Episode summary
Fundamentals Still Matter: Lone Pine’s David Craver
Exchanges (Goldman Sachs)
· · Guests: David Craver
Summary
David Craver argues that market structure has made stock picking harder in the short term and more attractive for long-term fundamental investors. He says passive flows and multi-strat trading have reduced the number of participants focused on valuation, while single-stock volatility and extreme valuations have created more dislocations. Lone Pine is leaning into that "white space" by using duration, concentrated positions, and deep research to think three to five years ahead rather than quarter to quarter.
Craver is especially constructive on AI infrastructure. He says the buildout is still early, models keep improving, capacity remains short, and real companies are already seeing major productivity gains. He expects the cycle to last longer because bottlenecks slow deployment, and he believes the next phase will include broader application across large incumbent businesses, not just the early winners like NVIDIA and other infrastructure names.
He also says private markets are now essential to public-market investing, because late-stage private companies inform his work and can create opportunities before IPOs. More broadly, he expects disruption to keep rising, which should make fundamental research more valuable and could reshape the largest companies by 2035.
Key takeaways
- Craver says passive flows and higher event-driven volatility have made valuation gaps bigger, not smaller, for active investors.
- He says Lone Pine’s edge is acting with duration, running a concentrated book, and focusing on three- to five-year outcomes rather than short-term earnings beats.
- Craver calls AI a "generational platform shift" and says infrastructure remains attractive because demand is still ahead of supply.
- He expects larger companies to adopt AI to cut costs materially, including CFOs describing hundreds of millions of dollars of annual savings in 2027.
- He says private-market investing is now an imperative for public investors because it informs underwriting and helps identify durable winners earlier.
Notable quotes
“There are fewer people active in the market that are taking fundamental views on valuation”
“my group is very focused on answering where we're going over the medium term”
“I don't care if a company's going to beat the numbers”
“this is a generational platform shift”
“it's not a bubble when everybody thinks it's a bubble”
How the episode opens
Welcome to another episode of Goldman Sachs Exchanges: Great Investors. I'm Tony Pasquariello, global head of hedge fund coverage in Goldman Sachs Global Banking & Markets. And today I have the pleasure of sitting with David Craver.
Dave is the co-chief investment officer of Lone Pine Capital, an investment firm with over $19 billion in AUM and a focus on long-term, fundamental-based investing. Dave, welcome to Great Investors. Thank you for having me.
It's an exciting time. You joined Lone Pine in 1998. I think listeners, people close to the markets will be familiar with the broad changes to the industry since then.
So, the rise of passive, the rise of private markets, increased regulation of the banks following the global financial crisis. What, in your mind, what's been the impact of these changes on the market itself? Well, I would say there's been two things that I would point to that are different today than when I first started in the business.
One is single stock volatility around events is greater than it ever has been and it's often not correlated with what I view as the actual qualitative news that's happening. So, that's pretty different than it used to be. I've told our partners that 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. And often, the moves around events are quite large relative to what a fundamental investor would consider. So, that's one thing.
The other thing is that there are companies at market caps today that are trading at very large valuations. And that's extremely different than when I first started in the business. I used to have a rule that anything that traded more than a $200 billion market cap that was over 20 times forward earnings was probably in trouble.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- market structure evolution
- ai opportunities
- fundamental investing
- long-term investing
- investment factors
Companies and tickers mentioned
- Lone Pine Capital
Watch the episode
Watch “Fundamentals Still Matter: Lone Pine’s David Craver” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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Exchanges (Goldman Sachs), this episode and its artwork belong to Goldman Sachs. Octagon is not affiliated with the show; this page is an independent summary.
