Inside Today’s Issue

• Essay: Leopold’s Software Glitch
• Leopold Tops This List
• All Presidents Run Up Debt
• All-In On Tech Stocks
• Chart Of The Day… uniQure (QURE)

Editor’s note: Today, Porter delivers part two of a three-part series on the implosion of Leopold Aschenbrenner’s Situational Awareness fund – and the key reason behind its failure that everyone seems to be missing… The final installment of this three-part series will appear in the next Journal, on Friday.

Also note this brief update to Monday’s essay, when we reported that Intuit (INTU) was a stock that Leopold Aschenbrenner’s Situational Awareness fund had shorted. Yesterday, Intuit reported fiscal Q4 results and guided fiscal 2027 non-GAAP earnings to $22.88–$23.12 per share against a Wall Street consensus of $27.31. Some people on Wall Street believe (like Leopold) that this is more evidence of the “death of software.” We disagree.

What actually happened is far more banal: effective August 1, Intuit stopped stripping out share-based compensation from these adjusted numbers. CFO Sandeep Aujla said the 2027 guidance carries a $5.81 impact from stock-based compensation expenses. Ergo, when you add $5.81 back, the guidance midpoint is $28.81 per share, 5% above the $27.31 estimate.

Here’s another way to look at it. Intuit’s GAAP accounting requires no reconstruction. Aujla guided fiscal 2027 GAAP earnings per share to $20.12-$20.36, (growth of 22%-24%) against a $19.94 consensus. Those are not the numbers of a dying business.

Fiscal 2026 revenue grew 14% to $21.4 billion. Non-GAAP operating margin expanded 1.5 points to 41.7%. Q4 adjusted earnings came in at $4.03 per share against a $3.58 estimate. Mid-market revenue grew 39% with customers up 28%, and Intuit Enterprise Suite – the accounting and payroll package sold to companies too large for QuickBooks Online – passed $145 million in annualized revenue, 4x the prior year.

Microsoft (MSFT) passed 30 million paid Copilot seats in the June quarter, up from 15 million in January. Tech wizards like Leo Aschenbrenner hate Copilot – Microsoft’s artificial intelligence (“AI”) assistant. Just like they hated Windows ’97. And everything else Microsoft has ever built.

So what?

Accenture alone bought 740,000 Copilot seats. Bayer, Johnson & Johnson, Mercedes-Benz, and Roche have each deployed more than 90,000. Microsoft’s commercial remaining performance obligation – contracted revenue not yet recognized, which is the closest thing software has to a railroad’s signed freight contracts – stands at $678 billion, up 84% year over year!

Annual recurring revenue for Adobe’s (ADBE) AI-first passed $500 million in the quarter ended May 2026 and tripled year over year. Salesforce’s (CRM) Agentforce went from $800 million of annual recurring revenue in the January quarter to $1.2 billion by April, up 205%. Veeva Systems (VEEV) is giving its AI agents away free inside Vault CRM through 2030, which is the single most revealing data point in the set: Veeva does not need to monetize AI, because Veeva’s moat is the validated record, not the intelligence applied to it.

Aschenbrenner thought AI would eat the applications. Instead, the applications are selling AI as an upsell on top of a subscription the customer cannot afford to cancel – because it costs nothing compared to the value it delivers.

These software companies are computing tollbooths: they’re what enterprises pay to implement compute. And as compute gets cheaper, they will generate vastly more revenue, not less. The proof is sitting there in their earnings and cash flow: they’re riding on lower and lower cost of compute, which makes their business more and more efficient.

• Adobe: 36.6% operating margin, 35.6% return on invested capital (“ROIC”), capital expenditure of $179 million on $23.8 billion of revenue – 0.75% – and $9.85 billion of free cash flow (“FCF”)
• Veeva: 28.7% operating margin, 68.5% ROIC, a 44.3% FCF margin, and effectively no capex at all
• Salesforce: $41.5 billion of revenue, roughly $14.4 billion of FCF, capex of about 1.4% of revenue, and $72.4 billion of contracted backlog
• Intuit (INTU): $18.8 billion of revenue, roughly $6.1 billion of FCF, $124 million of capex

Veeva earns 68 cents a year on the dollar. And invests nothing in growing its business.

Adobe currently trades at about 11x trailing earnings. Salesforce at about 13x. Intuit at about 14x. These are the multiples of a dying industry applied to businesses converting a third to nearly half of every revenue dollar into free cash.

This enormous mispricing was manufactured by people who, like Aschenbrenner, believed these businesses were doomed. But they aren’t.

And that’s not all.

Aschenbrenner assumed that because a technology is transformative, the capital that builds it will earn its cost.

There is no relationship between those two things. In fact, it’s more likely not to be true.

Leo’s own essay contains the tell:

Over the past year, the talk of the town has shifted from $10 billion compute clusters to $100 billion clusters to trillion-dollar clusters. Every six months another zero is added to the boardroom plans.

He wrote that as a bull case. But it isn’t. That is a recipe for a financial disaster.

• Amazon (AMZN) spent $131.8 billion of capex in 2025 against $139.5 billion of operating cash flow. That is 94.5% of everything the business generated poured back into the ground, in a single year. Its 2026 capex guidance is $220 billion.
• Alphabet (GOOGL) spent $91.4 billion in 2025, 55.5% of operating cash flow, and guides to $195 billion to $205 billion this year
• Meta Platforms (META) spent $72.2 billion, 62.4% of operating cash flow, and guides to $125 billion to $145 billion
• Microsoft spent $115.9 billion in the fiscal year that just ended, against $182.9 billion of operating cash flow. Capex was 34.9% of revenue, up from 18.1% two years earlier. FCF fell to $67.0 billion from $74.1 billion in fiscal 2024, on revenue that grew by more than a third over the same span. Microsoft is running harder and generating less cash. That is what a huge capital cycle does even to the best business in the world.
• Moody’s (MCO) projects hyperscaler capex of $785 billion in 2026 and close to $1 trillion in 2027, funded in part by roughly $175 billion of debt issuance this year. Where will the money come from?
• Oracle (ORCL) had fiscal 2026 capex of $55.7 billion, FCF of negative $23.7 billion, capex at 82.6% of revenue, long-term debt up from $76.3 billion to $124.7 billion, and $248 billion of future data-center lease obligations not yet on the balance sheet
• CoreWeave (CRWV) had $5.13 billion of 2025 revenue, $14.9 billion of capex, negative $7.25 billion of FCF, net debt at 8.1x EBITDA, term loans at 11% to 15%, a weighted-average short-term borrowing rate of 12.3%, and a $1 billion private placement in April 2026 at 9.75%.

