# Big Tech CapEx Surge and AI Market Implications

**Podcast:** Motley Fool Money
**Published:** 2026-02-06

## Transcript

Big tech is spending big money, but is it gonna pay off?
Motely Full Money starts now.
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From Fool Global Headquarters, this is Motley Fool Money.
Welcome to Mother Fool Money.
I'm Travis Hoyam, joined today by Lou Whiteman and John Quast.
And guys, big tech took center stage this week, and the conversation was all about capital expenditures between Meta, Microsoft, Alphabet, and Amazon.
We got guidance for about $650 billion in CapEx for 2026.
A year ago, the these companies weren't spending enough.
Now the market is saying, whoa, whoa, whoa, we're gonna spend this much.
We're gonna spend all of your operating cash flow.
Lou, what do we take from this week?
Because it seems like the numbers were so big that even the most bullish AI investors were shocked at how much money these companies are spending.
Yeah, let's double down on just how big that is.
Let's let's get some perspective here.
Uh that's 650.
All right.
Uh Bloomberg says the largest US automakers, construction manufacturers, railroads, aerospace companies, transports, and energy companies, 21 companies in all, they are gonna spend a combined 200 billion.
So less than a third of that in 2026 for 21 companies.
It's also ironically, 650 is about the combined loss of market cap by this, these big four post earnings.
And when they've announced this.
Look, so here's the thing.
How do we think about AI?
I am not going to dispute the potential.
I am not sure about the time frame, and I am scared about the economics.
All three things are true.
So I think there, yes, is a potential for payoff, but what will that payoff be and how long will it take?
I think that's what the market's worried about.
Also, you also have an opportunity cost here.
$650 billion is a lot of money, whether or not just just all dividends buyback or inventing the next Waymo, something is not happening because of all of this capex spending.
So a darn well better payoff.
And I think that's just really the question the market is asking is will it actually pay off?
I want to come back to the payoff for the hyperscalers.
But John, the first thing that I want to talk about is this rising tide seems to be lifting a number of similar boats, if you will, in the supply chain.
And that is look, if these companies are spending a ton of money, there's only a handful of companies they're going to be spending it with.
So their revenue is obviously going to go up, their margins are going to be good.
And that's really helping a lot of those companies, at least short term.
So are these semiconductor companies like NVIDIA, the ASMLs of the world, uh, Micron, are these still gonna be the winners, at least for the foreseeable future?
Yeah, I love the question, Travis.
The definite answer is it's gonna pay off for somebody.
The question is who, but one thing that we can say for sure is we we know that there is a lot of money going out from the hyperscalers, and some of them have even given us some pretty good details on exactly where the money's going.
Alphabet, for example, spending about 60% of its capex on servers.
So if you look at 2026, it's gonna spend over a hundred billion dollars on servers.
So let's think that through.
Uh one of the leaders in this space is Dell.
I know we don't talk about Dell very much, but it's a leader in servers.
And you look at this stock right now, trading at only 10 times its forward earnings.
I wouldn't be surprised if Dell had a bumper year this year in 2026 with all the spending that these hyperscalers will put out on servers.
Lou, the other thing that seems to be coming into focus, at least in the market's mind, is that the disruption that we thought we were seeing coming six months to a year ago, is particularly from OpenAI, that we had that huge uh RPO number that came out from Oracle.
This, you know, I think 1.5 trillion dollars in infrastructure to kind of help OpenAI build out their ecosystem.
Now that's getting flooded by these other companies that have the cash to keep investing.
Are they, are these big hyperscalers, the the big tech companies that I mentioned, are they just trying to bludgeon these startups that could have potentially been the disruption to their business model?
Think Google in particular, but even companies like Amazon.
I mean, if people go to ChatGPT to shop, that's bad for Amazon.
If if they're shopping at Chat GPT, they're not the companies aren't spending as much money on meta ads.
So they all have an incentive to not be not disrupt the the status quo.
