Chit Chat Stocks - 6 Stocks With Insider Buys This Week; CoreWeave's Collapse; Amazon's New Grocery Venture $AMZN $CRWV

Episode Date: August 15, 2025

The Investing Power Hour is live-streamed every Thursday on the Chit Chat Stocks Podcast YouTube channel at 5:00 PM EST. This week we discussed: (02:58) AI's Impact on Software Companies (11:52) Trends in Alcohol Consumption (21:02) Amazon's Grocery Delivery and Instacart's Challenges (30:41) Cava's Earnings and Restaurant Industry Trends (36:14) Analyzing Restaurant Performance Amid Economic Challenges (39:58) Insider Buys (44:29) The Hot IPO Market: Opportunities and Risks (48:25) Bubble Watch: Signs of Market Euphoria (50:50) Adyen's Growth Challenges in a Competitive Landscape (56:19) CoreWeave's Risky Bet ***************************************************** JOIN OUR NEWSLETTER AND CHAT COMMUNITY: https://chitchatstocks.substack.com/  ********************************************************************* Chit Chat Stocks is presented by Interactive Brokers. Get professional pricing, global access, and premier technology with the best brokerage for investors today:  https://www.interactivebrokers.com/  Interactive Brokers is a member of SIPC.  ********************************************************************* Fiscal.ai is building the future of financial data. With custom charts, AI-generated research reports, and endless analytical tools, you can get up to speed on any stock around the globe. All for a reasonable price.  Use our LINK and get 15% off any premium plan: ⁠https://fiscal.ai/chitchat  ********************************************************************* Disclosure: Chit Chat Stocks hosts and guests are not financial advisors, and nothing they say on this show is formal advice or a recommendation. Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to Chit Chat Stocks, a podcast that helps you discover, hopefully, your next great investment. Today we've got our Power Hour episode. We do these every week on Thursdays at 5 p.m. Eastern Time, and we do them live on YouTube. So if you have any questions and you want to ask us, and maybe you're listening on the podcast players, feel free to head on over to YouTube and ask away in the comments. once again that's five o'clock p.m eastern time on thursdays we've got a load of topics to discuss today one i want to talk about is the threat of ai potentially eating or disrupting

software that seems to be kind of a focal point and a point of uh discussion topic that a lot of people seem to be on both sides of and we've got some stocks that are down a lot maybe on that narrative as well. We also have, I don't know if there's a whole lot to talk about here for us, but Buffett disclosed his mystery position, I think 30 minutes ago. So we can talk about that. And then Brett, you've got a couple of items here as well. We've got Kava earnings. I've got a little, maybe a little pat on the back for you potentially in one of your portfolio holdings with portillos uh not going to spoil anything yet but how are you brett it's kind of the tail end of earning season so how has it been for you so far yeah we're i think every company in my

portfolio is reported so digesting everything uh we're in the tail end so earnings uh i don't even know how to describe them this week i don't want to use the the swear word term to describe these companies the companies that may not have much about them may not have much of a business are reporting this week um and it's nice to not have a barrage of information to try to digest i'm trying to get through everything but i thought kava was quite interesting i think core we've circle portals is related and amazon's grocery initiative which i think they may have finally gotten it correct but let's get to the first topic ryan what do we want to discuss first yeah well just to kind of touch on what you just said that the earnings season

call me crazy but what do we think of this spreading them out spreading out like earnings reports per the quarter you know yeah not concentrating thousands of them in one week so that people can you know actually look at all the reports but anyways i'm sure there's reasons that it's concentrated to a couple of weeks but it would be nice if it wasn't so jam-packed Yeah, exactly. I agree. I agree. Hey, SEC, what have you, auditors, if you're listening, maybe an idea. But for the companies that are already doing it, they're not going to switch. What do we want to discuss first, Ryan? AI eating software? Yes. First analyst. He's AI eating software.

There have been a number of analyst reports. I think one was actually named AI is eating software. And I want to talk about this because there are a couple very notable stocks that are now in big drawdowns. Salesforce is down 36% from all-time highs. ServiceNow down 27% from highs. Adobe has been cut in half basically, minus 49%. 99%. Monday.com is down 61% from highs and HubSpot has been cut in half as well. And the narrative here, I guess there's a couple schools of thought. So the first one is that AI is

so helpful that companies are now going to start building much of the functionality that they get from outside software vendors. They're going to start building it in-house internally. So CRMs, payroll software, maybe anything that they think they can do on their own, scheduling software. I know a lot of people actually subscribe to that, stuff like that. The thought here is that companies start doing it internally. I think that's the thought from some people. The other, I guess, narrative that goes along with this is that AI is making it so much quicker to scale a startup that there's now more competition for CRMs and other software solutions. That one I can kind of get behind a little bit more. But Salesforce is trading at its lowest free cash flow multiple of all time, I think. Maybe something happened to the dot-com, but I'm pretty sure it's the lowest of all time. Or not the dot-com, the GFC.