Meta’s Hyperion campus in Louisiana is financed through a special purpose vehicle in which Blue Owl Capital (OWL) holds 80% and Meta holds 20%, funded by $27.294 billion of senior secured notes at a 6.581% coupon maturing in 2049. The noteholders have no pledge on the physical data center. Their credit is Meta’s promise to pay rent starting in 2029, plus a residual value guarantee – that’s $27 billion of debt, secured by a lease, sitting off the balance sheet.

And like the EU’s finance minister explained two decades ago…

When it gets serious, you have to lie.

Microsoft extended server useful lives from three years to four, then to six, adding about $3.7 billion to fiscal 2023 operating income. Alphabet did the same, adding about $3.0 billion. Amazon added about $2.5 billion in 2024. Meta added $2.59 billion in 2025. Oracle added $573 million. Every one of those is a non-cash increase in reported profit produced by an assumption about how long a chip stays useful.

It’s a lie.

But not everyone is lying. Effective January 1, 2025, Amazon shortened the useful life of a subset of its servers and networking equipment from six years back to five, citing, in its own 10-K, “the increased pace of technology development, particularly in the area of artificial intelligence and machine learning.” That cost it $1.4 billion of additional depreciation and $1.0 billion of net income.

Amazon is the operator with the longest and hardest-won experience running data centers at scale, and Amazon is the one telling you the hardware wears out faster than the schedules assume.

Tell me what you think of today’s Daily Journal: porterstansberrydirect@gmail.com

Good investing,

F. Porter Stansberry
Stevenson, Maryland

Inside Today’s Issue

• Essay: Leopold Was Wrong
• GenZ “Invests” In Sports
• Consumers Tap Out
• Uncle Sam Keeps Spending
• Chart Of The Day… BWX Technologies (BWXT)

Editor’s note: Today, Porter begins part one of a three-part series on the implosion of Leopold Aschenbrenner’s Situational Awareness fund – and the key reason behind its failure that everyone seems to be missing… We will publish the next Journal this week on Wednesday.

Leopold Aschenbrenner lost $30 billion (67%) in a month.

The consensus post-mortem – from The Wall Street Journal to comments on X – is that the young man who ran the Situational Awareness fund used 4-to-1 leverage on concentrated positions and got carried out. While that is true, it does not convey any useful information. Leverage is certainly the reason Leopold lost so much, so quickly. But it is not the reason he lost. Leverage is merely a magnifying glass. It doesn’t pass judgment.

The reason his fund was doomed was because he’s wrong. And no one, anywhere, has explained why Leopold Aschenbrenner was wrong.

On the morning of Thursday, July 30, before the opening bell, Aschenbrenner’s Situational Awareness sold its entire public stock portfolio – the long side and the short side together, roughly $16 billion of it – to Ken Griffin’s Citadel in a single block trade.

That night, Aschenbrenner wrote to his limited partners. Net performance for the month, unaudited: down 67%. Net performance for the year: still up 80%.

We let you down this month. We came closer to permanent capital impairment than is acceptable to us.

Six days earlier, on July 24, he had written a different letter. That one reported a 439% net return for the first half of 2026, described the selloff in artificial intelligence (“AI”) stocks as one of the best buying opportunities since early 2025, and invited his investors to wire more money starting August 1. It closed with a postscript:

At times we call out opportunities that seem like a particularly good time to add funds, if you have been waiting for one.

Assets that stood near $45 billion at the start of July finished the month around $10 billion, and roughly half of what remains is a single illiquid private stake in Anthropic.

Leopold is 25 years old. He graduated from Columbia University at 19, as valedictorian. He worked at the FTX Future Fund from February to November of 2022, then joined OpenAI’s Superalignment team, then was fired in April 2024. Two months after the firing, he published a 165-page essay called “Situational Awareness: The Decade Ahead,” raised $225 million from Patrick and John Collison, Nat Friedman and Daniel Gross, and started a hedge fund. He had never managed money before.

Situational Awareness was constructed to express exactly two convictions.

1. The physical build-out of AI – the chips, the memory, the power, the data centers, the neoclouds – was the trade of the decade. The fund’s disclosed long positions read like an inventory of the second derivative of the AI boom. Bloom Energy (BE), fuel cells for data centers. Sandisk (SNDK) and Micron Technology (MU), memory. CoreWeave (CRWV) and Nebius Group (NBIS), rented compute. IREN (IREN), Core Scientific, Applied Digital, Riot Platforms, CleanSpark, Bitfarms, Bitdeer – Bitcoin miners converting their substations into AI compute.

2. Application software was going to be destroyed by AI. Not disrupted. Obliterated.

Leo explained why on Dwarkesh Patel’s podcast, in June 2024:

I’m so bearish on the wrapper companies because they’re betting on stagnation. They’re betting that you have these intermediate models and it takes so much schlep to integrate them. I’m really bearish because we’re just going to sonic boom you. We’re going to get the unhobblings. We’re going to get the drop-in remote worker. Your stuff is not going to matter.

That was the whole thesis. Buy the compute. Short the stuff that runs on the compute.

By CNBC’s reporting, the short leg included Adobe (ADBE). A 13F does not disclose short stock. It does not disclose swaps. We only know about Adobe because reporters were told… but you can look at the tape and, when you do, it’s clear that Leo was short software in a major way.

Between the June 30 close and the July 29 close – the last session before the block trade cleared his shorts – the two sides of his portfolio did this.

The longs:

• Sandisk: down 55.32%
• Nebius: down 46.33%
• Bloom Energy: down 45.90%
• CoreWeave: down 38.90%
• Micron: down 35.98%
• IREN: down 35.91%

The shorts, over the same 20 sessions:

• Workday (WDAY): up 37.24%
• Adobe (ADBE): up 28.49%
• Intuit (INTU): up 27.64%
• Salesforce (CRM): up 20.25%
• Veeva Systems (VEEV): up 17.15%

Over that same window, the Invesco QQQ Trust fell 10.14% and the SPDR S&P 500 ETF Trust fell 2.32%. Nvidia – the supposed epicenter of the AI trade – fell 5.04%, and finished the full month of July up 0.33%.

This was not an AI crash.