So is this money just basically saying, hey, look, you're not gonna disrupt us or replace us by having better AI than we do?
I don't know if it's a they're out to get open AI or they're trying to bludgeon them.
I mean, I think Sam Altman's made enough comments out there that maybe that's part of it.
You know, like there would be a little, but I think, look, if this is the cost of doing business, if this is what it takes to win this game, it's really hard for a company that doesn't have that revenue base to win that game.
So definitely, whether or not it's that this is just what they have to spend, or if it's they're trying to bully upstarts out of the market, I don't think that matters.
I think either way, it's bad news for these companies that don't have the revenue base.
Look, you can pivot here.
I still wonder about commoditization with the models.
And I still wonder if the real value won't be like what you can do with someone's model, whether or not it's your own or not.
I don't know.
OpenAI might be too far down the road to really pivot there.
Maybe not.
And I think that that's where the opportunity is below the hyperscalers.
It's okay, if this AI is being developed and if it's as half as good as you know, we hope it is, what tools can you make with it?
And what value can you layer on?
That I think is the real opportunity in 2026, even more so than these just throwing tons of money at it and hoping there's a payoff down the line.
John, the other piece is we got some pretty amazing information about how much these hyperscalers cloud businesses are growing.
I mean, the one that really stood out to me was Google Cloud GCP grew 48% and had a 30% operating margin.
So there's it's almost like you have to hold multiple things in your head.
Oh my gosh, these numbers that they're putting out are incredible.
The fact that Google Alphabet is going to spend 180 billion dollars on capital expenditures, but also they have this business, which is serving third parties that's growing at 48% and an incredibly high margin.
So is this an area where it they're all sort of doing the rational thing by going, all right, we're gonna go all in.
And the worst thing that can happen to us as these as as a hyperscaler as a huge company is you know what, in 2027, we'll pull back.
We won't spend 180 billion, we'll just spend 100 billion on CapEx.
Yeah, it's a great point, Travis.
Uh the margins in all of these businesses are extraordinary.
And so it does make perfect sense to double down.
What is so hard to parse out though is because those margins are so high, all of them have an incentive in some way to compete better when it comes to those things.
So I mean, circling back.
So the margin could could potentially get competed away over time.
Exactly.
It's the famous line from uh Jeff Bezos: your margin is my opportunity.
If we circle back to NVIDIA, right, the operating margin right now is around 60%.
It was 20% several years ago, which is also quite good for an operating margin, three times that now.
And so if you think about this, all of the other technology companies, they would love to take away some of this revenue opportunity from NVIDIA with their own products.
You look at Alphabet creating the TPUs.
Uh, you see all these companies and as well with the clouds as well.
That NVIDIA has incentive to not have all of its eggs in just the hyperscalers clouds.
It wants the neo clouds to succeed as well.
And so you do see it investing in the neo cloud so that the neo clouds can buy its GPUs.
So there's a lot of competition here.
It's kind of a stalemate.
You don't want to expressly be out competing with your biggest customers, but at the same time, there are margin opportunities here.
All right, let's get to the big question that I think we're all asking.
And that's the bubble question, the overspending question.
Lou, I've always heard about bubbles being talked about as you know what, it's not really a bubble until we start adding debt to the equation.
It's not really a bubble until no one thinks it's a bubble.
It seems like we're there now.
Not only are the hyperscalers now adding debt, you have companies like the NeoClouds that are have a ton of debt.
You have Oracle, which is now has over 100 billion dollars worth of debt.
They were supposed to be one of the winners of the of the OpenAI build out.
So there's that debt, there's that leverage there.
There's also you know, plenty of people who don't think this is a bubble.
I think there's a lot of people right now with it with this amount of spending.
Hey, if these companies are going to keep growing their spending, how can this possibly be a bubble?
Is that a concern?
Concern?
Sure.
I'll note that I don't remember from my econ 101 class ever getting a real definition of a bubble.
Bubbles tend to be clear in hindsight, right?
That's true.
