A Quick, Intersting Bull Case Worth Reading

I came across an interesting thesis yesterday that I wanted to share because it connects directly to something we’ve talked about before: ways to get exposure to leading off-market AI players without having to access private markets.

It seems there’s another way to gain exposure to one of these names that I did not highlight in my previous piece back in March. What stood out to me is that this might actually be one of the cleaner, more under-the-radar ways to do exactly that—while also owning a real, cash-generating legacy SaaS business alongside it.

I read a thread on X by a user highlighting the potential bull case that I wanted to pass along here.

As the post notes, the core idea is simple. Back in May 2023, a large public SaaS platform invested about $51M into a leading private AI lab. Based on recent secondary market valuations implying that AI lab could be worth around $1T, that stake is now estimated at roughly $11B.

That’s meaningful when you consider the platform’s entire market cap sits around $24B—meaning nearly half of its value is tied to its exposure to that AI lab, yet the market doesn’t seem to fully price or even widely recognize that connection.

If you break down the numbers further, it gets more interesting. The company holds about $7.8B in cash and has no debt. Adjusting for that—and discounting the AI stake for taxes—you end up with an effective enterprise value closer to ~$8B for the core business.

Against that, the business is generating around $800M per year in post-tax free cash flow, even when including stock-based compensation. That alone implies a relatively low multiple for a company that still has a sticky, global SaaS footprint...(READ THE FULL COLUMN AND GET THE IDEA HERE).

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