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Wednesday, October 21, 2026

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@convequity 1 click

Convequity on X

Convequity’s AI Bubble Barometer (ABBX) — Week of 2 October 2026 Our weekly framework tracks valuations, returns, capex, financing risk and infrastructure capacity across hyperscalers, neoclouds and model labs. Friday 2 Oct 2026 close (US ET): - Price drove the move: EV rose about $44B to about $14,114B. Invested capital (IC) was unchanged at $2,338B. - EV/IC: 6.04x, up 0.02x from 6.02x on 25 Sep. - All-in EV/IC: 6.76x. 1. Returns. Our paired, annualized forward ROIC (which is not trailing accounting ROIC) for Q2 2026 is 30.0%, against an AI WACC of 9.8%: 3.07x ROIC/WACC and a spread of +20.3 percentage points. 2. Capex. Latest-quarter cash capex is $228.7B. 3. Debt. Borrowings are $595B. All-in exposure is $3,624B, or 6.10x borrowings, adding purchase obligations, construction commitments and uncommenced leases on top of borrowings and leases. 4. Gigawatts. Current capacity is 45.7 GW, with 153.4 GW planned. $MSFT versus $GOOGL: MSFT’s all-in exposure is about 17x borrowings, and it is renting more: external capacity is about 12% now and 21% of planned capacity. GOOGL’s all-in exposure is 10.2x borrowings, while its external capacity share remains small at about 4% now. We see a price-led rise in valuation, with modeled forward returns still well above the cost of capital. Future spending commitments are much larger than borrowings alone suggest, and the reliance on rented capacity differs across companies.
@StableBread 1 click

Fajasy on X

My investing thesis in a nutshell (w/examples): 1) Buy with a strong margin of safety or stock price near/below cash and/or book value. 2) Buy in industries and/or markets where the money is flowing. Makes it a lot easier. 3) Buy the best early and/or the most overlooked in that particular industry. 4) Pay up for unfair advantages, excellent mgmt teams, and companies with huge latent pricing power. 5) Sell when the thesis breaks. Or a much better risk/reward setup hits your desk. Otherwise continue to add/hold. Don't track stock prices. Track the main business KPIs like any competent mgmt team would. Example #1: Bought $NBIS 4x mid $20's (best overall). Then bought $BRUN common and warrants pre-merger (most overlooked). Example #2: Bought $FTEK $1.39. Cash floor new excellent operator CEO. Strong upside potential w/data centers. Example #3: Bought $BABA $70's. Strong margin of safety, market leader, unfair advantages. Sold $170 for better risk/reward. Example #4: Bought $ELMT @$19 and @$14. Unfair advantage. Strategic. Cheap. Critical in strong growth industries. Example #5: Bought $TOST @$24. Beaten down due to macro headwinds and new/early $DASH competition. But almost everything in business stronger and expanding to new verticals. Lastly, if you're unsure or don't fully understand the business. Just say no. In fact, say no to most stocks. Most probably your best idea is already in your portfolio. Don't lockup your money in a 3/5 setup, you're trying to make outsized returns! And sub to my newsletter (link in bio) if you want my deep dives. 😉
@convequity 3 clicks

