Blog Disclosures: Latticework Series

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All charts and tables within this Blog series are created by SaratogaRIM. Figures 1-3 are within Understanding Capital Investment Cycles. Figure 1 uses data from Stijn Van Nieuwerburgh, "Financing the AI Buildout," Columbia Business School Working Paper, March 19, 2026. Historical infrastructure episodes are shown as realized average annual investment as a share of U.S. GDP over the periods indicated. The AI infrastructure figure (*) is a forward-looking estimate based on projected U.S. investment required to support anticipated artificial intelligence computing infrastructure. Comparisons are intended to illustrate the relative scale of investment rather than predict actual expenditures or investment outcomes. Figure 2 displays the net income, capital expenditures, and free cashflow of Hyperscalers (AMZN, GOOGL, META, MSFT, ORCL) and Semiconductor Companies (NVDA, MU, AVGO, AMAT) from 2010-2025 using data from FactSet and BofA Research Investment Committee. Figure 3 is derived from a chart by BofA Investment Committee to show the rolling 12-month forward free cash flow (FCF) of "Hyperscalers" (AMZN, GOOGL, META, MSFT, ORCL) and Semiconductor Companies (NVDA, MU, AVGO, & AMAT) in $ billions. Figures 4-6 are within Money Has a Price. Figure 4 contains two charts displaying the 10-Year Treasury Yield over two different time periods using data from both FactSet and Bianco Research. Figure 5 reconstructs a chart concept popularized by Bianco Research using a different forecast source (Philadelphia Fed Survey of Professional Forecasters). The actual 10-Year Treasury Note Yield (black chart line) uses month-end data from FactSet. The SPF consensus forecast paths, one strand per quarterly survey vintage, colored by era, uses data from Philadelphia Fed Survey of Professional Forecasters (TBOND mean). Quarterly leg spliced with annual projections; full method and caveats available upon request. Figure 6 uses data from Bianco Research and Bloomberg to show the 5-Year TIPS Inflation Breakeven Rate, Before and After COVID. Treasury Inflation-Protected Securities (TIPS) are U.S. government bonds designed to protect investors from inflation. Unlike traditional Treasuries, TIPS adjust their principal value based on changes in the Consumer Price Index (CPI). The coupon rate remains fixed, but because it is applied to the inflation-adjusted principal, the interest payments effectively rise with inflation and fall with deflation, providing a real return to investors. The breakeven inflation rate is the difference between the yield on a nominal Treasury and the yield on a TIPS of the same maturity. It represents the annual inflation rate at which holding a TIPS would yield the same return as a nominal Treasury. For example, if a 5-year Treasury yields 4.5% and a 5-year TIPS yields 2.4%, the breakeven inflation rate is 2.1%. This rate is a widely used market-based measure of inflation expectations. Figure 7 is within Pricing the Unknowable. Figure 7 displays the illustrative range of possible outcomes as the investment horizon extends and how the range widens with time. Nearer-term outcomes are shown as a narrower illustrative range; more distant outcomes span a wider range of plausible results. The widening reflects greater scope for interacting forces and unforeseen developments over time – not a claim that the true distribution is measurable. Vertical axis is conceptual; the peak of each curve is normalized to 100.

For further information or clarification regarding any of the charts, topics, or concepts within this report, please email your specific questions to InvestorRelations@SaratogaRIM.com.

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