The week’s issue of BeauMorgan Minutes highlights how quickly the investing backdrop can shift, as an “okay” U.S. economy with early signs of improvement, to one that now faces a new layer of uncertainty from the conflict around the Strait of Hormuz. The core message for long term investors is to focus on quality and avoid reacting to every headline.
Market Valuations, 401k’s, Investor Phycology
Recent market strength is once again reinforcing a reality the industry often overlooks: equity valuations, consumer sentiment, and economic growth are tightly linked. Historically, a 10% move in the S&P 500 has corresponded to roughly a 1% change in U.S. GDP. The exact ratio shifts over time, but the direction doesn’t it remains one of the clearest signals of how markets and the real economy interact. (5)
What’s different now is how that relationship is being fueled. Consumers are finding new ways to access liquidity, including borrowing against retirement accounts. These loans must typically be repaid within five years or become taxable withdrawals, but their growing use signals something more important: a willingness to spend. Where that money goes matters. Housing-related use points to longer- term investment; vehicle purchases help explain why auto demand has held up despite higher rates. (1)
Valuations suggest the market is leaning toward a return to “normal.” At roughly 18x forward 2026 earnings, implied returns sit near the long-term average of 8–9%. That doesn’t eliminate volatility—it guarantees it. Seasonal pressures, particularly around April tax payments, often create short-term dislocations. Historically, those moments have set up more attractive entry points as the year unfolds. Investors focused on 2027 earnings may find better opportunities as confidence rebuilds into the back half. (4)
The broader point: markets are forward-looking, even when sentiment is not. Periods of uncertainty will continue to trigger risk-off reactions, but they don’t change the underlying mechanism. Long-term investors who use volatility to selectively build positions in high-quality businesses are typically rewarded when earnings visibility return.
Equity Update – Technology Efficiency, Platform Flywheels, and “Real World” Optionality
What stood out this week:
- The changing economics of AI hardware and memory
- Airbnb’s push to become a full trip platform, and
- Kodak’s early but credible battery materials optionality.
AI Memory: Own What Can’t Be Compressed(7)
Google announced TurboQuant, a software upgrade that makes AI models roughly six times more memory efficient and up to eight times faster, with little or no loss of accuracy in tests on popular open source models. This directly challenges the assumption that AI growth must drive ever rising demand for high bandwidth memory chips (DRAM/NAND).
If even part of these lab gains translates into production, AI workloads could require far fewer memory chips, pressuring volumes, pricing, and valuation multiples for major memory suppliers such as Micron, Samsung, SK Hynix, Western Digital and Seagate. South Korea, whose equity index and trade balance are heavily exposed to memory exports, is especially sensitive to this shift.
Portfolio implication: We are cautious on “memory heavy” semiconductor names and broad chip ETFs dominated by memory, and we continue to favor companies that use AI to improve their businesses (software, cloud, platforms) over those that merely supply commoditizing hardware. That brings us to the company Airbnb!
Airbnb: Building Toward an “Entire Trip” Platform (8)
Airbnb announced this week that it has launched in app private car transfers in partnership with Welcome Pickups across 125+ cities in Europe, Asia and Latin America, integrated directly into the Trips tab and positioned as part of a broader ambition to own the “entire trip.” Early pilots earned near perfect user ratings, and management is guiding Q1 2026 revenue above consensus, reflecting confidence in ancillary services as an additional growth lever.
This move adds a new, asset light revenue stream (Airbnb earns a marketplace commission without owning vehicles) and reduces the need for guests to use competing apps at key moments, potentially improving engagement and repeat usage. Over time, this services layer (transfers today, potentially groceries, tours, and dining tomorrow) could support higher take rates and durable margins, building on already strong adjusted EBITDA margins of ~28% in recent quarters.
Portfolio implication: At roughly mid 30s earnings multiples, the stock already discounts steady growth, but successful execution of the “entire trip” strategy and evidence of meaningful ancillary revenue mix could justify a re rating. We are watching attach rates, U.S. rollout timing, and disclosures of services revenue as key catalysts for the thesis.
