MERIDIAN RESEARCH

The macro tape opens constructive but with a narrowing margin of safety. Fed Funds at 3.64% (FRED) sits ~75bps below the 2024 peak, consistent with the easing cycle that has supported risk assets, but the CPI YoY index level of 330.3 (FRED) implies still-elevated absolute price levels even as the rate-of-change moderates. High-yield credit spreads at 286bps (FRED) remain tight versus the long-run median (~470bps per ICE BofA historical data), signaling no credit stress — but also limited cushion if growth disappoints. The S&P 500 at 7,165 (FRED) is at/near record territory, which raises the bar for incremental conviction additions; we are increasingly selective.

The dominant overnight macro narrative is the AI infrastructure → power demand → utility bill transmission chain. CBS News reports household electricity bills are climbing materially in regions with concentrated data center buildout, and Business Insider confirms a $16B financing package for an Oracle data center in rural Michigan (Business Insider, 4/27/26). This validates our CEG thesis (nuclear baseload exposure) and is incrementally constructive for NVDA (NVIDIA-Oklo-LANL nuclear AI partnership noted in feed) and BWXT (small modular reactor optionality). It is a creeping political risk: rising consumer utility bills in an election-adjacent environment can produce regulatory backlash against hyperscaler power deals.

Second theme: competitive realignment in cloud and AI labor displacement. Financial Times reports Google is leaning on AI differentiation to close the gap with AWS and Azure — relevant to MSFT thesis (Azure remains #2 but Google narrowing matters at the margin). Fortune covers a Meta AI exec who departed after watching agents outperform top employees — a directional data point on white-collar AI displacement that bears on DOCS (physician network monetization), PCTY (HCM TAM), and FDS (analyst workflow disruption risk). Not a thesis-changer today, but a trend to track.

MSFT (Conviction 8/10, RECOMMEND) — FT report on Google's AI cloud push (FT, 4/27/26) is a marginal negative but does not break thesis. Azure's enterprise distribution, Microsoft 365 Copilot attach, and OpenAI partnership remain durable moats. Cramer commentary in the news feed is noise — we discount it. No conviction change.

NVDA (Conviction 8/10, RECOMMEND) — Nuclear-powered AI factory partnership with Oklo and Los Alamos National Lab (news feed, 4/27/26) is thesis-reinforcing: signals NVDA is locking up power capacity, deepening hyperscaler dependency. The "fracturing gamer bond" headline is a sentiment piece — Gaming is now <10% of revenue per FY26 10-K, immaterial. No conviction change. Monitoring valuation discipline given +21.6% 1M move.

MELI (Conviction 7/10, RECOMMEND) — No new data. 1M +12.5% reflects continued LatAm fintech momentum. Hold conviction.

CEG (Conviction 6/10, MONITORING) — +9% on the week is notable. CBS News data center power story and Oracle Michigan financing reinforce the secular tailwind. I am considering an upgrade to RECOMMEND (7/10) but want to see Q1 2026 earnings (expected early May per company IR) before committing. The risk: I am chasing strength.

LLY (Conviction 7/10) — Down 3.9% on the week. No new fundamental data; likely GLP-1 sentiment rotation. Thesis intact pending Q1 print.

MEDP (Conviction 5/10, MONITORING) — Securities fraud lawsuit headlines persist (Schall Law, Rosen) and 1M -12% / 1W -22% confirms the bear case is winning the narrative. Considering downgrade to 4/10. Will not add. Need to read the underlying class action complaint before deciding hold vs. cut.

FICO (Conviction 5/10) — 1W -5.5%. The Fannie/Freddie alternative scoring model news remains the dominant overhang. Thesis was already cautious; staying at 5/10.

CRWD (Conviction 6/10) — "Terrible week in software stocks" headline confirms the sector pressure, but 1M still +14%. Fundamentals untouched. Hold.

TTD (Conviction 6/10) — Quiet on news. 1M +10% suggests early stabilization in the post-drawdown thesis. Watching Q1 earnings closely.

Remaining MONITORING positions — No material new data warranting action.

No new initiations today. The S&P at 7,165 and tight HY spreads argue for patience, not new commitments. Active research queue:

• Power/grid infrastructure adjacencies — Following up on CEG/BWXT thesis with research into transmission and grid-equipment names benefiting from data-center buildout (potential candidates: GEV, ETN, PWR — pending data pull).
• OKLO — NVDA partnership headline warrants a primary look at Oklo's filings, though as a pre-revenue SMR developer it likely fails our durable-fundamentals screen.

• MEDP — active securities fraud litigation. Two firms (Schall, Rosen) actively soliciting plaintiffs. This is a binary risk event. Trigger to downgrade: confirmation of accounting restatement or material guidance cut. I am one data point away from cutting.
• AI power → political backlash. CBS News piece on residential utility bill inflation is the kind of story that precedes regulatory action. Watch state PUC commentary on data-center cost allocation. Risk to CEG thesis if regulators force hyperscaler subsidization of residential rates.
• Software sector sentiment — "Terrible week in software" framing affects CRWD, DDOG, NET, ADBE, SPSC, PCTY, DOCS simultaneously. Fundamentals must be re-checked at Q1 earnings; price action alone does not break theses (Hard Rule #7) but cluster weakness warrants vigilance.
• Valuation environment. S&P at 7,165 with VIX unavailable today — I cannot assess implied volatility regime. Will flag once VIX prints.
• Connected-vehicle data privacy (Motor1 Ford story) — Tangential, but signals continued consumer/regulatory pushback on telematics-insurance data sharing. Tracking for any read-through to insurance-tech names.

Active high-conviction count: 3 (MSFT, NVDA, MELI). Well within 10–12 cap.

• FRED (Federal Reserve Economic Data): Fed Funds 3.64%, CPI YoY index 330.3, S&P 500 7,165, HY credit spread 2.86%
• Financial Times (4/27/26): Google AI/cloud competitive positioning vs. AWS/Azure
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