| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
The manager argues that artificial intelligence is following Solow's Paradox, where massive capital investment fails to produce measurable productivity gains. Despite $2.5 trillion valuations for AI labs and $9.5 trillion for semiconductor suppliers, 95% of organizations report zero return on AI investments. The hyperscalers have accumulated over $2 trillion in off-balance sheet liabilities funding data center buildouts, while consuming all their cash flow and issuing debt to maintain dividends. Most critically, $1.2 trillion in AI-backed debt sits inside PE-owned life insurance companies with only 4% equity cushions, creating systemic risk identical to the 2008 housing crisis. The manager expects sequential failures starting with neoclouds, spreading to AI labs, then forcing hyperscalers to cut shareholder returns. Life insurance policy holders will demand redemptions, triggering runs and government intervention. Federal Reserve Chairman Warsh will repeat Greenspan's error of lowering rates based on false productivity assumptions, then be forced to print money to prevent systemic collapse. The manager recommends gold as the clearest safe haven.
The AI infrastructure buildout represents a massive debt-fueled bubble that will collapse and force Federal Reserve bailouts, making gold the optimal safe haven investment.
The manager expects the AI bubble to collapse in a sequence similar to the 2008 financial crisis. Neocloud companies will fail first as their debt becomes unsustainable, followed by AI labs reorganizing as productivity gains fail to materialize. Hyperscalers will survive but must cut dividends and buybacks to service debt while their market caps adjust downward to remove AI premiums. Life insurance companies will face runs, forcing government intervention to freeze policies and quasi-nationalize the industry. The Federal Reserve will have no choice but to engage in extraordinary money printing to prevent systemic collapse, despite Chairman Warsh's current optimistic rhetoric. Republicans will be blamed for the crisis, energizing radical socialists in the Democrat Party. PE titans will buy surviving assets at pennies on the dollar, further concentrating wealth. The manager views gold as the clearest and best safe haven for investors.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Aug 14 2026 | 2026 Q2 | 000660 KS, 005930 KS, AMD, AMZN, APO, ASML, AVGO, BAM, BLK, BX, GOOGL, INTC, KKR, META, MSFT, MU, NVDA, ORCL, TSM | AI Bubble, Data centers, Federal Reserve, gold, monetary policy, private credit, semiconductors, Systemic Risk | - | AI represents a $2.5 trillion debt bubble built on false productivity assumptions that will collapse and force Fed money printing. The hyperscalers are burning cash funding data centers while $1.2 trillion in AI debt sits in undercapitalized life insurers. When implementation failures trigger defaults, sequential collapses will spread from neoclouds to AI labs to insurance companies, forcing government bailouts. Gold is the optimal safe haven. |
| Apr 13 2026 | 2026 Q1 | - | Dollar, energy, geopolitics, gold, inflation, Iran, Mining, private credit | - | Gold's March selloff was liquidity-driven noise masking fundamental strength from geopolitical fracturing and inevitable Fed money printing to bail out collapsing private credit. Western hemisphere gold miners benefit from energy advantages and jurisdictional stability. Unsustainable debt levels across all sectors ensure dollar debasement regardless of geopolitical outcomes, making gold the essential hedge. |
| Jan 15 2026 | 2025 Q4 | MSTR | commodities, Dollar, Geopolitical, gold, inflation, Mining, monetary policy | - | Gold has outperformed all major assets when measured as real money, with the dollar losing 58% of its value since October 2023. The manager sees gold miners entering a multi-year bull market as Fed monetary policy loses effectiveness and the dollar's reserve status erodes. Silver offers additional upside from industrial demand and supply constraints. |
| Nov 4 2025 | 2025 Q3 | - | Defense Spending, Economic Cycles, Fed policy, gold, inflation, Monetary History | - | Historical analysis reveals Federal Reserve policies mirror failed empires from Rome to Weimar Germany. Exponential money creation becomes irreversible, leading to asset bubbles, economic chaos, and war. Gold at $4,000/oz remains undervalued versus Fed balance sheet coverage ratios suggesting $8,500-$13,000 targets. The choice: sound money backed by gold or monetary collapse following historical precedent. |
| Jul 15 2025 | 2025 Q2 | - | Defense Spending, geopolitics, gold, government debt, Iran, monetary policy, War | - | Gold will continue rising as government spending accelerates through the Big Beautiful Bill and structural political forces prevent fiscal restraint. While discounting immediate Middle East war premiums, the manager sees fractional reserve banking cycles requiring increasing money printing to support debt levels. Gold miners have launched higher and should benefit from continued currency debasement. |