Whether whether or not this is a bubble really comes down to what they do with all of this stuff they're buying and building.
And that is really, really hard to know.
I think the market reaction this week was sort of acknowledging that risk of the the uncertainty.
None of us know how this all plays out.
Could it be a bubble?
Yeah.
But here, one thing I do want to say, because I've heard a lot about like the big macro and you know, like what's going to happen here.
This may be a hot take.
People, this isn't what I'm hearing like when I turn on the TV right now.
But look, this is without doubt bullish for the big macro for the broader economy, at least in the near term.
Okay.
Because John mentioned Dell.
We have NVIDIA, we have construction companies, we have HVAC companies.
All of this economic activity, all of that $600 billion is real money that's going to be spent.
That can keep a f a economy that's weak elsewhere going.
There could be a price to pay eventually.
I don't want to be too polyanic, but in the near term, if they are going to spend what they're going to spend, that has to be a good for you know the chances of an up year of a economy continuing on at least in the near term.
They've spent so much already, and everyone else is still spending.
So we gotta keep spending too, right?
It's like a Hublings first kind of a scenario.
Exactly.
And especially considering that they have money coming out of their ears.
We're talking about the profit margins.
They do have money and they do have ability to raise more.
And if your competitors are still spending, you kind of gotta keep spending yourself.
What is strong bewegen can?
Then we come back, we're gonna talk about some of the mere strom the Berliner Stadtwerke, this can we give them for the stuff?
Then the Berliner Stadwerke invest here for all in a sauce.
Good for dich, good for Berlin.
Welcome back to Motley Full Money.
If you have followed the market at all over the past week or two, you can see that SAS stocks have been absolutely hammered in 2026, and the selling seems to be getting worse by the day.
The theory seems to be that AI is gonna do everything that software companies do today.
But my big question is, John, if the software companies aren't gonna be valuable and be making money, who pays for all the AI?
It seems like there's a lot of different narratives going on here.
So what's the real story?
That's a good question.
What is the real story?
Look, we we are talking about the software stocks selling off.
I don't know if that shoe quite fits.
Because you look, yes, there are some software stocks that are down and down by a lot.
But there are some other ones that are down as well, such as quantum computing stocks.
Look at Ion Q and Regetti, both of those down more than 30% here to start 2026.
You got Rocket Lab, which is a space company down over 30% from its high.
I think we're seeing a sell off in high valuation stocks more than anything, I think if we think about it more broadly.
And that is often included software stocks, yes.
But I think that people are starting to question we we thought that the software stocks were worth a high valuation in the past.
Are they in the age of AI?
Because in the reality, the software stocks, uh, the software businesses, excuse me, aren't necessarily seeing this all of a sudden.
They have no business right now.
The question is, what is that business gonna look like in three to five years?
And what is that stock worth today?
Those are kind of the questions being asked.
Yeah, to John's point, it does feel like that this week we've had an excuse to acknowledge some of what we should have been worried about the whole time, right?
And that's this weird thing about market psychology.
There's very rarely a real shock, like you know, Liberation Day or something.
Normally, it's just we suddenly care more about information we already had than we did yesterday.
You know, and and it it feels like, you know, it's it's like it doesn't matter until it does.
It does feel like there's an element of that just to the stock market this week.
Um that said, I think I get the reason for the SaaS sell-off.
And I do think that, look, John, yes, everything's down, but some of these were down a lot more than the broader market.
It feels like AI implementation, you know, I don't know if it's gonna be the imaginary friend on everyone's shoulder.
I do think it's gonna be a lot of processes that right now we use software for, just kind of taken more customizable or a better option.
I I keep using the analogy of almost like what Microsoft Word did to the typewriter.
It's just better tools for the job, incremental progress.
A lot of these one trick enterprise software, I think they are vulnerable.
So you're saying the companies that are built on a feature and not necessarily a platform, they're the ones that are gonna be potentially in trouble.
Yeah, yeah.