So Adobe, once again, they've been in public for a long time, but for sure the lowest valuation in 15 years, EV to EBIT I think is around 16 times trailing, maybe 17 times trailing, which is very low for them compared to their historical averages. What do you think? i guess two questions here do you think companies will actually take this let's build it in-house approach now that ai can maybe help do that or do you think that this is a lot of these were richly valued stocks anyway so it might just be a sort of a natural drawdown but do you think there's opportunity here maybe i have no clue the if someone said hey these companies are going to be able to use ai tools to build all this software in-house i'd say yeah that's plausible if it can do that i have no idea if the software can do that or the the ai tools can do that uh maybe

Maybe. It's a giant unknown to me because all these tools from Anthropic to Cursor, OpenAI, and Google, their products change every year and they've changed every month. So who knows if something's going to come out that actually revolutionizes this. my gut says these companies stay and what i mean is the adobe's the sales forces the other what have yous they're gonna stay entrenched within these large enterprises but at the edge maybe there's some disruption if i look at a company like monday.com though and maybe this is not indicative of the entire basket we're still at an ev to sales trailing month of seven. So it's not dirt cheap, even though it's in a drawdown. Perhaps these are priced to perfection. Adobe at 16 times earnings feels fair to me. I'm not touching these stocks.

I don't really invest in software. It's not an industry I know well whatsoever. But if you're someone that's confident Adobe is going to stick around and that the moat is going to be fine or maybe just slightly weaker than it used to be, the pricing power here alone should make it a good stock to buy. Plus, and I saw you posted this chart earlier this week on the Fiscal AI Twitter account, Adobe is buying back records amount of stock. So they are confident in the business and maybe they're seeing stuff that the investing narrative isn't portraying correctly. Because as I've learned in the last five to ten years, when Wall Street takes a hold of a narrative and the online investing community takes a hold of a narrative, the exaggeration of what is actually happening can get put a hundredfold. Like, there can be thoughts of, what is it?

Oh, the latest one, Google search is dead. that one was taken from a few big analysts on wall street and basically spread to everyone and google's valuation got cut in half so is that happening here maybe i have more confidence in google search something i think i understand better as opposed to software but i'm curious your thoughts ryan yeah i mean i had been a buyer of adobe i'll come out and say that so i i like them and i think they've been i think you get good returns from here would be my gut reaction and the fact that they're buying so much stock i think it's at basically an eight percent buyback yield. Every time in my short investing career that I've seen a business that's been deemed

ultra high quality for 15 years get really cheap and there's some sort of narrative that's crushing it. This is kind of like meta as well. When those management teams start turning on the buyback machine, it usually ends up in pretty good results a couple of years from then. yeah and meta didn't even turn on the buyback machine they've been they started abhorrent they're they're pretty abhorrent about it but yeah yeah i remember they they announced that they would and that was pretty much all it took uh and then the results started to improve as well so it became they weren't able to buy back at uh the same prices that they would have but i think Adobe is a bit of an outlier here in that when you look at task management and CRMs and IT ticketing software, those to me do feel susceptible for people to try to build it in-house.

and oftentimes i think startups especially like you typically do try to build like that crm initially on your own and a lot of people probably try it in a spreadsheet try to manage it there and then all of a sudden they realize that there's all these tools built out that are great for it and my gut tells me there's a these companies are all going to be fine uh there's this old saying i can't remember where i heard it but it's like does it make my beer taste better it's it was this sort of approach from apparently a famous brewery i think in germany where basically they said unless it affects the taste of my beer i outsource the function so if it's like the restaurant management software.

They're not going to build that. If it's payroll, obviously they're not going to build it. I think the listeners understand, Ryan. Yeah, I've heard the term before. It doesn't make my beard taste better. Companies aren't going to build all this stuff in-house. They're not going to build Adobe in-house, Canva in-house, Monday.com in-house.

Is that what Monday.com is? Ticketing software? They're task management for the most part, but they've also grown into CRM, I think. Yeah. other people can make money in this i don't have confidence in long term i just it's just not the sector i like um but hey if you are confident in the competitive advantages there are opportunities here given the valuation yeah and i i don't know what spurs the narrative on i swear it's like

you see one expert it's a game of telephone that's it that's all it is the people love to use expert transcripts for more than they are yes and it's like all of a sudden that catches on all of a sudden the analysts start putting it in their reports and saying oh you know we're seeing a slowdown or pressure or whatever and then every all of a sudden it becomes this big narrative remember when the apple executive came on under under oath and was like we're seeing to slow down in searches or something like that and then go far yeah but it's because google chrome is taking market share yeah and then the google the next day was like no we're not seeing a slow down in searches but that that narrative caught hold for like two or three months and search was

growing paid clicks were growing and they're like no no we don't believe it it's like yes they're giving you the numbers it's very memetic it's it's again a giant game of telephone that gets played around. One that I saw that I think you get turned into this in the opposite direction for Google search is, and I saw this from Mostly Borrowed Ideas Daily Dose. There was a survey from SEMrush around Google search usage before and after or people that use ChatGPT and people that don't. And fascinatingly, people that use ChatGPT more used Google search more, according to the survey now this is a survey of i'm assuming like 100 people maybe maybe it's statistically relevant but this could get spread around and then they go oh it's actually a huge winner now

