Dimitry Nakhla | Babylon Capital®
There are several respected investors who have long stayed away from companies like $GOOG, $AMZN, $MSFT & $META — skeptical of the returns on the enormous capital expenditures tied to cloud and AI infrastructure.
I understand the concern, but I don’t think that’s the right conclusion.
These businesses are building the digital backbone of the next decade, and exposure to them still remains beneficial.
At the same time, I’ve found it important to balance those “builders” with the cash cows — $MA, $V, $SPGI, $FICO etc — businesses with exceptional FCF margins, durable moats, and minimal capital requirements.
𝐓𝐡𝐚𝐭 𝐜𝐨𝐦𝐛𝐢𝐧𝐚𝐭𝐢𝐨𝐧 𝐚𝐥𝐥𝐨𝐰𝐬 𝐚 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐭𝐨 𝐩𝐚𝐫𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐀𝐈 𝐚𝐧𝐝 𝐜𝐥𝐨𝐮𝐝 𝐛𝐮𝐢𝐥𝐝𝐨𝐮𝐭 𝐰𝐡𝐢𝐥𝐞 𝐫𝐞𝐦𝐚𝐢𝐧𝐢𝐧𝐠 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐭 𝐢𝐟 𝐭𝐡𝐞 𝐂𝐚𝐩𝐄𝐱 𝐜𝐲𝐜𝐥𝐞 𝐜𝐨𝐨𝐥𝐬 𝐨𝐫 𝐬𝐞𝐧𝐭𝐢𝐦𝐞𝐧𝐭 𝐬𝐡𝐢𝐟𝐭𝐬.
The builders power the future; the cash cows become even more efficient by leveraging AI within their own operations — expanding margins, driving automation, & compounding value quietly in the background.
Lately, we’ve seen many quality compounders sold down to compelling valuations, while capital has chased anything labeled “AI,” even pre-revenue businesses now worth tens of billions.
𝘛𝘩𝘢𝘵 𝘥𝘺𝘯𝘢𝘮𝘪𝘤 𝘭𝘪𝘬𝘦𝘭𝘺 𝘸𝘰𝘯’𝘵 𝘭𝘢𝘴𝘵 𝘧𝘰𝘳𝘦𝘷𝘦𝘳.
Eventually, when the market begins to see cracks in AI-related CapEx or re-evaluates growth expectations, capital will likely rotate back toward predictable, high-margin compounders quietly executing in the background.
It’s not about being contrarian against AI — it’s about being contrarian within quality.
The great opportunities often come from owning world-class businesses everyone’s temporarily disinterested in.
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There are several respected investors who have long stayed away from companies like $GOOG, $AMZN, $MSFT & $META — skeptical of the returns on the enormous capital expenditures tied to cloud and AI infrastructure.
I understand the concern, but I don’t think that’s the right conclusion.
These businesses are building the digital backbone of the next decade, and exposure to them still remains beneficial.
At the same time, I’ve found it important to balance those “builders” with the cash cows — $MA, $V, $SPGI, $FICO etc — businesses with exceptional FCF margins, durable moats, and minimal capital requirements.
𝐓𝐡𝐚𝐭 𝐜𝐨𝐦𝐛𝐢𝐧𝐚𝐭𝐢𝐨𝐧 𝐚𝐥𝐥𝐨𝐰𝐬 𝐚 𝐩𝐨𝐫𝐭𝐟𝐨𝐥𝐢𝐨 𝐭𝐨 𝐩𝐚𝐫𝐭𝐢𝐜𝐢𝐩𝐚𝐭𝐞 𝐢𝐧 𝐭𝐡𝐞 𝐀𝐈 𝐚𝐧𝐝 𝐜𝐥𝐨𝐮𝐝 𝐛𝐮𝐢𝐥𝐝𝐨𝐮𝐭 𝐰𝐡𝐢𝐥𝐞 𝐫𝐞𝐦𝐚𝐢𝐧𝐢𝐧𝐠 𝐫𝐞𝐬𝐢𝐥𝐢𝐞𝐧𝐭 𝐢𝐟 𝐭𝐡𝐞 𝐂𝐚𝐩𝐄𝐱 𝐜𝐲𝐜𝐥𝐞 𝐜𝐨𝐨𝐥𝐬 𝐨𝐫 𝐬𝐞𝐧𝐭𝐢𝐦𝐞𝐧𝐭 𝐬𝐡𝐢𝐟𝐭𝐬.
The builders power the future; the cash cows become even more efficient by leveraging AI within their own operations — expanding margins, driving automation, & compounding value quietly in the background.
