Trade Ideas
Mark Rowan states Apollo has "zero software" in their private equity or credit books. He notes software stocks are down significantly but credit hasn't repriced. Dawn Fitzpatrick predicts a "painful 18 to 24 months" for the software sector shakeout. Software companies were the darling of the LBO boom (30% of the market). If AI disrupts their moats (coding becomes cheap, SaaS pricing power erodes), their leverage becomes unsustainable. This creates a toxicity in software-heavy ETFs. AVOID or SHORT software sector ETFs. AI integration actually accelerates software margins rather than destroying them.
Fitzpatrick notes that Public BDCs (Business Development Companies) are trading at a ~23% discount to NAV due to fear of private credit contagion. The market is throwing the baby out with the bathwater. While software credit is bad, diversified BDCs are priced as if *all* credit is bad. Buying liquid BDCs at a discount offers a margin of safety and high yield. LONG Publicly Traded BDCs (via ETF or top-tier names). A severe recession causes defaults to spike across all sectors, not just software.
Fitzpatrick argues AI favors incumbents with massive scale and data moats. Varshney notes Citi has 30,000 developers using AI to generate code, saving 100,000 hours/week. Small disruptors cannot afford the capex or possess the proprietary data lakes that giants like JPMorgan or Walmart have. AI becomes a tool for incumbents to crush unit costs and widen moats, rather than a tool for startups to kill giants. LONG Mega-cap incumbents with data scale. Bureaucracy prevents effective implementation of AI tools.
Nedungadi highlights "Data Center Optical Networking" as a subsector that can grow earnings 10-20x, unlike GPUs which are already priced for perfection. As data centers scale, the bottleneck moves from the processor (GPU) to the speed at which data moves *between* processors. This requires massive upgrades in optical interconnects. LONG Optical Networking stocks. Cyclicality in telecom spending (their other major client base).
Granat focuses on "IPPs" (Independent Power Producers). She notes that while chips are abundant, power is the hard constraint for AI. To turn megawatts into dollars for AI inference, you need grid connection. IPPs own the physical power generation and interconnects. They are signing long-term contracts that extend cash flow duration, repricing them from cyclical utilities to secular growth assets. LONG Independent Power Producers. Regulatory caps on power prices or faster-than-expected SMR (nuclear) deployment disrupting traditional IPPs.
"Ultra-short munis are out-yielding money markets by 75 basis points." High-net-worth investors are sitting in cash (Money Markets). By moving slightly out on the curve to ultra-short Munis, they get tax-equivalent yields that beat private credit with significantly lower default risk (Chicago vs. Apple credit quality comparison). LONG Short-Term Municipal Bonds. Federal tax rate cuts reduce the relative value of the tax exemption.
Rogers identifies Financial Services as undervalued. Specifically names Carlyle (CG) as trading at ~10x earnings with less software exposure than peers. Names Lazard (LAZ) as a beneficiary of M&A/Spinoff activity. Names JLL for real estate complexity. The market hates financials due to rate fears and commercial real estate panic. However, M&A is rebounding (Lazard), and private equity firms that avoided the software bubble (Carlyle) are mispriced relative to their earnings power. LONG Value Financials. M&A cycle stalls; commercial real estate collapse deepens.
Rogers states, "Americans no longer are drinking alcohol the way they used to." A secular decline in alcohol consumption (health trends, GLP-1 drugs) makes the "moat" of beer and spirits companies structurally weaker. They are value traps. AVOID Alcohol/Spirits stocks. International growth offsets US decline.
Rogers believes "Experiences" will dominate consumer spending as AI frees up time. Explicitly names the cruise lines and Madison Square Garden assets (MSGE/SPHR). Consumers are prioritizing doing over owning. Cruise lines and live entertainment venues have pricing power and high demand that is sticky even in softer economies. Sphere (SPHR) specifically mentioned as using AI to revolutionize entertainment costs/experience. LONG Experience/Leisure stocks. Consumer recession curbs discretionary travel spending.
This Bloomberg Markets video, published March 03, 2026,
features Mark Rowan, Dawn Fitzpatrick, Divia Nedungadi, Kelly Granat, Nicholas Vendetti, John Rogers
discussing IGV, SKYY, WCLD, BIZD, MAIN, ARCC, JPM, GS, WMT, CIEN, LITE, COHR, TLN, VST, NRG, CEG, SHM, MUB, CG, LAZ, JLL, STZ, TAP, DEO, CCL, RCL, NCLH, MSGE, SPHR.
9 trade ideas extracted by AI with direction and confidence scoring.
Speakers:
Mark Rowan,
Dawn Fitzpatrick,
Divia Nedungadi,
Kelly Granat,
Nicholas Vendetti,
John Rogers
· Tickers:
IGV,
SKYY,
WCLD,
BIZD,
MAIN,
ARCC,
JPM,
GS,
WMT,
CIEN,
LITE,
COHR,
TLN,
VST,
NRG,
CEG,
SHM,
MUB,
CG,
LAZ,
JLL,
STZ,
TAP,
DEO,
CCL,
RCL,
NCLH,
MSGE,
SPHR
