Newsletter

A note before we start: we published "Two Clocks, One Stock" — a systematic framework for reading the gap between software valuations and operational reality. It scores every software name on two dimensions: where its trailing PE sits in its own three-year history, and where its operations do. The

Programming note: we will return on Friday and take a look at Microsoft. The Two-Class Memory Market One of the peculiar features of an AI bubble is that investors eventually start buying nouns. "Compute" works. "Power" works. "Memory" definitely works. Never mind that memory

Programming note: our next issue lands 6 April, where we will take a look at the memory crunch. How to Fund AI with $100 Oil During the past few years, the Federal Reserve has been trying to pull off a soft landing—bringing inflation down without crashing the economy—something

Lobster Farming The most interesting economic indicator in AI right now is not Nvidia's revenue beat or a LLM benchmark score. It is the wait time for an Apple Mac Mini in Shenzhen, China. For many years, the Mac Mini has lived in the neglected corner of Apple&

Programming note: ARPU returns 23 March, where we will take a look at the real-world adoption of AI. Software Cockroach In the summer of last year, JPMorgan CEO Jamie Dimon offered a grim warning about the sudden collapse of a few obscure companies funded by private credit. "My antenna

Programming note: Our next issue lands 13 March, where we will dig into market data to see if the tech industry's fundamentals are keeping pace with the narrative. Salesforce's Dilemma As we discussed recently, the software industry has been crushed by a new market narrative dubbed

Programming note: our next issue lands 6 March, where we will examine the current market narratives about key AI players and platforms. AI Eats Software Over the past few years, the market's operating assumption was that Artificial Intelligence was a magical productivity booster that would lift all boats.

Programming note: our next issue lands 2 March, where we will be diving into the market pressures facing software platforms. The $4 Trillion Vibe Shift If you rewind the tape just a year or two, the consensus narrative on Wall Street was that Alphabet was a vulnerable incumbent trapped by

Programming note: ARPU will return on 23 February and examine the market narratives dominating the hyperscalers. Century of Faith The standard timeline for the AI economy is usually measured in months. We wait for the next model iteration, the latest GPU shipping estimates, or the next quarter's cloud

Programming note: The next issue lands 13 February, where we'll examine the financing of the AI economy. 120% Capture Rate Last time, we looked at the napkin math of OpenAI's intelligence treadmill, where every dollar of revenue seems to be immediately consumed by the cost of