Gavin's Four Watches
The Valuation Incoherence
"Semicap equipment companies trading at 40x next quarter's annualised earnings and DRAM companies trading at mid-single digits. At the peak of the last cycle it was 5x vs 12x. Those can't both be true." — Gavin Baker, May 2026
Forward P/E by Group — the signal Gavin watches most closely
If the AI build-out continues, DRAM must re-rate. The gap between DRAM (green) and semicap (blue) is the core arbitrage in this thesis. Watch it close.
Picks & Shovels — Core Holdings
DRAM — Highest Conviction Long
Semicap Equipment — Essential Regardless of Who Wins
Power / Watts — 2027-28 Timing Inflection
12-Month Relative Performance vs QQQ
"Tech essentially got as cheap as it's been versus the rest of the market at any point over the last 10 years. We had the most extraordinary moment in the history of capitalism — wildly bullish for AI — and you got a chance to buy AI at really attractive valuations." — Gavin Baker, April 2026
Thesis Stocks vs QQQ Baseline · 12 months · normalised to 0%
Cumulative outperformance vs Nasdaq 100. The lens Gavin uses to judge when his thesis is cheap or expensive relative to the market.
Natural Gas NG1 · 12 months
The watts proxy. NG down = US manufacturing cost advantage over Asia/Europe. "Natural gas was down 20%. Our relative manufacturing competitiveness improved overnight." — Gavin
Thesis Layer Status
"AI makes global GDP inexorably more silicon-intensive. Old SaaS: 85% gross margin, 5% to compute. AI companies: 40% gross margin, 50% to compute. Every dollar of AI revenue is structurally more silicon-intensive than any prior technology." — Gavin Baker
| Layer | Thesis | Key Positions | Avg Fwd P/E | Avg 1Y Return | Gavin's Signal |
|---|
Full Metrics Table
| Stock | Price | Exchange Time | 1D % | YTD % | 1Y % | Fwd P/E | Trail P/E | P/S | Gross Margin | Rev Growth | Mkt Cap |
|---|