may be a sell on rallies, from here.


Summary: Long AMZN: Anthropic investment at a steal valuation + 5GW Trainium commitment materializes November thesis; long-term bullish trend.

The catalyst we flagged as the cornerstone of our Amazon thesis in November '25 is materializing as expected:

- Amazon will invest up to $25B in Anthropic. And will invest $5B now at $380B market cap. This is a steal. Anthropic is trading at >$800B in private secondary deals.

- Anthropic to secure up to 5 gigawatts (GW) of current and future generations of Amazon’s Trainium chips to train and power their advanced AI models. This is a ~$100B spending commitment.

Amazon is +3% in pre-market. The sentiment around $AMZN continues to improve. This is a very long-term trend.

https://t.co/5YSliEvqOf


the most impressive part of Alphabet's latest earnings result was the acceleration and scale in Google's cloud division (GCP)

Summary: Bullish GOOGL on GCP acceleration and $462B backlog; bearish AMZN as AWS 28% growth is unimpressive vs peers.

There’s a lot of focus on Google’s consumer AI story. We all know how Gemini’s chatbot is gaining share versus ChatGPT and how search revenue is growing 19% at scale!

But the most impressive part of Alphabet’s latest earnings result was the acceleration and scale in Google’s cloud division (GCP):

This quarter, the GCP revenue grew at ~63% YoY!
Even more impressive is that GCP has an approximate backlog of $462B. 50% of this will convert to revenue in the next 2 years. That is, $231B in GCP revenue is already contracted for the coming 2 years. And they will get new business on top of this!
With numbers like this in the cloud division, I get why the market is unimpressed with Microsoft’s 40% growth in Azure and AWS’s 28% growth. Amazon, in particular, needs to accelerate its growth rate. 28% growth is not impressive enough in such a supply-starved environment (even of a higher base).


Amazon, in particular, needs to accelerate its growth rate. 28% growth is not impressive enough in such a supply-starved environment


AMD is the market leader in data center CPUs, and the gap is expected to widen further with the launch of 2nm Venice chips. AMD should get a better share of the incremental revenue driven by agentic demand for CPUs. $AMD is much better placed to win.

Summary: Long AMD as dominant data-center CPU leader poised to capture disproportionate share of agentic AI-driven CPU demand, widening lead with 2nm Venice.

While all the focus so far has been on GPUs, the next bottleneck lies in CPUs.

CPU bottlenecks account for ~90% of execution time for the agentic AI workloads, as CPU is responsible for API calls, data cleaning, and managing context windows.

Before agentic AI, we only needed one CPU for every 12 GPUs. But the latest projections from Nvidia put that at 1 CPU for every 2 GPUs.

AMD is the market leader in data center CPUs, and the gap is expected to widen further with the launch of 2nm Venice chips. AMD should get a better share of the incremental revenue driven by agentic demand for CPUs.

While both Intel & Nvidia (Vera CPUs) are competing in this market, $AMD is much better placed to win.


This is the writing on the wall for horizontal SaaS companies. Mercedes has reduced $SAP usage by 40%... If automobile companies that manage complex supply chains and production lines using SAP can cut it out, other companies will follow suit soon enough (or pricing will come under pressure).

Summary: Bearish SAP and horizontal SaaS broadly: Mercedes cutting SAP usage 40% signals enterprise AI displacing seats and pressuring pricing sector-wide.

This is the writing on the wall for horizontal SaaS companies.

Mercedes has reduced $SAP usage by 40% and is now prioritizing their own internal AI models.

This is the first time a major player has publicly mentioned reducing their software seats.

If automobile companies that manage complex supply chains and production lines using SAP can cut it out, other companies will follow suit soon enough (or pricing will come under pressure).


This is the writing on the wall for horizontal SaaS companies

Horizontal SaaS proxied by WCLD and IGV software ETFs


Accenture might be a hidden AI winner. If Accenture management can deliver AI implementation growth outpacing the slowdown in traditional consulting, the rerating will be significant. The stock now trades around 13x trailing earnings (Accenture usually traded at >25x) with a dividend yield of 3.6%

Summary: Bullish ACN as hidden AI implementation winner; 13x P/E vs historical 25x+ is a valuation re-rating opportunity if AI bookings growth offsets consulting slowdown.

Accenture might be a hidden AI winner.

The fears are palpable. AI can reduce billable hours, striking directly at Accenture's core revenue model, and now it's equally capable of producing those vague strategy decks that once justified paying a 22-year-old consultant $250 an hour.