alphabet could get re-rated from 20 times earnings to 40 times earnings who knows speaking of surveys did you know people don't drink anymore yeah ryan i'm seeing this chart here and i was the headlines that were getting tossed around that no one drinks anymore i don't even know if this chart is statistically relevant it's it's a tiny dash it going down is the okay yeah let me give some context on it because we're describing the chart i'll share this i'll share the screen i'll share the screen people listening probably don't appreciate it but a survey came out this week and i know surveys can be just a load of crap but i think there's some validity to this so the survey was conducted by Gallup, who has apparently been tracking alcohol consumption

since 1939. I didn't know Gallup had been around that long. According to Gallup, the percentage of US adults who say they consume alcohol has fallen to 54%, the lowest by one percentage point in Gallup's nearly 90-year trend. Now, like you said, is it statistically relevant? It's certainly I mean, it looks like the average has been about 63, like low 60% for the last 20, 25 years. And this is certainly the lowest it's been and way below that trend. I do think this is pressure on the alcohol beverage companies. There's no way that this is not leading to some sort of of top line pressure for them. Let me call out a couple things that I thought were a little fascinating here. When we look at who all is abstaining from alcohol, it's pretty broad-based,

but there are some interesting things worth calling out. Women are abstaining from alcohol more than men. I kind of expected that, I guess, a little bit. Lower income consumers are abstaining more than higher income. I guess that's to be expected. They just have less money to spend on this uh and then republicans are apparently abstaining more than democrats i'm not sure where they got their uh vote their voting registration as well your drink ran your total lib as they say yes i guess uh i wouldn't have guessed that i wouldn't have guessed that i know what happened yeah that bud light commercial must have done a real number it's still killing the industry wow interestingly though there doesn't seem to be any data

supporting the notion that declines in alcohol consumption are caused by people shifting to other mood-altering substances, in particular, recreational marijuana. So that was kind of, I think, one of the big things people pointed to, which was, okay, there's more alternatives today than there used to be. So yeah, people are turning to other substances. There doesn't seem to be any proof of that. Marijuana consumption has been pretty steady over the last five years while alcohol consumption continues to decline. So I guess my question to you is, do you think this trend will continue?

And do you have any interest in owning the alcoholic beverage companies if there is like continued pressure? It's a tough question. I would have interest at the right price, but knowing the right price is tough. It's a little more competitive than other CPG areas where market shares can shift. You've seen random changes in beer getting popular,

then wine getting popular, then spirits getting popular. So it's not like there's just cigarette brands that kind of stay the same. There's not that many new entrants. So that's a little bit of a downside versus soda, candy, or tobacco. But I would fade this a little bit. Alcohol has been a part of human civilization for thousands of years. And I don't know if I can call the end yet because we are at 54% consumption in a survey methodology that may not even be worthwhile during the internet. There's been a lot of talk about how the ways that some of these surveys go down, they're having trouble adapting to the fact that people don't answer phone calls anymore from unknown numbers, stuff like that. So I'd want to know the methodology, what's changed with it,

if that is having any impact and whether this is statistically relevant let's say if it falls below 50 maybe i'd be concerned uh but looking at the stocks here and i'll pull it up here on fiscal ai what's what's one bfb brown foreman isn't that jack daniels yeah fun fact jack daniels internationally is like a great brand in the united states it's kind of tacky but internationally. Fantastic. I'm going to pull up. How about EBIT? Let's use that. It's kind of our classic one. 13.6 on fiscal AI. Stocks actually rebounded a little bit, even on this news. Am I interested? A little bit, but for a company that could be in terminal decline, It's more of I want what Altria was, sub $40, which is like six times earnings, maybe not 14.

Because at 14, you're still pricing in, at least if you want an acceptable return, you still need some growth there. And I'm not sure they can provide it if the downside occurs. Yeah, I think that's fair. You want probably a true, true sin stock multiple if that's what this is going to be considered. Maybe a high dividend yield as well because I assume a lot of these alcoholic beverage companies are pretty mature and pay a dividend would be my guess. But here's what I guess blows my mind. The survey basically said people are coming to the realization that alcohol isn't healthy. That's what's causing this.

Are you kidding me? People have had hangovers for thousands of years. you think they wake up thinking that that must have been good for me no no there has been that narrative yeah but there's a health kick like online tech people silicon valley but i'm not sure that has staying power i'm not sure that's broad-based yeah maybe it's ozempic ozempic is and then the glp-1 the weight loss drugs maybe that's having an effect i could definitely see that having an effect on a 5% rate here, because this isn't a huge shift. But people saying alcohol is unhealthy, so I'm not going to have it anymore. Yeah, I agree with you. That's not going to be a

long term factor. And marijuana, I also agree with my my gut check. Or what I feel it lines up with that data there. I don't think that's going to have an impact. Marijuana is going to stay uh subscale not not not big um we've talked about this before we grew up in a state that was one of the first ones to legalize and it never becomes as big as you think it's not nearly as big as alcohol even though i think there's some profitable uh cannabis dispensaries in the seattle area yeah i'm i imagine that as a percentage of the population people that are cannabis consuming are probably it's probably going to stay relatively consistent just because it's legalized i don't see it increasing too much anyways that's kind

of speculation if you are serious about investing you need to consider interactive brokers i've said this before and i'll say it again the number one reason i use interactive brokers is because they do not cut corners. IBKR gives investors powerful capabilities that make a difference in the long run. For example, they offer margin rates up to 53% lower than the industry. They provide up to 3.83% interest on instantly available cash. They allow you to easily make extra income on your fully paid shares of stock held in your account through their stock yield enhancement program, plus much more. We considered a number of different brokerage platforms when we were deciding who to trade through here at Chit Chat Stocks. And all in all, Interactive Brokers was