The S&P 500 stayed near its record throughout. This was a violent rotation out of the leveraged, capital-hungry, second-derivative end of the AI complex and into the profitable, cash-generating, asset-light end of it. Which is to say: the market rotated out of exactly what he owned and into exactly what he was short.

Then there is Microsoft (MSFT).

Microsoft closed at $390.54 on Wednesday, July 29. It closed at $451.10 on Thursday, July 30 – that is a gain of 15.51% in a single session on 110.2 million shares, against a July average of 37.1 million. Yes, Microsoft reported its fiscal Q4 after the close on July 29. But the results were nothing out of the ordinary. Revenue came in at $90.00 billion against an $87.62 billion consensus – a small 2.7% beat. Earnings were $4.74 per share against $4.21. It was a good quarter. Not a historic one. A 2.7% revenue beat does not add roughly $450 billion of market value to the most widely owned company on Earth in six and a half hours.

The reason Microsoft was up 15% is extremely important. Leo blew up quickly because of leverage. But he failed because he is simply wrong.

Aschenbrenner’s software thesis rests on a single premise: that a company selling enterprise software is selling the work the software performs. If a model can perform that work, the company is worth nothing.

That premise is what a very smart 25-year-old engineer believes. It is not what anyone who has ever run a business believes.

Nobody buys Microsoft because Microsoft writes the best code. They buy Microsoft because Microsoft is the rail everything else runs on. Active Directory is where your employee identities live. Excel is where your board deck’s numbers come from. Teams is where the compliance-recorded conversation happens. Azure holds a FedRAMP High authorization and Department of Defense Impact Level 5 clearance, which means a defense contractor cannot casually swap it out for something cheaper without re-clearing the entire stack with the government.

Veeva Systems runs the customer relationship management and regulatory document systems of the pharmaceutical industry. Nineteen of the top 20 biopharmaceutical companies use Veeva’s regulatory information management platform. Those systems are validated under GxP – the good-practice quality regulations that govern anything touching a drug – and 21 CFR Part 11, the Food And Drug Administration’s (“FDA”) rule for electronic records and signatures. Every major release is formally qualified. When an FDA inspector arrives, the audit trail in that system is the company’s defense.

You cannot replace that with a model that is very good at writing code. You would have to re-validate a decade of regulated records, in front of a regulator, on a system with no track record, to save a fee that rounds to nothing compared with the cost of building a new drug.

How small a fee? Veeva’s licensing runs somewhere between roughly $1,800 and $6,600 per sales representative per year. A fully loaded pharmaceutical sales rep costs the employer between $134,000 and $219,000 a year. The software is 1% to 5% of the cost of the person using it.

Microsoft raised the price of a Microsoft 365 E3 seat from $36 to $39 per user per month on July 1 of this year, and E5 from $57 to $60. Add Copilot at $30 and a fully loaded E5 seat costs $1,080 a year. Against a knowledge worker costing $120,000 all-in, that is roughly 1% of the employee.

This is the part the compute maximalists cannot see. These companies are not selling labor. They are selling the rails on which labor runs, at a price so far below the value created that the buyer never bothers to negotiate hard, and with switching costs so high that the buyer could not leave even if he wanted to.

Do people try to leave? Constantly. And they almost always fail. (Ask me how I know!)

Panorama Consulting Group tracked studies of enterprise resource planning replacements and found average cost overruns at 189% across industries. Gartner projects that by 2027, more than 70% of recently implemented ERP (enterprise resource planning) initiatives will fail to fully meet their original business goals. Ripping out a core enterprise system is one of the most reliably disastrous things a large company can attempt, and it was true before anyone had heard of a transformer model.

The incumbents are not being disintermediated by artificial intelligence. They are selling it!

Next, I’ll explain how Aschenbrenner went terribly wrong. He thought AI would eat the applications. Instead, the applications are selling AI as an upsell on top of a subscription the customer cannot afford to cancel.

Tell me what you think of today’s Daily Journal: porterstansberrydirect@gmail.com

Good investing,

F. Porter Stansberry
Stevenson, Maryland

Inside Today’s Issue

• Essay: The Day “Safe” Stopped Feeling Safe
• An Important Market Warning Sign Gets Louder
• Axon’s New Deals
• Trouble At Broadcom
• Chart Of The Day… Franco-Nevada (FNV)
• Today’s Mailbag

Editor’s note: Today, Porter turns the Daily Journal over to Matt Tuttle, CEO of Tuttle Capital Management and portfolio manager of the Porter & Company Porter Portfolio Index ETF (PCPP).

It was April 8, 2025, about 20 minutes after the market open.

I’d already made my peace with the equity screen on my desk. The S&P 500 had given up 10.5% in the two sessions after U.S. President Donald Trump’s “Liberation Day” tariff announcement, bad enough to be the fifth-worst two-day stretch in 75 years.

And then there was the other screen.

The long bond was falling too. Not holding… not lagging… but plummeting. According to the conventions of portfolio management sold by Wall Street, a free-falling long bond while stocks were collapsing was precisely what was not supposed to happen.

By the end of what was a very long week, the 30-year Treasury closed at 4.85%, the sharpest weekly jump in long-dated yields since 1982. (The way a bond works is that when its yield rises, the price falls.)

This was big trouble for anyone with a classic 60/40 stocks/bonds portfolio. The airbag didn’t deploy because bonds – the asset that’s generally supposed to go up, when stocks go down – was going down too.

I’d seen this movie before.

Three times in 17 years, the hedge – the asset that was supposed to be the ballast – didn’t hedge.

In 2008, during the Global Financial Crisis, Treasuries held. Stocks lost 37%, long Treasuries returned more than 20%. What failed, though, was everything else that had sold as diversification: corporate bonds, mortgages, credit funds, alternatives. They fell together at the exact moment managers expected they would provide a cushion for stocks by not marching to the same drummer.

In 2022, the hedge itself failed. Pandemic supply shocks, stimulus spending and the energy spike after Russia invaded Ukraine drove inflation to a 40-year high of 9.1%. The Fed raised rates 425 basis points in nine months. (A basis point is one hundredth of a percentage point, so that’s a 4.25-point increase.) Few things are more challenging for a long bond than rising rates.

The standard 60/40 portfolio – for decades the default recipe in retirement planning – lost roughly 17.5% for the 2022 calendar year, as measured by Morgan Stanley Investment Management using a blend of 60% U.S. equities and 40% U.S. Treasury bonds. It was the worst year since 1937. And stocks weren’t doing the damage alone: long Treasuries fell harder that year than at any point in the recorded data.