| Apr 14 2025 | 2025 Q1 | - | China, credit, Economics, gold, History, Monetary, tariffs, Trade Policy | - | Trump's tariff strategy aims to demolish unsustainable post-WWII trade structures built on excessive credit creation. Gold at $3,200/oz remains undervalued as the ultimate monetary asset, positioned to benefit from the collapse of fiat currencies and return to sound money principles. The greatest credit bubble in history faces potential uncontrolled unwind with central banks too weak to intervene successfully. |
| Jan 14 2025 | 2024 Q4 | AAPL, AMZN, GOOGL, META, MSFT, MSTR, NVDA, TSLA | AI, Bitcoin, Bubble, Fed, gold, liquidity, Miners, rates | - | Market bubble in tech and crypto will collapse as Fed liquidity reverses and Treasury financing needs spike rates. Gold miners offer operational leverage to rising gold prices as international investors abandon dollar assets. Junior miners underperformed in 2024 despite favorable fundamentals but are positioned for outsized gains when bubble assets correct and capital seeks real assets. |
| Oct 10 2024 | 2024 Q3 | - | Bubble, credit, Deficit, gold, inflation, Politics, tariffs | - | The U.S. faces unsustainable deficit spending regardless of election outcome, trapped in history's greatest credit bubble with net interest exceeding defense spending. Both Trump's tariff policies and Harris's wealth transfers lead to massive inflation. Gold benefits as it thrives during credit collapse and currency debasement that governments use to mitigate economic disasters. |
| Aug 13 2024 | 2024 Q2 | - | defense, Dollar, geopolitics, gold, inflation, Russia, Sanctions, Stagflation | - | American imperial overreach and sanctions are destroying the dollar system while escalating wars drive unsustainable deficit spending. The resulting stagflation will be worse than the 1970s due to 122% debt-to-GDP and Fed balance sheet weakness. Stocks will trade sideways for a decade while losing 90% in real terms. Gold offers primary protection against monetary collapse. |
| Feb 15 2024 | 2023 Q4 | - | Banking, deficits, Federal Reserve, gold, inflation, monetary policy, Treasury Bonds | - | The Federal Reserve faces three insurmountable problems: ineffective tools against massive deficits, rising rates forcing cash preference reduction that could trigger price explosions, and banking system stress from bond losses while the Fed itself operates at a loss. All conditions favor gold investment as the post-1980 financial system approaches inevitable collapse. |
| Dec 10 2023 | 2023 Q3 | - | Banking, deficits, Fed policy, gold, inflation, Treasury Bonds | - | Myrmikan argues the post-1980 financial system faces inevitable collapse due to Fed insolvency, massive deficits, and banking system stress from Treasury bond losses. Despite gold investor frustration, all thesis conditions have materialized. The manager positions current gold investors like 1980 bond bulls at a major inflection point. |
| Sep 18 2023 | 2023 Q2 | AAPL, META, NVDA | Banking, Bubbles, Credit Stress, gold, inflation, monetary policy, Treasury | - | The 60-year credit bubble is breaking with stocks facing 50-75% declines as earnings yields normalize and margins compress. Structural inflation prevents Fed rescue while Treasury funding needs explode. Regional banks face massive losses and credit stress spreads. Gold miners are absurdly undervalued relative to resources while Chinese institutions pay $100/oz premiums, signaling imminent crisis. |
| May 12 2023 | 2023 Q1 | SIVB | Banking, Fed policy, gold, inflation, monetary policy, Regional Banks | - | Myrmikan Capital's Daniel Oliver argues the Fed faces an impossible choice between Currency School and Banking School monetary theories, creating systemic banking instability. With regional bank failures accelerating and the fractional reserve system reversing, he expects crisis management of increasing intensity. Capital will urgently seek safe-havens, with gold being the preeminent choice for early movers. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q2 |
AIThe manager argues AI is following Solow's Paradox, where productivity gains are not materializing despite massive capital investment. Implementation costs are exceeding expectations, with 95% of organizations getting zero return on GenAI investment. The AI labs are valued at $2.5 trillion despite steep losses and flawed business models relying on subsidized users. |
Productivity Valuations Implementation Business Models Solow Paradox |
Data CentersHyperscalers have over $2 trillion in firm orders from AI providers and are radically changing business models to meet demand. They are laundering capex through neoclouds to hide investments as operational expenses. The buildout represents 2.4% of US GDP but depends on products that regularly produce catastrophic errors. |
Hyperscalers Neoclouds Infrastructure Capex Off-balance sheet | |
Private CreditAI debt has ballooned to $1.2 trillion or 15% of the investment-grade market. PE firms are placing this debt into captive life insurance companies with only 4% equity cushions. The debt is secured against GPU assets and computing contracts that may become worthless, creating systemic risk similar to the 2008 housing crisis. |
Life Insurance Systemic Risk PE Ownership Leverage Reinsurance | |
SemiconductorsNvidia controls 90% of AI microchips and is funding both demand and supply sides of the market. The company is investing $30 billion into OpenAI and $10 billion into Anthropic while guaranteeing neocloud revenue. AI suppliers represent $9.5 trillion in market cap, up 550% since ChatGPT, but margins are inverted with suppliers earning 41% while AI labs lose 59%. |
