Motley Fool Hidden Gems Investing - Nike’s Fall, Netflix Growth, and What We Learned in Q3

Episode Date: October 2, 2026

We discuss what we’ve learned about the economy and markets through the first three quarters of 2026. Then we turn to Nike’s latest quarter (which was terrible), Netflix’s growth concerns, and we play “Over/Under”. As always, we end with the stocks on our radar. Travis Hoium, Lou Whiteman, and Jason Hall discuss: - What We Learned Thru Q3 - Consumer Health - Is Nike Toast? - Over/Under - Netflix Growth - Stocks On Our Radar Companies discussed: Nike (NKE), Netlfix (NFLX), Meta Platforms (META), Alphabet (GOOG, GOOGL), Accenture (ACN), CareTrust REIT (CTRE). Host: Travis Hoium Guests: Lou Whiteman, Jason Hall Engineer: Dan Boyd Disclosure: Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, “TMF”) do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. We’re committed to transparency: All personal opinions in advertisements from Fools are their own. The product advertised in this episode was loaned to TMF and was returned after a test period or the product advertised in this episode was purchased by TMF. Advertiser has paid for the sponsorship of this episode. Learn more about your ad choices. Visit ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠megaphone.fm/adchoices Learn more about your ad choices. Visit megaphone.fm/adchoices

Nike just didn't. Motley Fool Hidden Jems Investing starts now. Welcome to Motley Fool, Hayden Jem's Investing. I'm joined today by Lou Whiteman and Jason Hall. I do want to get to Nike's numbers, guys, because they were not very impressive after the market closed yesterday. But we've also ended the third quarter, the calendar third quarter.

So I want to know what you guys think we've learned about investing about the market, about where we're going from here. Lou, it seems like there's a lot mixing together, interest rates are higher, but when we look at the market overall, what is driving things? Yeah, kind of a state of union, right? Okay. Well, I mean, look, I think we have to start with AI. AI has been all we're talking about this entire year and it has been driving the market. I think what we've learned in this last quarter, though, is that maybe, just maybe, the frontier, that's where the hype has been, but that's not where the money is. All of these companies that

we're racing to get to, you know, imaginary friends, super intelligence first, all of the billions being spent. And the meanwhile, real companies are putting lesser models to work and driving real efficiencies. I kind of think that's sort of been the gloom and doom talk. I'm convinced at Anthropic and Open AI are just kind of trying to maybe slow to spending and focus on revenue ahead of a potential IPO. And so maybe that's kind of why they're talking about what we can't. We got to just slow down on the frontier.

But I think it's pretty clear at this point that maybe one day, Frontier will be where the money is. But for now, you don't have to be the best of the best to actually start to drive revenue. Yeah, Jason, does it seem like we're in a strange place with AI because it's not only driving the market. It's also driving the economy. We'll get to some of your consumer thoughts in just a second. But have we learned anything about where the business models are actually working in artificial intelligence? Because this is one of the things where if you look at these stocks, some of the valuations are up. crazy. And then some like Oracle, for example, is down, I think, over 50% since they signed that

huge deal with Open AI. So it seems like it just, it depends on where you are. It's not AI is lifting all boats. It's lifting most boats, but not necessarily everything. Well, it's lifting the big boats, right? If you look at the hyperscalers, the massive multi-trillion dollar companies, they're being lifted a ton. The picks and shovels companies, the big tech companies that are making the tech, they're being lifted because the money is flowing to and through those businesses right now. But I think the bigger thing to remember is this is super duper early. Yeah, now it's lifting the economy too broadly because money flowing to companies that are building stuff and skilled tradespeople that are earning great money and then they're spending

that money back in the local economies. All that's happening. But again, it's so early as much as like the big dollars are flowing into a small group of companies now, look at Anthropic and to a little bit a lesser degree, but still pretty impressive, Open AI, their revenue growth rates are off the charts. And if those growth rates continue, even if they moderate a little bit, they're going to be generating some gigantic numbers in just a few years. Hopefully, hopefully. Because, yeah, I mean, the business model question, I think the interesting part is, I don't think we know. As Jason says, it's way early, so I don't think we have to know. But the business model right now is throw, you know what at the wall and see what sticks. And some of it has stuck. I mean, Anthropic has a

pretty good enterprise business going. We'll see if and when we ever see, like, actually, their S-1 and their full set of numbers. There's been rumors about maybe that momentum hasn't proven sustainable, so I'm curious. But just a couple of quick stats on this, because I think that this is the biggest question we still have. This is just one person's opinion, but Apollo global management estimates that annual AI end user revenue has to hit between $1.5 and $2 trillion annually by 2030 to justify all of the buildout spending. All right. Right now, guys, worldwide, according to the Gardner Group, all spending on software, business and consumer, every dollar we're spending, is $1.47 trillion. So basically, Apollo says this only works out for these

