Michael Dell's blowout, Bessent's reshoring thesis, and a heavy earnings week

Founder Spotlight

Michael Dell at Dell Technologies Inc.

Our Dell thesis is simple: Michael Dell was built for this moment.

What makes Dell rare is his mastery of volatile supply chains. He has spent his entire career never running out of parts. The tech environment has never been more volatile, so where can customers turn? Increasingly, the answer is Michael Dell. After a monster Q1 FY27 that delivered $44B in sales (+88% YoY, a +23% beat), adjusted EPS of $4.86 (a +63% beat, more than triple a year ago), and an AI backlog of $51.3B (+13% above the Street's $45.3B), Dell raised full-year guidance to FY27 EPS of $17.65–$18.15, up from $12.65–$13.15. That is +$5.00, or +39% at the midpoint, driven by AI server sales of $60 billion in FY27. The stock surged +30% in the aftermarket. Investors are waking up to what we see.

The beat was driven by AI server sales, up more than eightfold year-on-year. Enterprises uncomfortable placing their most sensitive data in the public cloud are turning to Dell as the trusted on-premise partner, deploying private AI models trained on proprietary data to automate operations at scale. ISG sales nearly tripled. Operating margins expanded +330bp to more than 8%. AI server orders doubled to $24B, and Dell says AI shows "no signs of slowing." Dell offers bundled AI server solutions at scale, competitive financing, and decades of deep enterprise trust. Unlike hyperscalers or LLMs valued on future possibilities, Dell is delivering AI hardware packages quarter after quarter today. We see Dell as a compelling way to own the enterprise AI hardware buildout, and we maintain our long-term conviction in our fifth-largest holding.

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

Portfolio Pulse

Founders in Their Own Words

Michael Dell, Founder & CEO, · Dell Technologies Inc.

Q1 FY27 Earnings, May 28, 2026

“AI is the biggest technology shift of our lifetime. Every enterprise is going to need AI trained on their data, running in their environment, secured and managed by people they trust.”

Our take. Dell isn't selling servers, he's selling trust. In the enterprise AI buildout, trust is the scarcest commodity. Enterprises that won't put their most sensitive data in the public cloud have exactly one place to go, and Michael Dell has spent forty years earning the relationship that makes that choice easy.

Marc Benioff, Founder & CEO · Salesforce

Q1 FY27 Earnings, May 27, 2026

“Agentforce is the biggest growth opportunity for our customers and for Salesforce since we brought CRM to the cloud. We processed 28.6 trillion tokens this quarter (+152%) and converted them into 3.8 billion agentic work units.”

Our take. Benioff is making the case that Salesforce is the AI disruption, not the disrupted, and we agree.

Conviction Corner

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

Q: "Michael, how does your rules-based (80%) and discretionary (20%) investment selection process protect against fear and greed destroying long-term returns?"

A: That's exactly the right question, and it's one we designed FFF around. Fear and greed are the enemies of compounding, and they tend to strike at the worst possible moments. It is human nature to panic-sell at bottoms and chase momentum at tops. Our process protects against both.

On the greed side: no single position can exceed 7.5% at quarterly rebalance. It doesn't matter how compelling the thesis is or how much a name has run up. Our discipline is structural, not discretionary. That cap forces us to trim into strength, which is something most investors struggle to do emotionally.

On the fear side, the quarterly rebalance and reconstitution cadence impose a rhythm on decision-making that overrides the noise of daily volatility. We return to first principles four times a year, asking which founder-led businesses still meet our fundamental criteria and sizing accordingly. That cadence itself is a behavioral guardrail. The result is a process designed to be wiser than the market's worst moments, and our own. When market sentiment prices in a worst-case scenario, as we experienced with software earlier this year, our process forces us to stay patient through painful days instead of capitulating. This week, we are thankful we maintained high conviction in software and did not reduce our exposure.

Macro Minutes

U.S. Economic Releases · U.S. economic releases, week of June 2 to 5.

What Printed

What We're Watching

Our take. ISM Manufacturing holding above 52 with New Orders re-accelerating indicates the U.S. industrial economy is not rolling over. The big news this week will be Friday's payroll print. A print below 95k combined with an unemployment rate above 4.3% could give Fed Chair Warsh room to cut rates -25bp at an upcoming FOMC meeting. However, if payrolls surprise to the upside, the "higher for longer" camp will regain control. Either way, the labor data this week will likely set the tone for June Fed expectations, and by extension the growth-to-value rotation trade heading into summer.

Earnings Edge

6 FFF Holdings Reporting This Week

Washington Wire

Bessent's "While America Slept" reshoring thesis.

“Speaking at the Reagan National Economic Forum (May 28–29, 2026), Treasury Secretary Scott Bessent reframed the case for American production: "In reducing economics to consumption, we forgot production. We measured abundance at the checkout counter rather than at the factory gate." ”

Our take. This is the most important economic policy statement of the week, and it deserves more attention than it got. Bessent's "While America Slept" thesis (that decades of offshoring and efficiency optimization left the U.S. dangerously exposed in semiconductors, pharmaceuticals, rare earths, and defense production) is a structural argument, not just a view on trade. For equity investors, reshoring is a multi-year tailwind for domestic manufacturing, industrial software, and the AI infrastructure buildout that makes American factories competitive again. Our founders often have the vision to see trends two to three years ahead and boldly invest in that direction, maximizing their future advantage. Our founders did not need to wait on Washington to tell them that where they produce goods matters to Americans. They knew. Policy is now catching up to what some of our best operators already understood.