AI trade is back on given magnitude of upside at Micron, says Silvant Capital's Sansoterra

AI Demand & Market Fundamentals - Micron's demand indicates the AI trade's fundamentals are strong, despite short-term trader nervousness [2][3] - The AI sector is expected to see over 40% compound annual growth rate (CAGR) for the next few years, driven by off-the-charts demand [3] - Demand for chipsets continues to be solid [4] Free Cash Flow & Capex - Free cash flow is crucial for funding capital expenditures (capex) [5] - Mega-cap companies are generally covering 80-90% of their capex with cash flow from operations [7] - The market favors companies funding capex with free cash flow over those relying on debt [8][9] Company Strategy & Investment Focus - Silvent Capital prefers large-cap companies that are executing well and funding capex with free cash flow [5] - The firm is focusing on hyperscalers like Google (Alphabet), Amazon, Microsoft, and Nvidia, due to their capital and continued growth [10]