Tom Maher on Small-Cap Investing, AI Infrastructure and Opportunities Beyond Big Tech

Tom Maher of Hilton Capital Management explains what is changing for small-cap stocks as earnings improve and AI spending reaches beyond big tech. After years of justified large-cap leadership, he sees reasons to revisit smaller companies while remaining selective about business quality, financing needs and valuation.In this episode of Excess Returns, we explore the physical infrastructure behind AI, the case for diversifying beyond the largest stocks, and how Tom Maher finds businesses with improving fundamentals. We also discuss the effects of passive investing, opportunities in reshoring, and why knowing more about a company does not always lead to a better investment decision.Topics covered:Why stronger earnings helped justify large-cap leadership and what could change that balanceHow AI construction and equipment spending can benefit smaller industrial companiesWhy some small companies grow into large caps while others remain smallSelf-funding businesses versus companies that depend on outside capitalUnprofitable index constituents, private equity and the changing IPO marketHow interest rates affect financing costs, valuations and portfolio decisionsWhy ETF flows can move a stock independently of its business fundamentalsFinding improving businesses without mistaking a low valuation for an opportunityEvaluating management incentives, consistency and acquisition decisionsTom Maher's lessons on taking partial profits and reading unexpected stock-price reactionsLearn more about Hilton Capital Management.Chapters:00:00 Tom Maher's outlook: earnings, valuations and risk05:26 Small-cap earnings and AI infrastructure spending11:41 Defining small caps and why some companies stay small16:45 Active management and business quality22:03 Small-cap index quality and companies staying private27:15 Combining stock selection with a macro view32:58 Higher interest rates and portfolio decisions37:04 Passive investing and ETF-driven stock moves41:33 Finding stocks with improving fundamentals51:13 Valuation, consistency and management quality56:39 Reshoring and the industrial recovery01:01:14 Research, profit-taking and investor expectations Learn more about the Excess Returns podcast network.No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.