Nvidia GPUs CUDA Monopoly Circular Funding | |
RatesFed Chairman Warsh is repeating Greenspan's error by arguing AI will cause productivity gains requiring lower rates to prevent deflation. The manager argues this will fuel malinvestment just as it did in the 1920s and 2000s. When the AI bubble collapses, Warsh will have to print money to bail out the banking system and life insurance companies. |
Federal Reserve Monetary Policy Greenspan Put Malinvestment Bailouts | |
GoldThe manager concludes that when the AI debt bubble collapses and threatens the financial system, the Fed will print money to fund bailouts. For investors seeking protection, gold may not be the only safe haven but it is the clearest, simplest, and best option available. |
Safe Haven Currency Debasement Wealth Preservation | |
Credit StressLife insurance companies hold $11 trillion in assets with only 4% equity cushion. They have ceded $2.1 trillion in reserves to offshore reinsurers, with 49.5% of new PE-owned insurer investments in privately-placed instruments. Policy holders may demand redemptions when AI debt collapses, forcing asset sales and creating runs similar to bank runs in 2008. |
Insurance Runs Offshore Reinsurance Illiquid Assets Policy Redemptions | |
ValuationsThe AI ecosystem shows extreme valuation disconnects: neoclouds trade at 40-101 times revenue, AI labs at 40 times revenue with steep losses, and hyperscalers plus Nvidia comprise 29.7% of the S&P 500. The manager compares current valuations unfavorably to the internet bubble, where Webvan traded at 45 times peak revenue. |
Bubble Market Cap Revenue Multiples S&P 500 Historical Comparison | |
| 2026 Q1 |
GoldGold plunged 24.4% in March from $5,420 to $4,099 due to Middle East conflict and liquidity conditions, but the war has increased gold's fundamental value. The manager expects gold to recover as the Fed will need to print money to bail out private credit players regardless of Iran conflict outcome. |
Gold Safe Haven Reserve Asset Monetary Policy Liquidity |
Gold MinersHUI Gold Miners Index fell 20% during the March correction with little stock dispersion, suggesting liquidity-driven selling. The manager expects the market to begin discriminating between miners based on energy exposure and jurisdictional risks, favoring Western hemisphere producers. |
Gold Miners Energy Costs Jurisdictional Risk Mining Operations | |
Private CreditPrivate credit firms including Apollo, Ares, Blue Owl, BlackRock and Morgan Stanley are gating investors as redemption requests flood in. Apollo received withdrawal requests equal to 11.2% of its $15 billion fund. The manager describes this as a snowballing disaster requiring Fed intervention. |
Private Credit Liquidity Crisis Redemptions Credit Stress | |
OilEnergy prices surged due to Middle East conflict and Strait of Hormuz closure. The manager expects either conflict resolution leading to gradual price decline, or world fracturing into competing spheres with lowest prices in Western hemisphere. North America is expanding capacity aggressively. |
Oil Energy Prices Geopolitical Risk Supply Disruption | |
InflationRising energy prices will boost inflation and force the Fed to maintain or raise rates. If the world fractures into competing trade spheres, consumers will face massive inflation as cheap foreign products become expensive or unavailable. |
Inflation Energy Costs Trade Policy Consumer Prices | |
DollarThe dollar faces long-term decline regardless of whether establishment strategy or dissident narrative prevails. Galloping federal debt increases and vertical movement in total debt levels across all sectors threaten dollar stability, though imperial energy dominance could slow the demise. |
Dollar Debt Crisis Imperial Decline Currency Debasement | |
| 2025 Q4 |
ValueThe funds remain positioned in financially sound enterprises in parts of the world where company stock prices are more than collateralized by underlying intrinsic value. Despite high US market valuations, significant valuation gaps persist between US and non-US equities. |
Value Intrinsic Value Undervalued Valuation Gap |
PharmaceuticalsHealth care holdings including pharmaceutical and biotechnology companies added meaningfully to returns. Holdings such as Roche, Novartis, and Ionis Pharmaceuticals benefited from new drug approvals, steady earnings, and durable business models that generate cash through various economic conditions. |
Pharmaceuticals Biotechnology Healthcare Drug Approvals | |
Defense SpendingDefense-related holdings such as BAE Systems and Rheinmetall had been standout performers but fell back in Q4. While these businesses benefit from secular growth in defense spending globally, share prices have moved ahead of fundamentals, prompting modest position trimming. |
Defense BAE Systems Rheinmetall Defense Spending | |
AIMarket enthusiasm is attributed partly to excitement around artificial intelligence and its ability to dramatically impact productivity. However, the managers note that even the most profound technological revolutions aren't one-way streets to prosperity, suggesting caution about AI-driven market exuberance. |
