The Government Is Engineering a Business Cycle Surge Into 2026 w/ Andreas Steno Larsen
Summary
- The "Software as a Service" (SaaS) economy is facing an existential threat from AI ("vibe coding"), leading to a potential "death of the middle layer" of software companies.
- There is a massive rotation occurring from Software into Hardware and Real Assets (Commodities), driven by geopolitical decoupling and the need for Western supply chains.
- Private Credit firms (like Apollo) are heavily exposed to SaaS buyouts (approx. 25% of deal value) and are effectively "holding the bags" if the sector collapses.
- The US government is engineering a business cycle surge into 2026 via "bonus depreciation" tax incentives, driving a short-term Capex boom.
- Central Banks are relentlessly accumulating hard assets (Gold) to diversify away from the SWIFT system, a trend that will continue regardless of a Ukraine peace deal.
Trade Ideas
AI hyperscalers are announcing massive numbers, but the physical power grid is a major bottleneck. Connecting data centers to the grid takes too long. Bloom Energy (BE) provides decentralized fuel cells (running on biogas/nat gas) that allow data centers to bypass grid connection delays. LONG as a solution to the "AI Power Bottleneck." Volatility in natural gas prices or competition from other decentralized power sources.
Private Credit firms have allocated roughly 25% of buyout deal value to the Software sector over the last few years. If the "Death of SaaS" thesis plays out and AI commoditizes software, Private Credit firms like Apollo (APO) are the ones "holding the bags" on these massive leveraged buyouts. Andreas notes Apollo and Bitcoin have become the "same trade" due to correlation. AVOID or WATCH closely as a proxy for software sector credit risk. The SaaS sector proves resilient, or the Fed eases regulations (ESLR) allowing banks/private credit to lever up further, bailing out bad loans.
Central banks are buying hard assets to protect reserves from seizure. Andreas sold his Silver (SLV) due to extreme volatility but remains invested in Gold and Copper miners. Silver is too small and speculative (ETF turnover was 40% of yearly mining supply in one day). Gold (Barrick - GOLD) and Copper (COPX) offer much deeper liquidity and better volatility-adjusted returns for the "hard asset" trade. LONG the miners as a safer, leveraged play on the underlying commodity bull market. A strengthening US Dollar or a deflationary bust crashing commodity prices.
Andreas Steno Larsen
Founder, Steno Research
Despite the Trump administration's aversion to green energy, Andreas notes that ~50% of the US population still wants solar solutions (the "middle finger to Trump" trade). Enphase (ENPH) provides decentralized battery/solar solutions for households. Nextracker (NXT) (referred to as "Next Power" in the video but described as the tracker/software optimizing yield as the sun moves) is an "anti-China" solar trade because its supply chain is less dependent on China. LONG on decentralized solar infrastructure that works independent of federal subsidies. Punitive tariffs or complete removal of tax credits by the new administration.
Andreas Steno Larsen
Founder, Steno Research
Andreas states that the West has officially decoupled from China regarding critical minerals and the US administration plans to implement price floors for rare earths. Building a Western supply chain for rare earths is impossible without price floors due to profitability issues. Energy Fuels (UUUU) is unique because it is both a Uranium player (energy security) and a Rare Earths processor (strategic decoupling), solving two geopolitical problems at once. LONG as a top pick for the domestic US Capex and supply chain onshoring cycle. Failure of the US administration to implement promised price floors or delays in processing capabilities.
Up Next
This Milk Road Daily video, published February 05, 2026, features Andreas Steno Larsen discussing BE, APO, COPX, GOLD, ENPH, NXT, UUUU. 5 trade ideas extracted by AI with direction and confidence scoring.
Speakers: Andreas Steno Larsen · Tickers: BE, APO, COPX, GOLD, ENPH, NXT, UUUU