Your Strategic Monday Round - Up

🌟 Editor's Note

At Linda AGI, we believe the market is entering a new phase—one where AI capex, geopolitical tensions, and shifting consumer spending dynamics drive growth, not just traditional macro factors.

Investors should focus less on what’s being said and more on who is positioning for the next wave—and why those moves matter.

CIO Brief: Navigating AI, Geopolitical Risk, and Consumer Spending

Markets are pricing in a forward AI economy, mispricing geopolitical risks, and overlooking the revival of the real economy. We’re rebalancing our portfolio around this insight, with particular attention to Nvidia’s growth, Taiwanese risk, and boomer-driven travel spending.

The Situation

• Taiwan: The risk isn’t an invasion, but potential trade disruptions. We’re hedging with TSMC calls and U.S. defense exposure.

• Nvidia: AI capex is on track to hit $1T by 2028. This isn’t just a stock; it’s a geopolitical asset. Tactical: Watch for pullbacks in NVDA and hedge with selective semi-shorts.

• Cruise Line Capitalism: NCLH offers strong cash flow and backlog visibility. We’re positioning for increased weight in travel and discretionary stocks.

Linda AGI Macro Interpretation

Will China Invade Taiwan?

“Unlikely, but disruption remains the base case.”

• Key risk: A naval embargo or trade disruption—enough to shock semis, shipping, and capital markets.

• China’s military is untested, youth unemployment is high, and the one-child culture resists war sacrifice.

Strategic Implication: Don’t underweight Taiwan Semi on invasion fears—hedge tail risk.

Positioning Move:

• Prefer U.S. defense exposure as an asymmetric geopolitical hedge.

Market Pulse

🟢 Nvidia: $1 Trillion Capex Supercycle

• Jensen Huang has once again upgraded the terminal velocity of AI capex—$1T by 2028. That’s 3x current levels, 2 years faster than previous estimates.

• Hyperscalers are confirming this via capacity planning transcripts.

Why it matters: This is a Sovereign AI arms race, and Nvidia isn’t just a stock—it’s a geopolitical asset.

Consumer Cruisin’ – NCLH

• Norwegian Cruise Line (NCLH) is showing 6.5% FCF yield and 95% ROE.

• Baby boomers control $60T in wealth, rotating from goods to experiences.

Positioning: We’re looking at increasing weight to travel and discretionary names with strong balance sheets, backlogs, and yield—particularly those ignored due to misfitted recession narratives.

Healthcare Rotation – The "New Financials 2023"

• Boomers + entitlements = secular tailwind.

• Recent defensive leadership signals early rotation into non-AI quality stocks.

We’re Watching:

• Utilities: NEE

• Healthcare: UNH, CI, HUM

• Restaurants: LOCO (We own), EAT (candidate for this week)

• Financials: COF, BFI, ENVA, BCS

Small Cap Value Setup

• HPP and others show FCF yields that preceded large rallies in 2023.

• Debt-overhang and macro noise have crushed pricing—not fundamentals.

Portfolio Construction Strategy:

• Small size across multiple deep value, high-FCF plays.

• Combine with high-momentum growth names for convexity on both ends of the market cycle.

📈 Signal Screener: Momentum + Value Rotation

• Momentum has paused after a May surge. Healthy consolidation. Bull flags everywhere. We expect upside resolutions.

• Value catching a bid—especially in small caps and defensive names.

June Setup: Macro noise + technical strength → rotation tailwinds.

🧩 Meme of the Week:

“TACO vs BURRITO” – Trump’s tariff memes evolve.
Markets used to price in Trump’s backdown (TACO). Now they price in escalation (BURRITO).
We expect near-term inflation noise from new tariffs → possible summer swoon → Q4 rate cuts → risk rally.

Closing Thoughts from the CIO Office

“Markets aren’t wrong—they’re early. Nvidia is repricing, Taiwan is discounted, and small caps are incubating alpha. The bubble isn’t in AI—it’s in complacent quality.”