Kodak: An Option on PFAS Free Battery Materials (9)
Kodak’s partnership with startup Ateios Systems gives it a potential growth avenue in PFAS free lithium ion battery electrodes, leveraging its legacy high speed multilayer coating lines. Ateios’s RaiCoreTM electrodes have shown strong third party verified performance claims (higher energy density, better capacity retention, lower processing costs, and PFAS free credentials) and now span key chemistries such as LFP, NMC and graphite.
The partnership has progressed from lab work to early commercial traction: pilot programs with leading OEMs, first paid contracts, and Gen 4 electrodes now coming off Kodak’s own production machine, supported by NSF funding to scale. However, orders are still at kWh scale, no customer names or committed volumes have been disclosed, and Kodak does not report battery specific revenue within its Advanced Materials & Chemicals (AM&C) segment.
Meanwhile, the core businesses remain the primary value anchor: AM&C generated ~$715 million of revenue in 2025 and turned from a small loss to a positive operational EBITDA, while the Brand/Print segment delivered growing revenue and solid cash generating EBITDA.
Portfolio implication: At current levels, we view Kodak as essentially priced on its print/chemicals cash flows, with the battery partnership functioning as a long dated call option on a credible technology pivot. We continue to see this as “optionality” rather than a near term earnings driver and size any exposure accordingly, particularly when weighed against tax and liquidity considerations.
How this shapes our positioning
Across these updates, a common thread emerges:
- Software keeps eroding hardware scarcity rents (GOOG’s TurboQuant vs. MU’s memory chips), so we emphasize differentiated platforms over commoditizing components.
- Asset light ecosystems with rising ancillary services (Airbnb) can broaden revenue streams and deepen customer relationships without heavy balance sheet risk. Added to our watchlist.
- Legacy industrial assets can still create asymmetric upside when repurposed into new growth markets (Kodak coating lines for PFAS free batteries), but we treat these as options, not core earnings pillars.
As always, we are balancing these themes within diversified portfolios aligned with your individual objectives and risk tolerance.
Closing note
If you have questions about any of the topics in this issue, or would like to discuss how these market themes relate to your own portfolio, please reach out to Morgan Allen. She values hearing clients’ perspectives and always welcomes thoughtful conversation about any part of the market that may be on your mind.
Sources:
1- https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans
2-Hostage Crisis -The Bank Credit Analyst -US Investment Strategy -Tuesday, April 7 0:30 AM EDT | 3:30 PM BST| 4:30 PM CEST
3-https://usa.visa.com/partner-with-us/visa-consulting-analytics/economic-insights/the-sudden-increase-in-
the-wealth-effect-and-its-impact-on-spending.html
4-https://www.msci.com/documents/10199/a134c5d5-dca0-420d-875d-06adb948f578
5https://digitalcommons.unl.edu/cgi/viewcontent.cgi?article=1293&context=honorstheses
6-https://www.marketwatch.com/economy-politics/calendar
7-https://research.google/blog/turboquant-redefining-ai-efficiency-with-extreme-compression/
8-https://news.airbnb.com/introducing-private-car-services-on-airbnb-with-welcome-pickups/
9-https://www.businesswire.com/news/home/20260323818735/en/Ateios-Systems-and-Kodak-Expand-
RaiCore-Platform-to-Major-Battery-Chemistries-and-Earn-PFAS-Free-Verification
Disclosures:
This material is provided for informational and educational purposes only and is not intended as investment advice or a recommendation to buy or sell any security. References to specific companies are for illustrative purposes only. The views expressed are based on information believed to be reliable as of the date of publication and are subject to change. Past performance is not indicative of future results. There can be no assurance that any investment strategy or approach discussed will achieve its intended outcome. Beau Morgan Advisors often communicates with clients and prospective clients through electronic mail and other electronic means. We make every effort to ensure that email communications do not contain sensitive information. Please do not send private or sensitive information via email. Beau Morgan Advisors does not accept trading or money movement instructions via email. As a registered investment adviser, email communications may be subject to review by the firm’s Chief Compliance Officer or securities regulators. If you received this communication in error, please notify the sender and delete the message.