In this episode, U.S. Equity Portfolio Manager Grayson Witcher explores the evolving intersection of government policy, innovation, and capital expenditure (CapEx) in U.S. markets. The discussion unpacks how public spending and strategic government stakes—especially in sectors like semiconductors and defense—are reshaping the investment landscape. Grayson reflects on the unique blend of complacency and optimism in today's markets, the uncertain returns on massive AI-driven CapEx, and the importance of management quality and adaptability in navigating this new era.

Key highlights:

• U.S. markets are experiencing a rare surge in capital spending, driven by AI, reshoring, defense, and infrastructure—marking a departure from decades of just-in-time, low-investment environments.

• The U.S. government's direct stakes in companies like Intel signal a move toward more strategic, state-influenced capitalism, reminiscent of crisis or wartime interventions but now focused on critical industries.

• Despite significant investment, most companies have yet to realize meaningful returns from generative AI. The market's optimism may be outpacing actual productivity gains, raising questions about long-term ROI.

• The team seeks diversified exposure to transformative themes (e.g., AI, automation) without betting on single winners, emphasizing companies with adaptable management and clear execution plans.

• Rising CapEx, persistent inflation drivers, and government intervention create both risks and opportunities. The focus remains on businesses resilient to macro shifts and capable of thriving across scenarios.

This episode is available for download anywhere you get your podcasts.

Founded in 1974, Mawer Investment Management Ltd. (pronounced "more") is a privately owned independent investment firm managing assets for institutional and individual investors. Mawer employs over 250 people in Canada, U.S., and Singapore.

Host: Rob Campbell, CFA– Institutional Portfolio Manager

Guest: Grayson Witcher, CFA, AB – Portfolio Manager