Motley Fool Hidden Gems Investing - Dinosaurs Roar for Comcast and CoreWeave Goes Shopping

Episode Date: July 7, 2025

Andy Cross and Jason Moser discuss: - Jurassic World Rebirth delivers for Comcast - CoreWeave finally gets it done for CoreScientific - Oracle makes a deal with the federal government - Two stocks to look for if the market pulls back Companies discussed: CMCSA, NFLX, CRWV, CORZ, ORCL, IOT, HWM Host: Andy Cross Guests: Jason Moser Engineer: Dan Boyd Learn more about your ad choices. Visit megaphone.fm/adchoices

DINOSAURS ROAR FOR COMCAST WHILE CORY WEAVE MAKES AN ACQUISITION. MOTLEY FOOL MONEY STARTS NOW. Welcome to Motley Fool Money. I'm Andy Cross, joined by Motley Fool's Senior Analyst and Advisor, Jason Moser. Jason, happy Monday. Happy Monday, AC. Good to see you. Good to see you. Thanks for being here. We got confirmation today that CoreWeave is buying

another AI data center company, and Oracle is cutting cloud prices for Uncle Sam. We'll also talk about two companies we're keeping an eye on if the price is right. But Jason, let's start with the summer movies. Universal's Jurassic World Rebirth reportedly brought in more than $300 million globally this weekend, giving a nice win to Comcast, the parent owner of Universal. This continues that strong summer at the box office that included How to Train Your Dragon, also from Universal, and Apple's F1. Jason, is this good news for long-suffering Comcast shareholders like me? It's not bad news. Most certainly, it's not bad news. Now, Comcast content and experiences studio segment brought in $11 billion

in revenue in 2024, along with about $1.4 billion in operating profits. So, I mean, this isn't something from the revenue side that is a tremendous needle mover. Maybe it's a needle mover to the extent that we would say the same thing for Disney. This is the content space. It can be very lumpy. Some years are better than others. If you look at the same segment, the content and experience studio segment, we talked about $11 billion in revenue in 2024. I mean, that was $12.3 billion in 2022. So, it ebbs and flows. But this is terrific news. And I think the thing that I'm kind of amazed at, you know, the original Jurassic Park came out back in 1993. So, they have pulled a Disney to an extent and have really expanded and stretched

out this IP library. I think that is a good sign for Comcast. Jason, I 100%. So, I see this as, again, this Comcast stock has not done that well over the past couple of years. It now yields about 3.7%. And of course, we have the spin-off, the spin-out of the media properties called Versant. Versant later this year, where they're going to spin off CNBC and USA, MSNBC, the Golf Channel, and a few other properties. So I think that's got a lot of investors interested in Comcast, at least for me, those of us who own it. But this is the seventh film franchise of the jurassic franchise and that franchise is worth about six billion dollars and it is a disney play kind of jason because they're using that in their ip they're using the theme

parks i saw promotions all around the world all around the the cable properties for for the jurassic rebirth movie they were sold they were showing older jurassic movies on some of those cable properties this weekend so i think from that perspective it does help build that franchise out And it's going to be a very competitive summer. Disney itself has its Fantastic Four coming out this summer. We have the much-anticipated Superman movie from Warner Bros. coming out this year. But I think it does help build out that franchise that has become more and more valuable to those universal theme parks, including the one that just opened up this year. No question. And I mean, this also plays into sort of that summer blockbuster, right? We always love to see what

the summer blockbusters are going to be. And I just think it's noteworthy, these results, particularly given the sort of tepid reviews that the movie's gotten. I haven't seen it, and I kind of take critics' criticisms with a grain of salt. But, I mean, 51% on Rotten Tomatoes and a CinemaScore of B from the opening weekend audience. I mean, that's not lighting the world on fire from a critic's perspective, but clearly the audience loved it. Yeah, and also, Jason, interesting notes over the weekend that Netflix, with its 300 million subscribers, They said at the Anime Expo in Los Angeles this weekend that more than half its subscribers now watch Japanese anime. I found that interesting just because it continues to show the power of

the Netflix globally as a brand, and one reason why they're, along with YouTube, one of the most valuable media properties out there today. We've always said they do such a good job with that data. Personally, I'm not an anime consumer, but I think this is a great example for investors, where it's not necessarily wise to extrapolate one personal taste into a potential idea, just because it's not something that you like or eat or watch. It doesn't mean there isn't an opportunity there. And that 50% number globally really does tell us something impressive about Netflix's market position. 100%. When Motley Fool Money returns, core weave go shopping you gotta try breakfast at a and w

you gotta try breakfast at a and w and what better way than with a delicious pret organic coffee starting with just one dollar all day every day now until december 31st you gotta try breakfast at a and w at participating a and w locations in Ontario. AI infrastructure company CoreWeave announced that it will buy Core Scientific for around $9 billion in an all-stock deal. That's about $20 per share based on CoreWeave stock. Now, shares of Core Scientific, Jason, are down around 20% today to about 15%. So, the market's sensing something here. Yeah. This is an arms race like we