the clear choice. Head on over to ibkr.com. Restrictions apply. Interactive Brokers is a member of SIPC. All right, folks, if you are a regular listener to Chit Chat Stocks, then you know that we use fiscal.ai, formerly known as FinChat, daily. Fiscal.ai is our complete stock research terminal. It's where we have our investment dashboards. It's where we create financial charts. It's where I read all the transcripts for conference calls, sell side events, shareholder meetings, and it has Morningstar's high quality reports on more than 1,700 companies. It really is the complete research platform for stock-focused investors. If you use our link, fiscal.ai slash chitchat, you will automatically get two weeks of Fiscal Pro

for free. And if you find that it's worth upgrading, which I think you will, you'll get 15% off any paid plans with our link. Again, that is fiscal.ai slash chitchat. The link will be in the show notes. Let's get to some other topics though. Let's do grocery. Grocery. Okay. You want to do that? Sure. Let's go for it. Are you an Instacart shareholder? I think you were on the fence. It was a watch list stock for you. I was actually really considering buying it. And Then I think a day before I did my research episode on them, the CEO left and took a job at OpenAI, and I just got kind of shaken out of it. Well, maybe this will shake you even further away from having it on the watch list. Amazon just said that customers in more than 1,000 cities in the United States and towns now have access to fresh perishable groceries with free same-day delivery.

My first thought was how much CapEx this required, and maybe that's part of the spending they've been doing lately. This is same-day free delivery if you spend at least $25 on an order. I personally tested out. I didn't actually do an order, but I made a grocery cart, and they were pretty cheap. The items for my regular grocery bill were very, very cheap. They still don't have the grocery list problem solved

where you can't just make a list and it finds it. You have to search each time and then find the item. So building your cart might take just as long as the trip at the grocery store, even if I guess you don't have to drive there or not. I might test it out to see if it compares to in-person shopping at, you know, Trader Joe's, Costco, Walmart, what have you. My question here, Ryan, does this compete better with Costco and Walmart, which I think maybe the answer there is obvious. Yes, it helps them compete better there. But more fascinating, more interesting, does this ruin Instacart's value proposition? I kind of want to think this is like fade the news where it kind of feels a bit to me like how every grocery concept got crushed a while back when Amazon bought Whole Foods.

You mentioned it. So the user experience, yes, obviously logistics, they're as good, they're better than anybody. But there is some value to the user experience for an Instacart customer. They are recommending new products to you. They know what products you like. You know in which store you like to shop from. Like it is sort of a digital experience of going through the grocery store in some sense. i think that matters a little bit and i wish i don't think instacart sold off that much from

this unless i'm wrong did they when was this reported do you know it was like 10 it was yesterday they reported this i think it was about a 10 drop it's down 16 and a half percent in the last five days yeah i kind of think this maybe creates a buying opportunity for instacart honestly you really think they have a moat here though uh again this is a great value proposition i would it's going to be significantly cheaper than instacart in in sorry in what way which part like okay it's free uh like there's no delivery fee so that knocks off a huge fee no tips and the products are going to be cheaper and i can use my amazon visa card and get five percent back and are they going to grocery stores to get this stuff

i think it's their own logistics so it's like um i forget what that company is okado group or coupon or and then they have their you know fresh warehouse they're taking it straight from there and whole foods so i think and it's within it's not you know within an hour it can be okay we're gonna order this in the morning and it's gonna be in the window of 3 p.m to 7 p.m so i think it's within the regular delivery network i'm definitely gonna try it out i'll report back to listeners what i think but cost wise this is a significant undercut to instacart or door dash yeah i think i don't know if the costs on instacart are as steep as you're imagining as i mean you get a hundred dollar basket you're you can tip 10 bucks i

think a lot of people a lot of people that use instacart already cost is not their primary concern like if cost was their primary concern they wouldn't use instacart would be my uh guess because they would go get the groceries themselves the you know what i could be totally be wrong here amazon like i guess it depends on the items they have in fresh grocery my thought is a lot of people like their grocery store they know they're like they know what items they like from their grocery store they go to instacart and it's basically just facilitating that relationship between you and your grocer digitally cost or amazon in this case if you're buying from amazon i guess if they have the same items like the sku's or there's parity then maybe i'm wrong

maybe this does win but i just i don't know my gut tells me this is the habits for instacart customers might not change that much maybe i would never buy this stock it just seems like picking up pennies in front of the steamroller but amazon has not been able to execute in grocery this could be the one time they finally do but they've had all these announcements and seemingly interesting ideas and it hasn't worked so far this one at least coming from the gut the gut feel like this is the one time they've announced something where i go oh i would easily use this so that's what makes me a little bit nervous for instacart let's do a little quick valuation work on instacart using our friends at fiscal ai shout out to them uh operating profit

526 million dollars over the last 12 months current market killing so 20 20 times yeah i'm trying to see if that might be slightly outdated here yeah yeah you're right 10 billion 20 times i'm probably still not interested if this got to like uh amazon's going to kill them multiple which i'm thinking is more like 10 times i could be probably pretty interested there is probably some operating leverage still going on instacart as well assuming they continue to grow but yeah the risk reward there could be interesting 20 times what do you what are you really getting uh we have a comment here though that says has ryan been to an heb yet of course they are good yeah yeah it's a great do you know what heb is

a local grocery store i'm assuming yeah it's kind of like a it's maybe like a fred meyer i guess in terms of like what they offer but it's a little more like there's for some reason there's just a fascination with heb it is a nice grocery store it's low cost but it's not too different in terms of actual offerings. All right. Well, we got a lot of earnings to cover. Adyen, Circle, Coreweave, Kava. I'll let you choose, Ryan.

