| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Alpine Capital maintains a technology-focused strategy centered on AI transformation and the Magnificent 7 companies. The second quarter began with tariff-induced volatility but recovered strongly after President Trump paused tariffs for 90 days, validating the manager's decision to maintain steady allocations rather than tactical repositioning. The portfolio emphasizes companies investing heavily in AI infrastructure, with the Magnificent 7 allocating $330.7 billion in capex for 2025. Key portfolio moves included adding Galaxy Digital Holdings for AI data center exposure, initiating Lam Research while exiting Micron Technology on valuation concerns, and selling Visa due to blockchain disruption risks. The manager expects Federal Reserve rate cuts in the second half of 2025 to support equity returns. While US valuations appear elevated historically, they are supported by AI's structural growth potential. The outlook remains constructive for technology outperformance as AI adoption accelerates across industries, though SaaS companies face potential obsolescence risks without adaptation.
Technology companies, particularly the Magnificent 7 and AI-focused firms, are uniquely positioned to deliver sustained revenue growth and margin expansion as AI permeates both digital and traditional economies, creating formidable competitive moats through massive capital investments in data centers and AI infrastructure.
Markets will navigate policy-driven volatility with greater resilience than in the first half of 2025. Advancing trade negotiations and fading tariff impact should bolster global equities, while technology's transformative potential will drive outperformance. Rate cuts expected in second half of 2025 should sustain equity returns over short to medium term.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Jul 18 2025 | 2025 Q2 | AMZN, BN, BRK-A, CRM, CWEB, F, GLXY.TO, GM, LRCX, MA, MU, SOXX, TGT, V | AI, Data centers, Dollar, growth, semiconductors, technology, Trade Policy, US Markets |
GLXY CN LRCX MU V GLXY.TO LRCX MU V |
Alpine Capital maintains aggressive technology positioning focused on AI transformation, with the Magnificent 7 investing $330.7 billion in AI infrastructure. Recent moves include adding Galaxy Digital for data center exposure and Lam Research while exiting Visa on blockchain disruption concerns. Expected Fed rate cuts should support continued technology outperformance as AI adoption accelerates across industries. |
| Apr 15 2024 | 2025 Q1 | - | Cash Deployment, inflation, Manufacturing, tariffs, Trade Policy, value, volatility | - | ACR navigates tariff-induced volatility by maintaining disciplined value investing approach. Firm expects trade tensions to de-escalate due to political pressures while viewing current market declines as overdue valuation reset. Active capital deployment reduced cash to 9% as opportunities emerge. Despite tariff impacts on select holdings, overall strategy remains resilient with focus on attractive valuations over market timing. |
| Jan 31 2025 | 2024 Q4 | INTC, NVDA | earnings, growth, Market, technology, valuation, value | - | ACR delivered strong fundamental returns in 2024 while warning of extreme market valuations with S&P 500 at record 42.8 cyclically adjusted P/E. The firm maintains value discipline, replacing overvalued holdings with undervalued companies to capture earnings growth while protecting against multiple contraction risk in an eventual secular bear market. |
| Oct 30 2024 | 2024 Q3 | - | long-term, Market cycles, P/E Ratios, Secular Markets, value | - | Alpine Capital Research advocates a long-term value approach focused on company profits rather than market timing. With current P/E ratios at historically high levels, they accept underperformance during bull markets to position for superior returns during inevitable secular bear periods. Their strategy emphasizes owning reasonably priced companies relative to future earnings potential. |
| Jul 31 2024 | 2024 Q2 | - | AI, Quality, Speculation, Valuations, value | - | ACR warns US equity markets are borrowing from the future with AI speculation driving valuations to historically dangerous levels. The firm maintains strict value discipline, avoiding speculative pricing while focusing on quality companies with durable cash flows. Despite elevated market risk, ACR's disciplined approach has historically delivered strong returns regardless of starting market conditions. |
| May 15 2024 | 2024 Q1 | - | AI, Competence, Philosophy, Quality, technology, value | - | Alpine Capital Research maintains disciplined value investing focused on corporate profits while acknowledging AI as revolutionary but within their circle of ignorance. The manager emphasizes expanding their circle of ignorance faster than competence as protective discipline. Despite AI hype gripping markets, they plan to remain within competence circles while deploying AI tools and evaluating disruption defensively. |
