Oaktree Alpha

Oaktree Alpha · No. XIV · Monday, October 26, 2026

Not a Florida story. A Florida habit: this is where much of the state’s money is working.

The forced selling in AI is nearly done

Hedge funds spent 18 months crowding into the same AI stocks and the last 75 days dumping them, and Jordi Visser, the macro investor whose weekly class we follow, thinks the forced selling is done or close to it. His case: with positioning reset, the AI bottleneck trade is an entry, because the sellers were funds that ran out of borrowed money, while the buyers of computing power still can’t get enough: SpaceX says it could rent out its compute several times over. Bitcoin holds too, he argues, because AI attacks on banks and websites are happening now and will push banks toward blockchains, while the quantum threat is decades out; he concedes the upgrade may come too slowly and sets no exit rule in this class, and the sign he wants is a move back above about $100,000.

Funds borrowed to own the same AI winners. When losses piled up, they sold what was easiest to sell: the biggest AI names. On Thursday, Oct 22, most of the S&P 500 rose while the index fell. None of that changed what companies are buying. Blackstone, which counts AI and energy infrastructure as key themes, took in $63.3 billion of new money last quarter, per its SEC filing. The published list holds NVIDIA for chips, Micron for memory, Marvell for networking and Caterpillar for power equipment.

In Jordi’s view, only a real downturn breaks the AI case, and it shows up in order: margins slip, then earnings, then hiring. His checklist shows corporate profits up about 20% from a year ago. The first test is Thursday’s jobless claims and GDP; then junk-bond spreads, which have started to widen.

The Score

The list fell 1.7% on the week against a 0.76% fall for the Nasdaq 100. The published list overlaps with the wider AI bottleneck book Oaktree follows and invests in; since Issue I (Jul 20) the wider book is down 7.1% and the published list up 6.7% (equal-weight price return), the Nasdaq 100 up 1.2%. The book trails on its off-list power and optics holdings, such as GE Vernova, Cummins and Applied Optoelectronics.

Closes 2026-10-23 (Bitcoin and Ether: UTC day close). Price returns. Sources: Nasdaq, Coinbase.

Next Week

Fed decision Wednesday, Oct 28, at 2:00 PM ET; GDP, PCE inflation and jobless claims Thursday, Oct 29, at 8:30 AM ET. Watch NVIDIA, Micron and Marvell through Thursday’s data.

Full issue, the watch list and the track record

Opinion, not investment advice. Oaktree Reserve and Wesley Todd may hold positions in names discussed.

Also watched

Closes 2026-10-23 (Bitcoin and Ether: UTC day close). Price returns. Sources: Nasdaq, Coinbase.

Last Week

The wider AI bottleneck book fell 3.9% on the week, about the same as the 3.8% drop in Jordi’s own basket of roughly 100 AI names. Small caps rose 2%, as funds bought back the smaller stocks they had bet against.

The selling hit the most crowded, most traded names hardest. Alphabet fell 5.98%; a forced seller sells what it can sell fastest. Caterpillar fell 5.99%, and several power names off the list fell harder. NVIDIA fell 1.48%. The chip fund SMH is now 22% below its peak, a drawdown Jordi notes chip stocks go through almost every year.

Eli Lilly was the winner, up 1.31%, and made new all-time highs during the week. Lilly’s TuneLab trains one model on data from 135 biotech companies, and Jordi pairs healthcare with agent compute as the two ends of a portfolio. Marvell edged up 0.3%. Micron was flat on the week after an 18.13% fall over the past month.

Bitcoin slipped 0.52%. Ether fell 1.47%.

Off the list, optics names fell sharply, and the list’s choice of Marvell for networking held up. Hewlett Packard Enterprise rose 2.83%. It assembles servers, the same layer as Dell, and is followed off the list. Dell rose 1.05%. It is a server assembler; the list holds NVIDIA’s chips and Micron’s memory inside the server, and Dell is followed in the wider book. TSMC rose 1.43%. The chip foundry is followed as the supply read for the compute layer. Bloom Energy fell 12.66%. It makes on-site power, and the power layer is on the list through Caterpillar. Coherent fell 10.14%. It makes optical components, and the networking layer is on the list through Marvell. Lumentum fell 8.25%. It makes optical lasers, the same networking layer. Arista Networks fell 2.6%. Its network switches sit in that layer too. AMD fell 2.26%. It makes chips, and the compute layer is on the list through NVIDIA.