AI Artificial Intelligence Technology Productivity | |
| 2025 Q3 |
GoldGold represents a superior store of value with historical precedent spanning 4,000 years across civilizations. At current prices around $4,000/oz, gold remains undervalued relative to Fed balance sheet coverage ratios that historically ranged from one-third to half. Gold revaluation could provide Treasury funding but risks worsening inflation if spent. |
Gold Store of Value Monetary History Fed Balance Sheet Treasury |
InflationHistorical patterns show that once monetary authorities begin debasing currency, the rate of debasement accelerates exponentially. Roman, Byzantine, Russian, and German examples demonstrate this universal phenomenon. Current Fed policy follows the same trajectory as ancient Rome's monetary stimulus and asset price inflation. |
Monetary Debasement Currency Historical Patterns Fed Policy Asset Prices | |
Defense SpendingWar serves as the greatest economic stimulus, requiring continuous justification to maintain employment in defense industries. The Ukrainian conflict exemplifies this, with 90% of security assistance spent domestically on American manufacturers, creating jobs and economic growth that officials describe as needing continuation. |
War Economy Defense Industry Ukraine Economic Stimulus Military Spending | |
| 2025 Q2 |
GoldGold serves as free market money that measures value and reflects central bank health. The manager expects gold prices to rise due to increased government spending and debt monetization. Gold miners have launched higher with passage of the Big Beautiful Bill. |
Gold Monetary Policy Currency Central Banks Inflation |
Defense SpendingMilitary spending increased by $156.2 billion with total now over $1 trillion. War becomes the ultimate economic stimulus as it allows unfettered spending and commands national assent from all groups for increased expenditures. |
Defense Military Spending Stimulus Budget | |
GeopoliticalAnalysis of potential U.S. invasion of Iran based on Chinese professor's framework. Middle Eastern conflicts could affect gold prices if large enough to impact debt expenditures or threaten military might of currency issuer. |
Iran Middle East Geopolitics War China | |
| 2025 Q1 |
Trade PolicyManager extensively analyzes Trump's tariff strategy and its historical precedents, arguing that credit creation rather than tariff rates drives trade deficits. Discusses how tariffs serve dual purpose of balancing trade and raising revenue, with implications for Treasury demand and fiscal policy. |
Tariffs Trade War Protectionism Import Duties Export Certificates |
GoldGold positioned as undervalued at $3,200/oz, representing only 12.4% of Fed assets versus 12.9% in 1971. Manager views gold as one of few asset classes able to absorb safe-haven flows and provide diversification from Treasury bonds as it reenters the global financial system. |
Gold Standard Reserve Asset Safe Haven Monetary System Central Banks | |
Credit StressManager warns of the greatest credit bubble in history, with risks of uncontrolled demolition leading to panic unwind. Central bank balance sheets viewed as too weak to guarantee successful intervention, potentially causing bonds, stocks, and currencies to collapse simultaneously. |
Credit Bubble Financial Crisis Leverage Systemic Risk Deleveraging | |
| 2024 Q4 |
Gold MinersJunior gold mining companies offer operational leverage to gold prices through their thin margins and low valuations. When gold prices rise, their net present values increase fastest, and valuation multiples converge toward majors. They generally move last but then the most in bull markets. |
Gold Junior Miners Mining Services Leverage Operational |
CryptoBitcoin and cryptocurrency markets represent bubble dynamics, with MicroStrategy using convertible debt to leverage bitcoin exposure. The crypto market collectively trades at $3.3 trillion valuation including speculative tokens like Fartcoin and Butthole Coin with no economic value. |
Bitcoin Crypto Convertible Leverage Speculation | |
LiquidityFederal Reserve balance sheet reduction and Treasury financing dynamics are creating liquidity headwinds. The reverse repo facility has been drained from $2.3 trillion to $178 billion, while Treasury bill issuance strategy changes are affecting market liquidity conditions. |
Fed Balance Sheet Reverse Repo Treasury Monetary Policy | |
AIThe magnificent seven tech stocks, particularly Nvidia worth $3.5 trillion or 13% of U.S. GDP, represent artificial intelligence bubble dynamics. These companies increased 69% on average in 2024, driving S&P 500 returns while representing one-third of the index. |
Nvidia Tech Valuation Bubble Semiconductors | |
| 2024 Q3 |
GoldGold benefits from credit collapse and currency debasement. Gold underperformed during credit bubble periods like the 1980s and 2010s but loves credit collapses when governments start debasing currency to mitigate the collapse. |
Gold Currency Credit Inflation Debasement |
InflationMassive inflation expected from Trump's tariffs and deficit spending policies. Harris would explode the deficit through higher tax rates and transfer payments, following Lenin's program to crush the bourgeoisie through taxation and inflation. |