Then came, as I mentioned, April 2025, when both equity and bond screens went red at once.

Each time the classic hedges failed, we were told it was an anomaly.

But three anomalies in 17 years starts to look less like bad luck, and more like a design flaw.

I reached that conclusion the expensive way, one drawdown at a time. Porter reached it years earlier, and he published his thoughts for the world to read.

He talked about the erosion of the dollar, and the dark and inevitable arithmetic of a government that has not stopped borrowing. He called it the bond trap: the “safe” asset had quietly become one of the riskiest things you could own. He’d been writing that years before the charts made it obvious.

That’s why, when Porter’s team called late last year about turning those ideas into an exchange-traded fund – an ETF – it was a quick and easy answer.

So how does the asset that the industry treats as its safest… become one of its riskiest?

How the 30-year Treasury works: Hand the government $1,000 for 30 years. You get a fixed coupon (that’s the interest) every six months, and then you get your principal back 30 years later.

Two things decide what that promise is worth: What those dollars will buy in 2056, and what rate other buyers demand for the same promise in the meantime. Because if they demand a higher return, the bond that you own will be worth less.

So let’s look at the borrower. The United States government ran a federal deficit of roughly $1.8 trillion in its 2025 fiscal year – 5.9% of GDP, against a 50-year average of 3.8% – plus trillions more in unfunded Social Security and Medicare promises.

In my view, there is no politically viable tax increase, and no realistic spending cut, that could close a gap that size. Historically, gaps of this kind have often been narrowed by inflation.

In other words, dollars get created, each buys a little less, and the debt gets repaid in money worth a whole lot less in real terms than the money borrowed.

That isn’t a hedge. A hedge is supposed to pay when your stocks don’t. Inflation, though, takes both.

So if the long bond isn’t reliably the defensive part of a portfolio, what else might do that job?

Porter’s answer, and the part of his framework I had the hardest time arguing with, is to hand that job to property and casualty (P&C) insurance stocks. Those are the snoozefest (for anyone who’s not an investor, at least) companies that write your home and auto coverage, and pay out when a tree lands on a roof or you get in a fender bender.

A savvy insurer who knows how to price risk could be paid to hold its bonds. Premiums arrive today, claims are paid out years later – and the insurer can retain what it earns on the money in between. For example, Warren Buffett’s Berkshire Hathaway (BRK) ran roughly $176 billion of other people’s money that way in 2025.

Insurance companies also choose what to own and, for example, shorten maturities (to reduce volatility and downward price movement) when the rate environment is dangerous. A bond fund, though, holds whatever its index dictates, all the way down.

Of course, an insurance company that isn’t good at understanding the risks it’s taking on will wind up paying out more than it takes in, which doesn’t do investors any good. That’s why in the “bond” slice of the new fund I’ve created with Porter, we screen for underwriting quality before anything else.

PCPP is a passive fund. It seeks to track the investment results, before fees and expenses, of the Porter & Co. Porter Portfolio Index — a rules-based, multi-asset index. In the Porter & Company Porter Portfolio Index ETF (ticker symbol: PCPP), no holding is chosen by discretion on the day. The rules are written in advance.

A quarter of the portfolio goes to P&C insurance stocks, drawn from Porter & Co.’s analysis that’s screened for size, business mix, and historical return consistency. The top 20 that clear those bars go in, weighted so that historically stronger underwriters receive larger weights. No name accounts for more than 10%, and the index is rebuilt once a year.

Nobody gets to fall in love with a name. Porter & Co. builds the index. As the adviser, we can’t change it.

The other three sleeves of the fund operate the same way. You can read the full framework and the prospectus at porterandcofunds.com.

In my opinion, “safe” doesn’t suggest an investment that doesn’t move.

The question worth asking is whether the thing you bought as a hedge behaves the way you expected – during a week that the equity side is down double digits, and you’re looking at two red screens.

By that definition, the long bond may have stopped being safe some time ago.

From what I’m seeing, most portfolios haven’t gotten the memo.

Matt Tuttle, CEO/CIO
Tuttle Capital Management

P.S. Every morning before the open, I publish The Daily HEAT, my framework applied to whatever the market is doing that day. It’s free. Sign up here.

Tell us what you think of today’s Daily Journal: porterstansberrydirect@gmail.com

Porter & Co. Market Snapshot

Porter & Co. Top Positions

Inside Today’s Issue

• Essay: Target’s Tariff Refund Isn’t A Turnaround
• Evaporating Dividend Yields
• Down Days For Walmart
• How Bessent Played With Bond Yields
• Chart Of The Day… Veeva Systems (VEEV)
• Today’s Mailbag

Last September, I explained why I think Target (TGT) will end up in bankruptcy within five to seven years. Since then the stock is up 85% – which in the minds of most readers will surely lead to the conclusion that I am wrong. But am I?

Here’s my thesis.

Target was the premier retail shopping experience for roughly two decades. The “Target run” was a weekend habit for many middle-class and upper-middle-class consumers. Target combined outstanding retailing with competitive prices, which won it a higher operating margin than other retailers. Those profits powered its constant expansion and brand marketing, which created a valuable national brand. For a very long time, this was more than good enough to hold off competitive threats from Costco Wholesale (COST), Walmart (WMT), and Amazon (AMZN). But, at the heart of Target’s success was an elevated, in-person shopping experience.

Then COVID happened.

Consumers’ shopping habits changed… dramatically. Upper-middle-class customers stopped coming to the store, at first because of masks and now because delivery apps save so much time. Additionally, in many areas, Target’s stores became rundown and filled with both low-class employees and low-class customers. As traffic fell, margins collapsed.

The shopping app trend continues: DoorDash grew revenue 35.6% in its June quarter, to $4.45 billion from $3.28 billion. Instacart grew 14.1%, to $1.04 billion from $914 million. The affluent household now pays a fee to avoid going to Target.

Target lost the customer who made it profitable.

