Old West Investment Management Q2 2026 Manager Commentary

Portfolio Performance

For Q2 2026, Old West All Cap Opportunity returned -0.94% (net).

Old West All Cap Opportunity (12/01/2008 inception through 06/30/2026)

Q2 2026 Performance Highlights

Top Contributors

Navitas Semiconductor Corporation (NVTS): Navitas makes advanced power chips using gallium nitride (GaN) and silicon carbide (SiC). These chips convert and deliver electricity with less energy lost as heat. The company started out making phone charger chips, but management has shifted its focus to high-power markets like AI data centers, the power grid, and electrification. ^¹

NVTS was one of the best performing semiconductor stocks in Q2. Revenue returned to growth, guidance came in above Wall Street estimates, and Baird more than doubled its price target. ^² The biggest catalyst came in June, when Nvidia (NVDA) featured Navitas’ power technology atits Computex showcase. ^³ In our view, the real constraint on AI is not intelligence, it is electricity, and Navitas’ chips help deliver it.

Bruker Biosciences Corp. (BRKR): Bruker makes high-end scientific instruments that let scientists study life and materials at the molecular level. Its products include mass spectrometry, magnetic resonance, X-ray, and microscopy systems used in life sciences, biopharma, diagnostics, and semiconductor manufacturing. ^⁴

Bruker was a detractor last quarter, but that reversed in Q2 after the company introduced new instrument platforms and pointed to growing semiconductor demand. ^⁵ Bank of America raised its price target from $49 to $65, ^⁶ and by late June the shares were near their 52-week high. ^⁷ In our view, Bruker’s instruments are the tools that turn the physical world into data that AI can use, and the market is starting to see it that way too.

Nokia Corporation (NOK): Nokia is one of the last major Western suppliers of telecom and networking equipment. Its business spans mobile networks, IP routing, and, after its acquisition of Infinera, the optical networks that connect data centers. ^⁸

The market began to see Nokia less as an old telecom company and more as critical AI infrastructure. Revenue from AI and cloud customers rose 49% in the first quarter, with roughly €1 billion of orders from those customers. ^⁹ AI data centers need to move huge amounts of data, and Nokia provides the networks that carry it. JPMorgan raised its price target from $14 to $21, ^¹⁰ and the stock had roughly doubled year-to-date by early July. ^¹¹ The AI buildout is bringing new attention to businesses like this.

Top Detractors

Tidewater Inc. (TDW): Tidewater has the largest fleet of offshore support vessels in the industry and is the oldest and most experienced provider of marine support services to the offshore oil and gas sector, operating across more than 60 countries. ^¹²

Tidewater was a top contributor last quarter, and in Q2 it gave some of that back for one reason: the price of oil. The U.S.–Iran agreement took the war premium out of oil, and Brentfell from a high of $126 back below $80. ^¹³ Offshore stocks trade with oil, so TDW fell from its April highs even though it remained up nicely for the year. ^¹⁴ The fundamentals have not changed: vessel supply is tight, the global fleet is old, and oil is still well above where the year began.

Core Natural Resources Inc. (CNR): Core Natural Resources was formed in January 2025 through the merger of Arch Resources and CONSOL Energy. It is one of the world’s leading producers of metallurgical coal used in steelmaking and high-quality thermal coal used in power generation, and it owns marine export terminals on the East Coast. ^¹⁵

CNR declined along with most coal stocks, even though the business performed well: it beat earnings estimates and kept buying back stock. ^¹⁶¹⁷ The Department of Energy also selected a CNR subsidiary to build a pilot facility that extracts rare earth elements from coal waste. ^¹⁸ Electricity demand is rising for the first time in a decade, driven by AI data centers. In our view, coal stocks are priced as if their end markets are dying, and the demand picture suggests otherwise.

