Chit Chat Stocks - Buy The Dip On Netflix And Google? Intel's Rebound Report; Earnings Season Starting Gun

Episode Date: July 24, 2026

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: (00:00) Introduction (01:23) Google's Earnings (16:42) Uber's Acquisition of Delivery Hero (28:35) Netflix Earnings: Growth, Content, and AI (39:06) Intel's Revenue Growth and CapEx (45:10) Lockheed Martin's Defense Orders and Market Signals (49:20) Market Top Indicators and Investment Strategies (52:44) Reddit's Data Deal and AI Content Sources (55:18) Bubble Watch ***************************************************** Subscribe to Emerging Moats Research: emergingmoats.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

Trade, election, climate, and economic outcomes with IBKR Prediction Markets right alongside your stocks and options. Earn interest on your position and receive $1 per contract if you're right. Learn more at ibkr.com slash predictions. Welcome to Chit Chat Stocks, the podcast that helps you find your next great investment. I'm Ryan Henderson, and I am joined as always by the one and only Brett Schaefer. This is our weekly investing power hour episode. We do these every Thursday live at 5 p.m. Eastern time on YouTube.

So if you ever want to ask us any questions, head on over to YouTube at 5 p.m. Eastern time on Thursdays and look up Chit Chat Stocks. You will find us and you can ask us questions. We get plenty of questions. We have plenty of questions from listeners this week from the Substack chat, which a little shameless plug there as well. It's totally free to join Emerging Moats Research Service on Substack. Brett does a ton of great work there. But on these shows, we talk all things financial markets, news, headlines, bubble talk, bubble watch, and we've got some funny tidbits. But we also have a lot of news this week.

So Uber is buying one of their largest competitors. Philip Morris International reported, Netflix reported, Google reported. I mean, it's a big earnings week. Earnings are officially kicking off here. And Intel actually just reported about an hour ago. So plenty to dissect. Brett, where do we want to kick things off this week? If the sub-stack check is any indicator, which again, there are a lot of conversations there

for everyone, I think we should talk alphabet earnings. Who made the notes? Did I make the notes for that? Yes. Let me just go through the headline numbers and then we can discuss any of the nitty gritty. The biggest number, and I'm going to go through most impressive to Lee or just kind of the most impressive first, 82% Google Cloud growth, 17% growth in Google Search. I think that's an acceleration. Consolidated operating margin of 34%. Now, those three together, just fantastic

numbers. But on the downside, and why the stock is down, is the free cash flow negative. they raised their CapEx for 2026, correct? And probably 2027 is going to be even higher. And investors are nervous about that. But they have $242 billion in cash on the balance sheet. They raised money through debt and equity offerings earlier this year, and I think late last year as well. And given the cash burn is not that bad,

they're probably at at least five years of runway of still this aggressive AI infrastructure buildup before anyone gets concerned about ROI. So it feels like they're in a great spot. What were your thoughts on the quarter? Because I thought good all around, nothing too surprising. Yeah, I thought this quarter is maybe sort of a, I guess you could say a landmark moment in this CapEx cycle

because you simultaneously have the most profitable quarter ever reported by a company on a gap basis while also i believe the first quarter in google's history as a public company of negative free cash flow so the capex is massive the gap earnings are benefited by the mark to market on largely their spacex investment uh i believe their spacex investment is around i think it's valued around 95 billion could be getting that number wrong but it's it's massive the i thought the all the top line numbers looked really good the cloud numbers are kind of insane to think about so let me i'm going to show my screen here again uh i know we plug fiscal ai every episode but earning season it is the place to be this is the google cloud

We're at the fourth mark, Ryan. I think this is the earliest you've ever mentioned them. But yes, we'll be using them a lot this episode. A lot of charts. Look at this. Impressive. This is not even ARR, is it? No, this is quarterly cloud revenue for Google. The thing that stands out here – I guess there's a lot that stands out. Part of this is also the hardware. They're, I guess, selling hardware. It's a small piece of it. arr so google cloud arr which they don't report but you can just multiply the last quarter by by four and get their arr figure they added let's see if i can pull this up real quick uh i believe it was 19 billion dollars in arr in a single yeah 19 billion dollars in cloud arr This quarter, that is the largest single quarter of any cloud provider in history. So it trounces AWS, it trounces anything Azure has done, at least so far, they haven't reported yet. So maybe they're going to be able to beat this number. I'd be surprised if they did. But yeah, it's a massive acceleration. And I guess the stock fell after earnings. And so I think you kind of have to look at this. Maybe you can correct me if I'm wrong here, Brett, but here's how I kind of think about it. I view it as – and I know it's not a one-to-one correlation because the infrastructure investments for Google benefit all parts of the business. They benefit YouTube. They benefit Google Search. But if you look at it purely on cloud, the ARR added compared to the incremental CapEx. So I guess CapEx – let's see. I don't want to do too many numbers.