What do we go first? Let's do Kava because I think there's a broader discussion there around fast casual and fast food. spending generally right now okay so let's get the headline numbers out of the way revenue up 20 16 new kava openings in the quarter that's up 17 year of a year for store count so they're growing store count fairly quickly uh same restaurant sales growth was only 2.1 and i'm sure we're gonna have some charts here i posted one on my twitter account i think was good comparing them to some of the other restaurants and Kava had a huge slowdown. Their AUV still

$2.9 million. They had positive net income and free cash flow. So the business is still operating fine. For valuation reference, market cap $10 billion. Last 12 month revenue of about a billion dollars. There's 398 Kava restaurants valued each at $25 million. So they do about $3 million in AUV valued at 25 million dollars a piece and what sort of margins could you get at that 10 15 so still a steep valuation my question i know i say this every time what price are you a buyer ryan so restaurant level profits was 273 million dollars over the last 12 months So you said what was the market cap here? $10 billion?

$10 billion. So 40 times restaurant-level profits. I do like the trajectory of this concept. Now, that doesn't mean I'm a buyer, and you can still go wrong. But there seems to be – like because Chipotle had such success and it worked out so well for a lot of investors, there seems to be just this like fascination with restaurant concepts where – And giving them 50 times earnings. Yeah. And giving them 50 times like BS earnings.

Like this is 40 times restaurant level profit, which just excludes like all costs at the corporate level and probably some other costs too. So I don't know – I don't think these kind of things should be trading at a huge premium. It's the same with Wingstop. Like Wingstop got that same – gets that same multiple. Now theirs is primarily franchise economics, so a little different. But no, I'm not – I'm definitely not interested at this price. i would probably be if they got to like 15 to 20 times restaurant level profits i would be interested but we're 50 away from that yeah 50 drawdown well you look at it if

they're going to be and i know this is just one quarter but if they're going to be a normal comp store sales grower and maybe they expand restaurant count at 10% a year, you can grow revenue 12, 13% a year. Maybe earnings grow at 15% a year. Do you really want to buy that at say 55 PE? I don't think so. It seems like maybe somewhat of a fair valuation if you're thinking they're going to grow revenue at 15% for 10 straight years, which is definitely possible, but not guaranteed yeah i'm not interested and seeing these numbers and seeing sweet green chipotle some of the other ones what's funny is that the two restaurants that seem to be doing well are actually three are domino's mcdonald's and chili's you know chili's had 20 comp store

sales growth ryan that actually doesn't surprise me i know that's kind of weird but it's become like this cultural resurgence out of nowhere and it's very better now huh it's very big in the south too um it's not as big up in washington chile's i don't think yeah we get better tastes up here that's southern cooking and you know what this is this i should have known this girlfriend indicator uh my significant other was like we should go to chile's i see everyone been talking about it on social media numbers are backing that up yeah and you know what other chain seems to do well is texas roadhouse kind of a similar wow yeah like comp sales i think are really strong uh similar to not quite chili's level but uh yeah they've been doing let me just

pull up some numbers comp sales i was mentioning that to finish my thought seeing most restaurants struggle led me to actually buy a little bit more portillos we'll talk about these insider trades too the fact that they're actually posting positive comp store sales when chipotle and sweet green are negative um was a good indicator for me and i thought the valuation looked great um for reference i did talk about that on our newsletter and our chat that we have on the sub stack chit chat stock sub stack but yeah add a little bit to the position it was small it was about three and a half percent position so i just added it to a little bit higher but the comparison there made me feel a lot more comfortable that they're

facing macroeconomic headwinds and still generating a profit, generating restaurant level cash flow. And once or if this normalizes, they can post positive comp store sales over the long term. I'm going to pull up a comparison for you here. So let's go. Am I missing anybody here? I'm doing Wingstop, Portillo's, Chipotle, and Kava. I kind of think of those all as sort of fast casual that's fine you can put sweet green but doesn't matter okay this is a live advertisement for fiscal ai ryan look at that it is quick you can make a four company chart in uh during a live podcast there we go so we use our link fiscal ai slash chit chat get a discount there all right you got it loaded up ryan what does it say kava same store sales growth two quarters ago they

were doing 21 comp store sales which is actually remarkable this quarter they're doing two percent so it's fallen off a cliff same with wingstop they were doing 20 comps they've now uh tried to negative two percent chipotle has gone negative as well so negative four percent comps relative to last year the actually the only other positive one in this comp other than kava was portillo's which there we go which sandwiches we looked at portillo's first it just kind of sucks that they have to be the first ones to report i think maybe it's chipotle but you look at it in isolation you're like that's not really that great but if fast casual spending is slowing across the board these results for portillo for portillo's might be a little better than i think

