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Investors often talk about the power of compounding in terms of the value of investments. However, the same math applies to dividends as well. When you choose to reinvest a portion of your dividends, you own more shares each year and are paid more, even if the dividend rate is the same.
In recent years, HBM, or high bandwidth memory, has become particularly important, as AI computer systems require significant on-demand memory pools to function. Considerable attention has been paid to the high-performance compute market and chip designers like Nvidia, who have pushed the state of the art and made advanced AI models possible. However, high bandwidth memory chips like those produced by Micron also play a critical role in modern AI data centers.
I see this in a very positive light – as the macroenvironment continues to improve for O (decreasing cost of capital in the U.S., quite a low cost of capital in Europe, attractive cap rates achievable for the Company, and increasing activity of the transactional market), I view the deal with Blackstone as a meaningful signal of a turning point in the real estate market.
In particular, we’ll look and see if the discount is too wide for a mostly first lien portfolio with modest non-accruals, or if expected earnings per compression and further realized losses in 2026 warrant steering clear for now in anticipation of a material additional dividend cut and further substantial NAV per share declines moving forward.
AI remains a central investment theme, with hyperscalers like MU, AMD, and CIEN benefiting from robust CapEx, strong forward EPS growth, and discounted PEG ratios. Quant Strong Buy picks average 20% forward revenue and 73% EPS growth, far outpacing the S&P 500 and Mag 7 on both metrics.
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