But basically, I think they spent around $9 billion more in CapEx this quarter than they did last quarter. Again, this might not be the perfect way to look at it. So $9 billion in added CapEx. They added $19 billion in cloud ARR this quarter. So if you're looking at it purely on that, assuming that these cloud customers are sticky and you can forecast out that they'll be around for a long time, i i see why they are investing as much as they are it's hard not to think that they'll generate some returns on that the capex outlook i think people are just worried about i think people don't like to see google with negative cash flow even if management thinks it's the right thing to

do but yeah they front ran basically every tech company with their equity issuance it raised 85 billion before spacex and now maybe there's some questions around whether anthropic or open ai will even get to the public market so so maybe they timed it perfectly um i think they're in a really good spot yeah it seems nice i mean we can talk about the valuation after this because we do have a lot of topics to get to in regards to that capex versus ar might be even better than you're saying because what how they think about it and it's similar to tsmc and the the semiconductor part of the supply chain is when you lay out the money or you start putting money into a data center or the capital expenditures around that, you have a multi-year upfront commitment before stuff comes

online. So you should almost compare maybe a years ago CapEx versus today's ARR gains. And that's why people get nervous about CapEx growth because, all right, you're spending $200 billion this year that better show up next year and start getting a good return on that so far it's working well but yeah people are going to be nervous if they're this aggressive uh we have a comment that says thoughts on how aws will perform given the 19 billion dollar ar edition for gcp google cloud and that aws also serves anthropic uh i think aws is probably going to do well this quarter but they're going to have some more capex concerns so that i i don't the stock is reacting today because of that amazon stock is i think the

market's not going to like the heavy capital investments amazon will probably do more than than alphabet yeah they probably will i think aws you should expect that revenue growth there is going to accelerate i think cloud revenue growth will probably accelerate across microsoft amazon and google i don't see any reason why not just kind of given the times we're in but here's one from the chat on spacex uh this is from tyler who i think is joining us live right now too their other income was the spacex stake at about 99 billion dollars let's say roughly 100 billion dollars for the listeners does anyone know when their lockup will expire why would they not slowly sell SpaceX and either pay off debt or use

that cash for CapEx. That is a great point. The stock that is not, or the shares not owned by Elon Musk, get unlocked gradually from now through the end of 2026 for insiders that went through SpaceX as, you know, the

venture capital rounds in the, over the last 15 years. I think SpaceX is, or sorry, Alphabet is likely to sell the stake, I think. every other investor likely is to sell a huge chunk of their stake, if not the entire thing. And I think that's why the stock is going to keep falling.

Disclosure, I own a short through Echo Star. What do you think on that, Ryan? Yeah, from SpaceX specifically, yeah, that's just the nature of IPOs. like especially one like this where there were so many private funding rounds over the years you now have this just massive investor base of people that need probably need to return capital to their investors google technically does not they i mean i i don't think i mean they're not a vc even though they sometimes act like one so they have a venture firm within it but yes they have no but it's not just them yeah it's just their it's like treasury it's like their cash management right it's not

like lps i think sometimes within their it gets confusing because waymo for example is outside investors who want a piece of that business for whatever reason but yes it's mainly just them investing in stuff and they're pretty damn good at it uh given this performance but why why wouldn't They sell it off because, one, the SpaceX stake is not going to be a huge part of a $4 trillion market cap business, and they might want to use that cash over the next few years. Yeah, I think the only argument you can make is that maybe they want that strategic partnership in the long run and that they want more reasonably priced rides to space. Yes. So they might get favorable treatment from SpaceX if they're a large shareholder. But I think right now, yeah, you can make a lot of money and put that money to good use as they're at least telling investors if they do liquidate at least some of that stake. Did you mention the contract that they have with SpaceX? The monthly one? Did you just mention that? Is that the buying compute?

Yes, they mentioned this on the Alphabet call or the Google call and analysts asked about it and I don't think it sounded good for SpaceX because they essentially said we're filling the gap for the moment until we have our own

infrastructure to serve everything Doesn't that mean that revenue is going away shortly for SpaceX? And they said it's going to compress margins because if you have a middle man it's going to make your cloud costs more expensive yeah i guess on that note so far i think they reported 36 operating margins for cloud which is a record for them so yeah this was records across the board i it's even though they are

now cash flow negative i find it really hard to be pessimistic about google in any way youtube seems like it's in a phenomenal position they are almost growing faster than netflix on the top line now probably are if you include subscriptions the search navigated one of the biggest headwinds they could possibly have really well and they're again in a good spot and growing cloud obviously doing well i guess you could look at the google network or the like google adsense uh business and maybe be critical but yeah it's hard really not to like this company i think the biggest reason that it's selling off one it's the valuations expanded a lot in the last two or three years but it's just harder to value now because their

gap earnings are not like accurate and their cash flow isn't accurate really for what sort of normalized earnings would look like in four years so for the for the average investor there's not really like a true metric to look at yeah i understand why people get nervous about that okay we have an ev to ebit of 25 and a half ev to free cash flow of 71 of course that should that'll go negative this year most likely people are worried about what happens the next few years um would you buy sell or hold at this price is i guess what i'm asking hold uh i actually still loan a few shares and that's exactly what i'm going to do is just just hold the i wanted to while we're on this this is the first big tech company really to report so while we're on it

