A big part of our thematic research is trying to identify themes before everyone else does. AI, and all of the related sub themes, is the major driver in markets right now, but it’s not a secret and many of these stocks are extended. I still think you need to be there, but I doubt you are going to 10x on stocks like NVDA anymore. There are a couple of themes I think people aren’t paying attention to at the moment. The first is the Secret Gap (which I will talk about in more detail on Friday’s webinar, see below), there’s AI in healthcare, which I still think is a bit early, and then European digital sovereignty. I wrote about this a couple of weeks ago and I implemented a basket in my own portfolio and for our wealth management clients, today we hit it again…..

Here’s the story nobody is pricing correctly.

France just told 2.5 million civil servants to stop using U.S. video-conferencing tools — Zoom, Microsoft Teams, Webex, GoToMeeting — and move to a homegrown alternative called “Visio” by 2027. Not a pilot. Not a test. A mandate.

If you think this is about “saving on software licenses,” you’re already behind the trade.

Because what’s happening in Europe isn’t a procurement tweak… it’s a strategic doctrine. A sovereignty supercycle. And it’s spreading.

For the last 15 years, Europe treated U.S. platforms like gravity: inevitable, everywhere, and not worth fighting. You want email? Microsoft. Collaboration? Teams. Video? Zoom. Cloud? Pick your hyperscaler.

That era is ending — not because Europe suddenly fell out of love with American technology… but because it finally internalized a brutal truth:

Digital infrastructure isn’t “software.” It’s leverage.

And leverage gets used.

Every sovereignty pivot has a catalyst — a moment when the risk becomes undeniable.

For Europe, it was the growing fear of a platform “kill switch” after U.S. sanctions dynamics spilled into the digital world. When politics can reach into your communications stack, the “default vendor” stops being convenient… and starts being dangerous.

That’s why this shift isn’t just France. It’s a continent-wide pattern:

This is the key mental flip:
“We will be free… and saving money is the side benefit.”

Markets are treating this like a “culture war” headline. It’s not.

This is the beginning of budget gravity shifting — from:

And unlike consumer fads, government IT moves slowly… and then all at once.
Once a ministry migrates, it standardizes. Once it standardizes, procurement follows. Once procurement follows, ecosystems form around it (integration partners, security layers, hosting, identity, compliance).

The trade isn’t “France hates Teams.”
The trade is: Europe is building a permanent sovereignty premium into technology purchasing.

Think of it as a new line item in every large deal:

If you want the contract, you must prove:

That’s not a temporary trend. That’s a structural re-rating of how digital infrastructure gets valued and purchased.

1) European cloud + hosting “sovereign alternatives”
These are the players that can credibly sell: “EU jurisdiction, EU ops, EU control.”

2) IT services + systems integrators (the migration merchants)
Every exit from Microsoft/Zoom/Teams becomes a multi-year integration, security, and change-management project. That spending doesn’t disappear — it changes hands.

3) Cybersecurity + secure communications
Sovereignty is useless if the new stack isn’t secure. Expect security requirements to harden, budgets to rise, and “trusted supplier” lists to tighten.

4) Satellite and resilient connectivity
Europe’s anxiety about single-point dependency in communications doesn’t stop at software. It goes to the network layer.

1) Collaboration and productivity incumbents in public-sector Europe
This isn’t “game over” — but it’s a new drag on the easiest, highest-trust customer base.

2) U.S. hyperscalers — not “dead,” but forced to share economics
The sovereign-cloud workaround is basically Europe saying:
“You can stay… but on our terms.”
That can mean more local partners, more compliance cost, more structural friction — and potentially lower margins on regulated workloads.

This isn’t a tantrum. It’s not decoupling. It’s risk management.

Europe still wants NATO. It still wants U.S. capital. It still wants U.S. innovation.
But it no longer wants single points of dependency in critical infrastructure — especially when politics is getting louder, sanctions are getting sharper, and the world is getting more fragmented.

If you’re an investor, you don’t have to agree with the politics…

You just have to recognize the cash flow direction.

Markets keep treating Europe’s digital sovereignty push like a headline.

It’s not a headline. It’s a multi-year reallocation of public-sector tech spend — and a slow-moving structural change that will look “sudden” once procurement hits scale.

Europe isn’t just exiting Zoom and Teams.

It’s exiting complacency.

