Calendar

Previous belief → new evidence → updated belief. Previous belief: Micron was a strategically important AI-memory benchmark and potential correction entry, but the prior dossier explicitly warned that peak-cycle margins and trailing earnings could make valuation deceptively cheap; the decision gate was to normalize earnings at 50%/60%/70% gross margins rather than capitalize the then-current peak. New evidence: fiscal Q4/FY2026 materially exceeded the already exceptional prior guide, with $54.23B revenue, 87.0% non-GAAP gross margin, $33.42 non-GAAP EPS, $43.97B operating cash flow and $33.20B adjusted FCF; FY2026 adjusted FCF reached $62.31B. FQ1 FY2027 guidance is $61.5B ± $1.5B revenue, ~86.25% non-GAAP gross margin and $38.15 ± $1 non-GAAP EPS. This strengthens the structural HBM/AI-memory thesis and argues against an immediate reversion to legacy memory economics, but it also makes peak-margin normalization even more important. Updated belief: MU becomes an active thesis / buy-on-correction candidate, not a chase. Dossier v3 now uses the 30 Sep $1,065.11 close and a normalized 50%/60%/70% gross-margin framework, with 24-month PowerFund scenarios of bear $700–850, base $1,200–1,450 and bull $1,800–2,200. The probability-weighted midpoint is roughly $1,325–1,350, which is attractive but not enough by itself to justify capital at peak-cycle profitability and crowding. No planned action is created; future capital requires either a better price dislocation or more evidence that normalized margins/HBM share deserve another upward revision. Source: Micron fiscal Q4/FY2026 results, https://investors.micron.com/news/press-release/2026/Micron-Technology-Inc--Reports-Record-Fiscal-Fourth-Quarter-and-Full-Year-2026-Results/default.aspx

Previous belief → new evidence → updated belief. Previous belief: after the 16 Sep FOMC, PowerFund was SLOW / SELECTIVE because the policy-rate path and real-yield hurdle had worsened, so correlated AI-infrastructure deployment required both fresh company evidence and greater valuation margin. New evidence: BEA's 30 Sep releases show August PCE prices +0.3% m/m and +3.4% y/y, core PCE +0.2% m/m and +3.0% y/y, while real PCE rose 0.6% m/m. Q2 real GDP was revised up to 2.2% annualized from 1.5%, with real final sales to private domestic purchasers +4.6%; consumer spending and investment were important contributors. Inflation is therefore improving at the margin, especially core monthly PCE, but demand/growth remain too firm to treat this as a clean rate-relief signal. Updated belief: MAINTAIN SLOW / SELECTIVE deployment rather than accelerate correlated AI-capex risk. The macro valuation hurdle has eased modestly but has not disappeared; price weakness alone remains insufficient for adds. Independent-factor opportunities remain eligible if their own evidence and valuation gates clear. No planned trade is created by this macro review. Sources: https://www.bea.gov/news/2026/personal-income-and-outlays-august-2026 ; https://bea.gov/news/2026/gdp-third-estimate-industries-corporate-profits-state-gdp-and-state-personal-income-2nd

September 30 funding review completed. The federal government is funded through December 11, 2026 under a continuing resolution, removing the immediate shutdown risk and improving near-term defence procurement continuity. For MRCY, that is supportive but not enough to activate the deferred add: backlog conversion, sustainable margin recovery and free-cash-flow evidence remain incomplete, while the 29 Sep close of $82.64 still does not provide a sufficiently strong expected-return margin under the current 24-month framework. Keep the ~$3,994 add deferred until roughly $75 or lower with thesis intact, or until new operating evidence materially raises normalized 24-month earnings/FCF power.

BWXT Investor Day 2026 reviewed. Management set explicit 2030 targets of $5.5–6.0B revenue, $1.1–1.2B adjusted EBITDA, ~20% adjusted EBITDA margin and $525–575M free cash flow, supported by strong backlog and diversified government/commercial nuclear growth. The strategic thesis improved, but the old technical reclaim-above-$160 entry framework is obsolete. At the 29 Sep close near $138, PowerFund will not reactivate the old tracking plan automatically; future entry should follow a fresh 24/60-month expected-return underwriting using the new 2030 targets. The stale BWXT planned action was cancelled and dossier v4 records the new framework.