i want to uh tesla doesn't count come on same day they don't uh sorry they don't they uh in my book they're the biggest in the world 1.2 trillion dollar market cap okay well i mean yeah whatever the i'm gonna quiz you what do you think the expected free cash flow is for these two groups so for 2026 how much cash do you think big tech will generate and that excludes nvidia and tesla so just apple amazon microsoft google meta i'm missing someone no that's it those five apple apple in there too how much will they generate and then how much do you think the memory chip companies will generate apple might be the only for 2026 apple could be the only

positive one maybe microsoft will be slightly positive so let's say 100 billion for the hyperscalers memory chips 300 billion are they equally weighted because i don't remember micro and kind of is that 100 billion dollar range and i just kind of multiply that by three are we on my good yeah memory chip companies are expected to generate 305 billion dollars still got cash flow there we go right now and these numbers are probably going to come down significantly uh after this quarter's done the big big tech as a whole is expected to generate around 200 billion so big tech uh you you finally have a changing of the guard in terms of where the cash is going most of that's apple right yes i guess uh about 75 of that is apple

yeah so yeah anyway let's uh yeah we could talk google all day endless subsidiaries that seem to be doing well but let's shift gears do you want to talk uber sure we have a comment here right now what and this will lead into your notes on the did they report ryan or they have a they just acquired a big acquisition right yeah no report yet uh but they this is slightly old news but i don't think we talked about it last week uh i think it might have been late last week or early this week uber announced that they are acquiring delivery hero they are paying 14.8 billion dollars for the acquisition so it's sizable the this is one of the largest food delivery companies abroad so non-us especially in europe but they're basically going to be selling the european

business so they're not really acquiring that basically any of the markets where they compete directly or are the biggest competitor is uber eats they're going to sell those i think it's to a private equity firm uh so they are acquiring basically the asia business latin america business i think it's 99 different markets that delivery hero operates in here's the quote from i think their cfo had had a tweet he said our offer to acquire delivery hero exceeds the very high bar we set for m&a says every executive ever uh a business that's 10 percent of uber's market cap but adds 20 to our trips and gross bookings and drives significant accretion post close that is i think for a business like uber that's honestly a fair somewhat fair way to look

at an acquisition is how trips to market cap i guess so they're adding 20 to their trips but spending essentially 10 of their market cap in the process assuming that they can kind of convert the business and get all the synergies that they claim. But we can talk about that in a second. It says, for delivery, the transaction is transformational, roughly doubling our trip volumes and increasing gross bookings by nearly 50%. So it's very meaningful to their Uber Eats delivery business. They are projecting $1.2 billion in annualized cost synergies within 18 months of closing.

They expect this to be accretive to their earnings per share. They apparently share common tech platforms, so there's some synergies there as well. And then they want to expand their cross-platform adoption. A whole bunch of sort of boilerplate acquisition talk, but I do think this acquisition can make sense. I think they divested those European businesses because this would have gotten blocked by any EU authority. I mean, we know that EU tends to try to block a lot of deals, which makes sense. It makes sense in this regard because it is potentially the two largest players combining in the delivery market, and there are, I don't know, some barriers to entry in that business. So I think it's fair.

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It's probably fine. Are they funny with cash or stock? I'd assume cash. I believe this is cash. Let me double check. It doesn't. I don't think it changes much of an Uber thesis. We have a comment here in the chat that says thoughts on the economics of Uber.

Financially, they seem fine. it's a good and improving but the stock is down 25 over the last year that probably sums up the narrative of look this is a good business today but people worry about self-driving tech and that's essentially it uh it is a cash deal is it all cash deal it's probably fine it's a good it's probably a good price given the numbers you were saying there if it can fully integrate with an uber because uh i haven't i guess an anecdote having everything on one platform that's highly functional already has your payment information bank account information what have you is helpful because i was trying to rent one of those bike sharing things and it's a different brand it's

called like itow or something like that the portuguese accent is like the bank yeah it's like the bank is it for some reason the bank does it i don't know why it's a weird combination of businesses but i mean it's kind of like city bike in new york true true probably same thing uh the app doesn't work like you can't even connect your credit card it says air credit card not accepted and you can try all your cards it doesn't work but uber is a platform partner so you just show up your phone hold it next to the thing and everybody's got it locked and loaded so that that is probably more meaningful here i think this acquisition relates that type of thing or instead of multiple apps going everywhere you want uber to do everything in as many countries

as possible does that make sense yeah i think uber is in a really good spot i've actually seen a lot of what's the term kind of feels like a hedge fund hotel right now there's yeah uh seems to be a lot of hedge fund managers or asset managers that are getting excited by uber and that's what So we have – you've been looking at the new Fiscal.ai feature, right? Drank second mention. Yeah, should we plug it again? The fund letters archive is nice for anyone that's looking for new ideas. You can look up a stock and find any mention from investor letters basically.

I think it covers like 1,000 asset managers. So it's very nice. But yeah, Uber is consistently mentioned. And I do think it's a good business and it actually relates to something you're going to talk about in a second where the founder of Uber kind of like criticizes what Uber is today in this recent launch of his business. And I got to say, like you compare – it's hard to find any faults in what Uber has done over the last four years as far as like financial progression. They've become more profitable. They've grown share. They have successfully expanded into other businesses.