Antero Resources Corporation (AR): Antero is one of the largest natural gas and natural gas liquids producers in the United States. Its operations are in the Appalachian Basin, and its midstream and liquids infrastructure gives it strong access to LNG export markets. ^¹⁹

AR declined in Q2 for a simple reason: natural gas prices fell back toward $3 as the war premium came out of the market. ^²⁰ The business itself performed well, with record production and growing volumes expected through 2026. ^²¹ In our view, natural gas is still priced as if the electricity shortage were not happening: turbines are sold out for years, data center power needs keep growing, and the fuel trades near cyclical lows.

Portfolio Positioning

Q2 delivered much of the same volatility and unpredictability as the first. We saw investors who charged into oil, chemical and fertilizer stocks on the breakout of war ended up surrendering on talks of a ceasefire. Oil roundtripped to $70 as a combination of higher US exports, lower Chinese imports, “dark transits” through the Strait of Hormuz, and a severe drawdown of inventories made it appear as though nothing ever happened. ^²² It is unusual to see such opposite extremes of sentiment occur in rapid succession. We continue to find value in the production of basic materials and think the risk of disruption has not been eliminated.

Some have compared this period to the 1970s, when oil, inflation, and war in the Middle East were often in the news. We think there may be a stronger parallel to the 1870s, when a handful of industries grew to dominate the economy. The steam engine, railroads, telegraph, and electric grid all transformed how work was done and economic activity organized. We believe the United States is heading into a similar period of industrialization, with artificial intelligence increasingly being used to determine what should be built and how.

The development of that infrastructure is the main narrative today, with hyperscalers estimated to spend $700 billion this year alone and trillions more over the next few years. ^²³ That amount of capital flowing through a relatively small number of industries has placed acute stress on various points of the supply chain. Focus has shifted outward from the chips themselves to the surrounding infrastructure. Power has become the defining constraint as our ability to produce chips exceeds our ability to actually turn them on. Power semiconductors, the devices that regulate voltage and current, have seen demand inflect sharply higher as new generations of chips require increasingly more power.

Outside the datacenter wall, companies face a shortage of heavy electrical equipment and grid interconnection has become a logjam. Multi-year tie-in times are pushing companies to build their own power, and even that has become subject to delays. Heavy duty gas turbines are sold out for years with manufacturers reluctant to expand capacity after getting burned in past cycles. ^²⁴ Customers have started trading performance for speed of access, using less efficient but readily available gas engines instead. Meta (META) is proposing to string together over 800 reciprocating engines for a data center in El Paso ^²⁵ and xAI took a similar approach in Memphis, opting to deploy dozens of mobile gas turbines. ^²⁶

We think nearly all of these solutions highlight the importance of natural gas. It is the largest source of electricity in the United States, providing roughly 40% of supply. ^²⁷ We are blessed with an abundance of it, over 500 Tcf of reserves versus 40 Tcf of annual production. The majority is concentrated in two regions, Texas and Appalachia, and can be produced for less than $4/mcf. But gas is not easy to transport and needs dedicated pipelines or to be converted to a liquid and shipped. Prices are thus dictated by local availability and can vary widely by region. In Europe or Japan, where production is low and they depend on foreign imports, prices can be quite high by global standards. In the US or Canada, where supplies are plentiful, production in one region can often exceed not only local demand, but also the ability to export the surplus, creating pockets of very cheap supply. Prices even went negative in parts of Texas this year as associated gas from increased oil drilling overwhelmed takeaway capacity. ^²⁸

Moving gas from where it is cheap to where it is expensive can be a profitable business, and the companies that build and operate these pipelines have a portfolio of attractive expansion opportunities. But even those take time, and rather than wait for pipes some buyers are simply moving the datacenter. Chevron (CVX) signed an MOU with Microsoft (MSFT) for a multi-gigawatt facility directly in the Permian basin. ^²⁹ Meta announced a $10 billion datacenter in Alberta, looking to take advantage of low Canadian gas prices. ^³⁰