Inflation Deficit Tariffs Taxation Currency | |
Trade PolicyTrump's economic proposals center on internal improvements protected by high tariffs, echoing Lincoln's original Republican platform. These policies would bring massive inflation but develop internal national resources. |
Tariffs Trade Protection Internal Development | |
| 2024 Q2 |
GoldGold is positioned as the primary hedge against monetary debasement and currency collapse. The manager argues gold should rise 36% to $3,300/oz just to reach 1970 levels relative to Fed assets, with potential for much higher gains as the dollar system deteriorates. Gold rose twenty-four fold from 1971 to 1980 during the last inflationary crisis. |
Gold Monetary Inflation Currency Fed |
SanctionsWestern sanctions on Russia are destroying the dollar-based monetary system that has underpinned American hegemony. The seizure of Russian assets is causing global distrust in Western financial institutions and accelerating the move away from dollar reserves. This threatens the Eurodollar system that has allowed the US to extract seigniorage globally. |
Sanctions Dollar Russia Eurodollar Reserves | |
InflationThe current inflationary episode is driven by monetary debasement rather than credit cycles, making it more persistent than previous episodes. War spending, deficit financing at 5.5% interest rates, and Treasury bill issuance are all contributing to sustained price pressures. The manager expects stagflation similar to the 1970s but potentially worse. |
Inflation Stagflation Monetary Deficit War | |
Defense SpendingMilitary expenditures are escalating rapidly due to proxy wars in Ukraine and potential Middle East conflicts. The CBO estimates 2024 federal spending increased $400 billion above February projections, primarily due to aid to Ukraine, Israel, and Indo-Pacific countries. War financing at current interest rates is far more expensive than historical precedents. |
Defense War Ukraine Military Spending | |
| 2023 Q4 |
GoldGold investors are frustrated despite all necessary conditions being met for the investment thesis including massive federal deficits, inflation, banking system holes, and an insolvent central bank. The manager compares current gold investors to bond bulls of 1980, suggesting a major turning point may be approaching. |
Gold Inflation Currency Central Bank Monetary Policy |
InflationInflation has broken out due to COVID transfer payments hitting limited consumer goods supply. The manager argues that current massive federal deficits of $2 trillion per year are pouring directly into the economy like COVID payments, creating sustained inflationary pressure that the Fed cannot control with traditional tools. |
Inflation Monetary Policy Federal Deficit Consumer Prices Central Bank | |
Credit StressThe banking system faces severe stress from mark-to-market losses on Treasury bonds as rates rise. Banks become illiquid when cost of capital exceeds bond income or when they suffer losses on commercial real estate loans, forcing them to realize theoretical losses by selling bonds. |
Banking Credit Treasury Bonds Commercial Real Estate Liquidity | |
| 2023 Q3 |
GoldGold investors are frustrated despite all necessary conditions being met for the investment thesis including massive federal deficits, inflation, banking system holes, and an insolvent central bank. The manager compares current gold investors to bond bulls of 1980, suggesting gold is positioned for a major move as the financial system collapse is long overdue. |
Gold Inflation Currency Central Banks Monetary Policy |
InflationInflation has broken out due to COVID transfer payments hitting limited consumer goods supply. The Fed faces wrong tools as Biden's $2 trillion annual deficits pour directly into the economy. Cash balance preference theory suggests potential for 227% inflationary burst to normalize monetary conditions. |
Inflation Monetary Policy Deficits Fed Policy Cash Balances | |
Credit StressThe banking system faces severe stress as Treasury bonds serve as primary collateral but are suffering mark-to-market losses. The Fed's Bank Term Funding Program allows banks to borrow against bonds at face value, but banks must pay interest while the Fed itself is operationally insolvent. |
Banking Credit Treasury Bonds Fed Losses Financial System | |
| 2023 Q2 |
Credit StressThe manager describes widespread credit stress across multiple sectors including regional banks with massive unrealized losses, subprime auto dealers failing, credit card debt reaching $1 trillion with 24% average rates, and delinquency rates at smaller banks hitting 7.5%. This credit stress is viewed as part of a broader credit wave that has been building since 1960 and is now approaching a breaking point. |
Banking Delinquency Subprime Regional Banks Credit Cards |
GoldGold is positioned as the ultimate safe haven when the credit wave crashes, with the manager noting Chinese local premiums of $100/oz as evidence of institutional preparation. The manager uses the analogy of water retreating before a tsunami to describe current gold positioning, suggesting dramatic upside when the financing crisis arrives and central banks react. |
Safe Haven China Premium Tsunami Crisis | |