I mean, I know just kind of seeing companies implement it that, you know, a lot of times, like, look, you you get on Amazon Cloud and they have 15 partnerships that kind of give you versions of stuff that you're currently paying for as part of your package.
And the stat that I heard this week, I don't know if you guys heard this, but the average large company has over 400 different SaaS applications that they're paying for in an ongoing basis.
And every one of them, I'm sure answers some sort of question.
The question is if if there's, you know, let's say 200 of them or 300 of them are a feature, you know, it's a payroll feature, and now that can just be rolled into this bigger thing that AI can answer, maybe those don't be need to be paid anymore.
And Travis, I'll take it a step further.
How many of them, you say they all have a reason, but how many of them have just built up over time?
And if you are overhauling your IT because there is a new tech wave, how many of them just disappear when you realize, wait, we're still paying for that?
Almost like the stupid subscriptions that they always talk about on the consumer bill.
I think there's even a risk here.
There's another side to this though, too.
I do think, like when in times of disruption, it's good to look at who might the beneficiaries be.
I find it hard to believe that in this new AI world, that it is just, you know, maybe it is just your in-house IT can handle all this, but it feels like not everyone is going to have an AI guru that steps in.
Like not every like Joe's trucking company is, you know, is going to have an AI guru.
I do think that if we don't maybe necessarily need some of these SaaS companies, maybe it is an opportunity for, I don't know, Accenture, even some of like maybe Salesforce or ServiceNow, like the kind of the companies that can package the AI or figure out how to use the AI and be a one-stop shop instead of those 400 different vendors.
I do think there is an opportunity for some companies here.
I'm not sure exactly what that looks at, but that's sort of what I'm watching from here.
Because I I sort of I don't I don't want to buy the dip on this SAS, the sell-off.
I don't know if it's just kind of the market of reacting.
I do think that there is a there or a risk there for some of these platforms being just made irrelevant.
John, I know you like to find a good value stock, some stocks that are trading for very low price earnings multiples or price of book values.
Where are you kind of trying to bottom fish and trying to figure out whether you're catching a falling knife or getting a great deal?
It is such a weird market, isn't it?
Because on one hand, the SP 500 is still pretty close to an all-time high.
It's within a few percentage points.
And on the other hand, I am seeing some really quality opportunities.
And I haven't seen really this many when the market is at a high in quite some time.
And I'm with Lou here.
There, there are some software stocks that I wouldn't touch right now.
Not because I'm certain they're doomed, but just because I'm unsure of what the future holds for them.
But you look at a stock, I highlighted it yesterday on the podcast, GoDaddy, ticker symbol GDDY.
Uh, it's growing, its profit margins are expanding, yet shares are down 50% in the last year, and it now trades at nine times forward earnings.
That's intriguing to me.
Or take a shift for payments.
And I know that payment stocks aren't really popular right now, but it's still growing the top line more than 20% and trades at eight times forward earnings.
So I can't remember a time that I could look at the market so close to all-time highs and then find these high-growth, cheap, profitable companies throughout the market.
Yeah, it's it is fascinating to sort of look and go, wait, these this company that I wanted to buy but thought it was really expensive is now really cheap.
What am I missing?
And oftentimes that's when the values or the when the great buys can come out is when you feel crazy buying something that everyone else is selling.
Uh, but it's hard to know what's real and what's not in this market.
When we come back, we're gonna play in a little Olympics game.
Give gold, silver, and bronze out.
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So, John, I'm gonna have you go first here.
I gave you a list of big tech CEOs.
I want you to hand out bronze silver bronze silver and gold to Andy Jassy, Sundar Pachai of Alphabet, Satya Nadella at Microsoft, Jensen Wong at NVIDIA, or Mark Zuckerberg at Meta.
What do you have at the top of your list?
I'm gonna put Sundar Pachai at the top of my list.
He gets my gold medal here.
He has been at Alphabet for 10 years now, and during his tenure, earnings per share are up over 800%.
This is already a large company 10 years ago.