We like to think of natural gas reserves as crude electricity that’s still in the ground. The spread between what it costs to produce and what it can ultimately be sold for in fully refined form is immense. Mark Zuckerberg recently offered his company’s AI model 75% cheaper than competitors, explicitly calling out their excessive profit margins. ^³¹ We believe AI companies will be able to charge much less for their services (and pay much more for power) and still be very profitable. Large, low-cost reserves of this “electricity juice” strike us as strategically valuable, and today’s low prices may prove a temporary phenomenon as inadequate infrastructure gets solved with time and money. Many natural gas producers are trading at valuations that appear reasonable even at current gas prices.

The desperation to access power even leads us to see additional value in much-maligned coal. While its metallurgical uses are the most widely appreciated, we think a shortage of power may force a rethink of the aging and retiring workhorses that still provide nearly 20% of our electricity. Asia continues to build coal-fired generation, unburdened by Western environmental concerns, and we think the reports of thermal coal’s death are greatly exaggerated. This focus on power at all costs also strengthens our enthusiasm for uranium. We have written about the case for nuclear in these letters for the better part of a decade. Those investments are longer duration and more capital intensive than other forms of generation, but from a pure energy density standpoint uranium is hard to beat. Large, low-cost sources of current and potential uranium supply appear well positioned in that environment.

For the last few quarters we have discussed our belief in an impending scientific revolution as AI gets applied to challenges in the physical world. Frontier models are already solving longstanding problems in mathematics and conducting cutting edge research in physics and biology. We highlighted Bruker last year as an out of favor scientific equipment maker well positioned for this transition. Companies with large installed bases of scientific tools should also benefit as AI gets paired with their existing equipment.

We have seen a reimagining and repurposing of capacity is taking place across a wide variety of industries, especially those involved in manufacturing. Automakers are looking outside of autos to increase their returns on assets. After taking a bath on electric vehicles, Ford (F) decided that its battery facilities could instead be used to serve stationary storage markets for data centers and the grid. Stellantis (STLA), the struggling European automaker, struck a deal with a Chinese manufacturer to utilize excess capacity, and GM is in talks with Lockheed Martin (LMT) about manufacturing parts for weapons systems. Hyundai (HYMTF) owns Boston Dynamics, a leading US robot developer. Humanoid robots are large, complex machines with thousands of precision parts, exactly what an auto plant knows how to manufacture at scale. Legacy technology firms are also getting a second look. Nokia, until recently an unloved telecom play, saw a dramatic revaluation as investors looked past its historical end markets toward its ability to satisfy future optical networking needs. We are finding many interesting opportunities in companies where investors are overly focused on the past.

The big corporate news this quarter was the SpaceX (SPCX) IPO raising $85 billion and hitting a $2 trillion valuation, making Elon Musk the world’s first trillionaire. ^³²³³ The burgeoning space economy is one we have touched on in past letters and the large aerospace and defense companies remain an area of interest, especially after their recent weakness. If this really is the dawn of the space age, the handful of companies that have been operating there for decades may be well positioned. More broadly, we see enduring value in physical infrastructure: hard assets with high replacement costs that benefit from grandfathered rights-of-way, difficult permitting requirements, or control of scarce resources. This is a fascinating moment in history where entire industrial supply chains are being repriced.

We continue to see tremendous value in metals and mining companies, some of which sold off during the quarter on fears of higher interest rates. We believe central banks will find it increasingly difficult to address inflation with higher rates, because much of that inflation is not being driven by broad-based economic activity. Demand is coming from a concentrated segment of the economy and the shortages emerging across energy, materials and industrial infrastructure are supply problems meeting this new source of demand. If higher rates don’t affect that demand, inflationary pressure will continue until the necessary investments to increase supply are made.

