Nancy Tengler Adds PLTR, MSFT & GEV Positions, Explains Oil's Economic Impact

Laffer Tengler added positions in Palantir (PLTR), Microsoft (MSFT) and GE Vernova (GEV) along with other software and AI-linked names that were beaten down in the 'SaaS-pocalypse.' CEO/CIO Nancy Tengler expects "a lot of chop" in 2026 but says markets are moving in the right direction, indicating cautious, opportunistic positioning rather than broad risk-taking.

Analysis

AI reallocation is creating asymmetric winners: companies that own the data-to-model stacking (Palantir-style) or the cloud plumbing (Microsoft) should capture higher incremental gross margins as customers trade one-off model build costs for recurring platform fees. Expect these effects to show up in the P&L within 2-9 months as large enterprise pilots convert to paid deployments, with margin capture visible in +200–400bp gross margin expansion for vendors that can monetize inference and orchestration.

Second-order beneficiaries include chip power & cooling suppliers and utility-scale power equipment (relevant to GE Vernova) because each hyperscale AI cluster raises steady-state rack power by mid-single digits per cluster and increases demand volatility on local grids. Conversely, pure-play growth SaaS that relies on high CAC and weak retention will be disproportionately penalized in a capital-scarce environment; flow dynamics will rotate money from high-multiple subscription names into differentiated infra/software assets.

Key risks and catalysts: near-term moves are earnings- and guidance-driven (days-weeks) — missed enterprise deal timing or a pause in GPU supply materially delays monetization; medium-term (3–12 months) catalysts are multi-customer deployment announcements, large renewals, or partner certifications that lift re-rates. Tail risks include regulatory constraints on government contracts, rapid insourcing by hyperscalers, or a macro shock that re-prices risk premia across tech.

The consensus underestimates how quickly vendor economics can re-lever once churn stabilizes: a 1–3ppt improvement in net retention often translates to +15–30% FCF uplift over 12–24 months for platform players. That makes selective, sized exposure compelling now, but position sizing must be disciplined — Microsoft is more a steady compounder with capped upside, Palantir is higher variance/higher asymmetric upside, and GE Vernova is a cyclical structural play on electrification and grid stress relief.

Key Decisions for Investors

• Long PLTR (1.0–1.5% NAV): accumulate shares or buy 12-month slightly OTM calls sized to 1.5% delta-equivalent. Target +30–50% in 6–9 months on evidence of multi-customer AI deals; hard stop at -20% from entry if key contracts slip or guidance is cut.
• MSFT call spread (1.0% NAV): buy 9–12 month 10% OTM calls and sell 20–25% OTM calls to limit cost. Expect 2–3x return if cloud AI monetization accelerates and margin mix improves; max loss limited to premium (~1% NAV).
• GE Vernova (GEV) accumulation (1.0–2.0% NAV): buy on dips >10–15% or add in tranches into weakness. Target +20–30% in 9–12 months as data-center and electrification demand firm up; stop -25% if macro industrial orders collapse.
• Hedge/pair (relative trade, 0.5–1.0% NAV): pair long PLTR with a short basket of high-NTM multiple pure-subscription SaaS names (equal notional) for 3–9 months to isolate AI infra vs. legacy SaaS risk. Aim for >20% relative gain if monetization proves real; unwind on broad market risk-off or if PLTR underperforms by >15%.