Key stats from Target’s fiscal 2021 peak to its lows in fiscal 2025:

• Revenue: $106.0 billion to $104.8 billion, down 1.2% in nominal dollars across four years of inflation
• Operating income: $8.95 billion to $5.12 billion, down 42.8%
• Operating margin: 8.4% to 4.9%
• Diluted earnings per share: $14.10 to $8.13, down 42.3%
• Free cash flow after capital spending: $5.08 billion to $2.83 billion

The company’s product mix also demonstrates this key demographic shift in its customer base. Since 2022 (full fiscal year 2022 vs fiscal year 2026):

• Home furnishing and décor: $20.3 billion to $15.6 billion, down 22.9%
• Hardlines: $18.6 billion to $15.8 billion, down 15.1%
• Apparel and accessories: $17.9 billion to $15.7 billion, down 12.2%
• Food and beverage: $20.3 billion to $24.1 billion, up 18.9%

Target replaced its highest-margin customers with people looking for cheap groceries.

But that’s not what today’s headlines claim. The company reports that operating margins have soared – jumping from 5.2% to 9.6% in the latest quarter.

When I saw those headlines, I laughed. There’s no way to increase operating margins when you’re in the middle of a turnaround that requires you to vastly improve the shopping experience while lowering prices. Target is spending heavily to improve its stores and it’s lowering its prices. How could margins improve?

Target received $994 million of refunds on tariffs last quarter. Getting a billion dollars certainly helps! The company chose to book this income as a reduction of cost of sales. Cost of goods sold therefore fell 1.7% while sales rose 5.3%, in part because of inflation.

The increase in operating margins was not brilliant merchandising. It was a one-time windfall and an accountant with a valuable imagination.

Target’s headline result was: 33.7% gross margin, up from 29.0% a year ago; a 9.6% operating margin against last year’s 5.2%.

What were the numbers, absent the one-time windfall?

Let me show you the 2Q results from 2024 and 2025. (Fiscal 2025’s Q2 was the liquidation quarter, when Target cleared excess inventory and cancelled orders. It’s not indicative of the company’s normal business. Fiscal 2024’s Q2 is the last one that ran normally.)

Target has a new chief executive, an “acceleration office,” 30 new stores, 130 remodels, and price cuts on more than 10,000 items. What’s changed? After two years, costs continue to grow – Selling, General, And Administrative (“SG&A”) is now 21.6% of revenue – and profits continue to fall – operating margin is 5.9% down from 6.4%, net income is $1.12 billion down from $1.19 billion.

Target went from 1,926 stores and 243.3 million square feet to 1,995 stores and 250.5 million square feet, while merchandise sales per square foot fell from $430 to $410, down 4.6% before inflation – 69 additional stores produced less sales per foot.

Another sign of brand decline: credit card profit sharing, the fee Target collects on its co-branded card, fell from $710 million to $522 million. Fewer affluent cardholders spending on credit.

Target has seen a 3.6% traffic increase. Two quarters of rising traffic is evidence that something is changing. The numbers tell me it’s more people responding to Target’s discounting because gross margin and operating margin continue to decline (compared to a real baseline, not a liquidation quarter).

Target is buying traffic with lower prices. It has reduced prices on more than 10,000 items in the last year. Average transaction price was flat this quarter and fell 0.4% for the full fiscal year, despite inflation above 3%.

Target is completing its conversion into a discount chain — more customers, cheaper carts, thinner margins, and a store experience that pushes the remaining affluent shopper toward an app.

Competing on price means competing with Walmart, which has far greater scale, and Costco, which competes with less markup, and Dollar General, which has lower cost per square foot.

Target carries the cost structure of a lifestyle retailer and the assortment of a discounter. That’s the Kmart strategy. And it doesn’t work.

There’s one wildcard that could enable Target to continue to tread water for longer than I expect.

Target sells advertising (Roundel) to its vendors. The incremental cost of those advertising dollars is close to zero. It also has Target Plus – a third-party marketplace where Target books a commission. And Circle 360 is the paid membership program at Target. Management reported Roundel gross billings were up nearly 20%, Target Plus merchandise volume was up more than 40%, and Circle 360 membership revenue up over 40%.

Target discloses advertising revenue in its annual filings:

• Fiscal 2023: $404 million
• Fiscal 2025: $649 million
• Fiscal 2026: $915 million

These are impressive numbers. But advertising is only 0.87% of total revenue.

To add one percentage point of operating margin, Target needs $1.05 billion of incremental operating profit. Advertising would have to more than double, at zero incremental cost, to recover a single point of the three and a half points of operating margin lost since fiscal 2021.

It’s a very important part of its business and it’s something that Kmart didn’t have. Is it enough to save the business? I don’t think so.

Capital spending is up 30% this year to $5 billion for the year. Target continues to invest heavily into its core retail business even though it continues to report falling sales per square foot. Shareholders are funding a bet that remodeled stores attract a customer who has already installed a shopping app and won’t go Target again. That strategy isn’t working: Target has added 69 stores over the last four years. And sales per square foot continue to fall.

Frankly, I think these decisions and the management’s handling of the tariff refund accounting show they’re delusional. But if you doubt me, just consider that they are also saying Target will resume repurchasing its own shares in the back half of this year.

Operating cash flow over the last 12 months was $8.72 billion. Remove the $994 million refund and it is $7.73 billion. Spend the promised $5 billion of capital and pay the $2.07 billion dividend, and $661 million remains for the entire year.

What Target must do is rebuild its brand, its merchandising, and its shopping experience to recapture its core, high-margin user. So far it hasn’t found that formula. And with so much competition from Costco, Amazon, Walmart, and Dollar General I don’t believe that’s possible.

Tell me what you think of today’s Daily Journal: porterstansberrydirect@gmail.com

Good investing,

F. Porter Stansberry
Stevenson, Maryland

P.S. For 50 years, market predictions offered up at The New Orleans Investment Conference have become market reality. This year, Porter has been invited to address the prestigious event, taking place October 28 to October 31. To learn more about the legendary conference and to attend, follow this link…

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Inside Today’s Issue

• Essay: Follow The Flow Of Money
• The High Cost Of Diesel
• Private-Credit Cockroaches
• More 52-Week Lows Than Highs
• Chart Of The Day… Presidential Debt
• Today’s Mailbag

Editor’s note: Today’s the final essay in a multi-part series on how the massive spending into the AI buildout will play out over the economy and for the companies involved. Please see the first essay here, the second essay here, the third essay here, the fourth essay here, and the fifth essay here.

Here’s Porter now…

How do I know the funding and the buildout won’t continue? Because this entire bubble was never about technology. The bubble around the artificial intelligence (“AI”) buildout was caused, like all financial bubbles, by a corruption of the money supply.

