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| Quarter | Letter Date | Fund Name | QTD | YTD | Tickers | Themes | Quick Take |
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"Constructive on durable software application compounders benefiting from falling token costs, maintaining high cash reserves after exiting Atlassian and treating acquired Braze as cash while building conviction in Klaviyo."
Meditation Capital reports a strong operating period across its software holdings, though explicit fund-level net performance figures were not disclosed in the quarterly update. Portfolio cash levels have risen to higher-than-normal levels following the full divestment of Atlassian upon its sharp multiple re-rating, the acquisition of portfolio holding Braze by Salesforce (which the manager is treating as near-cash given minimal antitrust or discretionary termination risk), and selective profit-taking trims across other positions. The manager is actively seeking opportunities to deploy this excess liquidity into resilient growth assets. The investment team maintains a highly skeptical stance toward the broader market's "AI capex trade," differentiating it sharply from recurring "AI product investments." The manager warns of potential supply-demand imbalances as massive compute capacity (>100 GW planned through 2028) comes online, pointing out that hardware infrastructure revenues are cyclical second derivatives requiring multi-trillion-dollar software end-markets. In contrast, the fund focuses on software businesses that harness AI advancements on a recurring basis, gain operating leverage from declining token generation costs, and trade at reasonable base-case valuations that do not require speculative AI compounding. Klaviyo represents the fund's highest-conviction idea, identified as its cheapest software holding at approximately 3.0x 2027 estimated revenue with expected baseline organic revenue growth above 20%. The manager highlights Klaviyo's deeply entrenched moat in retention marketing, best-in-class email deliverability, sticky integration with the Shopify ecosystem, and structural insulation from perceived client self-build and consumer agent disintermediation risks, targeting a 2x to 3x return over the medium term.
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