Gold MinersGold mining companies are described as absurdly undervalued, with economic and growing resources managed by PhDs valued less than fancy New York apartments. The manager expects the market to rectify this imbalance dramatically and soon, drawing parallels to the explosive turn after previous periods of underperformance. |
Valuation Resources Undervalued Explosive Imbalance | |
InflationThe manager argues that unlike previous cycles, the next crisis may not provide deflation cover for Fed intervention due to structural changes including 120% debt-to-GDP, underinvestment in mining and energy, hollowed-out industrial base, and China's demographic challenges. These factors suggest persistent inflationary pressures that will constrain monetary policy response. |
Structural Debt Underinvestment Demographics Constraints | |
| 2023 Q1 |
InflationThe manager analyzes the theoretical debate between Currency School and Banking School views on inflation causation. He argues that current Fed policy operates under neo-Banking School thinking where real interest rates determine inflation, while the shrinking money supply suggests Currency School dynamics are also at play. |
Monetary Policy Interest Rates Money Supply Fed Policy Real Rates |
Regional BanksThe manager discusses the ongoing regional banking crisis, noting that three of the four largest bank failures in U.S. history have occurred since March. He highlights that regional banks are being squeezed on both sides of their balance sheets with deposits fleeing and commercial real estate loans souring. |
Bank Failures Credit Stress Commercial Real Estate Deposits KRE | |
GoldThe manager concludes that capital will seek safe-havens with ever more urgency, with gold being the preeminent safe-haven. He suggests that those who get to gold first will fare the best as the monetary system faces increasing crisis management. |
Safe Haven Capital Preservation Monetary Crisis Store of Value Currency |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| No Elevator Pitches found | ||||||||||
| TICKER | COMMENTARY |
|---|---|
| MSFT | Microsoft (market cap $3 trillion) reports $627 billion in back orders, half of which is just from OpenAI. The company has not yet hit the bond market for financing its foray into AI, but it has engaged in questionable accounting. For example, Microsoft invested $13 billion into OpenAI in 2023, but reportedly $10 billion of that figure was in the form of credits for OpenAI to use Microsoft's cloud services. Microsoft then counts the use of those credits as revenue. From Q1 2025 to Q1 2026, Microsoft's revenue grew 10.7%. Revenue then jumped 8.6% just from Q1 to Q2 2026 to $90 billion. Cash flow from operations rose an incredible 26% year over year from Q1 2025 to Q1 2026. Then it jumped by another 11.1% in Q2 2026 to $55.4 billion, stunning growth for such a large company. Microsoft shares leapt 15% (increasing the market cap by $435 billion) the morning Q2 results were announced. But cash flows show a different story. Official capex jumped 84% from Q1 2025 to Q1 2026 to $31 billion, then soared to $36 billion in Q2 2026. Dividends and buybacks remained steady at around $11 billion per quarter. Investments into privately held companies (which, as discussed below, is mostly laundered capex) ran from $5.5 billion in Q1 2025 to $7.8 billion in Q1 2026 to $11 billion in Q2 2026. Backing those expenditures out sent adjusted free cash flow from positive $3.9 billion in Q1 2025 to negative $7.8 billion in Q1 2026 to negative $11 billion in Q2. For normal companies, capex and investments are not counted against operating cash flows because of the assumption that they will produce revenue for many years. However, Microsoft revealed that roughly two thirds of our capex was for short-lived assets, primarily CPUs and GPUs, meaning the company will begin to suffer soaring depreciation charges (put another way, operating cash flows are well overstated). The company also purports that the huge growth in its cloud services, which represent two-thirds of revenue, is somehow immune from the AI bubble because nearly 90% [of revenue is] from customers outside of frontier model companies. But why are companies manically paying to put their data on the cloud if not for the intention of using AI to extract value? The most telling comment from Microsoft's earnings call was from CEO Satya Nadella: All of us are reading this 1873 as the book to be read. |
| AMZN | Amazon's CEO boasted in the company's most recent earnings release that the company's web services division grew 36.7% year over year while revenue grew 20% to $200 billion, with $496 billion in backlog orders. Net income increased from $18.2 billion in Q2 2025 to $62.6 billion a year later, though $53.4 billion of that figure is Amazon's write-up in the value of its equity investment in Anthropic. As with Microsoft, the market sent the stock up 21% after the earnings release, adding half a trillion dollars in market cap to make the company worth $3 trillion. But, as with Microsoft, cash flows reveal a different reality. Capex increased 68% to $54 billion in the quarter, an increase [that] primarily reflects investments in artificial intelligence, while official free cash flow sank from flat to negative $8.8 billion. In Q2 2025, Amazon invested $1.7 billion in corporate acquisitions, whereas that figure jumped to $24.4 billion in Q2 2026—net of other items, the company consumed $23.7 billion of cash in the recent quarter. The company has raised $77 billion in debt over the past twelve months to sustain its spending spree. |
