Given this trend, $SNDK FY27 EPS can reach >$80; up more than 5x from $15 consensus estimates just a few months ago.. power of exponential pricing and 100% passthrough to margins.

The counterpoint is demand destruction from consumer side, but the counterpoint to that is hyperscalers are price insensitive and will gobble anything remaining up, especially with NVDA ICMSP.

We’ll see, but if a $80 FY27 EPS is possible then FY+1 P/E is.. 8x. The stock got cheaper as it rallied.

What we have seen so far are just from Gen 1 models. Blackwell models aren’t even out yet, not to mention Rubin, or Feynman.. next decade will be wild.

Maybe AGI is just a state of endless prompting, looping, reasoning, and compute. Except that instead of humans being the prompters, it’s the agents prompting each other - hence eliminating the human’s drag of latency/knowledge limit/thoroughput etc to produce.. AGI.

It might be time to start treating your LLMs better.

Closed the short leg of Long $LITE / Short $CRDO & $ALAB for around +15% gain

Trimming 20% of SaaS shorts for around 15-20% gain, but mostly still pressing the shorts. Valuation is still far too high for a sector facing existential threat

Actually closed some small cap SaaS shorts trading at high teens to 20x fwd P/E on second thoughts, like $UPWK, $COUR, $MNDY, $ASAN etc.. Yesterday felt like a washout even for the most diehard SaaS believers (people who like pain), so I dont want to be short squeezed especially on the lower liquidity names.

Structurally I still think the sector is going through a sea change, and old mental frameworks that previously worked for SaaS will no longer work for most of these companies going forward. So I guess the question is what should be the new SaaS industry multiple?

Again this brings me back to my guiding principle for this AI cycle: to not plainly apply mental frameworks formed pre-AI to evaluate sectors post-AI — both for the long and short side. This current environment is great for a generalist, when industry factors > company specific factors as every sector is undergoing sea changes of their own.

Have been deleveraging a fair bit both on the long and short side. Had a good Jan and looking to keep Feb stable. Don’t like the extreme volatility across seemingly different sectors like PMs/SW - not sure if it will spread to other sectors. Market can’t find an equilibrium to stand on. Something feels off and I can’t quite put my finger on it, so better to be safe than sorry.

Stanley Drunkenmiller: "My number one job is to know whether I'm hot or cold. When I'm hot, I'm supposed to turn the dial way up. Not say, 'Okay, I'm up 40% this year. Let's go take a break.' No, you gotta make hay while you're hot. When you're cold, the last thing you should do is try and make big bets to get back to even. You should tone yourself down."

Also likely late to this but why isn’t crypto the perfect short hedge for Trump’s potentially poor midterms performance? If Trump out and Democrats in, might actually be over for crypto?

Was short $COIN at $195 and covered yesterday, but might have exited too early? 30x+ p/e, highly cyclical volumes in a niche industry facing potentially strong regulatory headwinds and competition..? If a squeeze happens I’m fading it down again.

Anthropic's latest AI model has found more than 500 previously unknown high-severity security flaws in open-source libraries with little to no prompting, the company shared first with Axios.

Why it matters: The advancement signals an inflection point for how AI tools can help cyber defenders, even as AI is also making attacks more dangerous.

Driving the news: Anthropic debuted Claude Opus 4.6, the latest version of its largest AI model, on Thursday.

Before its debut, Anthropic's frontier red team tested Opus 4.6 in a sandboxed environment to see how well it could find bugs in open-source code.
The team gave the Claude model everything it needed to do the job — access to Python and vulnerability analysis tools, including classic debuggers and fuzzers — but no specific instructions or specialized knowledge.

Claude found more than 500 previously unknown zero-day vulnerabilities in open-source code using just its "out-of-the-box" capabilities, and each one was validated by either a member of Anthropic's team or an outside security researcher.

What they're saying: "It's a race between defenders and attackers, and we want to put the tools in the hands of defenders as fast as possible," Logan Graham, head of Anthropic's frontier red team, told Axios.

"The models are extremely good at this, and we expect them to get much better still."

Shorted cyber sec names $CRWD / $ZS @ $400 / $176

Not naked shorts btw, meant to partially hedge out $NET long

Past week has been wild - it’s only February 26, imagine being in 2030. Recapping the key moving pieces:

1) Has capex numbers peaked? If capex hasn’t peaked yet, are hyperscalers going to turn to debt now as forward-looking FCF turns negative with some of these capex projections by GOOG/AMZN?

2) A sentiment shift from “what can AI Do” -> “what can AI not do”. The former was complacency holding on to positions: “it will be ok..”, and the latter is max-fear uncertainty sell-off “get OUT while you can”. This is best reflected in SaaS names. Kinda surprised it took so long for this sentiment gap to converge though. Every software name is now guilty till proven innocent, the entire sector is treated like cancer. Even Blue Owl was talking about their software loan exposure yesterday.

Think much of the SaaS problem is in the initial sector valuation - which was sky-high as sector was thought to be high switching cost, asset light, high incremental margins, high growth etc. now it’s perceived as low/no moat, operating lvg works both ways, low/no growth, customers switching may eventually become as easy as typing in a prompt.

If you look at multiples today (after the sell-off) in the former industry context, then maybe you think it’s oversold. but in the latter context, valuation is probably just decent to maybe still on the higher-end even. So what’s the right industry multiple? I think we eventually settle somewhere on the equilibrium between the two rather than on the extremes, and now I’m leaning neutral on the sector, may become cautiously bullish in next few weeks after the fear has been sufficiently front-loaded. Right now though, I think allocating your mental capacity to finding the winners from the massive productivity unlock from AI > knife-catching the SaaS bottom.