But Accenture can end up becoming the company enterprises call when they want to implement AI. The latest earnings showed $2.2 billion in advanced AI bookings, nearly doubling year-over-year.

Even OpenAI has raised $4B to build “The Deployment Company” focused on deploying AI at scale across enterprises. Anthropic is set to follow suit.

If Accenture management can deliver AI implementation growth outpacing the slowdown in traditional consulting, the rerating will be significant.

The stock now trades around 13x trailing earnings (Accenture usually traded at >25x) with a dividend yield of 3.6%, levels not seen in years for a business that has historically compounded at high-single-digit revenue growth.


MELI is a buy at the right price, but we think there's still some downside to go. The 30% drawdown has priced in some of the bad news. Not all of it. Margin recovery remains a 2027 story at the earliest. Great company. The price is still not right.

Summary: Despite great fundamentals, MELI still has downside: 4 consecutive EPS misses, margins compressed, loan book growing unsafely fast; price not right until market capitulates.

On $MELI

Most investors see a stock down 30% and think of an opportunity. With MELI, it's more complicated than that.

MELI is a buy at the right price, but we think there’s still some downside to go.

This is genuinely one of the best businesses in the world. It's Amazon, PayPal, UPS, and Goldman Sachs for 650 million people, most of whom are yet to shop online.

E-commerce penetration in Latin America sits at 12%. China is at ~35%. The average American makes 41 online purchases per year. The average Latin American makes just 7. The runway is generational.

The fintech flywheel is extraordinary. 83M monthly active users. $19.9B in assets under management. The Mercado Pago credit card is the most used on the platform in Brazil, accounting for 50% of transactions, which occur off-app at supermarkets and gas stations. That is a primary banking relationship for people who have never had one. There are 300 million underbanked people in Latin America. MELI is their first bank.

The ad business grew 73% YoY in Q1 2026, 4x the regional industry rate, at near-zero marginal cost, built on 27 years of first-party data no rival can replicate.

Q1 2026 revenue was $8.85B, up 49% YoY, the fastest growth rate in almost four years. GMV reached $19B, up 42%. Fintech TPV hit $87.2B, up 50%. On the surface, extraordinary.

But look underneath.

EPS came in at $8.23, missing consensus forecasts by roughly 7%, the fourth consecutive earnings miss. Operating income fell 20% YoY to $611M, with margins compressing to 6.9%.

Net income dropped 15.6% to $417M despite revenue growing 49%. The credit book has grown to $14.6B, up 87% YoY, and no matter what anyone says, growing a loan book this fast is not prudent.

Plus, the loans business has lower-quality earnings.

The pattern is consistent. Revenue accelerates. Profits disappoint. Management guides for more investment ahead.

The 30% drawdown has priced in some of the bad news. Not all of it. Margin recovery remains a 2027 story at the earliest.

Great company. The price is still not right. We’ll try and buy once the market capitulates (remember the market sold off Google to 18x earnings last year!).


Every single quarter, they issue new stock worth about 18% of revenue... dilutes shareholders... you don't actually have to make money - as long as there's always someone new willing to buy the stock... How long can a system go on where a 16 year old company (a leader in its space) still isn't GAAP profitable?

Summary: Bearish NET: chronic GAAP losses, -10% op margin, and ~18%-of-revenue SBC dilution make the model unsustainable.

SaaS Shenanigans #1

Cloudflare ($NET) has been around since 2009, but it still hasn't figured out how to make a GAAP profit. Even with the best products.

- They're currently running at a -10% operating margin. How do they keep the lights on?

- Every single quarter, they issue new stock worth about 18% of revenue. They call it stock-based compensation, meant to align employees' interests with the company's. In effect, it dilutes shareholders. Good while the market bids up the stock. Very bad once the gravy train stops: just look at what's happened to ServiceNow.

How does this go on for so long?

- Fund managers keep buying Cloudflare stock with their clients' money to fill the gap. We used to call this a 'burn rate.' Now it's just a cycle that never ends. Turns out you don't actually have to make money - as long as there's always someone new willing to buy the stock.

- Every company wants to be in passive indices, so passive money is forced to buy any shares they sell to the market.

And you wonder why SaaS is suddenly trading so poorly? How long can a system go on where a 16 year old company (a leader in its space) still isn't GAAP profitable?


Summary: Long CSU: thesis reinforced by strong FCF, accelerating M&A, resilient organic growth, and no AI disruption signal; AI expected as a tailwind.