Like Uber Eats is not just an idea anymore. they they seem like a real winner here and i would guess one that i know the worry about self-driving but i would guess it's going to be a probably a pretty good decade for trips for uber yeah we have next 12 month pe of 19 ev to ebit of 12.4 and ev to sales of two and a half with average three-year revenue growth of 13 that's a pretty good combination especially if they're buying back stock now why don't we talk about travis kalanick's new startup haven't heard this name in a long time apparently he's been uh and i said rising from the ashes i don't necessarily think it was like that he owned a huge stake in uber uh he got kicked out maybe rightly maybe

wrongly he's just an aggressive guy and is insanely intense and trying to win and that's how uber became the business it became in the united states and many other markets in the early days But he officially came out of stealth with a new business called Adams. Here is a quote today. Adams, well, they came out with a huge raise. I think they announced what they were a couple months ago. But he said, quote, today, Adams is announcing a $1.7 billion equity investment from A16Z. And Ben Horowitz will be joining the board.

As part of this investment, we have merged our various businesses into one equity structure. I've known Mark and Ben for a long time and we got close to partnering up at Uber in 2011. I blame Mark Ben blames himself but let's just say it was on all of us and in 2017 Uber suffered the consequences of not having Mark on the board. If you know

you know. That's kind of the Uber history. Very tumultuous roller coaster for everyone there maybe we can discuss that story another time. It's a fascinating tale but he's clearly a good startup leader extremely intense hard working knows his stuff right

yeah i and god i would argue what it takes to be a great startup founder ceo is different than what it takes to be a great public company ceo you're just like in one you have to establish credibility like and and calinic did a great job of that you kind of have to like will product market fit to exist in a lot of cases once you're a public company ceo for the most part you for credibility is already established it's more about management and capital allocation yeah it's fair point there were some talks that if he's successful here it would be fairly steve jobs-esque at pixar getting kicked out starting something new being successful but tbd if this company actually works so what is it it is a company about automation in the real world they have three different

segments at the start first is adam's food which is infrastructure for better food the second one is Adams Mining, which is more productive mines to power Earth's industries. And the third is Adams Transport, which is the wheelbase for robots. I don't know exactly what that means, but I'm sure it's just automation for transportation. And he said at Adams, we make gainfully employed robots, specialized robots with productive jobs that bring abundance to their owners and society at large. I'm excited to share more about our vision for Adams below, and I go through all the details of what they're trying to build. This seems familiar to what uh bezos is trying to raise with project prometheus great names all around i will say

that i think they're raising tens of billions of dollars for that project for ai into the physical world uh could be exciting there's a lot of robotic stuff going on i have no idea how to invest in it but i believe it'll be awesome if they can get this stuff going for society yeah i'm actually i think there seems to be a lot of ai announcements lately that are geared towards like physical world infrastructure improvements which i'm all for like i think it's nice that that's sort of a focus as opposed to like just bits it's real atoms instead of bits literally uh and and pun intended the can you guess so this company was just started can you guess how many open roles they have on their website oh no idea we have 1 000

no not quite that much 227 open jobs i don't know how they already determined quickly they have that they have the reputation he's not afraid of moving fast yeah that's true well i hope it works uh yeah i think i'll root him on from the sidelines um we'll see uh it's again he has done a good job or he did a great job with uber granted the company was kind of hemorrhaging money when when he was there but maybe that was yeah that's just the times they were in but yeah he's clearly clearly knows how to build a good business do we want to talk netflix earnings sure stocks down what do we what kind of drawdown we in a 50 drawdown so that's sneakily tough for this business in all in 2026 that's the year

when right yeah 49 drawdown i guess i'll lead in you got some notes here ryan what happened to the company how are the earnings and then we can discuss kind of our thoughts on the stock uh as of this recording yeah they've been shares have been cut in half this quarter looked pretty good i thought so revenue grew 13 year over year they grew double digits across all markets so it wasn't any one single market that outperformed it was pretty strong across all operating income grew 33 so margins are expanding they are forecasting 51 billion dollars in revenue for the full year about and just over 16 billion dollars in operating income about six percent of that revenue will be coming from advertising so and that's double what it was at last year

so it was good improvement there the i think the figure that maybe scared investors and and at this point it seems like this is a company that trades a lot on alternative data uh frankly like people see a lot of the streaming hour market share and that seems to worry or encourage people but viewing hours grew just two percent in the first half of the year the caveat i would give there is that one there was the winter olympics and two there was the world cup both of which they had i think essentially zero participation in as far as programming goes maybe they had some shows that were related to it or whatever but you know they didn't have the live rights i don't think for any of the world cup games yeah it's true it's probably a short-term headwind similar to the

nfl season the united states they see a seasonal headwind yeah i mean i this is purely anecdotal but world cup i think is the most watched event in the world and and i certainly did not watch much tv outside of soccer over the last at least during the world cup because it takes up pretty much the whole day the here was a quote that i thought stood out because they talked about how they're still investing heavily in live events and podcasts. Sarandos says, different types of content impact our business differently. Some drive more acquisition, some primarily aid retention, and some make the service feel indispensable. For example, in 2026, we expect live programming to account for just over 5% of our content spend,