people thought uh initially what i can't figure out is why doordash uh and i think well this is from say september 2023 again i'm using just fiscal ai not their uh press release september 2023 to now their gross order volume on doordash has grown at 23 so if all these restaurant spends are going down i'm trying to figure out where the doordash man is going is it all going to chilies i don't think so i think people eat in-house there maybe mcdonald's maybe domino's but what's happening i'm not sure could be i assume grocery i don't know the grocery i was gonna say i don't know if the doordash really breaks it out but maybe there's a growing piece of like convenience store pickups and grocery pickups but maybe it's those value chains

because McDonald's, Domino's, not only are they seeing stronger growth in some of these, but they're much larger as well. So hard to say. Now, this kind of leads into another topic, which is I looked through companies that had big insider buys over the last month really more so the last week and i just think it's a good indicator overall like when you see obviously people have said this a million times but executives sell stock for a lot of reasons personal finance reasons you name it but they only buy it for one yes you only buy stock for one reason and that's because you think it's

It's – well, sometimes it's to signal to people that you think it's worth more, but sometimes it's because you think shares will go up. Now, I have found six stocks that I thought were interesting that had recent insider buys. Number one, Asana. Have you heard this – do you know what's going on here with Asana? I don't, but I know the CEO is Dustin Moskovitz, founder – founder, but he's one of the founders of Facebook. and i know that he likes buying stock in the open market for some reason because he's mega wealthy it's yeah he has it on a what do they call it rule 10b51 or whatever plan where it's i've usually only seen that for insider sales like you have sales planned out over months he hasn't like

insider buys planned out over months like he literally just buys half a million dollars of stock seemingly every week and it's just like on automatic so he's been buying stock maybe he's going to somehow buy the whole thing one day uh elephants health which i think is the second largest health insurance company in the world the ceo is a health insurer yeah yeah ceo bought 2.4 million dollars worth of stock that was a the the big thing i look for here is not nominally how much did they buy but how much of a change in their ownership was it because if it's like a one percent change in their ownership it kind of feels more like signal like they're just trying to signal to investors that they're insider buying but yeah so seven percent increase for the ceo

decent transmedics the ceo bought two million dollars not much of an increase for him here were the three that i actually found very very compelling one shift for payments their payments processor that's kind of a hodgepodge of assets if i'm not mistaken they kind of have a number of different brands under their umbrella they acquire a lot yeah the ceo jared isaacman who is also an astronaut and kind of an extraordinary human being bought 16.3 million dollars worth of stock that increased his stake by 26 percent and this was after sort of a collapse following earnings and then the other two that stand out to me more so than anything else sonos and portillos portillos our resident shareholder here the ceo cfo general counsel and a board

member all bought shares in the last week and then at sonos yes the speaker company the ceo cfo and multiple directors all bought shares in the open market last week the thing i find a little weird about the sonos one they are not trading at all-time lows so it kind of feels like maybe they know something's coming or i don't know i got the tariff text on signal i guess but yeah i'm not sure portillo's and sonos both had four different people buying shares that are associated with the company which i thought was pretty promising yeah the shift 4 won the guy the founder isaac min he was going to be the director of nasa so this could be just him coming back and saying i'm confident in this company still i think what he's the board of directors now i don't know if

he's the ceo i'm not sure if he came back as the ceo but it was a whole thing where he's going to be the nasa director he retired from shift 4 but then they went in a different direction because He was an Elon guy, a whole long drama. Not sure. But, hey, Portillo's, this was one of the key reasons I decided to add to my position. Because the fact that they're confident here, along with the activist investors, and along with the new board of directors members from all these experienced restaurant executives, it is a good team.

And maybe this was just a bad quarter for restaurants in general. Yeah, it certainly looks that way. Where do we want to go next? We've got some bubble watch topics for sure, including maybe – You want to sprinkle in some fun stuff? Yeah. Talk about the company that went public this week. Well, I don't know much about them, but the company's name is Bullish, which is strange.

The ticker, I think, is BLSH. And they're a crypto exchange. I didn't know we needed this many crypto exchanges. I thought there was already enough, right? But they went public. I have no idea what the numbers are, but the stock went up 143% on its first day. So the IPO market is hot. Any company that wants to go public should go public now.

I think it is an optimal time, just not from an investor's perspective, but just from raising money. If you're someone that needs to raise money, do it. You're going to maybe get a billion dollars or what have you even more. We're going to be talking about that with Rocket Lab expert Simon Erickson tomorrow with the show that will come on next week. They raised a bunch of money at a very premium stock price on our acquiring companies and cleaning up their balance sheet, which is quite nice but what did you think of this company name called boss did you know it existed did you know the ipo was coming no i would guess there's probably a thousand crypto exchanges that i don't know exist the great name like if if the goal is to like take advantage of

ipo markets when they're hot a perfect name and frankly if you're a crypto exchange and you don't really care about the durability of the business you should take a you should change your name to something that could get memeable memeable because you're gonna probably get a better jump on your ipo anyways no had no idea this is this company existed i how many crypto exchanges do we now have public coinbase a lot is circle no there is not really right no circle is different yeah is it just i don't know the robinhood international robinhood technically is they all technically allow crypto trading now yeah i guess that's true um yeah I really think the team at Huddle should consider an IPO as a shareholder of Nelnet who owns a minority stake or a 20% stake in Huddle.