To see earnings per share go up another 800% during his tenure is phenomenal to me.
You look at also what he's done in the age of AI, starting falling flat on their faces out of the gate with Bard, if you remember.
Yeah, Bard.
That was when people were calling for his head.
They wanted him fired as CEO.
And I think that's another reason he gets gold here because it he was taking a lot of heat for his leadership during that time.
And yet, kind of cool, level headed, stayed the course.
Gemini has been a completely different story.
And Alphabet is firing on all cylinders right now.
Lou, who do you have at the top of the list?
I'm going, look, I'm a long-term focus investor.
So I'm gonna go with slow and steady wins the race.
And that's Satya Nadella.
It's hard to think of a company more just exposed to all of the things you want to be exposed to.
I know he didn't build that foundation, but if you think about the chaos that was there when he got there and what he's been able to do with it and just slowly perform.
Travis, I said it the other day on a different show with you.
I there isn't a management team in big tech that I would trade with Microsoft's.
And there are some really, really good names on this list.
But uh Nadella, just the way he captains this massive ship with in with so many tentacles and so many different things, and the way it just keeps going.
And that I that to me is what I want in the CEO.
All right, Lou, let's round yours out first.
Who is the silver and who's the bronze?
Jensen Huang has to be the silver, and how he's not the gold just speaks to how good of a group this is.
I mean, look, how many times have they I mean it it's one thing to hit the lottery once, but NVIDIA has a history of always being there when a trend happens.
Maybe that's that is true.
You talk about Ethereum.
Ethereum was something that was a huge boon for NVIDIA.
We don't we don't remember that.
That was a kind of a boom and bust.
And then right behind it, AI.
AI autonomous.
Look, maybe if you do that once, you're lucky.
If you do it more than once, you either have a crystal ball or you're really good at allocating capital to future proof your business.
I don't know how you can go wrong with what NVIDIA has done.
Uh, you know, and that's that, and I can only give them silver.
For bronze, I'm gonna go with Pachai because I do really respect everything John said about what out what's gone on Alphabet.
A lot of what I said about Microsoft, you can also apply to Alphabet.
I really love the job they're doing.
There are some great management teams in big tech.
Maybe it's because that's where the money is, so that's where the smart people go.
But you could do a lot worse than this list.
John, who's silver and bronze for you?
Yeah, me and Lou agree with the silver medal, and that's Jensen Huang for me as well.
And for all the reasons that Lou said, he does have a very good ability to see where things are going in the world.
I'd say he does a really good job of communicating that to his shareholders and his team as well.
So definitely he has to make the podium right as the world's most valuable company.
Yeah.
I I would give the bronze to Mark Zuckerberg.
And I I know that some people will push back on that specifically because of the fact that it seems like he's a one hit wonder with Facebook.
But I'm gonna push back on the video.
I mean he's he's acquired a lot of the growth, uh, some of the investments that he's made in things like the metaverse and even artificial intelligence tools and hardware hasn't hasn't really paid off.
Exactly.
And I think that he has taken some big swings that where he's lost some credibility as far as from the investor community.
But I'm gonna push back and say I think that Ray Bans and what they're doing in augmented reality.
I don't think that it's the final chapter.
I think we're in the early chapters of that book, and exactly how that plays out for Meta will be very interesting to watch.
And and I think that it's really interesting how he has led that initiative forward.
When you hear us talking about John wearing Ray-Ban AR glasses, that's when you know things have really turned the corner.
I don't I don't think we're quite yet.
There are we, John.
No, pigs are not flying.
Zuck reminds me in this group of who was that Turkish shooter in the Olympics that just didn't look like any of the other shooters and just kind of set up there and kind of doing it on vibes.
Yeah, do it on a vibes.
Uh, that that is Zuck in this group.
Not to take away from.
And look, poor Andy Jassy.
I think Andy Jassy's doing it.
Yeah, that's what I wanted to ask you about.
Well, he gets absolutely no love here.
And no love from the market, to be fair.
