Brett Ashcroft-Green, CFP® is a CERTIFIED FINANCIAL PLANNER™ , fee-only fiduciary, and the founder and owner of Ashcroft Green Advisors, a Nevada-based registered investment advisory firm.He has extensive experience working alongside high-net-worth and ultra-high-net-worth families, with a background in private credit and commercial real estate mezzanine financing as a business director at a large family office. His professional experience spans the U.S. and Asia, including several years living and working ...

Core Viewpoint - The current bear market for software stocks presents a significant opportunity for long-term investors seeking value, despite major stock indexes reaching new highs [1][4]. Group 1: Market Overview - The Dow Jones Industrial Average recently surpassed 50,000, the S&P 500 has gained at least 16% in six of the last seven years, and the Nasdaq Composite has outperformed both [1]. - The iShares Expanded Tech-Software Sector ETF is nearly 28% below its all-time high, indicating a challenging environment for software investors [2]. Group 2: Salesforce - Salesforce is identified as a bargain amid the software sell-off, with a market cap of $174 billion and a current price of $185.36 [6][7]. - The company has embraced AI as a growth driver, with its Agentforce AI platform generating over $500 million in annual recurring revenue (ARR), up 330% year-over-year [8]. - Salesforce's remaining performance obligation (RPO) surged 11% to $29.4 billion, and it maintains a forward price-to-earnings (P/E) ratio of 14.8, a 52% discount to its five-year average [9][10]. Group 3: Adobe - Adobe is also considered a historically cheap stock, with a closing price of $266.90, the lowest since October 2019 [12]. - Despite concerns about generative AI impacting its software solutions, Adobe's Digital Media segment ended with $19.2 billion in ARR, up 11.5% year-over-year [15]. - The company's forward P/E of 10.1 is 61% below its average since 2020, indicating a favorable valuation [18]. Group 4: Okta - Okta, a cloud-based cybersecurity company, is viewed as a strong investment opportunity, with a current price of $84.99 and a market cap of $15 billion [20]. - The company reported a 17% year-over-year increase in RPO to nearly $4.3 billion and a 37% increase in net cash from operating activities [23]. - Okta's forward P/E of 24 reflects a significant drop from previous years, making it an attractive option for investors [24].

Core Viewpoint - The impact of AI on job markets and inflation is significant, leading to a potential disinflationary environment, which may influence the Federal Reserve's monetary policy decisions [2][6][7]. Group 1: Job Market and AI Impact - The Federal Reserve is aware that AI is causing disruptions in the software sector, which may lead to job losses in the near future [2][5]. - The stock market may not react strongly to labor reports due to concerns about future job losses attributed to AI [3][5]. - The software sector, valued at $450 billion, is facing challenges from AI, which could lead to deflationary pressures [6]. Group 2: Inflation and Federal Reserve Policy - Core CPI year-over-year is expected to drop to 2.52%, indicating a return to pre-COVID inflation levels [6]. - The Federal Reserve is anticipated to adopt a dovish stance, with potential rate cuts later in the year due to the disinflationary environment [7][6]. Group 3: Market Dynamics and Sector Rotation - The market is currently experiencing a rotation from technology stocks (MAG 7) to sectors like energy, industrials, and commodities, which are perceived as more resilient [8][11]. - A potential market drawdown of 10-20% could lead to a bullish outlook for non-U.S. markets, as they are less tech-dependent [11][12]. Group 4: Cryptocurrency Market Sentiment - The cryptocurrency market is facing challenges, with investor sentiment negatively impacted by recent price actions and market conditions [12][15]. - The shift in investor focus towards gold, driven by its strong performance, has contributed to a decline in interest in cryptocurrencies [15][16].

Economic Data and Market Reaction - The U.S. non-farm payrolls increased by 130,000 in January, significantly exceeding the market expectation of 55,000, marking the largest increase in over a year [1][2] - The unemployment rate slightly decreased from 4.4% in December to 4.3%, the lowest since August 2025 [2] - Despite the strong employment report, U.S. stock markets experienced volatility, with the Dow Jones Industrial Average down 0.13%, S&P 500 nearly flat, and Nasdaq Composite down 0.16% [1][4] Sector Performance - Semiconductor stocks performed exceptionally well, with the Philadelphia Semiconductor Index rising by 2.28% and Micron Technology's stock surging nearly 10% [1][5] - The healthcare sector added 124,000 jobs, double the normal level for January 2025, indicating strong growth in this industry [2] - Large tech stocks showed mixed results, with Google and Microsoft down over 2%, while Nvidia and Tesla saw gains of 0.78% and 0.8%, respectively [5] Commodity Market Movements - Gold and silver prices surged due to increased risk aversion, with spot gold rising over 1% to $5,083.7 per ounce and silver up over 4% to $84.3 per ounce [7] - International oil prices also increased, with WTI crude oil futures up 1.05% to $64.63 per barrel, driven by geopolitical tensions [8] Geopolitical Developments - U.S. President Trump emphasized the need for continued negotiations with Iran after a meeting with Israeli Prime Minister Netanyahu, indicating a preference for diplomatic solutions [9][10] - The geopolitical climate remains tense, with military deployments in the Middle East and ongoing sanctions against Iran, which could impact market stability [11][12] Semiconductor Industry Insights - South Korea's semiconductor exports reached $6.73 billion in the first ten days of February, a year-on-year increase of 137.6%, reflecting strong global demand [13] - Micron Technology's stock price target was raised significantly by Morgan Stanley, indicating confidence in the company's future performance amid supply shortages [6][13] - The semiconductor industry is transitioning from quarterly business to long-term collaborative agreements, driven by increasing demand for advanced memory chips [14]

