The AI trend is bringing to light major limitations in how institutions and hedge funds are participating in this secular technology cycle. I believe the biggest pain point in Wall Street today is that owning AI’s safest choices, such as Nvidia, Google, Microsoft or Amazon, results in immense opportunity cost. This past year, the Magnificent 7 has not been so magnificent, but rather has lagged the QQQs, along with any AI portfolio that was not bold enough to concentrate across the varying layers of the AI stack. If 2026 has proven anything, it’s that the largest gains are coming from technologies that are deeper in the stack. In a cycle like this, identifying the company is only half of the battle. The harder challenge is having the conviction to hold it at an allocation large enough to matter. A so-called active strategy that owns 1% or 2% of a position in a multi-bagger may protect an investor from looking wrong, but it’s rarely enough to outperform in a meaningful way. In fact, despite the immense volatility over this past month, we are holding strong with five positions above 100% YTD and ten positions up more than 50% YTD. Many of these stocks were held at high allocations. For those who have been with us for some time, I hope it’s abundantly clear that we do not coast on past-performance. The 90-page report below helps to substantiate this claim. We have expanded the list from 15 stocks to 20 stocks to account for the first signs of an inflection in AI software, while continuing to focus heavily on the infrastructure companies leading the AI market.
OpenAI, Anthropic Surge to Record Lobbying Spending Ahead of Midterms