Every cycle has its “you had to be there” trade.

Now we’ve got a former president saying aliens are real on a podcast, then walking it back because the clip blew up.

I’m not trading the meme.

I’m looking at what happens when UAPs sit in the same sentence as war risk, policy risk, and tech shocks. 

I’m looking at how fast capital can move if this story keeps leaking into hearings, budgets, and the National Defense Authorization Act.

Maybe 90% of it is noise.

Maybe 99%.

That’s fine. H.E.A.T. is about asymmetry: if there’s even a small chance this turns into a real Disclosure Day, I want some of my portfolio pointed at the potential winners.

If you’re curious how I’m doing that in practice, join me later today at 2pm for a live briefing.

I’ll walk through the “what if they’re right?” trade, the sectors I think could matter most, and how this fits into a disciplined, rules‑aware approach to the UFO disclosure theme.

Register now and secure your spot for the free live webinar.

SECURE MY SPOT: Disclosure Day: A Playbook For Investors If The Government Confirms It Has Alien Technology.​

UFOD adds SAIC (2% of fund), BAH (1%), HII (1%), and GD (1%) to broaden exposure to U.S. defense modernization: 
 
Mission systems/IT, intelligence analytics, and naval/undersea platforms tied to long-cycle federal spending. 
 
Learn more: www.thetruthisoutthereufod.com 

Oh, and thank you Mr. President…..

Noise: AI trade is dead, AI companies are overvalued, etc. if AI spend doesn’t translate into ROI, the “capex party” slows and AI hardware loses its perceived safety.

News: The counterpoint (and I agree it’s important) is: the biggest spenders (hyperscalers, sovereigns) aren’t optimizing ROI quarter-to-quarter—they’re optimizing for strategic position + defense + “don’t fall behind.”

Translation: this stays bullish until balance sheets/credit spreads become the binding constraint.

However….

Credit spreads are creeping into the AI conversation

If “AI services” companies are increasingly funding the buildout with debt, widening spreads can become the pin that pops risk appetite even if AI demand is real.

In practical terms: the market can keep paying for winners, but it becomes less forgiving on “story stocks” and margin uncertainty.

“Late 90s” echo

It’s not that “AI = dotcom,” it’s that you can get a temporary valuation dislocation between “picks & shovels” and “apps/services,” then a violent reversal if the economics disappoint.

Meanwhile….

AI is quietly turning into a natural gas + turbines + grid trade (the “atoms” bottleneck)

Multiple brokerage firms are converging on the idea that AI constraints = physical-world constraints (fuel logistics, turbines, grid equipment, and interconnect).

If AI capex stays durable, the next bottlenecks aren’t just GPUs and HBM—they’re power generation equipment, interconnect, and fuel logistics. This theme also plays well as “old economy benefiting from AI” because it’s rooted in physical constraints + long lead times + pricing power.

This is not over, and it showed up in today’s target moves.

Implication: Even if “software survives,” multiples are still being reset by the market until AI ROI + margin structure are credible.

CAT (Caterpillar) — Stock I’m Watching: CAT is one of the cleanest “atoms” beneficiaries of the AI buildout because the AI boom ultimately shows up as physical demand: more data centers, more grid work, more earthmoving, and more commodities production. What’s notable is that the AI linkage isn’t just a narrative anymore—Caterpillar has been calling out rising orders for large “prime power” generator systems as data-center customers look for more on-site, 24/7 power, and its Power & Energy segment has been posting >20% sales growth in that context. The pushback (and why it’s not a “set it and forget it” compounder) is classic CAT risk: it’s still cyclical, and the company has also warned that tariffs could be a multi‑billion dollar headwind (they cited ~$2.6B of tariff-related costs in 2026), which can cap margin expansion even when demand is decent. What I’m watching: (1) whether data-center “prime power” demand stays incremental vs. just offsetting softness elsewhere, (2) Resource Industries dealer inventory and orders (early-cycle tells), and (3) pricing power vs. cost inflation (tariffs, inputs) to see if CAT can keep the “AI-adjacent” upside without giving it back in margins.

It is currently a bit extended.

Talking investment ideas with Tony Dong…

The H.E.A.T. (Hedge, Edge, Asymmetry and Theme) Formula is designed to empower investors to spot opportunities, think independently, make smarter (often contrarian) moves, and build real wealth.

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