It is hard not to be amazed at the pace of technological progress we are seeing. At Old West we follow these developments closely. Our AI “interns” are hard at work building models and reviewing company earnings reports and conference calls. Tasks that used to take hours or days can now be done in seconds or minutes, and for hundreds of companies at a time. It may still be a few years before these robotic assistants are bringing us coffee, but automating much of the mechanical work allows us to spend more time on higher value activities.

We are pleased with our performance in the first half and think we are well positioned for the next few years. We welcome the opportunity to discuss our ideas in more detail with prospective investors. Please reach out if you would like to set up a call.

Thank you for your consideration.

Sincerely,

Old West Investment Management, LLC

References

1 https: //finance. yahoo. com/quote/NVTS/

2 https: //stockstotrade. com/news/navitas-semiconductor-corporation-nvts-news-2026_05_14/

3 https: //www. fool. com/investing/2026/06/03/why-navitas-semiconductor-stock-is-skyrocketing-to/

4 https: //www. bruker. com/en/about. html

5 https: //www. quiverquant. com/news/Bruker+shares+jump+as+new+ASMS+launches+spotlight+proteomics, +energy, +and+semiconductor+demand

6 https: //www. timothyshykes. com/news/brker-corporation-brkr-news-2026_06_03/

7 https: //stockstory. org/us/stocks/nasdaq/brkr/news/why-up-down/brker-brkr-stock-trades-up-here-is-why-4

8 https: //www. kavout. com/market-lens/nokia-s-ai-driven-optical-surge-can-july-23-earnings-break-the-legacy-valuation-trap

9 https: //www. kavout. com/market-lens/nokia-s-ai-driven-optical-surge-can-july-23-earnings-break-the-legacy-valuation-trap

10 https: //ts2. tech/en/nokia-shares-rise-on-wall-street-push-for-ai-optical-network-plan/

11 https: //www. kavout. com/market-lens/nokia-s-ai-driven-optical-surge-can-july-23-earnings-break-the-legacy-valuation-trap

12 Tidewater Marine – Tidewater

13 Noble Corporation and Tidewater Shares Plummet, What You Need To Know – StockStory

14 Tidewater, Calumet, and Golar LNG Shares Are Falling, What You Need To Know – StockStory

15 https: //seekingalpha. com/symbol/CNR

16 CNR Stock Price and Chart – NYSE: CNR – TradingView

17 CNR: Buybacks And Cash Generation Will Drive Future Upside Potential

18 Core Natural Resources (CNR) Lands DOE Grant, Is The Stock Still 28% Undervalued?

19 Antero Resources (NYSE: AR) – Stock Analysis – Simply Wall St

20 Antero Resources (AR)

21 Antero Resources (NYSE: AR) – Stock Analysis – Simply Wall St

22 Short-Term Energy Outlook

23 AI Capex 2026: The $690B Infrastructure Sprint

24 GE Vernova expects to end 2025 with an 80-GW gas turbine backlog that stretches into 2029

25 Meta to deploy 366MW of modular gas units to power 1GW data center in El Paso, Texas

26 Musk’s xAI is running nearly 50 gas turbines unchecked at its Mississippi data center | TechCrunch

27 Electricity in the U.S. – U.S. Energy Information Administration (EIA)

28 Permian Natural Gas Prices Surpass 2024’s Negative Run

29 https: //www. chevron. com/newsroom/2026/q2/chevron-signs-20-year-power-agreement-with-microsoft-for-west-texas-data-center

30 https: //www. cnbc. com/2026/07/08/meta-is-building-its-first-big-data-center-in-canada-amid-ai-push. html

31 Mark Zuckerberg Is Spending Hundreds of Billions on AI. His New Strategy in the Race Against OpenAI Is Surprisingly Simple.

32 SpaceX IPO Officially Raised $85 Billion

33 https: //www. cnbc. com/2026/06/12/spacex-stock-jumps-2-trillion. html

Original Post

Editor’s Note: The summary bullets for this article were chosen by Seeking Alpha editors.