Constellation Software Inc. trades on TSX as CSU.TO

Constellation Software (CSU): Q1 2026

The Numbers:
- Revenue: $3.18B, +20% YoY, beat consensus by ~$40M. Pretty good!
- Total organic growth: 6% reported, 2% ex-FX
- Maintenance & other recurring revenue: $2.44B, +22% reported (now ~77% of total revenue)
- Maintenance of organic growth of 4% is solid!
- FCF available to shareholders: $733M, +44% YoY
- M&A in Q1: $697M cash deployed ($809M with deferred consideration)
- Already committed/closed post-quarter for Q2: $627M cash on closing, plus deferred on top
- For context: full-year 2025 M&A was ~$1.58B in total consideration

What it means:
The M&A numbers are the headline. Between Q1 deployment and what's already lined up for Q2, CSU has committed nearly as much cash to acquisitions in the first half of 2026 as it did in all of 2025. That's a meaningful step-up in pipeline activity, and it directly addresses the 'law of large numbers' concern of the bears.
The maintenance line is where Mark Leonard always told shareholders to look for the real health of the business. It's the most profitable, stickiest piece of CSU and the closest proxy for intrinsic value growth. Reported maintenance grew 22% in Q1, with organic growth of 4%. This is a genuinely reassuring read on customer retention and pricing power across the portfolio. No sign of AI disruption yet (it would show up in low maintenance organic growth)...
The next catalyst is the May 15 shareholder meeting, where Mark Miller will update the market on AI initiatives across Constellation.

Thesis check: Thesis is intact and reinforced. Strong FCF, an accelerating M&A pace that quiets the law-of-large-numbers debate, resilient organic in a tough environment for software, and a maintenance line growing organically at 4% rate signal strong customer retention and pricing power.

CSU's software is not getting disrupted so easily and we expect that AI will be a tailwind.


At approximately $313, DPZ offers a ~6.3% Free Cash Flow (FCF) yield (FCF/EV)... this is a 'quality on sale' setup... Trading at 16x forward FCF, well below its 22x historical average, this is a bet on a world-class operator navigating a macro trough.

Summary: Long DPZ at ~$313; 6.3% FCF yield, 16x forward FCF vs 22x historical avg, wide moat via vertical integration and tech, FCF compounding 4-5% through 2030.

Are Domino’s Pizza and other QSR companies in permanent decline?

Ozempic fears and a persistent consumer slowdown have created a perfect storm for Domino’s (DPZ).

With U.S. same-store sales slowing to 0.9% (low to mid-income consumers suffering) and GLP-1 adoption hitting ~12% of U.S. adults, the market has hammered the stock.

The math is starting to look interesting.

At approximately $313, DPZ offers a ~6.3% Free Cash Flow (FCF) yield (FCF/EV). While headlines focus on shrinking obesity rates and weary consumer confidence, you are buying a value-oriented restaurant (consumers will downtrade in a weak environment) that can compound its FCF at ~4%-5% annually through 2030.

This is a ‘quality on sale’ setup. Domino’s has a wide moat that is difficult to replicate:

- Vertical Integration: 25 supply chain centers drive a cost advantage that fuels a 25-30% franchisee ROIC, while rivals struggle at 8-12%.
- Efficiency Tech: With 1,600+ proprietary DJ dough-stretching machines and the Dom.OS operating system, they remain lean as labor costs rise.
- Proven Track Record: Boasting 11 straight years of U.S. share gains and 32 consecutive years of international same-store sales growth.

Trading at 16x forward FCF, well below its 22x historical average, this is a bet on a world-class operator navigating a macro trough.

Structural Risks

The GLP-1 threat is real and will be a headwind to future growth. The management has said they will address the GLP-1 threat by adjusting portion sizes and the types of pizzas offered (a possible focus on protein-rich pizzas?). Younger generations may not prefer unhealthy food (they drink less, too), and the US consumer has been weak. None of these factors is going away in a hurry.

The deep dive below is open to non-subscribers as well.

https://t.co/JwBn0KtrJP


Summary: Bearish SaaS sector: contract renegotiations, margin pressure, revenue model shift, and rising AI-native competition will keep weakness persistent.

WCLD (WisdomTree Cloud Computing ETF) best US SaaS proxy ETF

Don't think the weakness in SaaS stocks will resolve in a hurry here. Key headwinds are:

- Contracts will be renegotiated with margins under pressure. The revenue model will also change from seat-based to seat plus consumption based.

- Competition from AI native companies will only increase going ahead.


