Dividing Our Idea Funnel: Four Moves That Are Nicely Spread

AI is unquestionably driving demand for GitLab’s offerings, but there is concern around its traditional per-seat pricing model versus a consumption-based model. We acknowledge some of the risks Adobe faces, but at a P/E of sub-10x and a FCF yield north of 10%, the market is pricing the stock as a melting ice cube while growth is still right around 10%. We bought Adyen at a mid-teens EV/EBITDA and a P/E just north of 20x, while growing upwards of 20%. At the time of our purchase, Mips was trading at a high-teens P/E when adjusted for these legal expenses, while growing upwards of 30% FX-adjusted. In aggregate, we funded these acquisitions with the sale of Lattice Semiconductor, Disney and Workday, as well as a modest trim from our Alphabet position.

In our Q4 2025 commentary, we shared how we were dividing our idea funnel into three distinct buckets: 1) the AI beneficiaries; 2) the AI losers; and 3) far