| GOOGL | Google (market cap $4 trillion) reports over $460 billion in backlog orders, and its Q2 2026 net income increased by a stunning 298%, from $28.2 billion in Q2 2025 to $112 billion. Backing out the $99 billion in net income attributable to a write-up in Google's equity stake in Anthropic, there was still an impressive $10.8 billion gain. Yet to achieve this increase, capital investment nearly doubled to $44.9 billion and investments into private companies jumped to $21 billion. Google's manic spending sent adjusted free cash flow down sharply, to negative $26 billion, and the company had to issue $30.5 billion in common shares, $19 billion in convertible debt, and $24.8 billion in straight debt during the quarter to continue its spending. In Q1, the company had raised $32 billion in debt, including a $1.4 billion century bond with a fixed nominal yield of 6.125%—the U.S. dollar is unlikely to survive a hundred years, much less a technology company. Half of Google's revenues come from the now ad-cluttered search that produces archaic results compared to AI queries—the company has little choice but to bet everything on AI, and the market currently values this highly uncertain bet at $4 trillion. |
| ORCL | Oracle is the smallest of the hyperscalers with a market cap of only $420 billion, but it has the largest reported backlog at $638 billion. Revenue rose 21% year over year in the last quarter to $19.2 billion, and operating income jumped 137% to $8.4 billion. But, like the others, free cash flow was negative, at minus $1.9 billion. The company has raised $46 billion in long-term debt over the past three quarters, and it expects to raise another $40 billion of capital over the next year. Oracle has ended its share buy back program but continues to pay $1.5 billion per quarter in dividends, which means that the company is, at essence, replacing equity with debt. |
| META | Meta recently signed a $21 billion purchase contract with CoreWeave. The day that deal was announced, CoreWeave launched an offering of $1.25 billion in senior notes as well as $3 billion in convertible notes. Demand was so robust that the company upsized its senior note offering to $1.75 billion that same day and raised the convertible debt offering to $3.5 billion the following day. Again, Meta's promise, which backs the newly-issued neocloud debt, does not appear as a liability on Meta's balance sheet. Meta + Blue Owl's $27B Bet: Meta made an in-kind contribution to earn its 20% equity of the project while troubled asset manager Blue Owl Capital took 80%, contributing $7 billion in equity and selling $27 billion of A+ rated bonds with maturities of 24 years, the largest private-credit transaction ever executed. Under the deal, Meta leases and operates the campus but has no exposure to the natural catastrophe risk and can end its lease every four years, which keeps the liability off of its balance sheet (even though if Meta cancels the lease it has to pay the difference between the lease rate of the next tenant and the amortization of the debt). |
| NVDA | Nvidia was founded in 1993 to develop microchips to process graphics for the video game industry. In 2006, Nvidia developed CUDA (Compute Unified Device Architecture), a programming platform that allowed developers to use GPUs for general-purpose computing. When AI mania broke out with the release of ChatGPT in November of 2022, Nvidia found itself with a monopoly over the AI architecture, and the company now sells roughly 90% of AI microchips (nearly all of which are fabricated in Taiwan). Nvidia's share price ran from a split-adjusted $0.50 the month CUDA was released to $15 when ChatGPT came out, then to $206 currently, granting the company a $5 trillion market capitalization, tying it with Apple as the most valuable company in the world. Just as the hyperscalers are funding AI labs to establish equity ownership of and to fund their customers, Nvidia is also aligning with its customers to subsidize its own revenue and ensure that its microchip design remain the standard in the user market. Nvidia has invested $30 billion into OpenAI and $10 billion into Anthropic. On July 26, the Wall Street Journal reported that Nvidia is in talks with OpenAI to guarantee a $250 billion financing for a data center in Ohio: Nvidia's backing would allow the data-center developer… to raise debt at more favorable terms than it could if OpenAI had no financial backer, since OpenAI has no investment-grade credit rating as an unprofitable private company. Much of that $250 billion would return to Nvidia as revenue when OpenAI uses the funds to buy the microchips. Nvidia also funded Nebius with $2 billion in equity, taking a 9.3% stake, and placed $2 billion of equity into CoreWeave along with a $6.3 billion agreement to repurchase unused computing capacity: Under the terms of agreement, in instances where the Company's datacenter capacity is not fully utilized by its own customers, NVIDIA is obligated to purchase the residual unsold capacity through April 13, 2032. In other words, CoreWeave gets to buy the specialized microchips, Nvidia books the sale as revenue, records the profit, but then Nvidia guarantees CoreWeave's revenue, a guarantee that CoreWeave can then use to raise debt it needs to issue in order to pay Nvidia for the microchips. |
