Ep 220: David Jenkins - Dot-Com on Steroids Reality Check for the AI Era

Is the current AI-driven market rally a structural revolution or a speculative mirage? David Clark sits down with David Jenkins, Client Portfolio Manager at GQG Partners, to dissect the firm's recent contrarian stance on the technology sector.

Investors are feeling the squeeze of a "growth-at-any-cost" market. Jenkins explains why GQG, a firm managing over $250 billion AUD, is moving toward a defensive, value-oriented posture. We dive deep into their provocative white paper series, "Dot-Com on Steroids," exploring the "circularity" of AI capital expenditure and the looming risks in the private credit and data center boom.

If you’ve been questioning the sustainability of triple-digit multiples and wondering where to find quality when "gravity" eventually returns to earnings, this conversation provides a necessary, fundamental-based reality check.

Key take aways:

• The AI Capex Mirage: Why the massive spending by "hyperscalers" may be creating a circular revenue trap that isn't backed by real-world earnings.

• Quality vs. Hype: Understanding GQG’s "forward-looking quality" philosophy and why they believe traditional tech "quality" is actually deteriorating.

• Hidden Gems in Value: Why sectors like insurance, healthcare, and utilities are becoming the new frontier for compounding capital.

• Infrastructure Red Flags: The risk of securing long-term debt against short-lived assets like GPUs that may burn out in 18 months.

• The "South Beach" Story: A look inside the rapid rise of GQG Partners and how they’ve achieved a 90% alpha strike rate over rolling five-year periods.