The railroad boom of 1865-1873 was fueled by the paper money of the Civil War. The telecom bubble of 2000 was fueled by the Federal Reserve’s response to the Russian default and fears about Y2K. And, of course, the mortgage bubble of 2008 was fueled by the Fed’s aggressive response to 9/11 and the “War on Terror.”

The AI bubble is a direct result of the Federal Reserve’s response to COVID. Our central bank created an unimaginable amount of new money – roughly $7 trillion.

By late 2021, the money market funds that received most of this cash couldn’t find enough safe, short-term places to put it. So the Fed opened up what amounts to a giant parking lot for cash. It’s called the reverse repo facility (“RRP”).

Don’t let the jargon fool you. This is simply the government printing money and handing it out to favored financial institutions.

Technically, it works by a money market fund depositing its cash to the Fed overnight. (Note: there’s no reason the Fed, which can create as much cash as it wants, would ever need to borrow money from a money market fund.) The Fed then gives the fund a Treasury security as collateral for the night. The next morning the Fed gives the cash back plus a tiny amount of interest. It’s called “reverse repo” because from the Fed’s point of view it’s the reverse of a normal repo – the Fed is borrowing the cash rather than lending it. Once again – as with neocloud, which I wrote about on Monday – when something is called a made-up word that has no actual meaning in the English language, beware.

With the Fed handing out money for nothing, it was no surprise that the RRP “parking lot” filled up fast. At its peak in December 2022, the RRP held about $2.5 trillion in money market fund cash.

And that money is what has been powering the entire AI bubble.

Let me show you what happened.

Early in 2023, the interest rate on Treasury bills rose above the rate the Fed was paying on RRP cash. That happened because the Fed was responding, finally, to the massive inflation their policies and the government’s massive deficits had caused.

Money market funds are legally required to seek the best safe yield they can, so as interest rates rose, they pulled cash out of the RRP and bought T-bills instead. This happened continuously from mid-2023 through October 2025. Roughly $3 trillion of cash came out of the RRP over that period – from $2.5 trillion at peak down to essentially zero by October 2025.

As you’ll see below, what happened to this capital as it entered the private financial system is complicated. But all you have to know is that from mid-2023 until last October, trillions in capital flooded into our financial system. And that’s what’s driven equity valuations higher and higher, and that’s what’s funded the entire AI buildout.

The key thing to know is this: that money is now all spent.

Our private financial system works primarily on two tiers. Money market funds (when they can’t get a completely free ride from the Fed) lend cash to primary dealers (the biggest banks). The primary dealers relend cash to everybody else: hedge funds, private credit funds, real estate financing vehicles, and increasingly, the AI-capex financing engine.

When the RRP started draining in 2023, the money that came out went into T-bills at first. But it didn’t stay there. Through private repo lending, it funded the primary dealers (the big banks). And because the big banks now had an enormous amount of cheap short-term cash coming in, they lent out more and more to non-bank borrowers. Why? Because trillions in capital had to land somewhere in only about two years.

Non-bank is finance jargon for any lender or credit institution that isn’t a chartered bank. It includes hedge funds, private credit funds, private equity firms, mortgage lenders that aren’t banks, insurance companies, pension funds, real estate investment trusts, business development companies, structured product vehicles, and so on.

Collectively, they are called the “shadow banking system” because they perform banking functions – they extend credit – but they don’t take insured deposits and don’t have direct access to the Federal Reserve’s liquidity facilities.

The shadow banking system has grown enormously over the last 15 years. It’s where most private credit lending lives – Blue Owl Capital (OWL), Apollo Global Management (APO), Ares Management (ARES), Blackstone (BX), and KKR (KKR). It’s also where most of the AI-capex financing sits. Not the equity – that’s on the hyperscalers’ balance sheets – but the debt behind the data centers, purchases of the high-speed GPU chips, and neocloud operators. That financing gets warehoused in the shadow banking system and eventually distributed as securitized paper, which, hey, why not, Moody’s says it’s AAA!

The shadow banking system funds itself largely through repo. It borrows short-term cash from the primary dealers, secured by whatever collateral it holds – Treasuries for the most part, but also mortgage bonds, corporate loans, structured products rated AAA. That’s what’s so valuable about that Moody’s rating.

As a result, from mid-2023 through October 2025, both sides of the plumbing grew at the same time.

The primary dealers’ repo funding grew because money market funds pushed more and more cash into it as they pulled out of the RRP. Non-bank lending grew because the primary dealers, flush with all that new cheap cash, extended it out to the shadow banking system, which used it to fund private credit, hedge fund leverage, and – most importantly for our purposes – the entire ecosystem of data center loans, GPU-backed term loans, and neocloud financings.

Both grew because the same exogenous force – the RRP draining – was pushing money into both simultaneously. It looked like the private credit system was generating its own growth out of business demand. It wasn’t. It was being lifted from underneath by the parking lot emptying.

By October 2025, the RRP was effectively empty. The parking lot was drained. The COVID “credit card” was tapped out.

From that point on, the financial system became zero-sum. Any new dollar of primary-dealer repo funding has to come from somewhere else in the system. It can’t come from the RRP anymore because the RRP is empty.

Money market funds have a finite amount of cash to lend. If they lend more of it to primary dealers in repo, they have less to lend elsewhere. And the primary dealers, if they want to keep their own repo books growing, have to pay higher interest rates to attract that cash. Higher repo rates raise the shadow banking system’s funding cost. Higher funding costs mean the shadow banking system can either extend less credit or charge borrowers more.

The mechanical result: if primary dealer repo grows, non-bank lending shrinks by approximately the same amount. The two lines that had been rising together for three years – bank repo and non-bank credit – now move inversely.

That’s what’s happening. The correlation flipped in October 2025 and has stayed flipped. Repo went from a rising tide that lifted both dealer and shadow-bank balance sheets to a zero-sum competition between them.

Nvidia (NVDA) saw this coming and raised $25 billion to survive what’s about to happen. CoreWeave’s (CRWV) most recent financing tanked because of the impact of a zero-sum financial world.

Shadow banking is being squeezed. The most-leveraged, weakest-collateral, most-concentrated shadow bank borrower – a neocloud with GPU collateral serving AI customers – gets repriced first.

But this is only the beginning.

