π₯ Energy and compute scarcity are letting the bulls run wild π
AI Summary
The Strait of Hormuz remains closed, pushing Brent Crude to $109/barrel with Goldman Sachs warning of $140/barrel by July if unresolved. The U.S. government's $9B investment in Intel (made August 2025) yielded a $27B profit after Intel shares surged 24% to a 26-year high above $82. The newsletter argues that global scarcity of energy and compute is the dominant macro theme driving markets.
Key Facts
Author Takes
Hormuz closure as U.S. negotiation tactic
The U.S. appears happy to keep Hormuz closed longer as a negotiation tactic, but if it is one, it's an expensive one
Energy and compute scarcity as dominant market theme
Investors have shifted focus from AI apps to AI infrastructure β chips, data centers, and energy β and those on the winning side of scarcity are doing very well
Federal Reserve interest rate cuts
High energy prices from the Hormuz closure mean sticky inflation, making the Fed less likely to cut interest rates
Contrarian Angle
Government Venture Capital in Semiconductors
The U.S. government invested $9B in Intel in August 2025 and generated a $27B profit after Intel shares hit a 26-year high β a 3x return on a strategic industrial bet.
Governments are typically not viewed as successful venture investors, yet this sovereign bet on domestic semiconductor capacity yielded a 3x return
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