VC Reddit Mentions | ChartExchange

Hey y'all
I'm wrapping up my plans for 2026 reallocation. I usually invest in index funds but it’s my personal conviction that the AI trade will begin to deflate if not fully crash next year. I know people have strong convictions about this and I don't want to seem like I am an expert. I can predict as much as the next person, but I do think the numbers have gotten to a point where something has to break. I may miss another year to two of run up if the trade continues, but im looking for a more conservative approach this year. Most of my picks have followed a GARP strategy (Growth at a Reasonable Price) with some bellwethers and some speculative trades
I work as an AI engineer at a relatively large US company (with a $5 billion market cap), and I believe the lead held by frontier US models is less stable than it appears. On my research team, we're exploring how to integrate generative AI into our workflows, and we've found that small open-source models from China actually perform much better for our needs. Most of our use cases don't require frontier model capabilities. For workflows that operate within a fairly finite, non-deterministic scope, open-sourced, fine-tuned Chinese models often outperform their larger counterparts at about one-tenth the costs. And this isn’t just at my firm. Andreessen Horowitz reported that 80% of startups applying for VC money with them are suing these open source Chinese models instead of closed US Frontier models. As Chinese models get better (and they are getting much better) the US models are going to start feeling major pricing pressures.
Second, the energy is simply not there. To meet OpenAI's financial commitments, the US grid would need to grow by 20%—equivalent to 250 nuclear power plants at a cost of $10 trillion. Right now, there's a 5 to 8 year wait just to connect a new data center to the power grid. Meanwhile, China already has twice the energy capacity of the US at half the cost. We're also seeing new regulations emerge to protect consumers from these expenses. In July 2025, Ohio regulators ruled that data centers must pay for at least 85% of the energy they reserve for 12 years, regardless of actual usage. This prevents the industry from shifting the cost of grid upgrades onto ordinary households.
Third, the math is broken. OpenAIs disconnect between ambition and arithmetic is the most pronounced. OpenAI is committing $1.4 trillion to infrastructure against $20 billion in annual revenue. That's a 70:1 capital-to-revenue ratio. To generate even a modest 20% return on that $1.4 trillion investment, they would need $280 billion in annual revenue—fourteen times their current run rate. At a 25% gross margin, that means $1.12 trillion in total revenue would be required just to cover depreciation and hit target returns. The current AI market isn't even generating $20 billion collectively, yet one company alone needs to find over a trillion dollars in revenue to justify its infrastructure spend.
Because of this I have decided to reallocate toward companies with good cash flow, reasonable prices relative to their growth, and visible backlogs. I also tried to deallocate away from the US. I would rather be early to a more defensive position than late to a crash.Enough of my rambles:
Here are my picks for 2026 along with summaries and allocation percentage.
**Airbus** : 4.00%
- Global aerospace duopoly leader with 8,600+ aircraft backlog. Trading at 21x Forward P/E. Supported by €10B net cash and 60%+ share in high-margin narrow-body jets.
**Rheinmetall AG** : 4.00%
- Primary supplier for European re-armament with €83B backlog. Trading at 0.7 PEG with 35%+ earnings growth. Targeting €50B revenue by 2030 with 30% ROE.
**MDA Space** : 3.50%
- Monopoly on Canadarm3 robotics with C$4.4B backlog. Trading at ~16x Forward P/E. Expanding capacity to two satellites per day in early 2026 to serve Telesat/Globalstar.
**ABB** : 3.50%
- Automation leader with $23B backlog. 0.5x Net Debt/EBITDA. 20% of electrification growth driven by data centers; divesting Robotics in 2026 to focus on high-margin power.
**Hammond Power** : 3.50%
- North American transformer leader with $1.2B capacity target for 2026. Trading at 24.5x P/E. 28% backlog.
**MPLX LP** : 3.50%
- Midstream operator with 8.0% yield and 3.1x leverage. 90% fee-based earnings. Completing Harmon Creek III and Blackcomb pipelines in H2 2026.
**Novo Nordisk** :3.50%
- 71% GLP-1 market share with 80%+ ROE. Trading at 12.7x P/E. 2026 catalyst is the Wegovy pill launch, supported by tripled manufacturing capacity via Catalent.
**Prysmian** : 3.50%
- Global cable leader with 28% market share and €16B backlog. Trading at 16.4x P/E. Capturing the "Great Grid Upgrade" through subsea interconnectors and Encore Wire acquisition.
**L'Air Liquide** : 3.00%
- Global industrial gas leader with 18.5% margins. €4.4B investment backlog. Targeting €16B in energy transition and healthcare investments through late 2026.
**Kongsberg** : 3.00%
- Record NOK 142B backlog with 38% growth in defense. Trading at 32.5x P/E with an exceptional 35.8% ROE. Strategic leader in NASAMS missiles and maritime autonomy.