| Jan 31 2024 | 2023 Q4 | - | growth, Market Bubbles, Passive investing, Quality, valuation, value | - | ACR argues ownership of leading companies isn't necessary for investment success at wrong prices. The manager focuses on cheap quality across all segments, with EQR delivering 12% returns while maintaining lower valuation risk than S&P 500. Portfolio positioned in unloved international small-caps versus overvalued US large growth, expecting consistent returns while broader markets face potential lost decade. |
| Sep 30 2023 | 2023 Q3 | - | asset allocation, Banking, Fed policy, inflation, interest rates, value | - | ACR advocates avoiding long-term bonds at below-average rates while maintaining high equity allocations for inflation protection. Current S&P 500 valuations offer only 3% earnings yields, requiring idiosyncratic investing approaches. Regional banking stress creates credit opportunities. The firm's disciplined value approach has generated 7.7% real returns since 2000, outperforming during market extremes through careful valuation discipline and opportunistic cash deployment. |
| Apr 30 2023 | 2023 Q1 | - | - | - | |
| Jan 30 2023 | 2022 Q4 | - | - | - | |
| Mar 11 2022 | 2022 Q3 | - | - | - | |
| Jul 30 2022 | 2022 Q2 | - | - | - | |
| Apr 30 2022 | 2022 Q1 | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q2 |
AIAI is reshaping markets as a present force, not a distant promise. The Magnificent 7 companies are investing $330.7 billion in capex for 2025, primarily for AI infrastructure including data centers and advanced AI models. AI currently handles 30-50% of critical functions at companies like Salesforce, with expectations of further expansion and workforce reductions as AI-driven efficiencies are implemented. |
Data Centers Capex Workforce Efficiency Infrastructure |
SemiconductorsThe semiconductor sector presents attractive opportunities following earlier declines. The manager initiated a position in Lam Research Corporation, viewing it as a vital enabler of industry growth and akin to a modern utility. They also reallocated proceeds from Micron Technology to the iShares Semiconductor ETF to maintain diversified exposure while capitalizing on the sector's recovery. |
Equipment Fabrication Recovery Diversification Valuation | |
Trade PolicyThe US administration's abrupt announcement of broad tariffs triggered significant market turbulence in April, but President Trump's decision to pause these tariffs for 90 days catalyzed a robust market recovery. The market's ability to absorb tariff-related concerns suggests investors view these disruptions as transient, with a pragmatic resolution appearing likely as Trump's political capital on trade issues wanes. |
Tariffs Volatility Recovery Negotiations Disruption | |
Data CentersRising electricity demand driven by AI's energy needs is creating investment opportunities in utilities and related sectors. Galaxy Digital Holdings represents an asymmetric opportunity with its Helios data infrastructure facility in West Texas, which shifted from Bitcoin mining to AI use, leveraging 800MW of approved ERCOT power with an additional 1.7GW in progress to meet growing AI demand. |
Electricity Infrastructure Power Energy Capacity | |
| 2025 Q1 |
Trade PolicyTrump administration's tariffs have created economic uncertainty and market volatility. ACR believes de-escalation is likely due to political self-preservation concerns. The firm discusses comparative advantage theory and evaluates tariff objectives including protecting national security and restoring manufacturing jobs. |
Tariffs Trade War Protectionism Manufacturing Globalization |
InflationTariffs function as a tax on imports that raise prices. ACR estimates tariff impact on inflation could be a few percentage points if overall tariff rate reaches 10% on imports and exports. The firm maintains long-term inflation estimates of 2-4%. |
Price Increases Import Costs Monetary Policy Economic Impact | |
ValueMarket declines have created a valuation adjustment that appears unrelated to tariffs. Many companies with declining stock prices had higher valuations. ACR believes a valuation reset is long overdue and their strategy relative returns are likely to benefit if this dynamic persists. |
Valuation Reset Market Correction Relative Returns Price Discovery | |
| 2024 Q4 |
ValueACR focuses on owning reasonably valued companies and avoiding overpaying for profits. The firm's EQR strategy demonstrates value creation through replacing overvalued companies with undervalued ones, capturing added earning power while pruning valuation risk. |
Valuation P/E Earnings Multiple Fundamental |
AIThe letter acknowledges US technological superiority and optimism about benefits from artificial intelligence, synthetic biology, and quantum computing. However, it warns against overpaying for tech leaders despite their innovation potential. |
Technology Innovation Productivity Growth | |
