The Minotaur Global Opportunities Fund rose 9.2% in May, comfortably outpacing the 5.1% return of our benchmark. Both of our core themes - European defence and AI - delivered.
Defence: The West Rearms
European defence got a fresh leg up as NATO members began sketching a pathway to Trump's defence spending target of 5% of GDP by 2032. With NATO’s June summit in The Hague approaching, Secretary-General Mark Rutte is aiming for a 3.5% baseline and an additional 1.5% earmarked for broader security initiatives. Currently, the US shoulders 64% of NATO’s military spend, a ratio the White House seems determined to rebalance.
This reinforces our thesis: the shift in geopolitical burden-sharing isn't a blip, it’s a structural change that our portfolio is already positioned for.
AI: More Tokens, More Infrastructure
Nvidia, still one of our largest positions, smashed expectations again. In Q1 FY26, data centre revenue jumped 73%, helping overall revenue grow 69% and net income rise 31%. The key takeaway wasn’t just growth, it was usage. On the earnings call, management cited an explosion in inference demand, driven by reasoning models and agentic AI. Microsoft alone used 100 trillion tokens last quarter – a fivefold YoY increase.
The AI megatrend isn’t just intact. It’s accelerating.
Tailwinds from the Desert
AI also got a geopolitical boost. President Trump struck deals in Saudi Arabia and the UAE to channel investment into semiconductors and data centre infrastructure. When the world’s most energy-rich nations start backing your thesis, it’s worth paying attention.
Headwinds Elsewhere
Our shorts detracted this month as markets rebounded on hopes of trade de-escalation. The Trump administration softened stances with the UK, China, and the EU, and a US trade court later ruled that most of the Trump tariffs are illegal. Still, the rally felt fragile, what some are calling an “uneasy bid.”
Uneasy because there’s still lots to worry about. Moody’s joined Fitch and S&P in downgrading the US, citing a $37 trillion debt pile and a fiscal deficit running above 6% of GDP. Yields on 30-year Treasuries pushed past the psychological 5% barrier, and the US dollar recorded its worst start to the year on record (since the availability of data starting in 2005), falling ~8% YTD.
AI at Minotaur: Accelerating the Edge
Internally, we’ve leaned into AI even harder particularly with the advent of some new and innovative coding tools. This month, we used OpenAI’s coding tool, Codex, to build:
- An earnings preview generator,
- A daily Slack-pushed market briefing,
- A tax optimiser for trade structuring,
- A Taurient chatbot in Slack,
- A YouTube transcript summariser,
- And a tool to convert LLM text to Australian English as the standard for most LLM responses is American English (You can try this one on our Minotaur website!).
We’ve also started creating agentic workflows across parts of our investment research. For example, we have one AI analyst that sizes TAMs using reasoning models. It's like hiring a junior analyst who works 24/7 and never asks for coffee.
Passing of the Baton
May also marked a generational moment in markets: Warren Buffett has stepped down as CEO of Berkshire Hathaway after 60 years, passing the baton to Greg Abel. If you’re trying to find signs of optimism in US equities, look no further than Buffett’s favourite valuation metric - US total market cap to US GDP. This is back to levels not seen since 2020. Cheap, right?
The Bigger Picture
We continue to believe AI is not just a technology wave, but a force multiplier for our own edge - 30 years of pattern recognition honed into the new way to do fundamental investing. As Plutarch says, "The mind is not a vessel to be filled but a fire to be kindled". We would add, "and the kindling for that fire is AI."
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Minotaur Capital Management Pty Ltd (ABN 17 672 819 975) is a corporate authorised representative (CAR 1308265) of Minotaur Licensing Pty Ltd (ABN 86 674 743 198) (AFSL 557080). The Minotaur Global Opportunities Fund is issued by K2 Asset Management Ltd (ABN 95 085 445 094, AFSL 244393), a wholly owned subsidiary of K2 Asset Management Holdings Ltd (ABN 59 124 636 782).
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