Blue sky, sunshine, Shakin’ Stevens blasting out from my Bose Speakers. I feel as though I am flying. I was just talking to my son, and I said to my wife James always seems so cheerful. She said to me – So are you. What a wonderful compliment, and I don’t get many of those from my dear wife. You have to think that life is good until it isn’t. Poor Shakin’, he came from an era (think Gary Glitter) when rock stars felt they had to give themselves silly names, but, unlike Gary Glitter, Shakin’ Stevens was/ is a massive talent.
So is the ridiculously named Engelbert Humperdinck, whom I am going to see live at the Theatre Royal Drury Lane in September. When I was younger, I thought he was so naff; now I love him and, like Tom Jones, he has a fabulous voice. Demand for Humperdinck was insane. I went to buy tickets as soon as I was messaged on my email that he was performing, and while I was sorting out the wretched password, I got a message saying be quick, tickets are selling fast.
I am getting a good feeling about Nvidia that a whole new leg of a bull market is coming. There are three reasons for that. First, the fundamentals of infrastructure demand for AI, data centres and Nvidia’s chips are all running white hot. It would be staggering if the Q1 2025 earnings report, due 28 May, were not spectacularly positive. Second is the chart, which has formed what looks like a continuation pattern within a strong uptrend. Third is the Palantir effect.
Palantir is valued at over $300bn against the expected 2025 revenue of around $4bn. That is one hell of a valuation. Nearly all the analysts think it is crazy. We shall see, but it sets the tone for other shares like Nvidia playing an equally exciting and critical role within the sector. If Palantir can command a valuation of 75 times sales, maybe Nvidia, on closer to 25 times sales, falling to 10 by the year to 31 January 2028, looks cheap.
It seems to me that the Nvidia price could double and not look ridiculous in this new era, when the growth outlook for top technology businesses is so incredible.
First, a word on the charts. Coppock is for bear markets. I will keep an eye on what is happening, but my overall superbull reading of US stocks makes it less relevant. US technology shares, at least those playing a critical role in the rollout of GenAI infrastructure and its application in a fast-changing world, look early in an era of supercharged growth.
Analysts, being analysts, they will always find stuff to worry about, but we simpler folk can just see what is happening in front of us and draw the obvious conclusions. This boom is running white hot. Maybe it will go too crazy at some point, booms usually do, but not yet.
I have been reading company reports for UK and US companies for 60 years, and I can tell you, with all that experience, this is a new era. Listen to Satya Nadella on Microsoft’s Q3 2025 earnings report.
It was a record quarter, driven by continued strength of Microsoft Cloud, which surpassed $42 billion in revenue, up 22% in constant currency. Cloud and AI are the essential inputs for every business to expand output, reduce costs and accelerate growth.
Now, I’ll highlight examples starting with infrastructure. We continue to expand our data center capacity. This quarter alone, we opened DCs in 10 countries across four continents. Model capabilities are doubling in performance every six months, thanks to multiple compounding scaling laws.
We continue to optimize and drive efficiencies across every layer, from DC design to hardware and silicon to system software to model optimization, all towards lowering costs and increasing performance. You see this in our supply chain where we have reduced dock to lead times for new GPUs by nearly 20% across our blended fleet where we have increased AI performance by nearly 30% ISO power and our cost per token, which has more than halved.
[In the context of data centers, “ISO power” refers to the use of International Organization for Standardization (ISO) standards to improve power efficiency, security, and overall performance. These standards provide guidelines for various aspects of data center power management, including energy efficiency, environmental impact, and data protection.]
When it comes to cloud migrations, we saw accelerating demand with customers in every industry, from Abercrombie & Fitch, to Coca-Cola and ServiceNow expanding their footprints on Azure. And we remain the cloud of choice for customers’ mission-critical VMware, SAP and Oracle workloads with more regional availability than any other hyperscaler.
We’re also excited about the next frontier in cloud systems with quantum; in addition to putting our quantum stack on machines from our partners we’re also making real progress on a path to a utility scale quantum computer with the introduction of Majorana 1.
Satya Nadella, CEO, Microsoft, Q3 2025, 30 April 2025
For a company of this size to make progress at this rate is breathtaking. Microsoft is on 11.9 times expected revenue for the year to 30 June 2025, falling to 8.95 by June 2027. I think there is plenty of room for that valuation to move higher. Investors struggle to adapt to the scale at which these businesses are operating. We are not talking about a better way of selling groceries (maybe we are), but the real deal is a complete reinvention of how homo sapiens operates on planet Earth and, as Buzz Lightyear might say, ‘to infinity and beyond’.
