Podcast Summary:

Podcast: Exchanges (Goldman Sachs)
Episode: Fundamentals Still Matter: Lone Pine’s David Craver
Date: February 12, 2026
Host: Tony Pascarello (Global Head of Hedge Fund Coverage, Goldman Sachs)
Guest: David Craver (Co-Chief Investment Officer, Lone Pine Capital)

Episode Overview

This episode of Exchanges features a conversation between Tony Pascarello of Goldman Sachs and David Craver, Co-CIO of Lone Pine Capital, a $19bn investment firm known for its long-term, fundamentals-driven approach. The discussion dives into how market structure has evolved, the longevity and value of fundamental investing, and the impacts of AI on investing and enterprises. Craver also offers insights on his style, approach to risk, and the changing role of hedge funds in the context of private and public markets.

Key Discussion Points & Insights

Changes in Market Structure and Impact on Active Investing

• Rise in Volatility & Valuations

  • “Single stock volatility around events is greater than it ever has been, and it's often not correlated with...the actual qualitative news.” (David Craver, [01:03])
  • Behemoth companies now trade at large market caps and high multiples, a marked change from earlier decades.

• Comparison to Previous Market Regimes

  • “There's almost more rock and roll today than there would have been back then [late 1990s].” (Tony Pascarello, [02:24])
  • Craver agrees, noting both overvaluation and undervaluation exist now, creating “plenty of froth...but also plenty of opportunity.” ([02:44])

• Opportunity Set for Fundamental Investors

  • Craver believes current conditions are more favorable:
    • "There are fewer people active in the market that are taking fundamental views... The passive flows by definition are not taking a view on valuation." ([03:32])
    • Lone Pine sees white space in thinking and acting “with duration.”

What Makes Lone Pine Unique

• Small, Focused Research Team

  • “I have a small group that's focused on big questions. There's more change happening in the world today than I've seen in my career.” ([04:21])
  • Prioritizes medium-term over short-term outcomes: "I don't care if a company's going to beat the numbers... I'm trying to think about what the world is going to look like three and five years down the road." ([04:51])

• Enduring Orientation and Competitive Advantage

  • Staying power and long-term focus are key advantages: “The ability and willingness to act with duration.” ([05:51])
  • Large personal and LP investment enables patience: "An enormous amount of the money that we manage is our own...I don't get beat up when a quarter is not quite as good..." ([05:51])

Approach to Contrarianism and Growth

• Investment Style
  • “I'm more of a growth at a reasonable price guy.” ([07:17])
  • Looks for companies with enduring moats and secular tailwinds: “We're looking for companies with moats...that have a secular tailwind where we can own them with duration.” ([07:37])
  • Instructs team: “Let's talk about the stock market closing tomorrow and reopening three years from now. What do you want to own in that scenario?” ([07:52])

Views on AI and Technology Cycles

• AI as a Generational Platform Shift

  • “This is a generational platform shift...we are probably in the third or fourth inning of the actual build out.” ([09:20])
  • Three AI Trends to Watch:
    1. Models Scaling Up: “The models continue to get better in scale...the use cases are gonna continue to grow.” ([09:41])
    2. Shortage of Capacity: “When you talk to the hyperscalers...they do not have enough capacity today.” ([10:07])
    3. Business Adoption: “The companies...are seeing enormous value...they are getting from using this technology today is mind blowing.” ([10:34])
  • "It's not a bubble when everybody thinks it's a bubble. It's going to be a bubble when we get to the other side of this..." ([11:45])

• Next Phase of AI Investing

  • “I have a theme that I call Revenge of the Dinosaurs, which is larger companies are going to adopt this technology and take cost out of their business in a huge way over the next two and three and four years.” ([13:28])
  • AI benefits will extend beyond infrastructure to applications in logistics and other sectors, enabling much greater business efficiencies ([13:45]).

Portfolio & Risk Management

• Highly Concentrated Positions

  • “The single greatest risk mitigant is knowing our companies.” ([14:49])
  • Does not “pair trade”: shorts are usually “quite different than what we're long.” ([15:17])
  • Shorts focus on “industries, sectors where value is being destroyed.” ([15:37])

• Current Positioning

  • “We are positioned quite bullishly...this AI bet...and from a macro environment, a period where inflation is continuing to moderate.” ([16:15])

Interaction Between Public & Private Markets

• Active in Late-Stage Private Markets
  • “We are private market investors. I feel like being active in that world is an imperative if you're going to be a good public market investor.” ([17:04])
  • Sees value in cross-learning: “The research cycles on private companies...inform how I'm positioned in the public markets.” ([17:17])

Outlook for the Industry

• Evolution in Active Management Required
  • “With this platform shift...disruption is on the rise...the value of fundamental research is higher than it's ever been.” ([18:37])
  • Predicts future leadership in market caps will change: “When we get out to 2035, we're gonna look backwards, and the names that are in that list are not gonna be the same today.” ([18:55])

Notable Quotes & Memorable Moments

• “I used to be able to read a press release and tell you what the stock was going to do the next day and that is no longer the case.” – David Craver ([01:18])
• “I have a small group that's focused on big questions...” – David Craver ([04:21])
• “Let's talk about the stock market closing tomorrow and reopening three years from now. What do you want to own in that scenario?” – David Craver ([07:52])
• “This is a generational platform shift...the use cases are gonna continue to grow.” – David Craver ([09:41])
• “It's not a bubble when everybody thinks it's a bubble.” – David Craver ([11:45])
• “The single greatest risk mitigant is knowing our companies.” – David Craver ([14:49])
• “My greatest strength as an investor is the willingness to change my mind.” – David Craver ([19:44])
• “Trust your instincts...I can be slow to move sometimes, but I'm usually right about what my instincts are telling me to do.” – David Craver ([20:23])

Lightning Round (Personal & Professional Reflections)

• Greatest strength: “The willingness to change my mind.” ([19:44])
• Best advice received: “Trust your instincts.” ([20:23])
• Most admired investor: “Steve [Mandel]...the person that's most influenced me.” ([20:53])
• Outside interests: “I read a lot...my wife and I spend a lot of time philanthropically...helping kids help themselves.” ([21:19])

Important Timestamps

• Market structure and volatility: [01:03]–[02:24]
• Active vs. passive investing & opportunities: [03:32]–[04:21]
• Unique approach and research team: [04:21]–[05:51]
• Investment style and duration focus: [07:17]–[08:57]
• Deep dive on AI cycle: [09:20]–[13:15]
• Risk management & portfolio construction: [14:49]–[16:33]
• Private vs. public markets: [17:04]–[18:23]
• Industry outlook & value of fundamentals: [18:37]
• Lightning round (insights & personal): [19:40]–[21:59]