Core Insights - Software stocks have significantly lagged behind artificial intelligence (AI) stocks for most of the past year, and this performance gap has continued even as the AI trade has cooled [1][2] - Concerns about AI potentially threatening the software industry have driven investor sentiment, leading to a disconnect between stock performance and underlying fundamentals [5][13] Group 1: Performance and Sentiment - Software stocks began to diverge from the broader market around July 2025, with fears surrounding AI contributing to a steep decline in their performance [3][9] - Initial fears included the belief that AI would eliminate the need for traditional software, which has since evolved into concerns about reduced demand for software licenses [3][4] - Despite the negative sentiment, the fundamentals of software companies remain strong, with many reporting better-than-expected earnings and guidance [7][8][10] Group 2: Revenue and Growth - In Q3 2025, 20 software companies reported earnings that beat expectations, indicating robust revenue and profitability across the sector [7][8] - AI-related revenue for software companies remains minimal, accounting for approximately 1.5% of total revenue, with projections suggesting it could rise to 2% in the near term [16][18] - Companies like Salesforce are experiencing rapid growth in AI-related revenue, but overall revenue from AI remains small compared to traditional software offerings [18][19] Group 3: Market Valuation and Investment Opportunities - Current valuations of software stocks are considered undervalued, with an estimated 25% upside potential across the sector [24][25] - Top investment picks include Microsoft and ServiceNow, both of which are well-positioned in the AI space and have strong free cash flow margins [25][29] - Microsoft leads in public cloud computing and AI, while ServiceNow is recognized for its growth potential and profitability compared to larger peers [29][31]

Core Insights - The individual has extensive experience in investment research, having worked in various roles across different investment firms in Toronto for nearly a decade [1] - The journey began in sell-side research at a Canadian bank, followed by positions in a hedge fund, a family office, and wealth management [1] - Achieving CFA and CAIA designations by the age of 25 was a significant milestone in the individual's career [1] Lifestyle Changes - The individual has transitioned to living in a yurt in the boreal forest, approximately 100 kilometers from the nearest paved road or grocery store [1] - This lifestyle change includes living close to nature, with access to a lake for fishing and a creek for water [1] - The individual expresses a sense of freedom and gratitude for life after this significant lifestyle shift [1]

Core Insights - The individual has extensive experience in investment research, having worked in various roles across different investment firms in Toronto for nearly a decade [1] - The journey began in sell-side research at a Canadian bank, followed by positions in a hedge fund, a family office, and wealth management [1] - Achieving CFA and CAIA designations by the age of 25 was a significant milestone in the individual's career [1] Personal Transformation - The individual emphasizes the importance of self-conquest and personal growth before achieving professional success [1] - A significant lifestyle change occurred, with the individual living in a yurt in the boreal forest, indicating a shift towards a simpler, more self-sufficient life [1] - The current living situation is characterized by proximity to nature, with access to natural resources for water and heat, reflecting a deep appreciation for life [1]

Core Viewpoint - Iberdrola's CEO refutes claims that mismanagement at its Nunez de Balboa solar plant contributed to a significant blackout in Spain on April 28, 2025, marking the first public acknowledgment of the plant's ownership by Iberdrola [1] Group 1: Company Response - The CEO of Iberdrola, Mario Ruiz-Tagle, stated that there was no poor management or operation at the Nunez de Balboa solar plant on the day of the blackout [1] - A spokesperson for Redeia, the owner of the grid operator REE, declined to comment on the situation [1] Group 2: Background Information - Beatriz Corredor, chair of Redeia, previously indicated that mismanagement at a large solar plant in Badajoz made the power system more vulnerable during the blackout, although she did not specify the plant's name or owner at that time [1]

Market Overview - US stock indices opened higher after the latest non-farm payroll data but experienced a decline during the trading session, with the Dow Jones down 0.13%, S&P 500 nearly flat, and Nasdaq down 0.16% [1] - Major technology stocks showed mixed results, with Google and Microsoft dropping over 2%, while Nvidia and Tesla rose by 0.78% and 0.8% respectively [2] Technology Sector - The Philadelphia Semiconductor Index increased by 2.28%, with notable gains in stocks such as GlobalFoundries up over 16% and Micron Technology nearly 10% [2] - AI application software stocks faced significant declines, with Shopify dropping over 6% and Reddit down more than 7% [2][3] Chinese Stocks - The Nasdaq Golden Dragon China Index fell by 0.65%, with notable declines in stocks like Huya and JinkoSolar, both down over 5% [3] - However, Century Internet saw a rise of over 12%, and Kingsoft Cloud increased by approximately 10% [3] Commodity Markets - International gold prices rose over 1%, closing at $5083.7 per ounce, while silver prices increased by over 4% to $84.3 per ounce [3] - Crude oil prices also saw an uptick, with WTI crude futures up 1.05% to $64.63 per barrel and Brent crude futures up 0.87% to $69.40 per barrel [5] Economic Indicators - The US non-farm payroll report indicated an addition of 130,000 jobs in January, exceeding market expectations, which led traders to adjust their forecasts for the Federal Reserve's interest rate cuts [5] - The probability of a 25 basis point rate cut by March is currently at 5.9%, with a 94.1% chance of maintaining the current rate [5]

Core Viewpoint - The article aims to identify the most overvalued and undervalued US tech stocks using a specific methodology introduced previously, focusing on contrarian investment ideas based on Austrian economic theory [1]. Group 1 - The analysis is conducted by a full-time investor and owner of a macro research company, which specializes in FX, Equities, and Fixed Income [1]. - The author has 15 years of experience in investing and analyzing Asian and Global markets, previously serving as Head of Financial Markets at Fitch Solutions [1].