☕ An AI data energy reshuffle, what’s next?

Howdy! 👋 

The markets are very much like an old-country band song lately… it’s a one anda’ two. 

Up one day, down the next. 

Wall Street likes it that way because the constant noise makes it easier for ‘em to manipu…. err… influence markets. 🤦‍ 

Do NOT fall for their shenanigans! 

Make yourself and your money a harder target. 

• Buy the best, ignore the rest™ 
• Control risk at all times using simple, proven effective tactics 
• Focus on the signal, not the noise like everyone else 

Investing doesn’t need to be complicated (unless you make it that way). 

Here’s my playbook. 

1 – JPM just smoked the naysayers again 

Team Dimon just posted Q4 results that beat expectations across the board. (Read) 

Again! 

That makes 17 for 20 if memory serves – meaning the company has pounded naysayers 17 out of the last 20 quarterly reports. 

This go ‘round:  

• Adjusted EPS came in at $5.23 versus $5 expected 
• Revenue hit $46.77B versus $46.2B expected 
• Net interest income rose 7% to $25.1B 
• Equities trading revenue and fixed income trading both outperformed 

Yes, headline profit dipped because of a pre-announced reserve tied to the Apple Card portfolio but strip that out and the quarter was even stronger than it looks. 

So why are shares down this morning? 

Something we’ve talked about many, many times. 

Big go-fast traders played the momentum crowd into earnings by bidding prices up because they know there are still plenty of unsuspecting investors who think it’s a great idea to buy on strong earnings.  

This morning they're “running the stops” to stick it to ‘em on the downside by selling because they know many of those same folks are nervous money and holding on too tight. 

MyPOV? 

Keep it stupid simple. 

JPM is an apex predator with a $4.5T+ balance sheet, the deepest capability set of any bank, the most expansive geographic footprint, and unmatched scale among U.S. peers — all run by one of the best CEOs in the business.  

No scratch that. 

The best CEO in the business. 

JPM has returned ~150% over the past three years while the KBW Bank Index — a benchmark that tracks the performance of major U.S. banks — has returned ~74% over the same time frame. 

Guess which one I recommend to the OBA Family? 

The best, not the rest. 

Hopefully you’re tracking with your own portfolio but if not and you’re interested in learning how to get ahead and stay there, I’ll be here. 

Keith’s Investing Tip: Own the institutions that benefit from chaos instead of fearing it. Your portfolio will thank you, perhaps not immediately but almost definitely over time. 

2 – Core inflation up just 2.6%, WWJPD? 

The Bureau of Labor Statistics – aka the Ministry of Whitewash – just released a new report showing that core consumer prices rose 0.2% last month or just 2.6% annually. (Read)

WWJPD (What will Jerome Powell Do)? 

Probably nothing. 

The Fed considers core inflation to be a better long-range gauge of where inflation is heading but, even so, they probably won’t lower rates. There’s still a lot of work to do with medical costs, airfare, restaurants and recreation. 

I’ve often said the key to investing in environments like this is to laser focus on companies that can succeed irrespective of the Fed. And that’s still true today. 

JPM – which we’ve just talked about – is a prime example. 

3 – An AI energy shuffle that will catch many by surprise 

US President Donald Trump says Microsoft is making “major changes” to ensure Americans don’t pay higher electricity bills because of data-hungry data centres. (Read) 

Excellent! 

There are three takeaways. 

First, this is proof positive that the AI bubble babblers are going to be sent packing if for no other reason than that a sitting President proactively calls AI power demand on the carpet. In other words, AI is not a bubble, let alone a figment of everyone’s imagination. 

Second, this move makes sure that big, multi-billion-dollar corporations gobbling up power cannot distort the power grid in the name of progress and at the expense of consumers who would otherwise have to pay more for less available power as tech races to build AI data centers. 

And third, the move ensures that a desperately needed upgrade in America’s electric grid will happen because tech companies will be forced to work with local utilities to ensure badly needed modernization adds the needed supply. Microsoft is setting a great example and the first to comply. 

Trade Idea: Long power equipment makers – and not just in the US either. At the same time and debatably, short or buy putskies to counter the speculative froth in choices like Okla etc. 

Seems I’ve got some homework to do. 🤔 

4 – Buy Salesforce? 

Salesforce just rolled out an upgraded Slackbot powered by Anthropic’s AI models. (Read) 

Upgrade? 

Not. 

If Slack didn’t get AI-ified, Salesforce customers would simply reach around it like they’re doing already… straight to ChatGPT, Gemini, or Copilot.  

Here’s the challenge. 

Salesforce is adding AI to software that is already in many instances a huge waste of time in the name of cutting busy work. Data varies, but the average company may lose 1/3rd of every business day and $10,000 a year per employee using it to multi-task on “productivity” that goes right out the proverbial window. 

My own shop is a great example where we’ve banned tools like that in the name of having actual conversations. It may not be perfect, but I’d put our team up against the best of ‘em any day when it comes to getting stuff done. 💯 

Salesforce still reminds me of Adobe during its transition years — solid fundamentals, lots of promise, but a market that isn’t convinced yet. Growth is still stuck in the single digits while true AI platform leaders are compounding much faster. 

There’s a big difference in “adding something” versus building software that brings it all together. 

You know who does it a lot better. 😀 

5 – Buy Delta, I could make the case 

I wrote to you a while back that I expected Delta’s “lifestyle” rebranding to pay off, and it seems I may have been on to something. 

Delta’s CEO says record earnings are back in reach for 2026. (Read) 

The airline is guiding to $6.50–$7.50 in earnings per share this year, with revenue up as much as 7% in Q1… and not from the wooden bench section (which is what my grandfather euphemistically called economy seating). 

The money is coming from the front of the plane where premium ticket revenue jumped 9% last quarter and, for the first time, overtook main cabin revenue. Coach ticket sales fell 7%.  

That caught my attention. 

Delta says virtually all seat growth this year will be in premium cabins. 

Now, a reality check. 

I won’t normally touch airline stocks with a ten-foot pole except under very specific circumstances… like this, perhaps. 

Anecdotally, I went out of my way to fly Alaska for years but the last half dozen long haul flights my bride and I have gone Delta because it is now a considerably better experience… professional crews, clean aircraft, tasty food, stuff works and, of course, better pricing on routes that Alaska thought it had locked down. 

I could make the argument for $100 a share this time next year. 🤷🏻‍♂️ 

Bottom Line 

Strategy and tactics are not the same things. 

The former is where you're going, the latter is what you need to get there. 

As always, let’s MAKE it a great day. 

You got this — I promise! 

Keith 😀