Weekly Wisdom: Perspective and Opportunity During Decisive Change

Clarity During a Busy Market Week

This past week has been defined by a sequence of high-impact news events that have significantly reshaped the global investment landscape. As we navigate these headlines, it is essential to look past the initial volatility to see the underlying facts that continue to support a robust, bullish outlook for the economy. For this Weekly Wisdom, we want to provide a comprehensive overview of the escalating conflict in Iran, the Supreme Court’s tariff decision, and the unprecedented growth signaled by Nvidia that has been underappreciated by the market. By focusing on the tangible data, we highlight why the current market environment continues to hold compelling growth stories.

Military Action in Iran

On February 28, 2026, following weeks of unsuccessful negotiations, the U.S. and Israel launched Operation Epic Fury, a coordinated aerial campaign that dismantled Iran’s military command structure and resulted in the death of Supreme Leader Ayatollah Khamenei. This escalation is especially impactful due to the resulting shutdown of the Strait of Hormuz, a major global transit chokepoint handling 20% of the world’s oil and 22% of global LBG trade.¹

The impact on energy pricing was immediate and severe. Brent crude spiked 13.6% intraday to $82.37, adding a persistent $15 “war premium,” as markets priced in the loss of Iran’s ~3.45 million barrels per day (~3.2% of global supply) and potential disruptions to other key Gulf producers like Saudi Arabia and the UAE.² In natural gas, European prices surged 23% above last year’s average following a drone attack that forced Qatar to shut down the world’s largest LNG export facility, along with the cutoff of 125 billion cubic meters (bcm) of LNG flows, representing 3% of total global gas consumption.³ While new U.S. LNG export capacity is coming online to meet demand, it is not yet sufficient to offset these Persian Gulf losses in the immediate term.

Consequently, domestic energy giants have seen a massive surge in investor interest; ExxonMobil (XOM) is up 27.03% and Chevron (CVX) is up 25.08% YTD as a direct result of this risk premium and the spike in realized oil prices. Market participants are currently trading based on the expected duration of the conflict. President Trump noted he has been given projections of a four-to-five-week war, though he remains prepared for a longer engagement if necessary. To stabilize trade, the administration has announced plans to combat increasing energy prices, like providing naval escorts and insurance guarantees via the U.S. International Development Finance Corporation.

The Supreme Court Reshapes the Tariff Landscape

In a landmark 6-3 ruling, the U.S. Supreme Court fundamentally shifted the nation’s trade policy by holding that the International Emergency Economic Powers Act (IEEPA) does not grant the President the authority to impose broad tariffs. This decision led to an immediate and significant reduction in the U.S. effective tariff rate, which plummeted from approximately 17% to around 8%.⁴ While the administration quickly pivoted to a temporary 15% universal tariff under Section 122 of the Trade Act, this new rate remains more favorable for retailers than the ~20% incremental levies previously in place.⁵

The market reaction has been overwhelmingly positive for import-intensive sectors, as the ruling removes a major policy overhang for companies like Nike and Lululemon. Beyond just lowering future costs, the decision potentially opens the door for an estimated $175 billion in tariff refunds for affected importers, representing a massive potential injection of liquidity into corporate cash flows.⁶ By transforming tariff “unknowns” into quantifiable “knowns,” the Court has paved the way for improved margins and a more rational promotional environment, which we believe will provide a modest upside to earnings per share as we move into the second quarter of 2026.

Nvidia and the Bedrock of the AI Food Chain

Nvidia’s most recent report has provided data highlighting the long-term viability of the AI supercycle. The company’s 1Q revenue guidance of $78 billion not only beat the Street but matched the high end of the most bullish expectations. Data Center revenue reached a record $62.3 billion, up 75% year-over-year, but the true standout was the Networking segment.⁷ Generating $11 billion in revenue, a massive 260% increase year-over-year, networking is now a primary growth engine driven by the rapid ramp-up of the NVLink scale-up solution.⁸ Furthermore, the “Sovereign AI” business continues to scale at a breakneck pace, with revenue more than tripling year-over-year to exceed $30 billion as nations rush to build their own domestic AI infrastructure.

This explosive growth in compute is the primary catalyst for a massive multi-year investment cycle into the physical AI Food Chain. Data center-related capex is now projected to total approximately $7 trillion through 2030, with construction spending alone set to rise from $261 billion to $460 billion over the next four years. Supporting this digital expansion is a step-change in power demand, which is expected to shift from 3% to 11% annual growth over the next decade. To meet this demand, power companies are slated to invest roughly $1.1 trillion through 2030.⁹ This infrastructure demand is clearly reflected in the staggering backlogs of key equipment providers. GE Vernova (GEV) currently holds a $150 billion backlog with 65% order growth, while Quanta Services (PWR) boasts a $44 billion backlog. Eaton (ETN) and Vertiv (VRT) are seeing similar strength, with backlogs of $15.3 billion and $15 billion respectively, following year-over-year order growth as high as 252%.

The AI Frontier: Cyber and Robotics

The next leg of the AI expansion is moving rapidly into cybersecurity and physical automation. The growing deployment of LLM-based applications and AI agents is driving a cybersecurity market projected to grow to $338 billion by 2033.¹⁰ As software-based vehicle architectures expand, the threat surface is widening; automotive cyberattacks more than doubled in 2025, with ransom-related incidents accounting for 44% of all threats.¹¹ The complexity of these attacks is only being matched by the sophistication of the AI-driven defenses being deployed to stop them.

Simultaneously, “Physical AI” is reaching a historic tipping point as humanoid robotics enter the mainstream. Due to massive cost declines in sensors and actuators, humanoid price points have collapsed by 97% in just two years. The Unitree G1 humanoid, for example, is launching at just $16,000—a fraction of the $500,000 price tag seen in 2023.¹² We are already seeing this technology deployed at scale, with Amazon operating over one million robots across its fulfillment network to drive efficiency and safety. From digital agents in the cloud to humanoid workers on the warehouse floor, the integration of AI into the physical world is accelerating, and we remain incredibly bullish on the infrastructure, the power, and the platforms that make it possible.

Current Market Outlook

In summary, this week has provided an influx of news that has introduced volatility yet has not impacted the longer-term growth narratives we see in the market. The Supreme Court’s ruling has turned a major regulatory headwind into a multibillion-dollar tailwind for corporate cash flows. The energy markets, while volatile due to the conflict in Iran, are highlighting the strategic dominance and price-leveraged upside of domestic and U.S. owned energy production. Finally, Nvidia’s stellar results and the massive backlogs in the power and grid sectors prove that the AI revolution is backed by trillions of dollars in real-world infrastructure investment. Whether in the cloud, on the factory floor, or in the energy grid, the AI Food Chain is growing, and we believe the most exciting innings of this expansion are still ahead of us.

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[1] Bloomberg Intelligence: As of June 13, 2025
[2] Elara Capital Analyst Note: As of March 2, 2026
[3] ING Wholesale Banking Analyst Note, As of February 19, 2026
[4] Barclays Analyst Note: As of February 26, 2026
[5] Barclays Analyst Note: As of February 26, 2026
[6] Mizuho Analyst Note: As of February 27, 2026
[7] NVIDIA Earnings Release: As of February 25, 2026
[8] NVIDIA Earnings Release: As of February 25, 2026
[9] JP Morgan Analyst Note: As of December 23, 2025
[10] Bloomberg: As of February 24, 2025
[11] Bloomberg: As of March 3, 2026
[12] Bloomberg Intelligence: As of November 17, 2025