Summary: Long MSFT: full-stack enterprise AI moat (silicon, cloud, dev tools, apps) compounds; capex/disruption fears will fade.

No matter who ends up having the best model, Microsoft is going to win enterprise AI.

While the market debates which AI model wins, Microsoft is positioning itself to serve every stage of an enterprise’s AI implementation: hardware, the cloud, developer tools, and software. No competitor can serve all 4.

Silicon: Microsoft is now on the 2nd/3rd generation of designing its own chips. Cobalt CPUs and Maia AI accelerators run inside Azure alongside Nvidia GPUs. Owning the silicon means controlling cost and supply. Still behind Google and Amazon, but they can solve this.

Cloud infrastructure: Azure is the compute backbone. Azure grew 40% last quarter (at ~$100B revenue) and is supply-constrained into 2027.

Developer platforms: Azure AI Foundry exposes 11,000+ models through a single interface, with a Model Router that selects the right model for each task. Microsoft monetizes regardless of which model wins. This is where enterprises can develop their own agents.

Applications: M365 Copilot is available in Outlook, Teams, Word, and Excel. Copilot now has 20 million paid seats against a 450 million M365 base. At 4.4% penetration, the runway is huge.

Why this locks enterprises: Big companies already pay Microsoft for who logs in (Entra), where work actually happens (M365), and how it stays safe (Defender, Security Copilot). They trust Microsoft with their compliance and governance (Azure has the highest certifications for regulated industries).

Adding AI agents to Azure means the same login, the same bill, the same security rules, and the same trust. Security Copilot logos doubled this year because the customer was already inside the ecosystem (MSFT’s security business is the world’s largest).

Why can no one else copy this?
- Amazon has chips and cloud. No Office. No enterprise identity layer.
- Google has chips, cloud, and Workspace, but Workspace is a fraction of M365’s size and weaker in regulated industries.
- Anthropic and OpenAI sell models. They rent every other layer from the hyperscalers (Google, MSFT, Amazon). The hyperscalers will start squeezing their margins soon. Also, will any company want to hand over their data and processes to AI labs? The same labs that may create agents to end their own customers’ business model?

The moat is compounding: Copilot will embed itself in your emails, docs, meetings, and workflows. Organizational memory compounds monthly. Agents will be built on top of this memory graph. The better context an agent has, the more efficient it will be.

Our Take: Microsoft’s drawdown is due to capex fears and the notion that its software will lose to AI labs. Sounds a little like the ‘Google will be disrupted’ and the ‘no one uses search anymore‘ thesis about Google last year. These headwinds will fade. We remain bullish.


Summary: Long SPGI to $563 (~27% upside) on AI-beneficiary thesis, Mobility spinoff catalyst, and valuation gap vs Moody's; also long MCO on same quality re-rating.

industry='Financial Data & Stock Exchanges'

Wall Street needs to play the short-term performance game and is therefore dumping quality stocks. But you don't have to.

The market has absolute tunnel vision right now. If a company doesn't design AI chips, Wall Street is dumping its stock to chase tech FOMO. Companies with deep, long-lasting competitive advantages are trading at multi-year lows, even when they face minimal threat from AI disruption.

This extreme fixation is causing a widespread sell-off of elite businesses, creating an attractive setup for quality-focused, long-term investors.

Look no further than S&P Global (NYSE: SPGI)

SPGI operates at the absolute center of global finance. It shares a government-regulated credit-ratings duopoly with Moody's, together controlling ~80% of the market. On top of that, over $20 trillion in assets is benchmarked to S&P indices. Giants like BlackRock and Vanguard cannot easily switch benchmarks without triggering investor redemptions and violating their own fund prospectuses — creating an environment where customers literally cannot leave. This dynamic powers a 50.4% adjusted operating margin and $5.5 billion in annual free cash flow (~4.5% FCF yield at current prices).

Yet SPGI is down ~27% from its all-time high amid unjustified fears of AI disruption. We think S&P is actually an AI beneficiary:

AI models require massive amounts of accurate, verified financial data to train and run effectively. S&P owns 136 years of proprietary, irreplaceable data — exactly what these models need.

SPGI's Index and Ratings businesses will only strengthen with AI features layered on top. Indices carry powerful network effects, and a government-granted NRSRO license insulates the ratings business from new entrants entirely.

The Valuation Disconnect

The market's blind spot has created a significant valuation gap. SPGI's multiple is temporarily dragged down by its cyclical Automotive Mobility unit (CARFAX), causing it to trade at a steep discount to peers like Moody's despite running a structurally superior, higher-margin core business.