I would love for them to go public. Yeah, it could be a nice boost to Nelnet's stock price, which is hitting an all-time high. So still feeling good about that one. Question for you. There was one I don't know if – When's the last IPO you saw drop like a rock? just like collapse i can't remember one oh there was one last year wasn't it 2024 i swear there was one that didn't enter well the one time bill girley was celebrating

yeah we don't need to get we have other stuff to talk about we don't need to get into that debate but i've never seen well i've probably seen some but i cannot remember a super unsuccessful ipo lately they price it like that and they restrict the float they want it to be a little bit of pop so employees can celebrate it's kind of the whole game just wait it'll be down six months from now they're almost all down six months later so if you like the company just wait wait a year just wait a year you'll get a cheaper price another bubble watch was there's 18 year olds on linkedin uh posing rocket ship emojis about beating hedge funds been there but it's it's like it's again this is classic sign of a bubble behavior and are you aware of i think you might be

the online skit uh actor named druski yeah yeah he was on comedian ryan basically comedian skit yeah comedian skit actor why was he on bloomberg i have no idea i saw screenshots i i don't know what he was talking about do you actually i wouldn't invite that guy on a show because you know he's probably playing a prank on you but that again is i think a sign of seriousness going out the window and probably marx bloomberg's supposed to be the most sober network out there um there's a lot of nonsense i can't i could there was probably 10 other things i could have included this week i'd just say stay safe stay safe yeah i feel like bloomberg's like supposed to be the c-span of financial media financial news cnbc is usually the one that has

hey we have aaron rogers on what is your you're investing in this ayahuasca startup wow oh yeah martha stewart's on the board on the on the linkedin post if you're just getting started in the investing world it is easy to think you're really good at it based on returns like you know you can just buy us see a story you like buy it it's almost like a coin flip it really is like a coin flip like chance you know 50 chance you're going to make a lot of money maybe not a lot but so so yeah if you're eight months in i'm sure you can beat a lot of hedge funds uh if you're listening you're 18 years old don't post about it on linkedin i don't recommend it unless you have like a five-year track record it's really not

credible returns yeah you need quarterly updates or update your portfolio try to get a conversation going but bragging about stuff like that don't do it unless you're trying to raise money yeah i will say though i've seen john hempton who i like as an investor dunk on a lot of like kids on linkedin like really young people that are trying to get into the industry it's like just leave them who cares yeah their brains aren't formed fully do you want to talk adyen now this is a company i love uh i wish the stock would drop maybe you'll tell me if it dropped But how was the results? How was their first half results? And what did you think of the quarter? Slowest growth on record for Adian. So they processed, I think it was 334 billion euros this quarter in volume, which was only up 4% year over year.

that was primarily due to the loss of block as a customer so i guess block accounted for a good chunk of their wow payment volume did you know ryan do you want to did you know an email that block sent out today oh boy sorry i'm distracting something crypto related uh you got it you got it uh okay let's load this up essentially they have innovated in crypto mining apparently um they have been doing that for five years and yeah it's inconsequential the proto rig marking a new era in bitcoin mining eye on the ball eye on the ball dorsey a couple things that i have been proud of myself for in the investing my investing career is uh don't buy ipos i've never broken that rule and now i've had a rule if dorsey's involved don't

go anywhere near it and actually that served me fairly well because the core business cash app and square not doing that great they really aren't and they had no they had a gold mine they were like early to the point of sales business they had built out a lot of software for retail concepts and they could have just really kept plowing money into it same with cash app that you know they had a great business there and then it's just cash apps growth has completely stalled out and square has lost a lot of market share frankly to uh concepts like toast and clover and probably even add in as well let's go back to add in though real quick management uh well if you excluded block which i guess you really shouldn't do because it is lost volume but if you exclude

a block i think processing volume grew around 15 to 20 management also called out cautious consumers for online retail due to tariffs which you don't see you don't see that in it shopifies yeah shopifies gmb is soaring especially in europe which is adian's original market yeah i was gonna say that feels weird i i'm not seeing any consumers be like i don't know tariffs like uh like maybe maybe if there's been some sticker shock but like normal consumers are not sitting there thinking like i'm gonna pull back on spending because tariffs are coming like no yeah they they can't say anything about tariffs because they process payments and they are a take rate company so if things cost more they're just going to earn more per stuff if unit volumes lower

Yeah. Anyway, so the quarter was fine, I guess. The headline numbers were okay. There has been a slowdown pretty much across the board for payments processors. So I'm looking at some numbers here. Add-in, 4% process volume, growth. Shift 4 has slowed down pretty quickly as well. And add-in is larger than all of these. Toast is – there was a slight re-acceleration at Toast and then a slight acceleration for Square. But the trend seems to be towards slowing growth ever since lapping COVID. i i like addion the stock didn't come down that much i think it was down like five percent today

i can double check that but the yeah down 5.4 percent today i just don't think i'm realistically going to get this at a price i like not on either yeah yeah unfortunately yeah and it looks like maybe this is just normalizing inflation over the last year to 18 months is Possibly affecting that because these companies are going to grow faster if inflation is higher, but I don't know if the chart really is showing that. You know what's kind of – it seems like a company that's been really aggressive in this department lately is JP Morgan on their payments business. And there might be – Because they advertise on Acquired? Did you hear that ad?

