AI Hype & Handymen: A Modest Proposal

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The market, as always, is brimming with enthusiasm. Semiconductors – Nvidia, Broadcom, names whispered with reverence – are currently enjoying their moment in the sun. But let’s be honest, following the herd is rarely a path to true enrichment. One must look beyond the obvious, towards the slightly… less obvious. And, if one is particularly astute, towards the companies that are merely adjacent to the revolution.

Our esteemed billionaires, those paragons of financial wisdom, have been dabbling. Palantir Technologies, a name that sounds suspiciously like a Bond villain’s lair, has seen a rather… energetic surge. Two thousand percent since January 2023, they say. Ken Griffin and Cliff Asness, both gentlemen who seem to have mastered the art of outperforming the S&P 500, have taken notice. One suspects they’ve simply discovered a particularly profitable corner of the digital gold rush. Or perhaps they’ve found a really good accountant.

Then there’s Comfort Systems. Comfort Systems! The very name evokes images of plush carpets and attentive service. But no. This is a construction firm, specializing in HVAC and electrical work. And it has, inexplicably, risen a staggering 970% since the start of the year. Israel Englander and Steven Cohen, two individuals who clearly understand the nuances of wealth accumulation, are among its shareholders. One wonders if they’ve discovered a secret – that every server farm, no matter how sophisticated, still requires a functioning air conditioner. It’s a simple truth, often overlooked in the pursuit of technological grandeur.

1. Palantir Technologies: Data, Shadows, and a Hefty Price Tag

Palantir, we are told, builds platforms for managing information. A noble pursuit, to be sure. They offer a “decision-making framework” called an ontology. A fancy word for organizing things, really. Most companies merely report and visualize data; Palantir apparently thinks about it. The ontology, they claim, becomes more valuable over time. Like a fine wine, or a well-cultivated network of informants. They’ve added an AI platform, AIP, which allows one to interrogate data with natural language. One imagines a future where computers politely confirm one’s pre-existing biases.

The fourth-quarter results were, shall we say, impressive. Revenue up 70%, earnings soaring. They even achieved a “Rule of 40” score of 127%. A meaningless metric, undoubtedly, but one that Wall Street seems to adore. However, the stock trades at 214 times earnings. A valuation that suggests either boundless optimism or a collective delusion. They expect earnings to grow 45% annually. A perfectly reasonable expectation, of course, for a company operating in the unpredictable realm of artificial intelligence. A small position, perhaps, for the adventurous investor. But be prepared for a 50% drop. It’s the natural order of things.

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2. Comfort Systems: The Unsung Heroes of the Digital Age

Comfort Systems, as previously mentioned, installs and maintains HVAC and electrical systems. A decidedly unglamorous profession. But a necessary one. They operate through two units: mechanical and electrical services. The company boasts an extensive scale – over 50 subsidiaries across 184 locations. Efficiency, they claim, is their forte. They construct systems off-site, as modular components. A clever tactic, really. It saves time and money. And allows them to bill for more hours.

They supply air conditioning and specialized cooling systems for data centers. A crucial service, given the prodigious amount of heat generated by AI infrastructure. They also provide services to semiconductor manufacturers. Cleanroom ventilation, apparently, is a highly specialized field. Technology customers now account for 42% of revenue, up from 32% last year. A clear indication that they are capitalizing on the current craze.

Third-quarter results were strong. Revenue up 35%, operating margin expanded, earnings soared. Revenue backlog increased 66%. A promising sign, suggesting continued growth. The stock trades at 52 times earnings. Not cheap, but reasonable for a company expecting 39% annual earnings growth. A position, perhaps, for the discerning investor. One who appreciates the quiet dignity of a well-maintained air conditioning system.

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2026-02-09 11:32