but only 1% of view hours. Yet, live event programming accounted for six of the top 10 new member signup days over the last five years. And we've only been doing live events since 2023. So it's a good example of retain them with the content library, acquire them with the live events. It seems to be part of the strategy because 1% of the view hours, 5% of the content spend in theory, that shouldn't check out, but I don't know if that's the appropriate way to measure it. It gets people to sign up. That's the thing. I believe they gave out some anecdotes for example the world baseball classic in japan is a giant deal and they had the rights i think for all of it or most of it in japan on netflix and it's had a huge surge in signups

relative to average watch hours so you kind of get what i'm saying there yeah i follow the the other i guess concern here i think investors have is there's this narrative around ai potentially making it easier for companies to compete with netflix and they sort of leaned into that they acquired what's the company called interpositive which was co-founded by ben affleck for 587 million dollars it's during the quarter i believe probably probably stumped but it's okay yeah maybe it's just good name association to have i don't know but the that if i'm an investor and i'm worried about ai disruption or lowering the the cost to produce content and creating more competition them acquiring an ai company it

doesn't it would worry me more than it makes me feel positive about the company like it makes me feel like they netflix sees a threat and they have to go out and acquire something to make it happen but here's a quote from sarandos on the call that i thought was interesting we are broadly seeing that gen a gen ai is starting to have an impact across hundreds of our productions we are making higher quality uh higher quality output more quickly and more efficiently than we could have using traditional methods gen ai workflows now have been used in roughly 300 of our titles with the largest concentration to date on post-production we are leveraging gen ai for really complicated shots and sequences and then he goes on to say on the content side we believe

it takes great artists to make something great ai is not changing that we just did we talked about this on a recent episode the cost to produce content is going down but that doesn't mean i'm going to watch an ai generated script like it's not changing what it takes to create a good story So Tyler here says, I've heard that Netflix might be a hidden AI winner myself. Yeah, he's – thank you, Tyler. Spoiler. That was one of Ryan's choices from last episode. Yeah, I think they're in a really good spot.

I don't know if there's any company, any great company like stock returns-wise over the last 30 years that have had as severe of drawdowns as Netflix. They've had like probably almost 10, 50 percent drawdowns while generating significant value for shareholders over their time as a public company. So I think this is another one likely of those times where fear just becomes pervasive and it's so talked about with investors and the AI threat and all this and they're going to be just fine. We have a comment here that says, one concern is growth slowing in the U.S. and Canada. Revenue growth was down to 10% last quarter and guidance will be lowered to single digit next quarter. Yes, there was some good analysis on this.

I saw from Alex Morris at the TSOH Investment Research Service. We are planning on having Alex on to do a media update later this summer. Should be out in a couple of weeks here, given our recording plans. i think the ai threat is definitely overblown for a company like this because and don't apply my personal thoughts or wants to the entire world because it seems like there are some people out there that enjoy that that fruit cartoon love island thing uh that that's all ai generated so maybe that's the future and ai is or netflix is screwed but i kind of think given the just you know as everyone calls it slop across all the other entertainment channels of instagram tiktok

twitter youtube even if you go to netflix you go to amazon prime or apple tv and you say all right someone spent time trying their best to make a piece of art you know that you can watch that's where maybe netflix can shine i get that a lot of their viewing is these live events now as well as the reality tv stuff uh but i don't think ai is going to be a giant concern and as you talked about on the show it'll probably help them be more efficient in their content spend yeah and to the concern about north america this like obviously the world cup happens every four years world cup in america does not so the content calendar for u.s canada it happened to sync up in a time where it takes up pretty much the entire day for a good chunk of the people that watch no they're already

pricing in the 2038 summer comps it's a future headwind um i think this is maybe a quarter where some of the i don't want to say legacy businesses but like historically primarily linear businesses maybe had their day in the sun where anyone that had sort of the sports content rights over the last six months especially the world cup rights so uh comcast with with peacock had it um fox i can't remember who else uh it's gonna be a good quarter but i think it'll be a temporary blip and netflix will continue the same market share trajectory that they've had for the last 20 years okay the forward pe is almost exactly 20 i think it's in buy territory but it's not pound the table territory yeah i wish it was i wish this drawdown was happening at a time when

i didn't think there were other opportunities out there but i guess that's just investing so yes i would say probably in buy territory where do we want to go next brett intel maybe quick we don't know intel that well yeah there's not i don't think there's a whole lot to report here but The American semiconductor giant, the government is doing well on this one. The stock is up, yeah, after hours 5% here. Already at the close, it had a market cap of $500 billion. So there's a lot of expectations, and maybe they're starting to deliver. 25% revenue growth to $16 billion in the quarter.