Shares are down 10% as we started recording today.
Well, you know, he's kind of the Steve Balmer, isn't he?
I mean, I don't think Steve Balmer was as bad as kind of now his legacy is, but it's tough to follow the the Bezos, the gate.
And part of it is is that those CEOs probably got out at the right time.
So it's kind of do no harm.
And when do you and you know, maybe it's to the next guy that gets to kind of make bold decisions again.
Uh Zuckerberg, I'll tell you, I don't know if he deserves to be like the platinum medal or just not even invited to the games.
You know, I mean, I I think it's it's all Zuckerberg, if nothing else got one thing right and it happened to be just the eternal the the fountain of youth of cash, just like this this cash flow machine.
As John said, he isn't exactly a standout in what he's done with it since, but he owns that fountain, and he he uses it to his advantage.
So yeah, he's I I guess that gets him an invite to this Olympics, if nothing else, right?
All right, let's move on to restaurant stocks.
This is an area that has gotten absolutely clabbered by the market, which I tend to think make means there's maybe some buying opportunities, but uh it's also possible that things like GLP ones are gonna change the way that we eat forever.
So I've given you five stocks.
John, I'll start with you.
Kava, Chipotle, Starbucks, Portillos, and Texas Roadhouse.
What do you got?
Bronze, silver, and gold.
Well, maybe I should start with who I left off the podium completely, because I left them off for the same reason.
I left off Chipotle and Starbucks.
I think that both of these companies are facing some pricing issues that its customers are pushing back.
And when you kind of get into that dilemma, then your margins start taking a hit.
And we're already seeing that play out with Chipotle.
Do we have over expansion problems with both of them too?
I don't think so.
Maybe with Starbucks.
I don't think we have that yet with Chipotle, just based on the average unit volumes that are still very, very strong among the very best in the restaurant industry.
But I do think that the narrative took a hit as far as what you get for what you pay, and Chipotle is now trying to work through that.
It if it's not reality, it's at least customer perception right now.
And that's just as important.
I think that you got to give Texas Roadhouse here the gold of this of this group.
It is, if you want a high quality restaurant business with no drama in your portfolio, I think you go with Texas Roadhouse.
It just consistently quarter in, quarter out.
It's a pretty mature chain at this point, and yet same store sales are up again uh five or six percent so far this year.
That those are really strong numbers.
The restaurant level profit margins are good.
It's even working on some newer chains that it can grow from from here.
But then, as far as my silver, um, I'm definitely gonna give that to Kava.
I think that Kava, yeah, same store sales are drifting lower, but so long as those profit margins at the restaurant level stay above 20% as they are right now.
I think this is a growth opportunity just from opening up new restaurants.
Only around 300 or so right now, opening up 70 or so this year.
Uh, that that's a good growth rate.
And so long as margins stay where they are, it it should do well.
I'll give the bronze to Portillos.
Lot, a lot of upside if things go right.
It does have some execution issues going on right now.
Uh debt levels are kind of high, but I think that it can really perform well for shareholders if it can uh get back to some same store sales growth.
Lou, what do you got?
You know, so since we're keeping the Olympics analogy going, you ever get on like you turn on the Olympics and it's like, I don't know, you go to MSNBC and it's something, and so you quickly flip over and see if there's curling or something on another channel.
This is how I felt about the restaurant stock things.
I would I would change the channel before I would watch this this event personally.
But there's one restaurant you talk about, so let's hear your gold.
Yeah, so my gold is gonna be Kava, and this might be because this is the one that I personally go to the most.
I also think, like, look, healthier living in a world of GLP ones.
Maybe the Mediterranean diet is good.
I do wonder if flyover country, if the great Midwest will embrace Mediterranean dining.
So even here, I sort of do worry.
But definitely Kava is both the one I go to and the stock I would pick here for all the reasons John said.
I do think that there are still look.
I mean, I was in Kava's backyard the other day, and I couldn't believe how far I had to drive the DC area to find a Kava.
