Holdings Letter: Consumer Defense Is Over, I'm Turning to AI Infrastructure

This week's market weather: expensive valuations / loose liquidity / euphoric sentiment.

Three things worth remembering this week.

First, Trump's visit to China temporarily pinned down the macro rhythm. The panic phase of U.S.-China conflict has passed for now, and the market has moved from fear of trouble to fear of missing out.

Second, the CPU and memory chain is hot. MU, AMD, and INTC all rose sharply. AI is still the main engine behind this new high, and money keeps flowing into compute and hardware.

Third, Claude and OpenAI completed historic financing rounds. Great companies raising big money is not surprising. But when everyone starts believing "this time is different," the bubble often starts getting thicker.

The AI names above may rise faster and get more media hype, but the stocks that rise the most usually can't get out in time when the market turns. That's why I chose AI infrastructure stocks, which offer more of a cushion.

My own positions changed this week. The current market is telling me that the consumer defensive cycle is over and the physical AI cycle is beginning.

So I closed WMT, trimmed TJX, and bought PWR and RIO. PWR is a picks-and-shovels play on the U.S. grid and energy infrastructure. Whether it is renewable grid connection or AI-driven power shortage, grid upgrades are unavoidable. RIO is a global giant in iron ore, copper, and aluminum, and its dividend capacity gives me a safety cushion.

Macro does not switch from one large block to another. It jumps back and forth among several states. The response should not be all-in or all-out, but matching different positions to different states.

AI stocks are surging right now, but that doesn't mean there are good opportunities everywhere. I choose to be careful and move less, settle for some steady gains, and wait for a real pit to open in the future before picking up the cheap gold.