Causeway Human Intelligence: Notes from the Road

Broad market trends are easy to identify, but company-specific earnings outcomes will diverge sharply, making stock selection increasingly valuable.

• After more than 60 September meetings with Asian technology, media and telecommunications companies, Causeway found that established digital platforms may monetize AI through existing users, data and distribution, while memory-price pressure will affect companies unevenly.
• In AI infrastructure, suppliers may capture better economics than operators because several technology and telecommunications companies are investing heavily without clear sustainable operating advantages and rely on a small number of customers.
• Meetings with nearly 20 European biopharmaceutical businesses showed that pricing flexibility, pipeline execution and manufacturing capability matter more than headline demand; obesity drugs may expand patient access while lowering average revenue per patient, and biosimilars favor flexible in-house production.
• A September Orange County conference suggested that US consumer spending is stable but not strong, with quality, service and convenience determining outcomes; freight, trucking, packaging, materials and labor costs could pressure margins as contracts reset in late 2026 and early 2027.
• US electricity demand has risen about 2% annually over the past two years after two decades of flat consumption, while data centers under construction point to continued growth into the 2030s; existing generation assets may have the clearest advantage.

Takeaway: Investors should look beyond broad sector narratives and focus on companies with pricing power, execution, commercial reach, supply-chain strength, capital discipline or advantaged assets, while recognizing that demand growth alone will not ensure stronger earnings.