Founder Factor · Issue #1May 19, 2026

AI Software Stars, Survivors & Sinkers

Larry Ellison's Oracle emerges as the quiet AI infrastructure leader. Our contrarian software thesis, NVDA and ZS earnings previews, and what the new Fed chair's framework means for growth stocks.

MacroSoftwareEarningsWashington Wire

Founder Spotlight

Larry Ellison at Oracle

Our Oracle thesis is simple: in our view, Ellison will execute. Founder and CTO Larry Ellison is quickly emerging as a trusted leader in AI infrastructure, the profitable, less-glamorous layer of the AI stack that actually gets built.

In one year, Oracle's contracted backlog has quadrupled from $138B to $553B, growing from 2x to over 8x annual sales. Demand is so strong one customer recently told Ellison, "We will take all the capacity you have."

While many tech stocks trade on LLM headlines and distant AI dreams, Oracle is delivering private AI to existing enterprise customers right now: integrating LLMs into customer software stacks, training custom agents on private data, and automating internal operations. We see Oracle as a high-quality founder-led compounder at an attractive valuation, and a practical way to own the quiet AI infrastructure layer without picking individual LLM winners.

A Stat That Travels

3.1×

Founder-led S&P 500 companies outperformed their non-founder peers over the 25 years through 2014, and by 2.1× over the most recent decade. Most ETFs barely own them. FFF owns the 100 founder-led names indices underweight or miss.

Source: Bain & Company analysis of companies in the 2014 S&P 500; indexed total shareholder return from 1990 to 2014.

Industry Pulse

AI Software Stars, Survivors, and Sinkers

Our contrarian thesis: AI won't replace all software. In five years, we believe AI will be software's largest customer.

We expect AI to drive the biggest wave of software consumption in history, separating the "AI Software Stars" from the "Survivors" and "Sinkers." The market urgently needs to triage software.

Software trades at 24x forward earnings, barely a 2x premium to the S&P at 22x. Historically the premium has been closer to 10x. The market is pricing in AI as software's executioner. We see it as software's biggest customer. Software is FFF's largest industry exposure at 32%.

High Conviction Holdings: Software

Here are the 22 FFF holdings we believe are AI Software Stars building the future economy.

Ticker & Founder	Thesis
$ORCL Larry Ellison	The original enterprise cloud. Quietly becoming the preferred private AI infrastructure provider for governments and regulated industries that don't fit AWS or $PLTR.
$PLTR Alex Karp	AI interface that sits on top of messy, incompatible, siloed, and complex systems for clear, real-time decision making. The AI trusted when lives are on the line, from the Pentagon to hospital services.
$APP Adam Foroughi	Built the AI engine behind how most mobile apps monetize advertising.
$CRM Marc Benioff	The gold standard for sales and AI managing Fortune 500 customer relationships.
$CRWD George Kurtz	Cybersecurity becomes more essential as AI scales.
$FTNT Ken Xie	Protecting the network perimeter becomes more critical as AI scales.
$DDOG Olivier Pomel	AI does not run blind. Every AI agent must be monitored.
$ZS Jay Chaudhry	Zero Trust becomes zero choice as AI-powered ransomware becomes cheaper and faster.
$CRCL Jeremy Allaire	The large and growing stablecoin rails supporting global AI commerce.
$RBRK Bipul Sinha	Rubrik controls what AI can see. Data security for the modern era.
$PATH Daniel Dines	Built agentic automation of human work first.
$ZETA David Steinberg	The affordable AI-native marketing cloud that every brand needs.
$IOT Sanjit Biswas	Uniquely moated provider of real-time intelligence across trucks, machinery, and other regulated fleets.
$AUR Chris Urmson	The US autonomous trucking play. Long road, massive TAM.
$DT Bernd Greifeneder	Full-stack observability for every enterprise AI deployment.
$FROG Shlomi Haim	Manages the movement and delivery of developer software and AI models, every version, every deployment, every time.
$VRNS Yaki Faitelson	Grants and restricts enterprise data access to employees and AI agents.
$SOUN Keyvan Mohajer	Pioneered AI voice and now expanding into enterprise sales and customer service.
$YOU Caryn Becker	Identity verification in a world drowning in deepfakes. Trusted infrastructure for the AI age.
$WULF Paul Prager & Nazar Khan	Nuclear-adjacent power that no one else can replicate because the constraint is energy, not chips.
$IREN Dan & Will Roberts	Providing hyperscalers with renewable compute capacity they cannot build fast enough themselves.
$CIFR Tyler Page	Pure play AI infrastructure provider with Tier 1 validation. $GOOGL and AWS already signed.

Portfolio Pulse

Founders in Their Own Words

Mark Zuckerberg · Meta

All-Hands, April 30, 2026

“2026 is the year AI starts to dramatically change the way that we work. Projects that used to require big teams can now be done by one very talented person.”

Our take. When the founder running the largest AI capex program in tech tells his company the work itself is changing, listen. That's a core reason we own META. Q1 revenue $56B. 2026 capex $145B.

Larry Fink · BlackRock

2026 Chairman's Letter

“We are living through a period where things that would've defined a decade have become routine.”

Our take. Fink rarely says something this strong. The AI productivity wave is the structural force behind why we think the next decade rewards founder-led equity compounders.

Conviction Corner

RIA Q&A on FFF's Role in a Portfolio

QQQ has done very well. Why should I consider switching?

You're right, QQQ has been excellent. But semis are running hot. For clients who want to keep the innovation exposure but reduce chip concentration, FFF may be a fit. FFF flips QQQ's sector weights and is 100% founder-led, actively managed to find the software names we believe will thrive in an AI world, not just survive.

Macro Minutes

U.S. Economic Releases · Week of May 19–21

What Printed

ADP

−42.3k private payrolls, well below expectations. Initial jobless claims stayed elevated.

Housing

Pending sales modestly beat. Housing starts fell sharply.

U. Michigan

Sentiment at 48.2. One-year inflation expectations remain elevated.

What We're Watching

Wed, May 20 — FOMC Minutes

Clues on Chair Warsh's rate path.

Wed, May 20 — S&P Global PMIs

Early read on services and manufacturing activity.

Thu, May 21 — Housing Starts and Building Permits

The rate-sensitive housing read.

Our take. A negative ADP print with sticky claims is consistent with a labor market cooling faster than consensus, and we think part of that is the AI productivity effect showing up in hiring. If the cooling continues, the setup could give the Fed more room to ease later this year without reigniting inflation — historically a constructive backdrop for housing and high-quality growth equities.

Earnings Edge

2 FFF Holdings Reporting This Week

NVIDIANVDA

Jensen Huang, Founder & CEO

After the close · Wed, May 20

The operating system of the AI buildout: silicon, networking, CUDA, and an unmatched developer base. We're watching data center revenue, Blackwell ramp, and gross margin.

ZscalerZS

Jay Chaudhry, Founder & CEO

After the close · Thu, May 22

Category-defining zero-trust security platform. We're watching billings, net new ARR, and federal vertical commentary.

Washington Wire

Newly Appointed Fed Chair Kevin Warsh

“AI is going to make almost everything cost less. We're at the front end of a productivity boom. Economic growth won't be inflationary. We're in the early innings of a structural decline in prices.”

Fed Chair Kevin Warsh

Our take. Near-term, oil tied to Iran and ongoing AI chip, power, and memory shortages are real inflationary pressures, and they won't disappear tomorrow. Longer-term, we share Chair Warsh's framework. AI is a deflationary productivity shock closer to the late-1990s computing buildout than to any modern inflationary episode. We think his appointment is constructive.