And here's the cherry on top: Moody's itself has sold off due to the same short-termism plaguing the broader market, meaning we're not even paying a full price to close the gap. When the market rotates back to quality, both re-rate. SPGI gets a double tailwind.

S&P has already filed confidentially to spin off the Mobility division. When the official public filing drops in Q2 2026, the market will be forced to revalue S&P's core business on a standalone basis, closing the valuation gap with a peer that is itself undervalued.

We value SPGI at $563 per share, a ~27% discount to today's price for an incredibly resilient business.

While the crowd chases semiconductor momentum at sky-high multiples, we're buying a financial tollbooth that prints cash.

Subscribers get full access to SPGI's deep dive - and 24 others just like it.

https://t.co/5oMUHDTYJB


Moody's itself has sold off due to the same short-termism plaguing the broader market, meaning we're not even paying a full price to close the gap. When the market rotates back to quality, both re-rate


Visa now trades around 25x forward earnings, well below its 10-year average of ~33x and near the cheapest it's been in years. The moat will expand, not shrink, in an AI world. While the market obsesses over AI, Visa just keeps compounding. You get paid to wait, and you get the re-rating for free when the crowd remembers that earnings still matter.

Summary: Long V: trading at ~25x vs 10-yr avg ~33x, deepening moat in AI world, re-rating catalyst when AI froth cools and capital rotates back into quality.

Wall Street is selling quality to fund the AI trade.

Capital is being vacuumed out of the best businesses on earth and poured into anything AI and anything ‘bottleneck’.

But momentum trades reverse. When the AI froth cools, that capital has to go somewhere, and it floods back into quality. Real earnings, real moats, real pricing power.

Names like Visa (NYSE: V).

Visa is a toll booth on the global economy. It sits in a duopoly with Mastercard, taking a few cents on trillions in payment volume across 200+ countries, at a ~60% operating margin, among the highest of any large-cap in the world. In FY2025, it did $40B in revenue (+11%), earned over $20B, and returned $22.8B to shareholders in a single year.

Visa now trades around 25x forward earnings, well below its 10-year average of ~33x and near the cheapest it's been in years. The AI fear (stablecoins, agentic commerce) is backwards. Visa is building the rails for both. The moat will expand, not shrink, in an AI world.

Yes, there's the regulatory overhang. The interchange litigation is decades old and largely reserved for, and the DOJ's debit case is a known risk that's been weighing on the stock since 2024. The market has had years to digest the antitrust narrative, and it's a big part of why a business this good trades this cheap.

The best time to buy a great business is when nobody's talking about it.

While the market obsesses over AI, Visa just keeps compounding. You get paid to wait, and you get the re-rating for free when the crowd remembers that earnings still matter.


Summary: Long MSFT at ~$427 (~25x earnings); full-stack enterprise AI moat, strong financials, market mispricing it for 'not being AI enough'.

Part 3: Wall Street is selling quality to fund the AI trade.

Microsoft: Here's the irony - The market is dumping one of the core enablers of enterprise AI to chase semis exposure (momentum).

Microsoft (NASDAQ: MSFT) is down ~21% from its October 2025 high. The story is that AI capex is too high, ROI is uncertain, and OpenAI exposure is too concentrated. Every one of those concerns is real, but misses the bigger picture.

Microsoft is the only company that covers every layer of the enterprise AI stack at scale:

- Custom silicon
- Hyperscale cloud (Azure growing ~40% YoY at a ~$100B run rate)
- Developer tools through GitHub
- Foundation model access through OpenAI and others
- Productivity software like Copilot
- Identity and governance through Entra
- And now Agent 365, the control plane to manage AI agents as digital employees

No competitor covers all of it:

- Anthropic and OpenAI build great models, but they don't own enterprise distribution.
- Amazon and Google compete in pieces, but neither has Microsoft's grip on the productivity layer where work actually happens. Microsoft owns the relationship, the data, and the trust.

The numbers are strong. Q3 FY26 revenue grew 15% in constant currency to $82.9B, operating margin held at 46.3%, and the RPO backlog sits at $625B. Copilot has crossed 20M seats with engagement comparable to Outlook. The E7 Frontier Suite, launched May 1, is the first new top-tier enterprise SKU since 2015, and bundles agentic AI as a foundational component rather than an add-on. This is what AI monetization actually looks like.

At ~$427, Microsoft trades at ~25x earnings. This is not demanding.