haven't seen in some time. I mean, companies are just rushing to build out their AI capabilities, and this is just another sign of that. But I think it's really noteworthy, the core scientific shares being down so much today. I mean, there can be a number of reasons why something like that might happen. Investors don't think that we'll go through. Perhaps another bidder comes in. But AC, I wonder if this doesn't have something to do with the deal structure itself and what it's saying about the market's perspective on CoreWeave. Because that $9 billion number that's being bandied about, let's make sure we understand, that's just based on the July 3rd share price, right core scientific shareholders are going to receive 0.1235 shares of core weave for for each

share of core scientific that they hold but as noted in the release and this is important the final value will be determined at the time of the transaction close that's not until later in q4 so i don't know do you think this is like a glass half empty view on core weave and whether they can sort of hold their valuation because the stock has been on fire since it went public Yeah, it went public just this year, and the stock's done just fantastically well, and Core Scientific has done very well, although it has a little kind of a spotted history. It's one of those SPACs back in 2021 that, when it came public out there, was about $4 billion, and it basically lost almost 100% of its value, had to declare bankruptcy, defile from the markets,

came back to the public markets in January 2024, and actually, Core, we've tried to buy them last year for about $6 per share. So now they're paying far more for that. It does give CoreWeave that vertical integration, Jason, that I think that they need to build out. They're going to add about nine or 10 AI data centers of CoreScientifics, give them massive gigawatts of capacity. And as CoreWeave is trying to build out its own AI data centers, it does need to continue to build out that capacity. CoreWeave is CoreScientific's largest tenant. It makes sense from a vertical integration perspective, but I think the market is just saying, with the share issuance so soon after CoreWeave became public, there are some doubts about at what price they're

going to have to get CoreScientific into the CoreWeave family. Exactly. I certainly understand the market's enthusiasm around CoreWeave. When you're selling yourself as the AI hyperscaler, And I mean, there is something to that. And this is clearly a company that's playing a big role in the space. They just reported revenue growth 420% in this most recently reported quarter. But again, you know, and you're right, vertical integration, this is going to be something that really gives CoreWeave more power over its platform and to that power. I mean, this is a power play, right?

Through this acquisition, CoreWeave is going to own approximately 1.3 gigawatts of gross power, along with the opportunity of one plus gigawatts of potential gross power available for expansion. A gigawatt is a lot of power. That power is a medium-sized city. You think about the Hoover Dam. The Hoover Dam is one of our biggest hydroelectric generators here in the country. That's responsible for about two gigawatts of capacity. You can see how this could really impact Corweave if it goes through. Prediction time, yeah. Do you think it's going to go through? Do they have to lower the price, readjust the deal terms, you think, Jason? I think it's going to go through. I think

that probably the market's enthusiasm is going to remain for Corweave. I think the stock will ebb and flow here a little bit. My suspicion is it'll go through. Probably not going to end up at that $9 billion valuation at the end of the day, because that is pretty extreme for a company like Core Scientific. I mean, that's like 18 times full year revenue in 2024. So yeah, we might see some change in the price there, but my suspicion is it'll go through. There are definitely some synergies there and some cost savings, but I think it'll go through too. But I do think they'll have to readjust the term. Yeah, exactly. Next up on Motley Fool Money, Oracle gives Uncle Sam You've got to try breakfast at A&W.

You've got to try breakfast at A&W. And what better way than with a delicious Pret Organic Coffee? Starting at just $1 all day, every day, now until December 31st. You've got to try breakfast at A&W. At participating A&W locations in Ontario. a deal. Let's move over to news that Oracle is cutting cloud service prices for the U.S. government by as much as 75%, as reported this weekend by The Wall Street Journal. Jason, who's a winner here? Is this an Oracle beneficiary, a U.S. federal government beneficiary,

or a little bit of A, a little bit of B? I'm going to walk the fence here and say a little bit of A, a little bit of B. It does feel like both win somewhat here. This feels a bit like taking a page out of the book of Bezos. He was always known for driving down those prices in so many cases. He's got that quote, your margin is my opportunity. He's taking that uber long-term view. I think for federal agencies, they're under this mandate to modernize while also managing tighter budgets at the same time. The old saying, cash is king, I think in this case, it seems maybe cost is king. And we're seeing other cloud providers follow this same lead. Salesforce has done the same thing in regard to Slack, Google, Adobe. So, this isn't anything necessarily

new. But then, I think for Oracle, these discounts can help lock in really multi-year contracts. And that offers more stability for their business model and revenue prediction. And if they can extend those relationships, they can start talking a little bit about maybe exercising a little bit more pricing power down the road if they do a good job. So I can see both parties benefiting from that. I thought this was a little bit more beneficiary for Oracle when I first started studying it, but then I think the GSA, the General Services Administration, is starting to shake their big stick here to try to get some pricing out of some of these big players. It is interesting to me that

this is for the licenses, not really for the subscription, and it goes through November. The pricing option goes through November of this year. So it does give Oracle a foot in. it's really the first deal the GSA cut for government-wide solutions, including lots of areas where Oracle and other cloud titans provide some of those services and compete very heavily. So, I think it's just more evidence of CFO Safra Katz becoming more and more competitive, trying to push Oracle into markets. Clearly, Oracle has had some nice beneficiaries here in the markets and in their business as the stock has gone really well. It's up 60% the past year, 40% year-to-date, Jason. It's now north of a $600 billion company. 35 times earnings,