The two-year Treasury to Fed Funds interest rate spread sits at +50 basis points – the same level reached in the second halves of 2001, 2008, and 2021. Emerging-market inflows just posted one of the largest sudden stops on record. Real U.S. personal income is falling at recession pace. Year-to-date household-survey employment losses exceed both 2001 and 2008. Prime-age labor-force dropouts are at ex-COVID records. Except for mortgages, credit delinquency rates are at crisis highs.

What ends a capex boom? It eventually runs out of money.

Jesse Livermore described what happens when a capex boom runs out of money in Edward Lefevre’s book Reminiscences Of A Stock Operator.

Finally there came the awful day of reckoning for the bulls and the optimists and the wishful thinkers and those vast hordes that, dreading the pain of small loss at the beginning, were now about to suffer total amputation – without anesthetics. A day I shall never forget, October 24, 1907… No money anywhere, and you can’t liquidate stocks because there is nobody to buy them. The whole Street is broke at this very moment.

Livermore made $1 million on that day. He saw his signal to start shorting when the railroads began advertising equity offerings that had earlier and earlier execution dates and accepted payment in installments.

He recognized a death struggle for capital.

Will you?

Tell us what you think of today’s Daily Journal:porterstansberrydirect@gmail.com

Good investing,

F. Porter Stansberry
Stevenson, Maryland

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Inside Today’s Issue

• Essay: No More Free Money
• Bonds On Fire
• Traders Short, Insiders Long
• The Home Depot (HD) Reports Earnings
• Chart Of The Day… Axon Enterprise (AXON)
• Today’s Mailbag

Today is Porter’s fifth essay in a multi-part series about the enormous financial risks of the ongoing artificial intelligence (“AI”) bubble. Please see the first essay here, the second essay here, the third essay here, and the fourth essay here.

Hyperscaler free cash flow is on track to fall roughly 50% from its late-2024 peak through early 2026, and to turn negative for the first time in 2027.

That means the entire bubble will depend on credit by the end of this year.

Microsoft (MSFT), Alphabet (GOOG), Amazon (AMZN), Meta (META), and Oracle (ORCL) have added roughly $350 billion of on-balance-sheet debt in five years, plus $1.1 trillion of off-balance-sheet data-center lease commitments and GPU supply deals – $1.65 trillion of hidden obligations across five names.

Morgan Stanley estimates the sector faces a $1.5 trillion external financing gap against $2.9 trillion of capex through 2028.

Where will the money come from…? Some of it will come from Nvidia’s (NVDA) new $500 billion credit fund. And even more will come from the public.

Pay attention: This is where the artificial intelligence (“AI”) buildout goes from something that will threaten tech companies to something that will threaten our entire banking system and our entire economy.

Banks, ever ready to package dodgy debt for other people to hold, have begun operation “AI bag holder.”

Outstanding data-center debt securitization issuance grew from $4 billion in 2020 to $61 billion year-to-date 2026. Barclays projects $180 billion in securitizations by year-end 2028 (!).

How will so much AI data-center debt possibly be sold to investors? By regulatory arbitrage of course! How do you make dodgy debt attractive to the financial system? By “proving” to the regulators that it’s risk-free.

On February 11, 2026, $500 million of Compass Datacenters’ $830 million asset-backed security (“ABS”) became the first data-center securitization rated AAA by Moody’s. Pricing: +120 basis points over Treasuries.

Keep in mind, Moody’s only began rating the sector in September 2025.

Thus, on a credit channel that’s scaled 15x in six years, using a rating methodology that’s about a year old, Moody’s delivered its first AAA rating just as the bubble reaches its zenith.

Where have we seen this before? The AAA-rated collateralized debt obligation (“CDO”) of the AI era is here!

And regulators just gave the AI credit machine the same free pass that created the entire mortgage fraud bubble. On July 29, 2026 – the same day CoreWeave (see Friday’s Journal) paid an extra 125 basis points to force through its loans backed by fast-processing GPU chips – the Securities And Exchange Commission’s (“SEC”) Office of Structured Finance sent a letter to Latham & Watkins – the law firm representing the case – that will move a trillion dollars of debt.

The staff wrote:

Based on the representations in your letter, we agree that the fixed-income or other securities issued in data center securitizations of the type described in your letter are not asset-backed securities as defined in section 3(a)(79) of the Securities Exchange Act of 1934.

Translation: AI debt isn’t an ABS. So the rules Congress and the SEC wrote after 2008 specifically to prevent another AAA-rated credit blowup do not apply.

Regulation RR’s 5% risk retention – the Dodd-Frank rule (a federal law passed in 2010 to prevent another Global Financial Crisis) that was supposed to force the sponsor of a securitization to keep skin in the game – gone. Regulation AB’s loan-level disclosures – gone. Rule 192’s prohibition on conflicts of interest, the one written to stop the Abacus-style short-your-own-deal trades – gone. Rule 15Ga-2’s pre-sale disclosure of third-party due diligence findings – gone.

The $200 billion of data-center debt Barclays expects to be sold by 2028 will move without any of these investor protections. Put that together with the Moody’s AAA rating and you’ve got the makings of an epic financial bubble – and collapse.

The rating agency that stamped AAA on subprime CDOs is back with a rating methodology less than a year old, on a market that grew 15-fold in six years, issuing AAA on paper the SEC has just exempted from the risk-retention, disclosure, and conflict-of-interest rules that were written to prevent exactly this. This is not a bug in the system. This is the system moving $1 trillion of AI credit onto insurance-company, pension-fund, and bank balance sheets by pretending the risk isn’t there.

History rhymes because leverage rhymes.

Jay Cooke & Company financed the Northern Pacific Railway on the theory it could always sell more bonds to European investors. A Vienna real-estate bust froze European demand in mid-1873. Cooke was left holding 75% of the bonds himself. He declared bankruptcy on September 18, 1873. The New York Stock Exchange closed for 10 days. Eighty-nine of the country’s 364 railroads failed. Eighteen thousand businesses went under. Unemployment reached 14% nationally and 25% in New York City. Rail construction fell from 7,500 miles laid in 1872 to 1,600 miles in 1875.

The AI collapse will be similar. What’s the first domino? Oracle.

Its credit spreads will blow out when its $300 billion of committed revenue disappears and its equity will collapse.

Data-center ABS spreads will widen from 400 to 800 basis points within six months of the first hyperscaler cancellation.

Digital Realty Trust (DLR) and Equinix (EQIX) marks drop 50%.