The market is selling Microsoft for not being AI enough. We think it is one of the most embedded AI franchises on the planet. Their distribution is unrivaled and will be a key moat.


Summary: Google's $80B equity raise signals massive capex surge; super bullish for Nvidia, AMD, all semis, and MSFT/AMZN forced to match AI spend.

Google raised $80 billion yesterday. All of it in equity, and no debt.

For a company that made about $164.7 billion in operating cash flow last year, that is strange. Why not raise debt? Here’s how I am thinking about it and the implications:

- Capex will be up significantly next year: Maybe $250B? Google has already raised more than $85 billion in debt this past year and can borrow easily. Equity is its priciest option, so you only reach for it when $80 billion is not the overall number. You raise equity to keep the balance sheet strong so you can borrow far more later. If $80 billion were all they needed, they would have just borrowed it. Capex will be up significantly based on this. MSFT and AMZN will have to match this growth. The AI arms race is on!

- Potential Model or Compute Requirement Breakthrough: Management is smart, so spending past your own cash flow means they see something big coming, either a model breakthrough or a huge jump in compute demand. Cloud backlog is over $460 billion and has nearly doubled in one quarter. They flatly say demand is way more than the compute they can supply. Compute is scarce, and whoever serves it wins.

- Derisking before major IPOs: They moved before OpenAI, Anthropic, and SpaceX line up for the same cash. Grab the money while the window is open, in case conditions tighten and markets close.

Implications: This is super bullish for Nvidia, AMD, and all Semiconductors. Google just aggressively confirmed that the spend is going up materially.


This is super bullish for Nvidia, AMD, and all Semiconductors.

US semiconductor sector best proxied by SMH ETF


MSFT and AMZN will have to match this growth.


Marvell's ASIC contracts will be the first to be canceled in the event of a glut, before those of Broadcom, AMD, or Nvidia. Such moves don't end well.

Summary: Bearish MRVL: ASIC contracts most vulnerable to cancellation in a glut, 50% 2-day surge driven by hype unsustainable, valuations matter.

Signs of Gambling in the Semiconductor Space

Jensen Huang says Marvell can be the next Trillion-Dollar Company, and the stock rises 50% in 2 days.

Such moves don’t end well.

Marvell’s ASIC contracts will be the first to be canceled in the event of a glut, before those of Broadcom, AMD, or Nvidia.

Am I wrong here? Do valuations not matter as growth is potentially exponential (if all goes well!)?


here's why we are passing on the company

Summary: Passing on LULU despite low P/E: earnings risk from re-investment, ongoing margin pressure, and unpredictable fashion trends make it uninvestable.

On $LULU

With the stock trading at a historically low P/E of 10x, the company looks very interesting from a value perspective.

History shows us that apparel turnarounds are notoriously difficult to pull off.

Here's why we are passing on the company:

Earnings Risk: The 10x PE may quickly rise to 13x-15x if the new management decides to invest in building the brand and/or R&D for new products (I guess they have to).

Margin Pressure: If the brand’s popularity does not improve, Lululemon’s gross margins will continue to remain under pressure. Weak consumer spending adds salt to the wound.

Fast Moving Fashion Trends: It is difficult to predict how women’s clothing preferences will play out in the coming years


Summary: Bullish NFLX: best-in-class content efficiency, lowest churn, and post-WBD-deal-collapse valuation now attractive.

Netflix is now down 40% from its ATH.

The decline is driven by a narrative shift, with investors worried about an engagement plateau due to short-form competition (YouTube, TikTok), generative AI flooding the market with cheap synthetic video, and the abandoned Warner Bros. deal.

But underneath, Netflix’s competitive moat remains exceptional.

- Netflix spent $55 per subscriber on content (lowest among competition) while generating $139 per subscriber (highest among competition).

- Netflix also has the lowest churn in the category (<2% per month) compared to ~4% for the industry.

- Despite repeated price increases, retention has remained the same.

With the Warner Bros merger falling through and the valuation coming down to more attractive levels, the risk-reward has finally tilted in Netflix's favor.


Summary: Bullish NFLX: lowest content spend per subscriber + highest revenue per sub is a compounding structural moat reinforced by two decades of viewing data.

Here’s what everyone misses about Netflix:

They have the lowest per-subscriber content spend while having the highest revenue per subscriber. (Rebound Capital estimates)

This advantage only compounds.

Two decades of viewing data tell Netflix what to greenlight and whom to recommend it to - which lowers content risk and lifts ad revenue. Netflix also ranks among the most Emmy-nominated platforms in entertainment year after year.