Remember, they have $500 billion market cap. Gross margin up to 40% versus 27.5% a year ago. positive operating margin of 11%, and importantly, data center and AI revenue up 59% and foundry revenue up 31%. Have they finally got their mojo back? Did the AI deliver a miracle to help Intel get back on its feet? And when should they start raising all this capital that they're going to need to try to compete with TSMC? now raise it now the uh question from tyler in the chat did they finally turn a profit what's a pretty margin or who not netflix right until yeah 11 positive 11 operating margin got

it right here wow it uh i think every semiconductor has company seems to have their mojo at the moment i don't think all this uh support from the government can hurt them so it makes sense that shares are rising but you read the taiwan semiconductor conference call every time i read their conference call i think it's they're going to be hard to catch so i just don't see i don't see how intel necessarily catches the leading edge do they need to catch them though i don't think so no but there is better there's competition and you can't just tell a startup hey we're going to give you 300 billion dollars go after it it's going to be terrible terrible roi for society it's kind of one of those industries where for the time being the health of the

industry is better if there's kind of an oligopoly now that could change over the next few decades but for the time being like that's it's so hard to get into the business the advanced stuff is so important for society national security risk that you want diversification yeah you can understand what uh all the most people are making i find this interesting how much do you think intel spent on capex this quarter this quarter eight billion am i way off let me compare the numbers to tsmc is at like six they're guiding for 60 billion this year for the year right okay Okay. So Taiwan Semiconductor, Intel, quarterly CapEx. Let's see here. So Taiwan Semiconductor last quarter reported around $16 billion in CapEx. Intel is at $2.5 billion. Yeah. Early days of the foundry. It's a smaller business and foundry is small.

I mean, they were spending $5 or $6 billion a quarter on CapEx a year or two ago. I would think that they're investing heavily now, but maybe it's just a timing thing. It's the big cruise ship or tanker. It's turning, but that can take a half hour. Yeah. Intel just does not excite me, especially now. We're 10 times sales. Probably less.

Is TSMC at 10 times sales? actually probably given their margins yeah they might be close the you know what we didn't talk about and partly it's because this isn't a politics show did you see the news of like the truck the api yeah i was gonna ask if you're buying your truth api that it's that is insane i mean that is what have we come to get money from the high frequency traders that make that are just insanely profitable yeah that's pretty sad money grab no doesn't affect our investing but yeah it was tough i mean could you imagine And like 50 years ago, if we said, whoever pays me, I'll give them my information sooner.

Yeah, that's tough. That's outrageous. It's pretty cut and dry bad. Yeah, that's a tough one. It's pretty funny. The Truth API. That's a good – it's a funny name though. Should we be posting our podcast on Truth?

Yeah, the Truth API. the you know what else i saw airlines fuel costs i mean there's not a whole lot to talk about here but alaska airlines fuel costs basically doubled quarter over quarter this is a good example of uh macro news basically the impact it can have over time on individual companies so fuel costs soared absolutely soared for pretty much every airline i'm guessing this quarter unless someone timed it up really well with hedges but my my i can't imagine most airlines are are hedge funds so yeah it's gonna hurt profitability alaska airlines was actually unprofitable this quarter thanks entirely to this increase in fuel costs how long does it

take before that trickles through to consumers we'll see it's probably already happening the uh the other one i was going to mention uh i don't know if you saw this lockheed martin added 41 billion dollars in new orders for their missile systems which missile defense probably patriot missile it's it's uh yeah maybe both that is a absolute record it's one of those kpis that i track and i think oh yeah as the industrial sign but good for lockheed shareholders as the industrial bureau consultant at the motley fool i was well aware of this kpi yeah very very good headline uh writing there that yeah yeah the the missile defense what what do they call it is it called missile defense interceptor interceptors well they i think the segment is called missiles

and fire control yeah revenue something it's like the the interceptors that have been used extensively in the middle east they're supposed to three to four x uh manufacturing because stockpiles went out quickly i don't know if that affects this business that much though it's like a one-time bomb they're trying to make him way cheaper too maybe they can special dividend something it the other kpi i saw that i like to track because it just feels like a sign of the times it's cash as a percentage of total assets for charles schwab so this hit i believe an all-time low maybe it was lower uh in the great financial crisis but just just nine percent of client assets are being held in cash which is the lowest in some time so

toppy it's feeling toppy yeah well look at the numbers out of the brokerages schwab's account growth is high interactive brokers account growth is strong it is people are bullish and excited they want to trade they want to trade south korean stocks i was reading the ibkr transcript which is always nice they don't blabble babble like we do on the show i guess we uh but they were asked about hey how's the south korean market going because they opened that up directly to clients earlier this year there's a big marketing push around that and they're like every week the number goes up and to the right more trades so people are excited and yeah probably get time to be cautious i like my long-term bonds

right now it is yeah what is because we come on the show every week and it seems for the last six months we've been coming up with uh new headlines that seem to indicate a top but how do you actually hedge at all i know you have a short book oh yeah yeah that's different i think that's for any market environment that's more of just finding ridiculous pre-revenue companies at 10 billion dollar market caps or even three billion dollar market caps which maybe are more likely to happen over the past year um you can buy bonds like bond funds long-term bonds 10-year bonds 30-year bond fund there is usually a lot of defensive names but maybe defensive is the wrong term there's always something that is out of favor in kind of like a bull market theme

and right now i see tons of stuff payments e-commerce companies the stuff we talk about that we've looked at as attractive in the last few years like given where a lot of the valuations are i think the absolute performance of owning a lot of these things will be fine over the next uh a couple of years even if there's a broad market crash the ai complex doesn't do well but i think it does fine even if the ai complex does well so you're inverting the jim cramer saying there's in your world it's there's always a bear market somewhere and we're here to help you find it yeah i want to be buying the lows we have some comments in the chat this one's funny from tyler He says, every time a Patriot intercepts a quadcopter drone, a Lockheed Martin shareholder gets their wings.

