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Tuesday, October 20, 2026

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Vicor Update, Part Three

Vicor’s $66.6 million in AI power-delivery royalties generated about $50 million of operating profit, eclipsing its module business as revenue reached $197.1 million.

VICR $9.7B
CV's Substack 28 clicks

From X

@ParadisLabs 3 clicks

Paradis on X

Once again, the GPU depreciation bear thesis is dead. Elon on the $SPCX call: "The value of compute per watt will increase over time, not decrease... that's why you see things like even old computers like H100s renting for more than they rented when they were new." When supply is this constrained, GPU rental prices are set by the value of the marginal token, not the replacement cost of the chip. Models keep getting better, and better models raise the value of every installed watt faster than new GPUs deflate the old ones. Various datapoints all stack up: -> $SPCX says compute contracts are renewing "at higher dollars per watt, not lower dollars per watt" -> 1-year H100 contract pricing went from ~$1.70/hr to ~$2.35/hr between Oct 2025 and Mar 2026 (a 2022 chip!) -> $CRWV signed an A100 contract running into 2029 (a 2020 chip) and said older-gen pricing is at / above a year ago, and raised list prices ~25% in July. -> $NBIS's first Blackwell auction cleared 15% above its previous high and as a reminder....they told customers H100 on-demand goes up ~17% (from Oct 1). -> Zuckerberg: $META is getting offers for its compute "at a significant premium over what we paid for it". -> Lenders are now lending against GPUs out to 2030 e.g. $NBIS borrowed against its GPUs at SOFR+250 in July. Feels like the 2-3 year GPU useful life bear thesis keeps getting setback. Ofc, the one thing that ruins the party is the S/D gap closing -- Rental prices fall back toward replacement cost + older GPUs get repriced on perf/W. Which won't happen anytime soon.

Investor Letters

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Heico Corporation

HEICO sells FAA-approved aircraft replacement parts at 30% to 50% discounts to OEMs, gaining customers as restrictive aftermarket contracts…

HEI $42B
D Invests 13 clicks

Copper Fox Metals: Research Flash

Copper Fox’s C$9.1 million Schaft Creek program advances metallurgical, tailings, water and road studies toward a pre-feasibility study,…

TECK $31B
Atrium Research - Equity Research 6 clicks

AppLovin Deep Dive

AppLovin rebuilt its ad model with AXON 2.0, lifting LTM revenue to about $7 billion and margins to 77% as Unity competition threatens ad…

APP $92BU $18B
Speedwell Memos 66 clicks
CBT · short

Cabot CORP

Cabot’s short case targets a market pricing FY26 EPS of $6.00–$6.50 as trough earnings and assigning value to its battery-materials…

CBT $3.8B
Value Investors Club 2 clicks

Crane Co.

Crane Co. sells sole-source aerospace and process-control components, with 40% aftermarket revenue and margin expansion following its 2023…

CR $12B
Kairos Research

RH - the Universe Intervenes?

RH’s debt-funded luxury expansion faces weakening demand, deeper member discounts and a balance sheet strained by $2.4 billion of net debt.

RH $2.3B
Brevarthan Research 1 click

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