So they even have in their backyard expansion opportunities.
I'm a silver on Texas Roadhouse just because they're such a good operator.
And like John said, there are expansion opportunities.
It is sort of, I think, not the growth story it was necessarily.
And that's my problem with Chipotle and uh Starbucks too.
Even if they're solid businesses, the market rewards growth.
And I don't know how these become solid investments as far as market beating investments from here.
I don't know if I can award a bronze.
Because like John says, there's potential with Protillos, but there is also negative comps, margin pressure.
I I have a real hard time watching this event or buying in here, even with Kava.
I just gotta go ahead.
This is a pretty empty podium from Lou.
Apparently, everyone has been disqualified.
But now I want a Kava bowl.
All right, let's go to our final list.
The 2026 potential IPOs.
We have SpaceX slash XAI, whatever they're gonna be called in the future.
Canva, the uh potential Adobe disruptor, Jersey Mics, which just hit the news buyers over the past week or so.
So that could be potentially interesting if they do go public.
Strava, they've been talking about IPOing for a while, and also Discord.
John, you're gonna go first again here.
What's your gold, silver, and bronze?
Well, we'll start with gold.
And it's not because I'm sure that it's the best business here, but with Discord, I'm very intrigued with what the financials could look like.
Discord is a communications platform.
You can form communities inside of the platform.
There, there it seems like this is a business that can certainly do some some really good numbers as it scales.
I'm curious about that.
Uh listen, SpaceX slash XAI, I'm gonna give the silver medal here.
I I do think that, you know, on one hand, we're kind of joking around a little bit about one Elon Musk company buying another Elon Musk company.
On the other side of things, I do think that there is a real business strategy here with AI in space in that combination.
And so I'm intrigued about that.
Um, I'll give Jersey Mike's the bronze.
I am a sucker for restaurant stocks.
I definitely will take a look at the side.
Go in the opposite direction of Lou here.
I know.
I I've I've bought so many rest bad restaurant stocks over the years.
So I I am choosy at this point, but I'm always intrigued.
All right.
So yeah, Jersey Mike is not on my portfolio.
You know, everything I just said about restaurants applies.
I am gonna lean in and go gold for SpaceX.
Uh, I I John, I don't know if I agree with you.
I don't know if there is a logical business reason to put SpaceX and XAI together, other than the fact that in the end of the day, we're all investing in Elon Musk's brand.
So why not get those all under one roof, all of his different projects?
I do think, though, that if I had to get an allocation in any of these, the one I think that is I'm most likely to be able to sell quickly for a profit or hold on and profit over time is SpaceX.
And at the end of the day, that's what an IPO is, right?
I'll do Discord as a silver for the same reason so we don't have to rehash them.
So I gotta go.
So Strava scares me on valuation.
And I do think Strava just fits in better better with someone else's portfolio.
But if I'm going to ignore potential valuation on SpaceX, I can't turn around and slap Strava with it.
I do like what Strava's doing.
I'll give them a bronze, but very, very lukewarm.
Other I don't like buying IPOs in general, very, very lukewarm beyond SpaceX.
I feel like there's a lot of expectations built in management team, and we'll see how that works.
Canva didn't make the list.
That one surprises me because that seems like business is going extremely well.
You still have that disruption story uh against Adobe.
Seems like that would be one that should at least be on people's radar.
I don't know if we know what the valuation will be.
We don't know the valuation, and also it is it a disruption story or is it a potential disrupted story?
See our earlier conversation about all of the free tools and AI and all of that.
Yeah, when it comes to AI, Canva kind of business area is one area that I'm concerned about.
So that low price, you know, maybe not quite the high value, the premium products like Adobe has, you're a little bit more worried about that kind of lower end.
Hey, Travis actually uses this on a day-to-day basis.
He's happy to switch to something else.
Exactly.
It seems like generative AI can do what Canva does really easily.
Yeah.
Fair enough.
Well, when we come back, we are gonna get to the stocks on our radar.