ECOC 2026 review completed. The conference confirmed a broad industry shift toward higher optical density, 400G/lane, 3.2T, CPO/NPO and optical die-to-die architectures. For CRDO, the evidence strengthens the optical-adjacency and architecture-resilience thesis via Cardinal/Kfir/ZeroFlap/PILOT, but does not justify a second tranche at the current valuation without production/customer diversification, cleaner working-capital conversion, or a materially better expected-return setup. COHR's PhotonLink/3.2T/6.4T demonstrations strengthen its vertically integrated photonics thesis; LITE's ELSFP and VCSEL D2D work strengthen its scale-up/CPO-NPO exposure. Both remain valuation-sensitive rather than chase setups. Portfolio implication: optics are becoming a larger AI bottleneck, but value capture is distributed across DSP, silicon photonics, lasers, modules and packaging, so company-specific commercial conversion matters more than generic optical exposure.

Completed 17 Sep 2026 after the Sep 15–16 FOMC. The Fed unanimously raised the target range 25 bp to 3.75–4.00%, its first hike since 2023. The September SEP shifted materially hawkish versus June: median appropriate fed funds is 4.1% at end-2026 (vs 3.8% in June), 4.1% at end-2027 (vs 3.6%), 3.9% in 2028 and 3.6% in 2029; the longer-run median rose to 3.2%. Sixteen of 18 submitted rate paths call for at least one further hike in 2026. The macro mix is stronger growth/labor plus stickier inflation: 2026 GDP median 2.3% vs 2.2% in June, unemployment 4.1% vs 4.3%, PCE inflation 3.7% vs 3.6%, core PCE 3.4% vs 3.3%; 17 of 18 participants see PCE inflation risks tilted upside and 15 of 18 see core-PCE risks tilted upside. Chair Warsh emphasized that underlying inflation trends have not meaningfully improved and declined to give forward guidance. Financial conditions remain restrictive: Sep 16 2-year Treasury yield rose ~7.5 bp to 4.738%, 10-year reached ~5.00%; the latest 10-year TIPS real yield before the meeting was ~2.62% on Sep 15; the dollar index rose ~0.63%. Equities weakened but AI/tech showed some resilience: S&P 500 -0.44%, Nasdaq essentially flat and semiconductors +0.6%. The implementation framework continues ample reserves and full rollover/reinvestment, so the tightening impulse is principally the higher policy-rate path rather than renewed balance-sheet runoff. PowerFund conclusion: MAINTAIN A SLOW / SELECTIVE DEPLOYMENT STANCE; do not accelerate correlated AI Infrastructure deployment. The long-term AI-capex thesis remains intact—Fed itself describes capital investment as robust and the growth outlook strengthened—but the discount-rate/real-yield hurdle has worsened and the 10-year near 5% means valuation discipline must tighten. Existing thesis-intact holdings remain holds; NBIS remains strict no-add without contract/financing evidence; SNDK remains deferred. Do not average down solely because AI names have fallen. New AI adds require both fresh company-specific evidence and a re-ranked expected return that compensates for the higher cost of capital. VRT's drop into the ~$235–240 area is now economically interesting but should trigger a refreshed dossier/opportunity ranking rather than an automatic add, especially given UIG acquisition integration/capital-allocation risk and the recent sector-wide debate about AI buildout pacing. Independent Defence/Robotics/Energy opportunities remain eligible if they clear their own gates. The late-September PCE/GDP review remains the next scheduled macro deployment gate. No trade or planned action is created by this macro review alone.