I think they're one of the ones that blocks shift in volume to. I think it's – they mentioned that they were shifting it to like three different companies, but I think J.P. Morgan was one of them. I don't know. Maybe sort of a dark horse in the payments processing side of things. But there could also be – this industry, there are so many different aspects to the value chain that they could be not overlapping here. I could be wrong, but it – I don't know. jp morgan watch out for him because it doesn't get broken out they don't they don't explicitly no one's really tracking them i guess as they're uh as a competitor in this space

do you want to talk the quintessential ai infrastructure company core weave sure let's do it well they reported earnings uh i should say the stock is down 15 today so there's been a little bit of a flood out of it um still up way significantly from their ipo price they went public back in may but let's go through the numbers 1.2 billion in revenue up from $395 million a year ago, but operating margin was down to 2% compared to 20% a year ago, and interest expense is at 22% of revenue. So what that means, Ryan, is that even if they get to Google Cloud's operating margin, they're going to have net income margins of zero. Their backlog, if you believe the way they report it, backlogs can be finagled. Backlogs $30.1

billion dollars. So thirty point one billion dollars versus run rate revenue of maybe five billion dollars. So significantly higher. They raised two billion dollars in 2030 notes at nine point two five percent interest rate. And they had drumroll negative four billion dollars in free cash flow. So free cash outflow. I always say that weirdly. It's kind of a double double negative. they lost they drained four billion dollars in free cash flow in the first six months of this year i'm going to ask and i want you to answer it then i'll answer it does this business exist at this time in 2028 exist does this equity exist okay does this equity exist

so you're looking at core weave q the bankrupt core weave q could be yeah is it core weave q or not three years i don't know they might not they might have enough financing to last three years because they could get less aggressive buying gpus and then suddenly their backlog means nothing but i i think it's a terrible business how much of that operating margin contraction is just purely due to depreciation all of it you do not dive deep into the numbers enough to care or i don't care enough to dive deep into the numbers but that's a great question i think that is expensive debt yeah gun yeah pretty expensive yeah gun to my head i say it doesn't exist the equity does not exist in three years this might be the most aggressive company

i've ever seen capex wise right it's not like palantir or palantir they boast about uh killing the shorts blah blah blah but the business and the balance sheet is clean so yeah they're they're profitable yeah and this is not well this company's technically profitable okay sorry they generate cash that's what i mean they generate cash yeah core weave is crazy they just think of when supply finally reaches demand yeah and people say oh that's never going to happen it's going to happen eventually we talk about that we've talked about it constantly it will happen and the thing is like if you are sort of cheering for nvidia's innovation the depreciation schedule could accelerate on these

gpus like here's the one thing that i feel like we a lot of people just don't talk about So GPUs – Sean Wang came on our podcast and said GPUs are the fastest depreciating asset in human history. For a company like CoreWeave, that's their entire business and it's depreciating so quickly. They have to keep raising financing I imagine to continue to finance new workloads and to be a provider here. but yeah i've also heard that they are like the access provider for uh compute where it's not good they're like they're bragging about signing on hyperscalers it's like well you you're only going they're only going to you temporarily maybe they can sign open ai which they said they have a huge contract with but

how reliant are you going to be on that yeah some of it it's a bit over my head in terms of like what they actually technically are providing to these companies oh they're hyperscaler but they just say ai focused is it basically like they're just renting out gpus yeah yeah it's trying to replicate a google cloud or uh what but they don't have their internal chip division they have no advantages that the big three have yeah when i think about the hyperscalers like azure google cloud and aws i think about them having like uh people utilizing their services beyond just the uh compute beyond the like the rental of gpus let's see what their website says right now i'm sure it's really really good and not gobbledygook

well there's also nebius have you heard of this one i've seen the ticker it's uh funny experience the note this is their tagline experience the no compromises cloud platform purpose built for ai the core weave cloud platform simplifies the complexity of engineering assembly running and monitoring state-of-the-art infrastructure at a massive scale deliver cutting edge performance and efficiencies for ai workloads help unleash the full potential of your ai innovations with core weave aka we rent gpus yep okay well yeah it's an extremely aggressive business model it feels like they don't need to be that aggressive they could just you know tone it back a little bit grow a little slower get a little profitable

business but to each their own i suppose i think we are going a little long here and we've hit most of the topics other than circle which every time we talk crypto companies it just puts my more brain in circulation i guess it's not yeah i don't want to talk crypto so maybe we wrap it on that yeah let's wrap it up uh reminder and thank you to our sponsors interactive brokers go check them out our preferred brokerage of choice not bullish ibkr and fiscal ai use our link fiscal.ai slash chit chat or now you can also use a coupon code chit chat at checkout to get 15 off we are not financial advisors and then we say on this show is not formal advice or recommendation ryan i earn a podcast guest may hold securities discussed in

this podcast and held them in the past and may buy, sell, hold them in the future. Thank you everyone for tuning into the live show and we'll see you next time.