Investing in the Infrastructure of Intelligence

July 2025 Client Letter

With two teenage boys at home—one back from the University of Florida and the other heading into his senior year of high school—mealtime is a high-volume operation in our kitchen. The amount of protein they go through is astonishing.

Years ago, my mom gave us an Instant Pot—a gift we didn’t know we needed. It’s become a kitchen essential, cranking out chicken, farro, soups, oatmeal, and hard-boiled eggs in a fraction of the time it used to take.

But the Instant Pot hasn’t been the only regular fixture on our kitchen island. Sharing the space is my wife’s iPad. It used to be there for browsing recipe blogs and cooking websites. These days, though, it’s usually open to a simple AI chat window.

If she wants to know how long to cook black beans, she just asks—and in seconds, gets a clear, direct answer. No ads, no pop-ups, no scrolling through endless paragraphs. Just the information she needs, right when she needs it.

When I asked why she prefers the AI assistant, her answer was simple and telling: “I just want the answer—fast. I don’t have time to click through a dozen links when I’m trying to feed you people.”

The AI Market is Becoming an Economic Powerhouse

For decades, we’ve relied on traditional search engines. They help us find information, but often require time and effort to sort through. Today, that model is being replaced by something more intuitive: answer engines.

This shift is a big one. Instead of wading through a maze of content, we now just ask—and get a direct, personalized response. Often, it comes with helpful follow-up questions or even remembered preferences. It’s a move from searching for information to simply having a conversation.

Why does this matter? First, it cuts down friction and speeds up decisions. No more digging through SEO-heavy websites just to find a cook time or a definition. Second, adoption is happening fast. ChatGPT surpassed 400 million weekly users in early 2025. Bain & Company estimates the market for AI products and services could hit $990 billion by 2027.

And third, these tools are getting better with time. They remember context and adjust as they go. Ask once about cooking chicken, and the next time they’ll help with steak—tailored to the cut, your appliance, and even your preferred doneness.

Search Engines Catalog the Web. Answer Engines Work for You.

We’re moving from searching to solving—trading endless clicks for direct, personalized answers. When we planned a family trip to London, we used an AI travel tool that not only built the itinerary but nailed a recommendation for a Sunday roast at Blacklock’s. People don’t want to search—they want answers. And there’s no going back.

It started with dinner at home. Now it plans our travel. The same AI powering everyday choices is reshaping entire industries—changing how businesses operate and how people decide.

The Companies Powering AI—and the Ones Putting It to Work

The rise of answer engines is shifting how people interact with the digital world. Companies including NVIDIA and Broadcom are building the chips and systems that make real-time AI possible. Amazon, Google, IBM, and Oracle are creating the cloud infrastructure where these models—trained to understand language, spot patterns, and generate responses—live and evolve. Apple and Meta are weaving AI into everyday life, from messaging to media. And, traditional companies including Kinder Morgan, Lowe’s, and McDonald’s are using AI to streamline supply chains, personalize marketing, and improve customer service. 

We feel your portfolio is positioned to reflect this shift with exposure to both the foundational technologies powering AI and the established brands adapting to it.

Smarter Infrastructure: Kinder Morgan’s AI Advantage

Let’s look at how this plays out in the real world—starting with energy infrastructure.

Kinder Morgan is one of the largest energy infrastructure companies in North America, operating over 50,000 miles of pipelines that move natural gas and other products from major production hubs like the Permian Basin to key markets. Now, Kinder Morgan is enhancing its operations with help from Palantir Technologies.

Palantir Technologies builds advanced data platforms that turn complex, siloed data into real-time, actionable insights. Its Foundry platform is used across sectors from energy to defense to streamline operations, improve forecasting, and enhance efficiency. 

Kinder Morgan’s use of Palantir’s Foundry platform shows how traditional infrastructure companies are using artificial intelligence to modernize operations. According to a Palantir case study, tasks that once took two to three hours of manual data compilation now yield actionable insights in just minutes. The company now has a real-time view of its natural gas storage and delivery network, with time-stamped points across the system—not just at the endpoints. 

This improvement isn’t just about speed—it’s about smarter decision-making. With predictive analytics, Kinder Morgan can schedule maintenance when volumes are low, identify inefficiencies, and optimize gas across the network. The result: greater uptime and more reliable deliveries.

For income-focused investors, Kinder has raised its dividend for seven straight years and currently yields about 4.1%. Looking ahead, demand from data centers and rising energy use could provide strong tailwinds.

The AI Factory: A Digital Assembly Line

Dell Technologies and Lowe’s are partnering to bring cutting-edge AI into retail, aiming to improve efficiency and customer service across more than 1,700 Lowe’s stores as well as corporate offices.

In May 2025, Dell introduced upgrades to its AI Factory with NVIDIA, a platform designed to help businesses of all sizes put artificial intelligence to work in practical, scalable ways. Think of the AI Factory as a modern digital assembly line for intelligence—combining powerful servers, smart software, and expert services to turn data into real-time decisions. 

This progress builds on a long-standing collaboration between Dell and NVIDIA, which took a leap forward in May 2024 with the launch of the enhanced AI Factory. The initiative brings together Dell’s infrastructure and services with NVIDIA’s AI software and accelerated computing to help businesses deploy AI more efficiently and effectively.

At Lowe’s, AI is being used to optimize inventory through models that analyze purchasing patterns, improve asset protection, and alert associates in real time to assist customers in-store. Dell’s technological infrastructure enables real-time data processing and advanced analytics, such as computer vision, directly at the store level.

The collaboration with Dell is part of Lowe’s broader “Total Home Strategy” and reflects how AI is reshaping even traditional sectors like home improvement retail. It also shows Dell’s growing role as an enabler of business-ready AI across industries.

Lowe’s has a 63-year track record of dividend growth, with a 15% annualized increase over the past five years.

McDonald’s & AI: Fast Food, Smarter Systems

In an evolving market landscape, companies that adapt and innovate tend to stand out. As one of the world’s most recognizable brands, McDonald’s is modernizing its operations and customer experience through strategic investments in technology, particularly artificial intelligence.

Through a partnership with Google Cloud, McDonald’s is deploying edge computing and AI tools across thousands of restaurants to optimize staffing, kitchen, performance, and service. Digital menu boards now adjust automatically based on time of day, weather, and customer behavior—boosting upselling opportunities. In the kitchen, AI sensors monitor equipment performance for fryers and McFlurry machines to predict maintenance needs and reduce downtime. AI also supports smarter workforce scheduling and inventory management through demand forecasting. Customer-facing innovations are evolving too—from voice AI in the drive-thru to computer vision that verifies order accuracy before it reaches the customer. 

McDonald’s has raised its dividend for 48 consecutive years and currently yields around 2.43%. 

Investing in the Age of Intelligence

Whether it’s helping get dinner on the table or driving efficiency at companies like Kinder Morgan, Lowe’s, and McDonald’s, AI is no longer a futuristic idea. It’s a practical tool reshaping how we live, work, and invest. What began as a shift in how we search for answers is now transforming entire industries.

As investors, we’re focused on identifying companies that aren’t just reacting to change—but leading it. From core enablers like NVIDIA and Broadcom to established brands adapting fast, we believe there are growing opportunities. And while no investment is without risk, exposure to this digital transformation positions your portfolio to potentially benefit from the next wave of innovation. 

As always, we’re here to help you navigate what’s next. If your financial situation has changed—or if you have questions about your investment portfolio—please don’t hesitate to call us at (800) 843-7273.

Warm regards,

Matthew A. Young
President and Chief Executive Officer