Completed 15 Sep 2026 using the Aug PPI/CPI releases and post-CPI market reaction. Aug PPI rose 0.4% m/m and 5.4% y/y; final-demand goods rose 1.1%, services 0.1%, and final demand less food, energy and trade services rose 0.3% m/m. Aug CPI rose 0.4% m/m and 3.4% y/y; core CPI accelerated to 0.3% m/m while easing only to 2.4% y/y. Shelter rose 0.3% m/m, services less energy services rose 0.3% m/m, transportation services 0.5%, and gasoline 3.9%. The print therefore did not meet the pre-release benign threshold needed to clear the rate/valuation gate. Market confirmation strengthened that conclusion: September Fed hike odds rose from roughly 72% before CPI to near 90% after the release; the 10-year Treasury subsequently crossed 5% on 14 Sep, while the dollar strengthened and oil remained above $100/bbl. Equities initially rallied on 11 Sep as oil eased, showing no immediate fundamental break in AI demand, but the broader discount-rate backdrop worsened and AI/tech remained vulnerable to valuation and factor pressure. PowerFund conclusion: SLOW new correlated AI Infrastructure deployment into the FOMC rather than accelerate. Keep existing thesis-intact holdings; do not average down solely because prices have fallen; require company-specific evidence and valuation margin for adds. NBIS remains no-add without contract/financing evidence. With cash ~90% of NAV there is no need to force deployment ahead of the 16 Sep FOMC. This review does not change the long-term AI-capex thesis; it raises the near-term cost-of-capital hurdle. The September FOMC review is the next macro deployment gate. No trade is created by this review alone.

Completed 5 Sep 2026. BWXT has improved technically from the late-August $147.74 low, with a sequence of higher lows and two closes above roughly $160, but Sep 4 closed back below that level, so reversal confirmation is incomplete. Fundamentals remain intact and received a modest positive update from a new NNSA design award; no material negative change identified in naval backlog, PCG integration, margins, medical-divestiture execution, or nuclear-quality standing. Conclusion: do not initiate a full 0.75–1.0% starter yet. Permit only a ~0.30% NAV tracking position if BWXT reclaims and holds above ~$160. Retain the stronger ~$169–175 reclaim as the fuller-starter confirmation gate. A sustained break below the recent ~$147.7 low would invalidate the current reversal setup and trigger reassessment.

Completed 5 Sep 2026 using the 4 Sep August Employment Situation and market reaction. Payrolls rose 162k versus ~56k expected; June was revised +11k to +31k and July +44k from -23k to +21k, lifting the two-month total by 55k. Unemployment held at 4.1%; participation edged up to 61.6%; the workweek rose 0.1 hour to 34.4. Average hourly earnings rose 0.3% m/m and 3.1% y/y, the latter easing from July and limiting the wage-inflation signal. Markets nevertheless treated the report as reducing near-term rate relief: the 2-year Treasury yield rose roughly 4–5 bp to ~4.37–4.38% after briefly reaching ~4.42%; the 10-year finished near 4.78%; the dollar index rose ~0.2%; S&P 500 fell 0.38% and Nasdaq 0.29%. September Fed hike odds rose intraday into the ~60% area before easing somewhat. PowerFund conclusion: labor resilience is positive for end-demand and does not weaken the AI-capex thesis, but it raises the discount-rate hurdle and leaves CPI/PPI as the decisive near-term macro gate. Maintain, do not accelerate, AI Infrastructure deployment. Existing positions remain unchanged; do not chase rebounds; keep SNDK deferred and require company-specific valuation/fundamental evidence for any adds. The already-scheduled Aug CPI/PPI review remains the next macro decision gate.