| 2024 Q3 |
ValueManager emphasizes focusing on profits and not overpaying for them as the path to investment success. The strategy involves carefully pruning portfolios of high prices during bull markets to ensure satisfactory returns during bear markets. At historically high P/E ratios like today, their portfolios have very different characteristics than the market. |
Valuation P/E Ratios Profits Price Returns |
| 2024 Q2 |
AIAI exuberance continued into Q2 with financial speculation driving valuations. ACR views AI as both a financial bubble and transformative technology, similar to historical patterns with railroads, automobiles, computers, and the internet. The firm believes speculation is necessary to fund new companies and products, though they avoid sky-high prices and overly optimistic cash flow estimates. |
Artificial Intelligence Technology Speculation Bubble |
ValueACR maintains strict value discipline by avoiding high valuations in speculative markets and insisting on buying companies with durable cash flows at low prices relative to those cash flows. The firm's EQR strategy has historically performed well regardless of beginning market P/E by pruning portfolios of high valuations. Current valuation data shows they have maintained this discipline despite recent market challenges. |
Valuation Cash Flows Discipline Quality | |
| 2024 Q1 |
AIAI represents a revolutionary technology comparable to the Internet, with potential to impact everything from individual companies to labor markets. The manager acknowledges AI hype gripping markets since ChatGPT's release but maintains it remains within their circle of ignorance. They are planning defensively for disruption while evaluating cash flows and deploying AI tools across their firm. |
Artificial Intelligence ChatGPT Technology Disruption Productivity |
| 2023 Q4 |
ValueManager emphasizes investing in cheap quality companies across market caps and geographies. The portfolio trades at attractive valuations with price-to-value of 0.81 compared to historical average of 0.84. Focus on companies converting profits into dividends and realized gains rather than waiting for market adjustments. |
Valuation Quality Dividends Price-to-value |
QualityCore investment constraint is quality at the company and security level. Manager seeks quality merchandise marked down, following Ben Graham's principle that price is what you pay and value is what you get. Quality companies can include both growth compounders and value situations. |
Quality Ben Graham Fundamentals Business quality | |
| 2023 Q3 |
RatesInterest rates have ranged from over 15% in 1981 to less than 1% in 2020, with the 10-year Treasury rising to nearly 5% recently. The Fed's zero interest rate policy and quantitative easing did not stimulate growth but inflated asset prices across all major asset classes. Real yields on government debt are largely what central banks want them to be, with expectations of 1-2% real yields on long-term government debt. |
Interest Rates Fed Policy ZIRP QE Real Yields |
InflationMassive fiscal spending during the pandemic ultimately resulted in inflation rather than central bank monetary policy. The Fed's response to inflation above 2% is to raise rates, though this is a blunt tool likely to cause recession unless wielded with precision. Equities are viewed as the only potential solution to policy-inflicted negative real bond yields and serve as a long-term hedge against inflation. |
Inflation Fiscal Policy CPI Real Returns Asset Protection | |
Credit StressRegional banks made long-term loans at historically low rates while borrowing short-term, precipitating the regional banking crisis. The longer short-term rates stay high, the more likely banks, real estate investors, and private equity sponsors who invested long-term and borrowed short-term at inadequate spreads will face trouble. This imprudence is likely to provide opportunities for credit investing. |
Regional Banks Duration Risk Asset Liability Mismatch Credit Opportunities Banking Crisis | |
ValueThe S&P 500 cyclically adjusted P/E is 33, translating to a paltry 3% earnings yield and expected real return. ACR avoids investing in equities with these characteristics and focuses on identifying equity investments with different and more attractive valuation characteristics. During periods like today, idiosyncratic portfolios are essential for protecting from valuation multiple contractions. |
Valuation P/E Ratios Earnings Yield Idiosyncratic Investing Multiple Compression |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Jul 18, 2025 | Fund Letters | Nick Tompras | GLXY CN | Galaxy Digital Holdings, Ltd. | Financials | Capital Markets | Bull | TSX | Crypto, datacenters, infrastructure, Optionality, Power | Login |
| Jul 18, 2025 | Fund Letters | Alpine Capital Research | V | Visa Inc. | Information Technology | Data Processing & Outsourced Services | Bear | NYSE | Blockchain Technology, Competitive Moats, Digital Assets Disruption, Duopolistic Control, high margins, payment processing, Valuation Derating | Login |
