Quote · Excess Returns
The $2 Trillion Question | Tobias Carlisle on SpaceX, the AI Buildout, and the Rotation No One Sees
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Value investing during disruptive technology cycles
At 43:05 · chapter starts 37:57
Kai Wu's research shows value has worked consistently in non-disrupted industries throughout the tech boom. Carlisle explains the earnings recession in small/micro from 2022-2025 and why it's bottoming. [1] — Tobias Carlisle "Small/micro earnings recession 2022–2025: US small, micro, and mid-cap companies experienced an earnings recession from 2022 through late 2…" 41:10
Value investing has worked consistently in non-disrupted industries throughout the current tech boom — the underperformance is concentrated in disrupted sectors. The challenge is identifying disrupted industries in advance. For non-disrupted businesses trading at discounts, value metrics have been remarkably reliable.
US small, micro, and mid-cap companies experienced an earnings recession from 2022 through late 2024/early 2025, with earnings falling or trading sideways while large-cap earnings rose.
Energy stocks represent just 3% of market cap versus a 12% historical average. AI data centers will consume energy voraciously, and Carlisle thinks nuclear is the only long-term solution — though natural gas bridges the gap. Oil equities are doing the opposite of what everyone expects right now.