AVGO Q3 FY2026 AI read-through completed 3 Sep 2026. Broadcom reported record Q3 revenue of $29.6B (+86% YoY), semiconductor revenue of $20.8B (+127%), and AI semiconductor revenue of $16.7B (+221% YoY, +54% QoQ). Management guided Q4 AI revenue to ~$21.7B (+236% YoY), FY2026 AI revenue to ~$58B, and said supply has been secured to support approximately $115B of FY2027 AI revenue, with continued growth expected into FY2028. XPU shipments were >3.5x YoY; AI networking revenue was >2.5x YoY, and Broadcom said AI networking should grow roughly as fast as XPUs over the next few years. Read-through: hyperscaler/frontier-model AI capex and networking demand remain exceptionally strong, so the current PowerFund AI-infrastructure drawdown is not supported by evidence of an AI-capex demand collapse. This is supportive for CRDO's high-speed connectivity thesis, CLS's AI networking/compute program demand, and VRT/NVT power/cooling demand. It also confirms that custom accelerators are scaling alongside GPUs, which is positive for total infrastructure spend but raises architecture/share-shift risk for NVDA and supplier-specific content risk. MRVL/ANET remain beneficiaries of the broad networking/custom-silicon build, though Broadcom's strength increases competitive pressure. Portfolio implication: classify the current AI-infrastructure weakness primarily as valuation/factor/rates pressure unless company-level evidence says otherwise; do not average down solely on price, but keep thesis-intact dislocations eligible for the opportunity-ranking process.

CRDO Q1 FY2027 earnings review completed before planned entry. Q1 passed the fundamental gate: revenue exceeded prior guidance, Q2 guidance implies another double-digit sequential step, non-GAAP gross margin held near 68%, and the broader copper/optical connectivity thesis strengthened. The main risks remain customer concentration, inventory/receivables growth, dilution/SBC, valuation, and PowerFund's already-heavy AI-capex factor exposure. Dossier was refreshed to v5 with the Q1 evidence and updated scenario framework. Planned entry was resized from $5,000 to $3,000 and conditioned on regular-session price at or below $195 with thesis intact; if CRDO rebounds above roughly $205 before entry, defer and rerank rather than chase. No fill is authorized or booked by the agent.

Completed 30 Aug 2026. BWXT fundamentals remain intact and valuation has improved materially after the ~37% drawdown, but the bottoming/reversal structure is not yet confirmed. The prior ~$154–157 support failed, a fresh low of $147.74 was printed on Aug. 25, and the rebound to $155.85 faded to $152.85 by Aug. 28. There is not yet a confirmed higher low or sustained reclaim of ~$159–160, and the more important ~$169–175 resistance area remains unrecovered. Decision: watch-only. Consider a 0.25–0.35% tracking position only after a higher low above $147.74 plus a closing reclaim of roughly $159–160; require stronger reversal confirmation near ~$169–175 for a fuller 0.75–1.0% starter. Fundamentals to monitor: PCG integration, naval backlog conversion, Government margins, medical-business sale and nuclear-quality execution.

Completed after Jackson Hole 2026 and the Aug. 28 market reaction. Chair Kevin Warsh said the 2% PCE target is firm and that the Fed must be confident underlying inflation is moving clearly and sufficiently quickly toward target or 'we have work to do.' He described labor markets as stable, output as solid, AI-related capex as a major driver of investment, and medium-term inflation expectations as broadly anchored, but emphasized that inflation remains too high and avoided dovish forward guidance. Markets interpreted the speech as hawkish: rate-hike expectations increased and U.S. equities finished lower. Conclusion for PowerFund: the AI/semiconductor fundamental demand thesis is strengthening, but the valuation/rates headwind has not cleared. Maintain—not accelerate—AI Infrastructure deployment. Keep existing CLS, VRT, NVT and NBIS positions at current sizing; no averaging down in NBIS without contract-level evidence. Favor selective entries/adds only when company-specific evidence is strong and valuation offers a margin of safety. CRDO remains gated to its own earnings; ANET/NVDA remain high-quality but valuation-sensitive. The current AI Infrastructure sleeve is only ~5.6% of NAV and cash is ~92%, so there is ample capacity to deploy later without forcing purchases into a still-hawkish rates backdrop.