**Thales** : 3.00%
- European leader in defense electronics and cybersecurity. Trading at ~1.2 PEG with 17% annual growth forecast. Supported by €50B backlog and Imperva integration synergies.
**First Solar** : 3.00%
- US thin-film solar leader with a sold-out backlog through 2027. Trading at 11x Forward P/E with 0.4 PEG. Massive 100% domestic manufacturing moat and net cash position.
**Nexans** : 3.00%
- Pure-play electrification leader with €7.9B backlog. Debt-free balance sheet (0.06x leverage). Record 13.7% EBITDA margins driven by high-voltage subsea grid hardening.
**Valmont** : 3.00%
-40% global share in precision irrigation and utility poles. Trading at 36x P/E with 23% ROE. 47-year dividend streak supported by $1.5B grid-infrastructure backlog.
**Preformed Line** : 3.00%
- Global leader in transmission hardware. Net cash position with 10% debt-to-equity. 36% YoY EPS growth driven by global grid hardening and fiber-optic build-outs.
**Amphenol** : 3.00%
- 33% share in AI data center interconnects. Trading with 33.5% ROE and 0.7x leverage. 52% dividend increase in late 2025 following record 27.5% operating margins.
**CATL** : 3.00%
- 38% global EV battery share with $15B net cash. 25% ROE. Shifting focus to Energy Storage Systems (ESS) with 1,300 GWh production target for 2026.
**ASM International** : 3.00%
- 60% share in ALD semiconductor tools. Trading at 32x P/E with €1.1B net cash. Primary winner in the 2026 transition to Gate-All-Around (GAA) transistor architecture.
**Constellation Software** : 3.00%
- VMS aggregator with 24% ROE and $2.7B cash for M&A. Late 2025 results showed 46% FCF growth. Reinvests 100% of FCF into mission-critical niche software.
**Marvell Tech** : 3.00%
- Data infrastructure chip leader with AI driving 75% of revenue. 31% projected 2026 growth. Dominant in photonic fabric interconnects and custom AI ASICs.
**Amazon** : 3.00%
- Amazon
**Novartis** : 3.00%
- Pure-play medicine leader with 32.6% ROE and 3.0% yield. Trading at 14.0x P/E. Management confirmed 6% annual sales growth through 2030 via oncology/immunology.
**Baker Hughes** : 3.00%
- Dominant 95% share in LNG turbines with record $31.3B IET backlog. Trading at 15.4x P/E. Booked $700M in data center orders YTD; targeting 20% EBITDA margins by 2026.
**Kawasaki Heavy** : 3.00%
- Japan’s 2026 defense champion with ¥700B sales target by 2031. Trading at 18.5x P/E with PEG below 0.5. World-first liquified hydrogen infrastructure and 787 supply chain leader.
**Northrop Grumman** : 3.00%
- Monopoly on U.S. nuclear triad's air leg. Trading at 19.6x P/E, 26.2% ROE, and 2.3% FCF yield. 22-year dividend growth streak with $4 billion FCF target by 2028.
**Leonardo** : 3.00%
- 22% global share in civil helicopters with €47B backlog. Trading at 0.96 PEG. Participating in the structural re-armament of European land and air defense infrastructure.
**MTU Aero Engines** : 3.00%
- Critical partner in A320neo ecosystem with €24B backlog. Trading at 0.86 PEG and 25.6% ROE. High-margin MRO business captures the full lifecycle of the GTF engine.
**NextEra Energy** : 3.00%
- Largest U.S. renewable developer with 36GW backlog. Trading at 18x Forward P/E. Consistent 10% dividend growth supported by Florida’s regulated utility growth.
**ONEOK** : 3.00%
- Midstream giant with 5.6% yield and >15% projected EPS growth. Supported by $500M in synergies from EnLink/Magellan acquisitions and 90% fee-based revenue.
**Argenx** : 3.00%:
- Immunology leader with $4.3B cash. Vyvgart quarterly sales surpassed $1B in late 2025. Positioned for five registrational readouts across autoimmune niches in 2026.
**Arcosa** : 2.50%
- Infrastructure leader with 30% EBITDA margins in Construction Products. Trading at 34x P/E. Backlogs in utility structures and wind towers support 41% earnings growth in 2026.
**Array Tech** : 1.50%
- US solar tracker provider with $1.9B backlog. Trading at 14x P/E. Strategic pivot to domestic manufacturing to capture legacy tax credit demand through 2026.
**Shoals Tech** : 1.00%
- Solar EBOS leader with $720M backlog and 27% growth. High-margin "Big Lead Assembly" model reduces on-site labor. Expanding into BESS revenues in 2026.

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