Lately, we’ve seen many quality compounders sold down to compelling valuations, while capital has chased anything labeled “AI,” even pre-revenue businesses now worth tens of billions.
𝘛𝘩𝘢𝘵 𝘥𝘺𝘯𝘢𝘮𝘪𝘤 𝘭𝘪𝘬𝘦𝘭𝘺 𝘸𝘰𝘯’𝘵 𝘭𝘢𝘴𝘵 𝘧𝘰𝘳𝘦𝘷𝘦𝘳.
Eventually, when the market begins to see cracks in AI-related CapEx or re-evaluates growth expectations, capital will likely rotate back toward predictable, high-margin compounders quietly executing in the background.
It’s not about being contrarian against AI — it’s about being contrarian within quality.
The great opportunities often come from owning world-class businesses everyone’s temporarily disinterested in.
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Offshore
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Quiver Quantitative
Representative Byron Donalds sold Fiserv stock on September 4th.
Fiserv is a financial services company.
Donalds sits on the House Financial Services Committee.
$FI has now fallen 52% since his sale. https://t.co/VVhIExesFY
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Representative Byron Donalds sold Fiserv stock on September 4th.
Fiserv is a financial services company.
Donalds sits on the House Financial Services Committee.
$FI has now fallen 52% since his sale. https://t.co/VVhIExesFY
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Offshore
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Clark Square Capital
RT @joinyellowbrick: Added 62 new stock write-ups to the site (pt 1):
@LuxOpesResearch (quick overviews) - $PLX.PA, $UMG.AS, $STLAM.MI, $XFAB.PA, $TFI.PA, $DSFIR.AS, $NK.PA, $ARGX, $G24.DE, $PUIG.MC, $CASH.MC, $SGO.PA, $AL2SI.PA, $WPP.L, $AIXA.DE
@ClarkSquareCap - $VRA
@AnotherBio - $VELO https://t.co/Q8UesCHtSt
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RT @joinyellowbrick: Added 62 new stock write-ups to the site (pt 1):
@LuxOpesResearch (quick overviews) - $PLX.PA, $UMG.AS, $STLAM.MI, $XFAB.PA, $TFI.PA, $DSFIR.AS, $NK.PA, $ARGX, $G24.DE, $PUIG.MC, $CASH.MC, $SGO.PA, $AL2SI.PA, $WPP.L, $AIXA.DE
@ClarkSquareCap - $VRA
@AnotherBio - $VELO https://t.co/Q8UesCHtSt
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Offshore
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Quiver Quantitative
BREAKING: Jay Jones is now the favorite to win the Virginia Attorney General race.
Strong early turnout numbers for Democrats. https://t.co/G4rlAKmOYK
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BREAKING: Jay Jones is now the favorite to win the Virginia Attorney General race.
Strong early turnout numbers for Democrats. https://t.co/G4rlAKmOYK
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Offshore
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App Economy Insights
$AMD AMD Q3 FY25:
• Revenue +36% Y/Y to $9.2B ($0.5B beat).
• Operating margin 14% (+3pp Y/Y).
• Non-GAAP EPS $1.20 ($0.03 beat).
• Q4 revenue +25% Y/Y to $9.6B ($0.4B beat). https://t.co/Yc2a1XP2n8
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$AMD AMD Q3 FY25:
• Revenue +36% Y/Y to $9.2B ($0.5B beat).
• Operating margin 14% (+3pp Y/Y).
• Non-GAAP EPS $1.20 ($0.03 beat).
• Q4 revenue +25% Y/Y to $9.6B ($0.4B beat). https://t.co/Yc2a1XP2n8
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Offshore
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Quiver Quantitative
Members of Congress have been buying up stock in a particular pharmaceutical company recently.
Here's our report: https://t.co/BUGFayL1Ca
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Members of Congress have been buying up stock in a particular pharmaceutical company recently.
Here's our report: https://t.co/BUGFayL1Ca
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Offshore
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Quiver Quantitative
JUST IN: Markets are now giving Democrats a 35% chance of taking both the House and the Senate in 2026.
Odds almost doubled after tonight's election results came in. https://t.co/KhcDibEDoY
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JUST IN: Markets are now giving Democrats a 35% chance of taking both the House and the Senate in 2026.
Odds almost doubled after tonight's election results came in. https://t.co/KhcDibEDoY
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Dimitry Nakhla | Babylon Capital®
RT @DimitryNakhla: @sockey88 $AXON would have to fall ~40% from today's price of $524, in order for me to even consider it
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RT @DimitryNakhla: @sockey88 $AXON would have to fall ~40% from today's price of $524, in order for me to even consider it
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