Just think, $4 million a pop in replenishment funds. That's dividend growth right there. And they're protecting people from dying. So it's not, you know. Tyler says, we hedge with Bitcoin. Duh. Should we do a weekly Bitcoin check? I honestly have no idea.

what the i think i check this maybe every show my elevator puts it in um brazilian currency on the on a little advertising thing maybe that's also a sign of the times but yeah i see it in that it's like 60 something in usd right uh yeah 60 65 i think um let's maybe take some of these listener questions here we've got so first one is on this reddit versus google news yes do you want to go over this i don't actually see the headline yes i can get some headline stuff so we can understand what's going on okay cnbc headline from yesterday july 22nd reddit stock sinks on report it may not remove renew google ai content deal uh shares of reddit said eight 100% because they have discussed shutting off Google's access to its content for artificial intelligence use.

The two companies struck a deal in 2024 to allow the search giant to train its AI models on Reddit's content. It's also a source, right, for Gemini? You kind of, maybe it's a skeptic in me. It's a source on a lot of queries. Yeah, I always go, what is the information? Where are you getting this information, Gemini? Oh, from here. Ah, nice Reddit thread.

Okay. well we'll investigate how uh truthful that might be but as google's ai suburbs reduce traffic to websites from the search results page reddit is reconsidering the benefits of the deal according to the journal citing people familiar with the matter the report is 60 million dollars a year uh and is ending soon and the companies aren't talking about potentially renewing the partnership if you're reddit i think you're in a good spot here because i don't think you're at risk of ruining your business people still go on there regardless of ai overviews or gemini or anthropic or claude or chachi bt but you could probably charge each of these companies

hundreds of millions of dollars a year am i crazy no i don't think so it sorry i agree but and no you're not crazy the top 10 cited sources for july 2026 for gemini number one reddit number two wikipedia number two is youtube number three wikipedia then forbes walmart.com that's shocking ebay edmunds car and driver kbb and target but yeah reddit's the leader by a long shot they get paid 60 million a year by the with this deal that's not i mean it's meaningful obviously to their revenue but it's not crazy and it's not that meaningful to google so i would think google's more than willing to pay up for this my guess is this is largely a negotiating tactic like hey we'll we'll pull your access red is leaking this to the public

a hundred percent here's another quote i found from the article or go ahead this is a different topic no it's positive i think for reddit this is a huge positive and if you're gemini you kind of need reddit it seems i think that's exactly right here's the other one quote i saw from the article the search traffic trend can be seen on other sites as well politicals google traffic falling 23 cnn 25 and business insider down 85 r.i.p business insider i think it's not a working website business insiders website it fails to function on my computer it just loads there's like i get paywalled every single yeah it's a second uh let's see apple is apparently using clarna for phones you can lease your phone i thought this already was

happening. The first thing I thought of as a Nelnet shareholder is that's more Klarna volume for them. I don't think anyone else was thinking about that, but that's what I thought about. Yeah. I didn't even make the connection there, but yes, that's good for them. The other thing I'd mention here, there are business insiders, search traffic trends have dropped 85 there are some businesses who have gone more towards premium trying to be like more heavy on the paywall so i don't know i don't know if it's necessarily indicative of like revenue it might not be as great of a leading indicator as it seems it yeah i i don't i i honestly think reddit's in a phenomenal spot we have we have some comments

says open ai is already paying a little more than that already good go for reddit tyler says i still don't understand why we decided reddit's data was the holy grail well i mean yeah for people's opinion sure also there can be astroturfing people just faking stuff yeah do you want accuracy no you want speedy responses that's what matters most and there's people have a lot of conviction on there it helps for like all right i have a query to this chatbot they can come up with any answer on anything where can i get an answer on anything for any sort of direction like oh actually i believe this tell me confirm my bias this way oh wait let me go 180 confirm my bias for here yeah it's it's helpful for building something

that will talk with you uh which is good for reddit's business i mean it's good business I like the platform. Yeah. Got a couple other listener questions. It says, curious your thoughts on LAM research. Do you group it in with the ASMLs of the world? It's probably a bit pricey, but it's pulled back a bit over the last month. We talked about them briefly on the semiconductor primer, right?

