April 24, 2026

In the Loop – April 24, 2026

“In The Loop” is designed to give you a short update reflecting major developments, earnings, and investment trends across some core Equity Income and Growth holdings. All clients should be aware that individual buy/sell recommendations will be conveyed directly to you on an individual basis. Have a great weekend.

We have so many tools and so many ways to analyze different aspects of the economy, which helps increase our odds of success. However, predicting the outcome of the Iran Conflict has been a difficult process. Our intel from the Global Intelligence Group has been amazing, but difficult to apply to investing in certain cases. Therefore, today we are taking a break from Iran and accepting the fact that since the Original Ceasefire was announced, the Price of a Barrel of Crude is Lower, Gas Prices are Lower, The Dollar is Lower, Interest Rates are Lower, Mortgage Rates are Lower and Growth Stocks have had an outstanding move higher. Now what?

We are seeing a very real split emerge this earnings season between investment-driven winners and consumption-driven laggards, and the market’s reaction is making that divide unmistakable. On the investment side, companies tied to long-cycle capital deployment are delivering both strong results and strong stock reactions. On the Investment side, GE Vernova reported a blockbuster Q1, with earnings and revenue well ahead of expectations, driven by surging demand for power infrastructure tied to AI data centers and electrification. The market response was decisive, shares jumped roughly 12–14% following the release. On the consumption side, Nike provides a clear contrast. While results were broadly in line, management commentary pointed to softer global demand, inventory challenges, and cautious consumer behavior—leading to a double-digit decline in the stock following earnings.

Follow the Money

The chart below highlights the rapid acceleration in hyperscaler capital expenditures, illustrating how AI-driven infrastructure investment has evolved from approximately $162 billion in 2022 to an expected $600–$750 billion by 2026, with further growth likely beyond current forecasts. The progression reflects a shift from early-stage cloud and AI adoption to a full-scale industrial buildout, where spending is increasingly directed toward data centers, power generation, and supporting infrastructure. The visual underscores that this is no longer a typical technology cycle, but a large, sustained capital investment trend that is reshaping multiple sectors across the economy.

Artificial Intelligence Phases

The market’s first phase of AI investing rewarded compute. The second phase is rewarding connectivity. The third phase—now emerging—is centered on power, signal integrity, and efficiency. These are not optional layers; they are the physical constraints that determine whether AI scales or stalls. As a result, radiofrequency, analog, and mixed-signal companies are moving from the background of the semiconductor ecosystem to the center of it. In many cases, they are now the bottleneck—and historically, bottlenecks are where the highest returns are generated.

Company Updates

Next week many of our portfolio companies will be reporting First Quarter Earnings. I will spend more time on this section over the next two weeks as we analyze and report results.

We remain focused on navigating market trends and positioning portfolios for long-term growth and resilience.
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Formidable Asset Management (“Massey Romans Capital”) is an investment adviser registered under the Investment Advisers Act of 1940. The information presented in the material is general in nature and is not designed to address your investment objectives, financial situation or particular needs. Prior to making any investment decision, you should assess, or seek advice from a professional regarding whether any particular transaction is relevant or appropriate to your individual circumstances. Although taken from reliable sources, the Firm cannot guarantee the accuracy of the information received from third parties.

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