| 000660.KS | SK Hynix is the dominant player in the high-bandwidth memory (HBM) that goes into Nvidia's GPUs. The stock rocketed higher by thirtyfold between November 2022 and June of 2026 to a market cap of $1.5 trillion before being cut in half in the past six weeks. Just as the hyperscalers are funding their neocloud suppliers, Nvidia signed a $500 billion strategic partnership with SK Hynix to codevelop HBM optimized for CUDA, keeping the development market on the Nvidia standard. Nvidia is also funding an SK Hynix affiliate to build a data center that will use its microchips. |
| 005930.KS | Samsung and Micron Technology are also critical suppliers of HBM—their stocks have also soared and their combined market cap exceeds $2.3 trillion. |
| MU | Samsung and Micron Technology are also critical suppliers of HBM—their stocks have also soared and their combined market cap exceeds $2.3 trillion. |
| TSM | Taiwan Semiconductor manufactures Nvidia's GPUs and has seen its share price jump six times since ChatGPT, giving the company a market cap of over $2.2 trillion. |
| AVGO | Broadcom makes the high-speed networking equipment that connects Nvidia's GPUs in the datacluster. Its stock has moved sevenfold since late 2022, valuing the company at more than $2 trillion. |
| INTC | Adding Intel (which makes CPUs tailored to coordinate Nvidia's GPUs), ASML (the dominant supplier of the photolithography systems needed to manufacture advanced microchips), and AMD (the only credible future competitor to Nvidia) adds another $2 trillion in market cap. |
| ASML | Adding Intel (which makes CPUs tailored to coordinate Nvidia's GPUs), ASML (the dominant supplier of the photolithography systems needed to manufacture advanced microchips), and AMD (the only credible future competitor to Nvidia) adds another $2 trillion in market cap. |
| AMD | Adding Intel (which makes CPUs tailored to coordinate Nvidia's GPUs), ASML (the dominant supplier of the photolithography systems needed to manufacture advanced microchips), and AMD (the only credible future competitor to Nvidia) adds another $2 trillion in market cap. |
| BX | The giant private equity firms, BlackRock, Blackstone, Apollo, KKR, Brookfield, etc., are all vying for AI infrastructure deals and their associated fees. According to Bloomberg: The amount of debt tied to artificial intelligence has ballooned to $1.2 trillion, or 15% of the investment-grade market. On August 10, the firms listed above announced a syndicate to source $500 billion in additional financing for Nvidia: The deals will use compute power as collateral for the debt. Blackstone has placed $209 billion into its Fidelity & Guaranty, Everlake, and Resolution Life. |
| APO | The giant private equity firms, BlackRock, Blackstone, Apollo, KKR, Brookfield, etc., are all vying for AI infrastructure deals and their associated fees. According to Bloomberg: The amount of debt tied to artificial intelligence has ballooned to $1.2 trillion, or 15% of the investment-grade market. On August 10, the firms listed above announced a syndicate to source $500 billion in additional financing for Nvidia: The deals will use compute power as collateral for the debt. Apollo has placed $227 billion of its deals into Athene US Life, its captive life insurance company. Apollo-backed Athene US Life has reinsured substantially all of its $200 billion in annuity liabilities with Athene Holding Ltd. Bermuda. |
| KKR | The giant private equity firms, BlackRock, Blackstone, Apollo, KKR, Brookfield, etc., are all vying for AI infrastructure deals and their associated fees. According to Bloomberg: The amount of debt tied to artificial intelligence has ballooned to $1.2 trillion, or 15% of the investment-grade market. On August 10, the firms listed above announced a syndicate to source $500 billion in additional financing for Nvidia: The deals will use compute power as collateral for the debt. KKR has placed $163 billion of its deals into its Global Atlantic. |
| BLK | The giant private equity firms, BlackRock, Blackstone, Apollo, KKR, Brookfield, etc., are all vying for AI infrastructure deals and their associated fees. According to Bloomberg: The amount of debt tied to artificial intelligence has ballooned to $1.2 trillion, or 15% of the investment-grade market. On August 10, the firms listed above announced a syndicate to source $500 billion in additional financing for Nvidia: The deals will use compute power as collateral for the debt. |
| BAM | The giant private equity firms, BlackRock, Blackstone, Apollo, KKR, Brookfield, etc., are all vying for AI infrastructure deals and their associated fees. According to Bloomberg: The amount of debt tied to artificial intelligence has ballooned to $1.2 trillion, or 15% of the investment-grade market. On August 10, the firms listed above announced a syndicate to source $500 billion in additional financing for Nvidia: The deals will use compute power as collateral for the debt. Brookfield has placed $90 billion into its American National. |
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