Podcast Summary: “Getting Ready for the ‘European Kill Switch’”

The Compound and Friends
Aired: March 2, 2026
Host: Downtown Josh Brown
Guest: Matt Tuttle (CEO & CIO, Tuttle Capital Management)

Episode Overview

This episode explores the surprising outperformance of international and especially European stocks, focusing on the emerging thesis that Europe is seeking greater technological and digital independence from the US—what guest Matt Tuttle calls the “European kill switch.” The hosts and Matt break down the investment opportunities that stem from Europe’s drive for digital sovereignty, defense self-reliance, and the broader tectonic shifts in global markets. Practical investing ideas—including specific stocks and ETF approaches—are discussed in detail.

Key Discussion Points & Insights

1. Setting the Stage: Outperformance of International Stocks

• The MSCI EAFE index is up about 20% from the October lows, compared to 14% for the S&P, but year-to-date EAFE is up 8% versus the S&P’s 14.4%.
• Major US “Mag 7” tech stocks have stalled or pulled back, fueling more interest in non-US equities.
• The usual explanations (valuation, dollar weakness, mean reversion) might miss a bigger, structural shift.

2. Europe’s “Kill Switch”: Digital Sovereignty (03:17)

• Matt Tuttle: “If you’re relying on somebody else for your own defense, that’s a problem. If you’re relying on somebody else for energy, that’s a problem. Digital sovereignty to us is the same thing.”
• Europe aims to cut dependence on US tech and platforms, echoing prior moves towards energy and defense autonomy.
• The main event: Europe building optionality away from the US, seeking their own digital infrastructure.

3. A Short History: Europe’s Tech Dependence

• In Internet 1.0 and the cloud era, Europe let US tech firms (Microsoft, Amazon, etc.) dominate.
• Now, political friction and regulatory assertiveness are fueling a movement toward European-native solutions.
• France’s push to get off American software like Teams and Zoom is cited as an example.

Quote:
“A lot of these international ETFs leave a lot to be desired because what you’re getting is a lot of financials and not that much tech. I would rather say I want to be concentrated in areas. Digital sovereignty is one.” – Matt Tuttle (05:37)

4. Thematic Investing Beats Broad Indexes (06:53)

• Buying a broad developed-market ETF won’t effectively capture the digital sovereignty or defense theme.
• There’s currently no dedicated ETF for European digital sovereignty, though Matt hints he’s working on something.
• For now, investors could build a basket from a shortlist of ADRs (e.g., Capgemini, ASML, SAP, Deutsche Telekom, Ericsson, Infineon).

5. The Geopolitical Web: Energy, China, and “Third Country” Trades (09:14)

• The US’s actions against oil suppliers to China (Iran and Venezuela) have potentially large macro and investment implications.
• Trade tensions result in trade routes being “rerouted” rather than vanishing, shifting winners/losers among Europe, emerging Asia, and LatAm.
• The rise of “third country” strategies where trade and supply chains bypass direct US-China links.

Quote:
“When trade barriers rise, trade doesn’t disappear. It reroutes. That means relative winners and losers shift across European Union, EM, Asia, LATAM and selected connectors.” – Matt Tuttle (11:43)

6. China: Not to Be Ignored, but Still Requires Thematic Focus (10:24)

• Chinese firms (Alibaba, Baidu) and sub-themes like robotics, AI, and humanoid robots are important.
• Instead of broad China ETFs, investors should look for those that focus on tech and innovation.
• KWEB is cited as an example for Chinese tech.

7. How to Play Europe’s Build-Outs: Defense, Digital, and “The Euro Stack”

• Europe’s “hard power rebuild”: Aerospace and defense (Airbus, BAE Systems, Rheinmetall, Leonardo, Saab, Thales, Dassault).
• “Soft power rebuild” (The Euro Stack): Building a European-controlled tech stack—compute, cloud, security, apps.

Key Segments & Companies (18:16):

• Defense: Airbus, BAE Systems, Rheinmetall, Leonardo, Saab, Thales, Dassault.
• Digital Sovereignty: Capgemini, ASML, SAP, Deutsche Telekom, Orange, Infineon, OVHcloud.

Quote:
“I want pure play. I could put 40 names that get 10% of the revenue from defense spending... But I’m not going to do that. I want to create a product that I want—and those are the key names where the money is going.” – Matt Tuttle (18:54)

8. Investment Tools and Strategies (17:26, 24:14)

• AI-driven platforms (like Public.com) now let investors build custom, prompt-based baskets to target specific themes.
• While an ETF for Euro digital sovereignty doesn’t exist yet, Tuttle thinks it will soon, since the demand for such focused vehicles is growing.
• Until then, building a DIY basket of European tech/defense ADRs is viable for individuals.

9. Risks to US Tech from European Nationalism (22:45)

• Zoom seen as the most vulnerable to Europe’s push for sovereignty.
• Larger US entrenched companies (Google, Cisco, Microsoft) are “too important” to be pushed out but may see incremental shifts.
• Tuttle does not advocate dropping US leaders in favor of European stocks—instead, it’s about diversification and theme exposure.

Quote:
“To me, it’s more I’m going to own Google and I’m going to own the EU companies, not I’m getting rid of Google and buying EU.” – Matt Tuttle (23:47)

Notable Quotes & Memorable Moments

• On Why Investors Need to Look Thematically, Not Just Internationally:
  “If you look, and I’m an ETF guy, but I think a lot of these international ETFs leave a lot to be desired because what you’re getting is a lot of financials and, you know, not that much tech.” (05:37)

• On “Being Early” to Thematic Trends:
  “We launched [EUAD] right after Trump got elected because to me this was the obvious Trump trade and I was pounding the table for it and really it was up 70%. And then all of a sudden everyone’s like, oh my God, I want to buy this. Dude, you should have been listening to me 70% ago.” (20:02)

• On The Changing Global Landscape:
  “Once you see it, you can’t unsee it... the world building optionality away from US policy and platform dependence.” (07:27)

Timestamps for Important Segments

• 03:17 – What is the “European kill switch” and the case for digital sovereignty
• 05:37 – ETF pitfalls and the need for thematic investing
• 08:41 – Which European stocks reflect the sovereignty and defense trend?
• 09:14 – Energy politics, China, and trade rerouting
• 11:43 – The international investment takeaway: “Trade reroutes, doesn’t disappear”
• 18:16 – Specific stock ideas in European aerospace, defense, and digital sovereignty
• 20:02 – Matt’s experience launching thematic ETFs “too early”
• 22:45 – Risks to US tech companies from EU nationalism
• 24:14 – The outlook for a European digital sovereignty ETF

Closing Thoughts / How to Follow Matt Tuttle

• Tuttle Capital Management specializes in thematic, trader-friendly ETF solutions—targeting trends before they’re mainstream.
• Follow Matt: Tuttlecap.com – newsletter and daily themes.

Takeaway for Investors

• International (especially European) outperformance is about more than cheap valuations or a weak dollar—there’s a profound strategic realignment underway.
• The key is not to buy broad ETFs, but rather to target themes like defense, digital sovereignty, and technological self-reliance.
• Use new AI-driven platforms or build your own baskets to access these opportunities—ETF products will likely follow.
• Don't ignore US tech, but consider that global diversification may finally be rewarding again after a decade of US leadership.

For more info, reach out at Tuttlecap.com and check out the podcast every Tuesday and Friday for further analysis and thematic investing ideas.