that's almost two times its five-year average. So, what do you think about Oracle, the stock, going forward? I'm glad you brought that up. It does seem like a little bit of a richer valuation. But going back to Safra Katz, he's looking at fiscal 2026 targets here. Cloud revenue growth projected to grow from 24% to over 40%. And then that IAAS, that infrastructure as a service, that growth there is projected to hit about 70%. So, anytime you see valuations like that, I mean, you have to just kind of step back and say, okay, why is the market doing that? Where's the growth? And I think that's where they're seeing some of that growth. Now, they just have to deliver. Yeah, I think so, too. I do, again,

like this licensing play, because as they continue to push more subscription, this does get into the core part of what Oracle has done for so long and done so well for so many years. So I think it is a nice foothold for Oracle. I guarantee the GSA is going to be issuing lots of different kind of pricing asks of lots more providers as they continue to manage their own footprint, as they kind of push towards to be a little bit more technological savvy at the federal government. Finally today, Jason, stocks are down a little bit, but passed through all-time highs last week. Let's end things with two stocks that we're keeping fresh on our watch list. If the prices are right, what are you looking at?

Everybody loves stock ideas, right, ACO? Of course, yes. One that I just continue to keep my eye on is a company called Samsara. Ticker is IOT. It's now a $22 billion company. And Samsara operates its Connected Operations Cloud, which is a software platform that connects all of the devices that a company has in its buildings, its equipment, its cars, and other facilities.

And the platform then establishes this massive network of data and information specific to that company. Now, the company's still working its way to profitability. Basically, technically, it's cash flow positive, but stock-based compensation more than eats that up, which isn't uncommon for a company at this stage of its lifecycle. It's around 14 times forward sales projections today. Now, when I wrecked this company in the trend service back in 2023, the beginning of 2023, it was at 13 times. And it's been a bit of a bumpy ride, and the stock has pulled back a little bit. But when you look at the fundamentals of this business, they just reported first quarter results that it exceeded all targets that leadership set the quarter ago,

revenue up 32%, annualized recurring revenue up 31%. They have 2,638 customers with ARR over $100,000. That's up 35% from a year ago. So it is a company that continues to grow and establish a fairly dominant position in its market, is what it seems. It really does seem like this is becoming kind of the top dog in its space. And I think it's also a company that possesses a lot of those hidden gems traits, those principles that our CEO, Tom Gardner, loves, he's so fond of, right? I mean, you get reasonable, remarkable growth into expanding markets, check, right?

led and owned by true long-term believers in the company. Check, right? I mean, this is a company that is led by co-founders Sanjit Biswas and John Bickett. They own almost 70% of the voting power. And in a relentless curiosity towards bold technical exploration, I mean, that is a double check for a company like this. So if we ever see any kind of a material pullback in this one, I certainly would be very tempted to add it to my portfolio. Jason, do you have any thoughts on these cute kind of ticker names, IOT? Does that tend to scare you away from a company? Not really. I never would recommend a company on the ticker alone, but you just made me think of Core Scientific and its ticker, Cores. It's like the Smokey and the Bandit ticker. It's funny to

see those sometimes. Yeah. Jason, I'm looking at Howmet, symbol HWM. It's a formerly part of Alcoa, its history is steeped into high-precision metalworking. It provides 90% of all structural and rotating aero engine components for the aerospace, transportation, energy markets. These are really super high-end precision airfoils and forging, forge wheels and chassis for the commercial trucking and auto space. The stock has doubled over the past year, and it's up almost 50% since the Rule Breakers team over in Stock Advisor, we recommended it. just this year. It has these really serious competitive advantages that we love to see. It's patents, manufacturing, the history behind it, its core clients. You don't really want to

mess around with replacement parts for these kinds of really high precision manufactured items. It does have some opportunities in the energy space because it provides the blades for a lot of these, for the engine turbines that power a lot of the energy that goes into supporting data centers. I do love this business. It's just the stock has done so well. And while Rule Breakers and the Stock Advisor team, as well as our Rule Breakers team, love buying into strength, I just want to see, I'm not going to criticize anybody for adding this great business to their portfolio. But for me, I'm just looking for a little bit of value, maybe a market breather before I kind of start looking at how that symbol HWM, just a wonderful business, $73 billion. So

it's not small and it has a lot of room to grow in the aerospace market. Yep. Plenty of examples in my investing life where patience tends to pay off. 100%. There you have it. Those two high-quality companies, Samsara and Hamet, that we're watching. If the markets go on a little bit of a tailspin here in the dog days of summer,

maybe they go added to our portfolio. That's a wrap for us today here at Motley Fool Money. Jason Moser, thanks for joining me here. Thanks for having me. Here at The Motley Fool, we love hearing your feedback. To be part of that feedback or to ask a question, email us at podcasts at fool.com. That's podcasts at fool.com. As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations

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