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“The Magnificent 7 … now comprise over 30% of the S&P 500, a level of concentration exceeding even that of the dot-com bubble”
@Sparkline Capital
Record S&P 500 concentration ties the index to AI; an equal-weight basket strips that cluster risk out.
RSPLONG@ $192.35
$211.44+9.92%
since call Oct 23
peak +14.8%
“With the AI arms race transforming Big Tech from asset-light to asset-heavy, a model we find associated with inferior returns…”
@Sparkline Capital
Mag 7 going asset-heavy on AI capex erodes the returns that made them great; rotate out.
XYZ100SHORT@ $25,600.25
$28,026.57-9.48%
since call Oct 23
“In investment booms, infrastructure builders put the most capital at risk and, as a result, often suffer the greatest losses in a bust.”
@Sparkline Capital
AI infrastructure builders trade at a 137% premium; they put the most capital at risk and lose most in a bust.
NVDASHORT@ $184.96
$199.28-7.74%
since call Oct 23
“Oracle, which has been signing huge AI cloud deals, tops the chart, having ramped up capex by 249% over the past year.”
@Sparkline Capital
Oracle's 249% capex ramp into AI cloud deals fits the loser profile of every capital cycle.
ORCLSHORT@ $281.04
$127.53+54.62%
since call Oct 23
peak +58.6%
00:00LONG
“the model has gradually rotated away from the big AI infrastructure providers toward a broader set of AI early adopters with lower valuations and capital…”
@Sparkline Capital
The real AI winners are cheap, asset-light early adopters; rotate the AI dollar toward them.
ITANLONG@ $35.91
$42.77+19.09%
since call Oct 23
peak +21.8%
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