Completed after Marvell Q2 FY27 results and call. Marvell materially strengthened the AI-interconnect demand thesis: Q2 revenue was $2.739B (+37% YoY), Data Center revenue $2.172B (+46% YoY), FY2027 Data Center growth outlook rose to ~60%, and FY2028 Data Center revenue is expected to grow >60%. 800G remains strong while 1.6T ramps rapidly; 51.2T switching and scale-up/optical opportunities are expanding. Read-through: positive for CLS, ANET and CRDO demand and mixed-positive for NVDA because stronger custom-XPU activity validates both AI capex and alternatives to merchant GPUs. Do not chase MRVL on the beat; keep MRVL watch/investigate. Keep CRDO entry gated to its own next earnings because Marvell's expanding optical/switching stack raises the competitive bar despite a stronger TAM.

Review completed 27 Aug 2026. VST remains the preferred Energy starter versus CEG at current prices. The operating thesis remains intact: Q2 guidance was reaffirmed, near-term generation is heavily hedged, and Meta/Cogentrix upside is not yet embedded in current guidance. NVIDIA's Aug. 26 results strengthen the AI/data-center power-demand read-through. The offset is macro: core PCE remains elevated and the 10-year Treasury is around 4.67%, so sizing should stay small. Using existing PowerFund scenario values at current prices, VST offers higher probability-weighted expected return than CEG with similar modeled bear downside. Action: create a ~$3,000 VST starter planned buy; do not scale beyond starter size until Cogentrix leverage/integration and rates are better resolved.

NVIDIA Q2 FY27 materially supports the view that the recent AI/semi selloff has been driven primarily by factor/valuation compression rather than a break in AI infrastructure fundamentals. Q2 revenue was $96.2B (+106% YoY, +18% QoQ), Data Center revenue $89.0B (+117% YoY, +18% QoQ), and Q3 revenue guidance is $108B ±2% despite assuming no Data Center compute revenue from China. Vera Rubin is now in full production, with racks running at CoreWeave, Google Cloud, Microsoft Azure, Oracle Cloud Infrastructure and Nebius; Spectrum-6 systems are arriving at gigascale AI factories. These points reinforce ongoing demand for compute, networking, power/cooling and data-center systems relevant to VRT, NVT, CLS, ANET, CRDO and NBIS. The principal caution is valuation/expectation risk: Q3 gross margin is guided to 74.0% ±50bp versus 75.0% in Q2, while investors remain sensitive to the sustainability and financing of AI capex. NVIDIA also announced financing partnerships intended to mobilize >$500B of third-party capital, which supports buildout capacity but increases the need to distinguish genuine end-demand from financing-supported expansion. Portfolio conclusion: lift the temporary blanket pause on correlated AI/semi deployment that was imposed pending NVIDIA, but do not mechanically average down. AI/semi names are again eligible for normal opportunity ranking and the pre-buy integrity gate; CRDO remains gated until after its 1 September earnings, NBIS remains not addable pending post-financing per-share analysis, and any SNDK/VRT/NVT/CLS action still requires current prices plus company-specific evidence. Existing holdings remain HOLD; no individual thesis invalidation or trim signal is triggered by NVIDIA's results.

July PCE/Q2 GDP review completed before NVIDIA earnings. Inflation was modestly hotter/stickier than ideal and Treasury yields remained elevated, raising the discount-rate hurdle for valuation-sensitive AI Infrastructure. However, the equity reaction was contained and there was no macro evidence that the underlying AI-capex cycle had weakened. Maintain the temporary pause on new correlated AI/semi deployment until NVIDIA provides the fundamental demand read-through; independent Defence, Energy, and Robotics/AI opportunities remain eligible. No portfolio decision change was required from this macro review alone.

Nebius's August financing closed on 24 August 2026 at $5.75B gross principal after full exercise of purchaser options. The event materially improves liquidity/funding certainty for contracted AI-cloud capacity but also increases gross debt, coupon/accretion burden, and dilution complexity. Dossier updated to v4 with final terms, pro-forma share/dilution analysis, and refreshed next diligence. Investment stance is unchanged: maintain the existing small high-beta position; do not add solely because the financing closed. Reassess addability only after the full post-settlement financing stack, actual updated share count, and capacity-to-revenue economics are reconciled.