Watched: Intel fell 3.22%; it stays watched, not listed, because its AI share is still unproven. Corning fell 6.3%; data-center demand for its fiber and glass is real but a smaller share of its revenue.

The Read

Prices and demand split this month, and the demand side keeps growing. SpaceX ended September with 1.7 gigawatts of computing power installed, by its reported figures. Jordi reads Musk as planning 10 more gigawatts in 2027, about six times what exists today. Each additional gigawatt needs chips, memory and networking; the published list represents those layers with NVIDIA, Micron and Marvell.

What a reader does with it: judge the bottleneck names by jobs, profits and credit.

Next Week, in full

Wednesday, Oct 28, 2:00 PM ET: Fed rate decision, with the press conference at 2:30 PM ET. No new projections at this meeting; the next set comes Dec 8-9. Thursday, Oct 29, 8:30 AM ET: third-quarter GDP, first estimate (BEA). It shows whether growth is holding, the economic test that matters for the AI trade. Thursday, Oct 29, 8:30 AM ET: September personal income and spending, with PCE inflation (BEA). Thursday, Oct 29, 8:30 AM ET: weekly jobless claims (Labor Department). Claims are the first item on Jordi’s recession checklist. Wednesday, Nov 4: the Treasury’s quarterly refunding statement, which Jordi names as a possible spark for crypto.

Track record

Since Issue I (July 20, 2026), equal-weight price return: the wider AI bottleneck book Oaktree follows and invests in -7.1%; the published list's equities +0.6%; all eight published names +6.7%; the Nasdaq 100 (QQQ) +1.2%. Closes through 2026-10-23.

The earlier frozen index, published in Issues I to V, remains on record: +4.14% against QQQ +1.11% as of August 14, 2026.

Sources

Jordi Visser weekly class, Oct 25, 2026, "AI Bubble Burst? Bitcoin to Zero? Hedge Funds Wrecked? Sounds Like a Bottom is Near" (YouTube CjquP0fupG4) and its published description Blackstone third-quarter 2026 results, Oct 22, 2026: https://www.sec.gov/Archives/edgar/data/0001393818/000119312526428297/d160590dex991.htm SpaceX third-quarter 2026 results, Oct 20, 2026: https://axios.com/2026/10/20/spacex-earnings-ai-elon-musk SpaceX compute capacity: https://letsdatascience.com/news/spacexs-si-segment-overtakes-connectivity-revenue-in-third-q-e1260459 SpaceX compute capacity: https://www.constellationr.com/insights/news/spacexs-q3-musk-says-it-could-rent-out-its-ai-compute-several-times-over SpaceX SEC release (1.7 GW at Sept 30): https://www.sec.gov/Archives/edgar/data/1181412/000162828026066482/spaceexplorationtechnologi.htm Treasury quarterly refunding schedule: https://home.treasury.gov/policy-issues/financing-the-government/quarterly-refunding/most-recent-quarterly-refunding-documents/ Federal Reserve FOMC calendar: https://www.federalreserve.gov/monetarypolicy/fomccalendars.htm BEA release schedule: https://www.bea.gov/news/schedule Labor Department weekly claims: https://www.dol.gov/ui/data.pdf Prices: Nasdaq historical closes (stocks) and Coinbase UTC daily closes (Bitcoin, Ether), Friday, Oct 23, 2026; 1W from Oct 16, 1M from Sep 23, QTD from Sep 30, YTD from Dec 31, 2025, 1Y from Oct 23, 2025 Since Issue I: equal-weight price return of each name, close to close, Jul 20 to Oct 23, 2026; Nasdaq 100 via QQQ