Maybe you did. This is the equipment company I do not know as well as the other ones. What are we at? PE of 60? Yeah. i group in a lot uh i kind of group a lot of semiconductor companies into one massive bucket which is probably flawed thinking and maybe there's some distinctions but i do think you're probably going to get a lot of correlated movement for the stock prices like if the

semiconductor basket as a whole gets cut in half i don't think lamb research is going to be resilient like and and just yeah exactly defy short defy gravity yeah stocks up the last three years total return of 425 percent been a nice winner yeah the other one here service now reported earnings it here's the question it says service now earnings and at what price they seem attractive to you guys i've been building a small position the current price isn't super cheap on a trailing gap basis but is very reasonable for the business quality depending on where you think mature margins could land don't bet against software al pacino seems like a winner yeah i think people really underestimated myself included how sticky service now is in some enterprises i mean it is

literally 98 percent retention rate which is probably just businesses failing uh i i'd be so voluntary churn it's i guess not i wish i had that hair he does look mysterious uh i i would guess that voluntary churn is outrageously low for service now like one of the lowest in the entire software world my only thing with service now yes i like the quality but in the world of software where everything has been blown up i think there's better opportunities the numbers look good and but yes the easy to sales is 6.7 uh what's their okay even a gross profit nine it's it seems like a good business all the numbers look great but it's not absurdly cheap yeah i think you make money but i just think in software specifically there's there's

better opportunities out there do we want to take any of your bubble watch topics oh there was some good ones this week yeah save the best for last well first there was shout out to our past guest hopefully he comes on in the future actually has his own podcast uh what is it called preferred shares it's a good one it's very academic lawrence hantel uh there was a tweet and ryan i like this he's a shareholder of this other company in 2011 lebron acquired a two percent stake in liverpool for 6.5 million dollars that has appreciated by 1800 percent then they did a bunch of brain emojis uh and his stake is now worth 124 million dollars and lawrence i don't know why i thought this was hilarious i think ryan our listeners will as well he said so he

underperformed o'reilly auto parts pretty sad yeah this uh i got a good chuckle out of that A lot of people have. I looked, and it's true. 2,000% for O'Reilly since 2011. I mean, yeah. It is one of the most resilient business models out there. You know what else might be a top indicator is sports team transactions. I think when you start getting these big, look how much money this billionaire made buying this sports team, it might be a little sign of the times.

Seahawks just sold, I think, for almost $10 billion to Coastal Ventures, I think was the lead investor on that one. Vinod Coastal. Yeah, the person. The VC firm, didn't it? Yeah, I don't think it was Coastal Ventures. Okay. I was going to VC fun. They bought a sports team. Yikes. True.

Yeah, now I feel a little bad. We have a comment in here. It says, for your information, the ServiceNow CEO had an accident and lost an eye, I think, and had multiple face surgeries. I thought he looked cool. I thought it was great. He's the coolest looking CEO out there. I thought it was selective this whole time. i thought he was like uh doing it for looks but uh evidently not all right other bubble watch let

me just share this right here forbes which i think is all written by ai now uh maybe according to that that thing you saw ryan ai startup corgi of seven day work week fame raises yet again at four billion dollar valuation now they have dogs here corgi is the ai insurance startup that works seven days a week and operates an all-night cafe in San Francisco. And it's raised money from investors yet again for the third time in three months. The current fund raised values of the company at $4 billion,

also almost twice its worth in May. Do we know what they do? No. But it's AI and it's insurance. Deals like 2021. And I think it's fun. Should we go to their website?

Yeah. Let's check it out. corgi insurance it is startup insurance wow that's really tied to the startup cycle okay here's what it says it is corgi is an ai native full-stack insurance platform built for technology companies that means fast quotes competitive pricing and a team that understands your business i was unaware that these companies needed insurance sorry what what companies is it it's named corgi no no i know what companies are they insuring technology companies right you're not getting it they have a cafe and they have a van like

from silicon valley uh what are they insuring i i don't know is this yeah okay um i guess just don't ask questions uh number go up don't ask questions the yeah good for that i honestly i like the van i like it gimmicky marketing you gotta do you gotta do it i've been looking at uh i've been looking at doing a subway ad for fiscal ai nice nice yeah that could work new york city make sure you get the right stops right in the financial district uh here's the last one as we're going long are you tired of all the company names to keep track of uh yeah especially the private all right there's there was uh i don't know why this is so funny but this is this is company and apparently

it's huge a thousand retweets it says cognition is acquiring interaction which is the maker of poke i don't know what any of these mad libs are yeah that's a sentence i've never i miss the old company names taiwan semiconductor you know what it does yeah cognition acquiring interaction what was it that's why we love physical ai it's basically like semi-intuitive you know yeah it's better than poke yeah i think there should be if i ran for government i would outlaw single word names that's a good one yeah just you have to you have to be semi-descriptive in your company name i think okay think about the old names microsoft micro software great name intel intelligence on your computer it's great these names have no like it's just standard oil

standard oil yeah standard ai you're gonna come up with that one yeah i just thought those were funny like the corgi one the the the sirens are going off that that's a spf style company yeah ai insurance like that's novel you know who's benefiting from ai and insurance the leading insurance companies boom there you go yeah it's not yeah anyway uh okay that was we went a little overboard uh over time we had a lot of topics to get through we're probably going to have a lot next week as well as we're still in the heart of earning season. Thank you everyone for tuning in. May earning season bless your portfolios and may you have good fortune. That's going to do it. We want to remind listeners that Brett and I are not financial

advisors. Anything we say or discuss here on Chit Chat Stocks is not formal advice or recommendation. We may buy, sell, or hold any of the securities discussed in this podcast. Thank you again. We'll see you all next time. We'll see you next time.