| Jul 18, 2025 | Fund Letters | Nick Tompras | LRCX | Lam Research Corporation | Information Technology | Semiconductor Equipment | Bull | NASDAQ | AI, CapEx, Cycles, Equipment, semiconductors | Login |
| Jul 18, 2025 | Fund Letters | Nick Tompras | MU | Micron Technology, Inc. | Information Technology | Semiconductors | Bear | NASDAQ | AI, Cyclical, Discipline, Memory, valuation | Login |
| Jul 18, 2025 | Fund Letters | Nick Tompras | V | Visa Inc. | Financials | Data Processing & Outsourced Services | Bear | NYSE | disruption, Fintech, Moat, Payments, valuation | Login |
| Jul 18, 2025 | Fund Letters | Alpine Capital Research | GLXY.TO | Galaxy Digital Holdings | Information Technology | Data Processing & Outsourced Services | Bull | Toronto Stock Exchange | AI infrastructure, Asymmetric, Bitcoin mining, CoreWeave Partnership, data centers, Digital Assets, Electricity, ERCOT, West Texas | Login |
| Jul 18, 2025 | Fund Letters | Alpine Capital Research | LRCX | Lam Research Corporation | Information Technology | Semiconductors & Semiconductor Equipment | Bull | NASDAQ | Attractive Valuations, Fabrication Machinery, Modern Utility, Semiconductor Ecosystem, semiconductor equipment, Technology Enabler | Login |
| Jul 18, 2025 | Fund Letters | Alpine Capital Research | MU | Micron Technology | Information Technology | Semiconductors & Semiconductor Equipment | Neutral | NASDAQ | Competitive Advantage, memory semiconductors, Opportunistic Investment, profit-taking, Strong Fundamentals, Valuation Discipline | Login |
| TICKER | COMMENTARY |
|---|---|
| AMZN | Amazon's $100 billion Capex alone exceeds the market cap of 80% of S&P 500 companies, including firms like Ford ($30B), General Motors ($55B), and Target ($75B), based on mid-2025 estimates. Amazon CEO Andy Jassy emphasised AI's impact in a recent letter, stating, '…we anticipate a reduction in our corporate workforce as AI-driven efficiencies are implemented across our operations.' |
| V | We also exited our position in Visa, a company we've long respected for its formidable moat, high margins, low capital intensity, and near-duopolistic control of global card payments alongside Mastercard. However, growing concerns about potential disruption from digital assets and blockchain technology prompted us to reassess its outlook. While Visa remains a fundamentally strong business, we believe its market is vulnerable to competitive pressures that could lead to a significant valuation derating or extended period of stagnation. |
| MU | We sold our stake in Micron Technology, a standout S&P 500 performer in 2025, as its rapid price surge drove valuations above our comfort levels. Our initial investment in Micron was a calculated move, capitalising on its significant decline from prior highs while recognising its strong long-term fundamentals and competitive advantage. |
| LRCX | We capitalised on attractive valuations in the semiconductor sector by initiating a position in Lam Research Corporation, a premier semiconductor equipment manufacturer. Lam Research drives technological advancement by producing the machinery essential for semiconductor fabrication, positioning it as a vital enabler of the industry's growth, akin to a modern utility. |
| SOXX | To maintain our positive outlook on the semiconductor sector, we reallocated the proceeds to the iShares Semiconductor ETF (SOXX), ensuring diversified exposure. |
| GLXY.TO | Consequently, we've added Galaxy Digital Holdings—a digital asset and AI infrastructure-focused company—to select portfolios, seeing it as an asymmetric investment opportunity. The investment centres on its Helios data infrastructure facility in West Texas, which has shifted from Bitcoin mining to AI use, leveraging 800MW of approved ERCOT power to avoid 36-month delays, with an additional 1.7GW (totalling 2.5GW) in progress to meet growing AI demand. A recent deal with CoreWeave for the initial 600MW ensures strong cash flow and stability. Effective management execution could deliver substantial returns over the next 2–3 years, though volatility is anticipated in the coming months. |
| CRM | Salesforce CEO Marc Benioff recently highlighted AI's transformative role, noting that it currently handles 30% – 50% of critical functions such as engineering, coding, support, and customer service at Salesforce, with expectations of further expansion. |
| BRK-A | To complement our growth-focused technology investments, we continue to hold positions in banks, financial conglomerates like Berkshire Hathaway, and private equity firms such as Brookfield Corp. |
| BN | To complement our growth-focused technology investments, we continue to hold positions in banks, financial conglomerates like Berkshire Hathaway, and private equity firms such as Brookfield Corp. |
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