Hi All,
Welcome to our brief overview of portfolio news from the past few days.
The AI Energy Rush: Going Nuclear
Meta Platforms is making the “physical reality” of AI undeniable by securing massive power capacity.
The Vistra Deal: Meta signed 20-year agreements with Vistra for over 2,600 MW of nuclear energy.
The Oklo Bet: A partnership with Oklo to develop a 1.2 GW nuclear campus in Ohio, targeting 2030 to complete the first phase.
Meta is funding TerraPower to develop two new Natrium® units capable of 690 MW of firm power, with delivery as early as 2032. The deal includes rights for up to six additional units (2.1 GW), targeting 2035. Across 8 potential units, this represents 2.8 GW of baseload generation plus 1.2 GW of built-in storage.
Meta isn’t just buying power; they are actively building the grid of the future. By diversifying across three timelines, Vistra (Now/Existing), Oklo (2030/SMR), and TerraPower (2032/Advanced Sodium), they are hedging their bets against regulatory delays and technology risks. Securing ~6.6 GW of carbon-free, 24/7 power is a massive strategic moat that competitors will struggle to replicate without similar capital commitments.
AMD at CES: The “Yottascale” Era
AMD is aggressively expanding its portfolio to challenge Nvidia, unveiling a suite of products at CES 2026 under the banner of “AI for Everyone.”
CEO Lisa Su declared we are entering the “Yottascale” era, where AI model deployment will require a 100x increase in global computing capacity.
AMD projects the number of AI users to explode from 1 billion to 5 billion in just five years. This isn’t just about servers; it’s about putting AI in every hand.
New Hardware & Benefits:
Ryzen AI 400 Series: Targeting the consumer PC market, these chips deliver tangible productivity gains: 1.3x faster multitasking and 1.7x faster content creation compared to peers.
Helios AI Server Rack: Featuring 72 MI455X GPUs, launching 2H 2026 to compete with Nvidia’s rack-scale solutions.
Ryzen AI Halo: A new platform for developers to build local AI apps, further democratizing access.
AMD is positioning itself as the engine for mass adoption as AMD’s “AI for Everyone” strategy targets the volume market.
PayPal’s Two-Pronged Attack
PayPal announced two major developments that target both user acquisition and high-margin monetization.
1. The Paychex Partnership
PayPal is collaborating with Paychex to add a PayPal direct deposit option to the Paychex Flex Perks platform. This allows employees of Paychex clients to receive their wages directly into their PayPal balance. Most importantly, this offers access to pay up to two days early.
The promise of early wages is a strong hook for adoption. By capturing the paycheck at the source, PayPal gets fresh capital into its ecosystem regularly. New users come for the early access, but once the money is in the wallet, PayPal can monetize it through spending, crypto, or savings products.
2. Transaction Graph Insights (The Ad Play)
PayPal launched a new ad platform that leverages its unique data advantage: it sees the actual purchase. Unlike Google (search intent) or Meta (social interest), PayPal knows exactly what you bought. Early tests with Ulta Beauty showed a 20% lift in transaction spend.
This is potentially huge. Advertising is a high-margin business that could significantly move the needle on profitability. If PayPal can scale this without degrading the user experience, it unlocks a new valuation multiple for the stock.
Greggs: A “Transition Year” Testing Patience
Greggs shares fell ~5% after a trading update that, while solid on the surface, reset expectations for 2026.
The Good (Revenue Acceleration): What we liked was the acceleration in revenue. Q4 underlying sales grew 2.9%, a clear improvement from the 1.5% growth seen in the previous quarter.
The Bad (Store Openings & Margins): Previously, the target was 150 net new stores per annum. The new guidance of 120 net new shops for 2026 implies a slowdown, although this comes with a more cautious capex approach.
The Margins: While operational costs were controlled (delivering £13m in efficiencies) and cost inflation is expected to lower in 2026, the new Derby facility is creating headwinds. The fixed costs associated with bringing this capacity online are weighing on margins, leading to “weak” guidance for operating profit to remain flat year-over-year.
Investors (including us) were expecting operating leverage to kick in, expanding margins for 2026. Instead, we are getting flat profit guidance due to the costs of bringing new supply chain capacity online.
Valuation View: While the “peak Greggs” narrative is circulating, we disagree. The Derby facility is a necessary fixed-cost investment to support future growth (short-term pain, long-term gain). Even adjusting for lower 2026 expectations, our valuation model suggests the target price is still above current levels. However, with flat profits on the horizon, the stock likely faces a “show me” period, it may be dead money until execution improves in 2027.
Other Key Updates
Anthropic: Reports of a $10B raise at a $350B valuation confirm the extreme capital intensity of the AI race.
Defense: Lockheed Martin surged on calls for a 50% US military budget increase.
Samsung/Google: Doubling its AI-enabled devices to 800 million this year, effectively making Google’s Gemini the default AI for a massive chunk of the global population.
Gmail AI: New summarization and “Help Me Write” features are rolling out, bringing AI utility directly into the daily workflow of millions.
That’s a wrap. See you soon.