Convequity on X

What $MNDY can learn from Cursor’s breakout and $PLTR’s head start General productivity AI may still be waiting for the foundation-model capabilities that helped coding applications take off. That leaves a possible breakout ahead for MNDY. But waiting for the next model release would give its competitors the same opportunity. Our latest SaaS Survival Scorecard explores what MNDY could build in the meantime. During 2023 and early 2024, Cursor had already built its coding editor and an early harness around models such as GPT-4 and GPT-4 Turbo. That surrounding software supplied codebase context and helped developers apply and review changes. But the models still struggled to perform complex coding work reliably. Cursor had built a way to deliver AI assistance, while the intelligence available through it limited how much work developers could delegate. The turning point came with Claude 3.5 Sonnet in June 2024, which Cursor made its default model the following month. Its stronger coding capabilities made the application Cursor had already built much more valuable to developers. Subsequent releases, including Claude 3.7 Sonnet and Sonnet 4, extended what it could do. General productivity could experience a similar improvement. Coding, however, has an advantage that helps explain why it advanced earlier: verifiability. Code can be run. Tests can check whether it produces an expected result. A training system can try different approaches and reward the ones that pass. This gives model developers repeatable feedback about what worked. Work management combines verifiable actions with decisions that are much harder to judge. Did an agent send the document to the correct approver? That can be checked. Should the approval have been requested in the first place? Should one customer’s urgent request interrupt another team’s project? The answer may depend on commitments, exceptions and relationships that nobody has written down. The result may only become clear weeks later. Rewarding an agent for closing tasks quickly could even encourage it to close work before the customer’s problem is resolved. This helps explain why narrower AI-native applications have progressed faster. Harvey focuses on legal work. Sierra focuses on customer interactions. Their narrower scope makes it easier to define the job, connect the necessary systems and assess whether the customer received value. Legal interpretation and customer disputes still require judgment. The advantage is a more specific problem than “help everyone across this organisation work more effectively”. MNDY therefore has work to do before foundation models improve. It could capture more of the knowledge that managers use to coordinate people and departments, then turn that knowledge into rules and records an agent can check. For example, when a manager repeatedly overrides an assignment, the agent could ask why. When a project requires an extra approval, it could identify the condition that triggered it and ask the responsible person to confirm the rule. Over time, MNDY could connect those rules to named customers, documents, dependencies and permitted actions. It could then check whether the handoff was accepted, whether the work was reopened and whether the intended outcome occurred. That would improve the information available to today’s models and create better examples for evaluations and eventual post-training. $PLTR shows how valuable this preparation can become. Its forward-deployed engineers have spent years working directly with customers and the people who use its software. Those conversations reveal how work actually gets done, including exceptions that a standard process diagram leaves out. Consider a manufacturer waiting for a component. One customer can accept a substitute. Another requires a quality approval. A third faces a delivery penalty that makes the delay much more expensive. An engineer working with those users can discover these differences and build them into the software. This means the AI agent has explicit rules and relationships to follow instead of having to guess from a collection of documents. PLTR’s ontology also gives data from different systems a common vocabulary. The agent can recognise that an account in one application and a customer in another refer to the same organisation. This accumulated work helps explain why PLTR could make earlier, less capable models productive when it introduced AIP in 2023. It also gives PLTR an advantage that is difficult to reproduce quickly. MNDY’s off-the-shelf approach - as with typical SaaS - has historically placed more responsibility on customers to describe their processes through boards and automations. That makes the product easier to distribute, but leaves much of the unwritten knowledge in employees’ heads. PLTR’s customer-specific implementations have captured more of that knowledge through direct engineering work. MNDY’s opportunity is to find a cheaper, repeatable way to capture it across its installed base. Its existing harness work is a start. Context, memory, tool controls and evaluations take it beyond basic retrieval, which is why our report scores its model-layer integration at 2.5. The larger opportunity is to make more customer workflows explicit and verifiable. That could improve agent performance before the next model breakthrough arrives. Better foundation models would then operate with a maintained understanding of how each customer works. If customers depend on that understanding to complete work reliably, MNDY would have a stronger reason to retain their business than access to a model its competitors can also buy. The full MNDY report develops this analysis within our SaaS Survival Scorecard. #AgenticAI #SaaS

Investor Letters

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Eli Lilly And Co. (LLY)

Eli Lilly's Mounjaro and Zepbound drove 2025 revenue to $65.2 billion as the drugmaker expands AI partnerships with Nvidia, Isomorphic…

LLY $1.2T
SixSigmaCapital: Navigating the Financial Markets 25 clicks

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…

VICR $9.7B
CV's Substack 28 clicks

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 $29B
Atrium Research - Equity Research 6 clicks

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