Regional banks with data-center and office exposure will fail: Zions Bancorporation (ZION), Regions Financial (RF), KeyCorp (KEY), Truist Financial (TFC), and Fifth Third Bancorp (FITB).

Index fund concentration is worse today than it was in March 2000. The top seven S&P 500 stocks are 35% of the index today, versus 18% for Cisco Systems (CSCO), Microsoft, Intel (INTC), and General Electric (GE) at the 2000 top. A 50% to 60% Magnificent 7 drawdown takes the S&P 500 down 35% to 45%.

Treasuries rally… at first. Flight to quality will push the 10-year yield down 75 to 100 basis points. But then the fiscal deficit will soar as capital-gains tax receipts collapse, and unprecedented government borrowing demand will push yields to levels we haven’t seen in decades. Over 10% on the 10-year U.S. Treasury bond.

Unemployment will soar. Direct tech and hyperscaler layoffs of 300,000 to 500,000. Data-center construction workers, utility contractors, and second-order services take another million-plus. Prime-age labor-force participation will fall another 100 basis points.

Then the 2028 election will become a critical referendum on how we’re going to run our country. The Democrats will win. And they will choose socialism.

The CHIPS Act passed in 2022 shelled out $50 billion in federal money to support the semiconductor industry. Expect CHIPS Act 2.0, with federal grants converted to equity. Expect direct Fed liquidity facilities to backstop the data-center ABS and GPU-collateralized-loan markets, resembling the 2008 federal emergency lending programs. Total emergency fiscal envelope, 2026 through 2028: $500 billion to $800 billion, on top of existing deficits.

How to protect yourself?

• Gold, in the long run
• Cash, in the short run
• Regulated utilities that captured the AI power-purchase agreements before the mania
• Tobacco and energy majors with capital discipline
• Biotechnology, because compute cannot destroy a 20-year patent

What to short: Oracle. CoreWeave. Nebius Group N.V. (NBIS). IREN (IREN). Vertiv Holdings (VRT). Digital Realty. Equinix.

Tell me what you think of today’s Daily Journal: porterstansberrydirect@gmail.com

Good investing,

F. Porter Stansberry
Stevenson, Maryland

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Inside Today’s Issue

• Essay: From Him Who Hath Not, Much Will Be Taken
• Hedge Fund Treasury Pile
• What Hyperscalers Don’t Put On Balance Sheets
• Replacing Treasuries With These
• Chart Of The Day… LandBridge (LB)
• Today’s Mailbag

Editor’s note: Today is Porter’s fourth in a series about the enormous financial risks of the ongoing AI bubble. Please see the first essay here, the second essay here, and the third essay here.

It’s no surprise, but investors must remember that when the financial plumbing goes zero-sum, the pain will not be meted out equally. It’s the weakest who will suffer the most.

As Jesus says in Matthew 25:

From him that hath not, even that which he hath is taken away.

Here’s one “hath not” that I’m certain will soon go to zero: CoreWeave (CRWV).

CoreWeave is a “neocloud.”

When a business model is described by a made-up word that has no actual meaning in the English language… buyer beware.

Neoclouds are companies that buy huge quantities of Nvidia fast graphics processing unit (“GPU”) chips, house them in data centers, and rent them out by the hour or the month, primarily to artificial intelligence (“AI”) companies. CoreWeave’s biggest customer (both directly and indirectly through Microsoft) is OpenAI. OpenAI isn’t funded from earnings. It’s funded by investors (who are taking losses) and Nvidia vendor financing.

CoreWeave has a business model only a sadistic mother would love. It is enormously capital-intensive because it must buy the Nvidia GPUs upfront – billions of dollars at a time. But the customer revenue comes in slowly over the following years. It is far from certain whether this future revenue will outpace the rapid depreciation of Nvidia’s GPUs.

And here’s the bigger problem: its collateral is also Nvidia GPUs. GPUs are physical hardware that Nvidia itself has said will be obsolete on a roughly two-year cycle. A GPU-backed loan is a claim on hardware that is losing value from the moment the loan is signed. And the price of these rapidly depreciating assets is likewise correlated to demand for CoreWeave’s services. It’s similar to how car-rental companies all go broke. When there’s a recession and no one is renting cars, the price of used cars likewise collapses.

The same will happen to CoreWeave’s data centers and its GPUs.

On July 29, 2026, CoreWeave came to the leveraged loan market to raise $2.6 billion of new debt secured by its GPUs. But the death scramble for capital had already begun. CoreWeave’s collateral looked shakier than it had 10 weeks earlier, because the market had started digesting the possibility that AI-application revenue wasn’t scaling as fast as the capex commitments.

The loan came to market with initial price talk of SOFR+425 to +450 at 99 OID. Translation: the interest rate would be the standard short-term rate (the Secured Overnight Financing Rate, currently around 4.3%) plus roughly 4.4% on top – so about 8.7% all in – and the buyer would pay 99 cents on the dollar and get repaid at 100, giving them a small extra return over the life of the loan. That’s “price talk” – where the underwriters expected the deal to clear based on pre-marketing to buyers.

The deal actually cleared at SOFR+550 at 97 OID. Translation: the interest rate rose to about 9.8%, and the buyer only paid 97 cents on the dollar and would get repaid at 100 – another chunk of return.

That’s a “125-basis-point flex” – the interest rate had to be widened by 1.25 percentage points from the initial guidance to get buyers to take the paper. The total yield to maturity ended up at 10.44%. And to get even that, CoreWeave had to accept a covenant requiring a 1.35x debt service coverage ratio, meaning if its EBITDA falls below 1.35 times its debt payments, the lenders can take action, aka, force the company into liquidation.

Only 10 weeks earlier, CoreWeave had raised $3.1 billion at SOFR+450, and the deal had actually tightened by 50 basis points during marketing – meaning demand was so strong the underwriters could offer worse terms to buyers. By late July, the same borrower had to offer 125 basis points more, plus a discount on the paper, plus a tighter covenant, just to get the deal done.

The borrower didn’t change materially in 10 weeks. But the credit environment did.

What kills capex booms isn’t poor earnings. Investors, seeing revenue soaring, will always put up more capital.

What kills capex booms is the money running out.

And the money is running out.

In the next essay, I’ll show you exactly what sparked the industry’s desperate scramble for capital, and I’ll show you why the AI buildout is on borrowed time.

Tell me what you think of today’s Daily Journal: porterstansberrydirect@gmail.com

Good investing,

F. Porter Stansberry
Stevenson, Maryland

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