Small Themes: June 2026
Five Big Trades in AI’s Blind Spot
Attention Tax
Did you know that compute, power, HBM, NAND, the concrete, and transformers it takes to stand up a data center, the special kind of Taiwanese glass, and the alphabet soup that turns light into data, are all in short supply?
Yes. Of course you did. But there’s an even more scarce input that AI has resulted in a shortage of: Attention.
Every marginal hour of analyst brainpower (or analyst token budget, I guess) has been pulled toward a single trade. We would know, having spent the better part of three years following (and occasionally shaping) that narrative.
Still, there’s a cost to myopia, and we figured it was a good idea to cast our gaze wider.
The AI trade is – at a minimum – crowded, even where it is right. We think the risk of “AI exhaustion” is high and it’s probable that we will see some degree of rotation into things that people have seemingly stopped caring about.
The mechanism we care about is simple enough: capital crowds into one theme, while names outside it get under-owned, which is mildly interesting in and of itself. These names also get under-modeled and overlooked.
We spoke a little bit about this in reference to the life sciences cycle that, in our opinion, has already bottomed. Five years ago, we would’ve seen these stocks bounce off the lows in anticipation of the upswing. Instead, they’ve sat in the doldrums of 52-week lows as nobody wants to shift risk into a destocking recovery while DRAM IS THE BOTTLENECK.
The world still spins and the gap between a forgotten estimate and a moving reality is where thematic money has always been made. Attention is a finite resource, but it can quickly shift amidst a run-of-the-mill momentum unwind. And, sometimes when it shifts, it brings new focal points into investor consciousness, even when momentum swings back to rallying.
We are revisiting our “Small Themes,” which are trends and catalyst-driven trades that aren’t big, decade long, market disrupting stories. Instead, they are interesting, below the radar narratives in less popular sectors that can surprise. Five themes, none of which require a view on AGI timelines or token economics. Boomers checking into senior housing. Sold-out stadiums. A twenty-year exchange monopoly meeting its first real competition. A resurgence in fintech. And airlines, where two of our favorite names spent eighteen months getting punished for things that had nothing to do with whether they make money.
Our macro view is that the market will continue to go higher, but it will also see a significantly increased incidence of 10-15% sharp drawdowns driven more by positioning than fundamentals. That means we should hang onto our semi names, but probably stop letting them be the only thing on the map. Right now, our AI allocation has been getting progressively trimmed down over the past month as everybody with an internet connection has donned their bottleneck-investor-hat and we’ve gotten a bit more interested in what the AI Dutch disease has left behind.