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Every Sunday, we get together to talk about the week's tech news on This Week in Tech.
Hi, this is Leo Laporte.
I hope you'll join us for this week's Twit.
We're covering CES.
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Jennifer Pattison Tui covers home automation for The Verge.
Jason Heiner covers AI for the deep view.
And Father Robert Balliser, the digital Jesuit, has his top five picks.
Plus, watch out for falling robots.
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Before we get to radar stocks, John, I wanted to get your quick thoughts on what's going on with Bitcoin.
It's fallen off a cliff.
Is there a real story here?
You know, about every four years, people seem to forget that Bitcoin falls about every four years.
This crash in stock in the price of Bitcoin is pretty much right on schedule.
Maybe, maybe a little bit early, but it goes through a cycle called the having cycle, and it's every four years.
This leads to very predictable swings in supply and demand, which causes the price to swing.
And these swings of prices can be exacerbated because people are using so much leverage.
It doesn't necessarily say anything about Bitcoin adoption, though, and that's the more important thing for investors to look at.
Let's get to stocks on our radar.
Lou, you're gonna be up first, and we'll bring in Dan Boyd behind the glass.
Dan, I am going with sexy exciting.
I'm going insurance.
I'm going with Markel tickle ticker MKL.
This is an insurance giant and corporate holding company, similar to Berkshire Hathaway.
We always look for the next Berkshire Hathaway.
It's kind of been sitting in front of us the whole time.
Last year, Markel management made some tough decisions.
They cleaned house and insurance, exited some of the businesses, refocused elsewhere.
This latest quarter announced this week suggests those decisions are paying off.
Revenue top 4 billion in the quarter, insurance profitability is up, and overall adjusted operating income grew by 10%.
Yet the stock has barely moved over the past year.
I think the improvements will continue.
I think the market will finally catch on at some part point.
Markel, stock I own, stock I'm excited to watch from here.
Dan, what do you think about insurance?
I think the listeners need to know that before recording today, Lou is trying to butter me up with Markel by mentioning that full alumni and personal friend of mine, Morgan Housel is on the board.
And Lou, while both of those things are true, I don't really appreciate the gamesmanship before recording.
Dan, did I not tell you how good you look today, too?
You really look sharp.
I always look sharp, Lou.
There you go.
All right, Sean.
What's on your radar this week?
Okay, this week I'm looking at Kupang, ticker symbol CPNG.
This is the largest e-commerce player in South Korea, sometimes called the Amazon of South Korea.
I'm not enthusiastically ready to call this a buy yet, but it does report some financial results in a couple of weeks, and I think they're going to be telling.
So the short story is that this stock has dropped down to about one time sales because of a data breach.
I'm optimistic that this company actually has a moat when it comes to logistics.
And I think that it's going to be able to push through this setback.
Now, if I'm right, then this is actually a magnificent opportunity because the company is still growing.
It is very profitable.
It now trades at about 25 times its free cash flow.
And keep in mind that that's while investing in its business with a lot of capital expenditures.
And so it it is going to need to pay out some things for those affected by the data breach.
But again, if the financial results prove that it has a moat moat that its customers are staying around, I think this is a long-term winner.
And I've been waiting for it to finally trade at a price I can get behind, and it's there now.
Dan, are you ready to coupang?
Well, it's an Emily Flippin stock with an Emily Flippin' pitch with data breaches and almost a buy.
So I don't know about that, gang.
Listen, we love Emily Flippin'.
All right, what do you got for your watch list this week, Dan?
We do love Emily Flippin, but one thing that Lou did not mention is that Markel is a Virginia stock.
And I'm a Virginia boy.
So we're gonna go Markel.
Congratulations to Lou for winning this week's radar stock.
The always handsome Dan Board coming through.
Or Lou Whiteman, Sean Quast, and Dan Boyd behind the glass.
I'm Travis Hoyam.
Thanks for listening to Motley Full Money.
We'll see you here tomorrow.