Listen to Palantir’s boss, Alex Karp, to comprehend what is happening, especially in America.
The rush towards large language models, as well as the foundational software architecture that is capable of making them valuable to large organizations, has turned into a stampede.
What was once a relatively orderly process of assessment and evaluation of these novel technologies has evolved into a ravenous whirlwind of adoption as an increasing number of institutions grasp the magnitude of the shift that is washing over industry and government.
We believe our results are indicative of a revolution sweeping across our business and industry.
Alex Karp, CEO, Palantir, letter to shareholders, Q1 2025, 5 May 2025
Karp is wonderful. In defence of his allegiance to the US, he quotes from St Augustine.
Saint Augustine, who was born in the fourth century on the fringe of the Roman empire, reminds us to acknowledge and yet move beyond that central thorn in moral philosophy, rightly making the case that an abstract obligation to come to the aid of all need not prevent us from fulfilling our obligations to those with whom we are closest.
“All men are to be loved equally,” he wrote. “But since you cannot do good to all, you are to pay special regard to those who, by the accidents of time, or place, or circumstance, are brought into closer connection with you.”
Alex Karp, CEO, Palantir, letter to shareholders, Q1 2025, 5 May 2025
He is defending Palantir’s determination to defend the US against its enemies, which he says has become unfashionable in recent years. How I love this guy as he hammers the liberal elite for their smug assumption of moral superiority. And what a clever guy St Augustine was.
The establishment in this country is not merely adrift, as many have claimed, but has lost a sense of confidence, self-possession, and internal resolve.
It is not quite clear what much of the establishment even holds dear, beyond its own self-regard.
And the learned class, our new educational and cultural aristocracy, is far more entrenched and resilient than previous nobilities, whose positions were more precarious.
“Nobility had nothing to explain their right to stay in power, apart from their birth,” Michel Houellebecq, the sardonic and uncomfortably insightful French author, said in an interview last year. “Contemporary elites claim intellectual and moral superiority.”
The empathy for and interest in protecting the powerless and a ruthless pursuit of opportunity for all, no matter of high or low birth, that once defined a righteous and productive political movement has been set aside in favor of a performative politics—whose most zealous adherents are often more interested in signaling membership in a caste—that has turned off vast swaths of the public.
When there is no yardstick, no willingness to measure and quantify the success or failure of a political movement or policy, and no intellectual curiosity in assessing whether an ideology or worldview has delivered for its constituents, we must be willing to expose our purported shepherds as corrupt.
Alex Karp, CEO, Palantir, letter to shareholders, Q1 2025, 5 May 2025
This sheds a whole new light on the political revolution being led by populists like Trump and Farage. As a member of the very elite that Karp and Houllebecq are attacking, these comments hit home. I don’t have any problem with Karp’s plans to bring violence and death to America’s enemies, but I am starting to see Trump’s plans for tariffs and ambitions to bring about a whole-sale reindustrialisation of America and rebalancing of international trade as far more intellectually compelling than I ever realised before.
You may think I am wondering from the point, but not necessarily. To make America great again (MAGA), America needs the most incredible technology businesses that planet Earth has ever seen. This project needs Nvidia, Microsoft, Palantir et al to be worldbeaters as they are and will continue to be. It is a glittering prospect for the US stock market and a kick up the backside for the mandarins in Brussels who think that, despite being unelected, they have a divine right to rule over us lesser mortals.
They don’t, and if Keir Starmer thinks they do, he is in for a shock.
Share Recommendations
Nvidia NVDA
Microsoft. MSFT
Strategy – Believe US Tech Is Just Getting Started
The reinvention that is coming in the Anglo-Saxon countries, the US and Britain, mainly England (the Welsh and the Scots are way off piste), is going to be more transformational than anyone can imagine. The worry is that Trump is gathering too much power in his hands, but the direction in which he is taking America and which likely would be echoed by a Farage premiership, has much to recommend it.
What also might be a worry down the road is that to progress the technology revolution and ultimately reach for the planets, and make sure the democracies can defend themselves in a dangerous world, mega-caps like Nvidia and Microsoft need to become vastly bigger even than they are today. The day is coming when capital expenditure budgets at these great corporations will be measured in trillions of dollars, which means they need to generate correspondingly vast profits and free cash flow.
It will happen and may involve an alarming concentration of power in a few hands, but that is a problem for another day.
