It is, after all, a truth universally acknowledged that a financial instrument in possession of a good reputation must be secure in its standing. But even the most carefully cultivated position can be imperiled by external events, and it is to the particulars of this situation that we must now turn.
Let us begin with VONG, a fund that, with a portfolio of 391 stocks, attempts a certain breadth, a democratic spread of ambition. Yet, beneath this veneer of inclusivity lies a pronounced preference for the technological. A substantial 59.7% of its holdings are devoted to the digital realm, a concentration exemplified by its top five constituents: Nvidia, holding court with 12.7% of the fund’s assets, followed by Apple, Microsoft, Amazon, and Broadcom. A familiar constellation, wouldn’t you say? It’s as if VONG, despite its numerical diversity, is merely a slightly more elaborate echo of the technological dominance that defines our age.
Four tech behemoths – Alphabet (Google, to its friends), Meta (formerly Facebook, still confusing some people), Microsoft, and Amazon – are collectively gearing up to spend close to $700 billion by 2026 on building out the data centers that will house all this artificial intelligence. That’s a colossal sum, enough to build a small country, or at least a very well-equipped server farm. These companies, you see, have stumbled upon the enviable position of generating vast amounts of cash from their existing businesses – Google’s near-monopoly on search, Meta’s mastery of social distraction, Microsoft’s enduring grip on office software, and Amazon’s relentless domination of online shopping and cloud services – which allows them to fund these ambitious, futuristic projects.
Everyone talks about ‘disruptive’ tech, about chasing the next unicorn. I’ve learned the hard way that most unicorns are just horses with glitter glued to them. Give me something…consistent. Something that won’t require me to explain to my broker why I thought a company that makes self-folding laundry was a good idea. Walmart, despite being the retail equivalent of beige, is that something. And, with $3,000, you can get a little slice of that beige for yourself.
However, the universe, as a general rule, dislikes monopolies. (It’s a deeply ingrained principle, somewhere between the second and third laws of thermodynamics.) And so, while Nvidia basks in the glow of its AI dominance, other contenders are emerging. One such contender, and the subject of our current investigation, is Broadcom. They’re a networking giant, responsible for ensuring that roughly 99% of all internet traffic doesn’t just… vanish into the ether. (A surprisingly common occurrence, if you don’t have the right infrastructure. Imagine the support tickets.)
One might be tempted to call this a buying opportunity. A ‘dip’, as the jargon has it. But a closer inspection reveals a company not so much wounded as… exhausted. It appears to have lost the knack of surprising anyone, and in the modern market, that is a fatal affliction.
The report doesn’t mince words. Over the past decade, the S&P 500 – once a rough map of the American economy – has become a shrine to technology and, more recently, the artificial. A ‘Great Narrowing,’ they call it. A polite term for a tightening grip. The common man, the one who toils in the digital fields, is increasingly subject to the fortunes of a handful of masters. It’s a familiar story, dressed in the language of algorithms and venture capital.
Nvidia, of course, had been waiting. Not with impatience, but with the quiet certainty of a craftsman who understands the weight of the future in his hands. Since the awakening brought on by the whispers of ChatGPT, the company had become something of a legend, its stock ascending with a fervor that bordered on the mythical—a thousand percent climb, they said, as if measuring the ascent of a lost city. But lately, a stillness had fallen, a mere one percent gain in recent months, causing tremors of doubt amongst the anxious constellations of investors. A pause, perhaps, before the next great surge, or the first sign of a fading star?
It’s like watching a slow-motion corporate identity crisis. Tesla, once laser-focused on dominating the roads, appears to be…distracted. It’s shifted gears, and not in a good way. It’s less ‘Fast and Furious’ and more ‘taking a scenic detour to build humanoid robots.’ Which, look, I’m all for robots, but maybe finish the car first?
Here’s the thing. Fluor used to take on projects where they promised a price, no matter what. If the cost of dirt went up, or the workers demanded sandwiches made of gold, Fluor ate it. Now, they mostly get paid for whatever the project actually costs, plus a fee. The customer pays for the gold sandwiches. It’s a sensible change, really. Passing the buck, as they say. Eighty-one percent of their current backlog is structured this way. They’ve added twelve billion dollars recently, and eighty-seven percent of that is also “customer problem” construction. It’s a tidy improvement, if you don’t think too hard about who ultimately pays.