companies if they represent the entire global software spending budget for consumers and businesses, plus a little for inflation, in just four years. I think an important part of that to remember, though, is that it's not zero-sum. It can sound zero-sum, and I know, Lou, you're not trying to make it sound zero-sum, because AI is not replacing all software. I think a lot of what's going to happen is there's going to be some zero-sum stuff in the enterprise where AI tools make businesses more efficient. They need less people to do things. But I think broadly, it's going to create new industries and new opportunities that things that don't

exist that didn't exist 10 years ago are going to exist five years from now. And that means that the economic pool is going to be a little bit larger. So I think that's part of the story. Initially, there's going to be disruption and it's going to be ugly and uncomfortable. But on the other side of it, just as we've seen with every massive ground swell and change, new tech new innovation, the other side of it is more productivity and economic gains for the world largely. It's an interesting thing, though, if you take that to the macro, because you're right, there's a lot of ways this can go. But what you're implying is then that companies will expand what they're spending on, which means I have questions about the efficiency gains that were the

point in the first place. Are the companies actually becoming more efficient in spending more? And if so, Does that mean a bigger drag on the rest of the economy because these companies somehow gain pricing power or new pricing power because they're using AI tools? It still feels like something has to not work there. I mean, if business and retail consumers are spending more with these companies, therefore they can justify higher spend on new opportunities, where are those businesses and consumers getting that money from? You know, there's just, there's a lot of assumptions that money pile grows and they might be right, but there's a lot of blanks to be filled in there. Well, Jason, the other thing that's very different this time around is if we look at the changes

that happened, whether it was in the 80s or 90s, with computers, with mobile in the in the odds, and then the 2010s with things like cloud computing. I mean, I'm just looking at Amazon's KAPX numbers. When Amazon was building out not only the retail business, but also AWS, I mean, if we go back to 2013, they spent $3.4 billion on CAPEX. That was like the peak of their growth, you know, peak of their powers. Right. They probably spent that last week. Right. They $173 billion over the past year. Now, the thing that I have trouble kind of pulling apart is if we want to use the bubble word, when bubbles happen, it doesn't mean that the technology

doesn't work, that something amazing isn't being built. It's that the finances get ahead of the actual payback. And that's, as we're spending trillions of dollars, if this isn't changing the world, if it isn't changing the way that we work in the next couple of years, it seems like that's where there's big question marks for the market over the next, you know, five to 10 years, which should be the time frame that we're looking at as foolish investors. Well, I mean, more than one thing can be true at the same time. Yeah.

And I think that what we're going to see is that AI broadly is going to be transformative in a lot ways and a success and is going to grow a lot of different parts of the economy. And overall, I think five years from now, probably 10 years from now, certainly, there will be tremendous value created by these AI tools. But along the way, individual company plans are going to blow up. Things are going to fail. That's the way capitalism works, right? This is the biggest capitalist capitalism experiment in some ways, maybe in history, thinking about the fact that we've got how AI is being built in the U.S., how it's being built in China. So we've got these dueling models of how do we do it going on at the same time. And there's definitely going to be things

that are utter, utter failures. There are going to be billions of dollars in losses, maybe trillions in some cases, while at the same time, there's going to be massive amounts of wealth and value created at the same time that money's being lost. That's how. these things always play out. The financial crisis is an example of that. The dot com crash is an example of that. All of those infrastructure and assets that were put in place had massive value over the long term. It's just you never end up taking the journey to get to the destination that you thought you would. And that's, to me, maybe the most compelling thing about this. Jason, wanted to get your thoughts. We've covered a lot on AI. But the consumer is a big story here, too, going into the

end of 2026. What have we learned about the consumer? You know, it's interesting. The consumer spitting is still really held up broadly, like as a big number, but what we're seeing is a small percentage of the population controls the majority of the consumer dollars, like the discretionary dollars. So the resilience has been there, but there's plenty of people that are struggling. You know, stock market is still, you know, these very high levels. But look at McDonald's. Look at Wingstop, TjX companies, the TJ Max, Marshall, you know, is the parent company behind some of those home goods. Nike, we're going to talk about later. These companies are struggling, and they're struggling mostly on the backs of not the consumers that have plenty of discretionary funds,

but the consumers that don't, right? And as an investor, right, as a person in the world that you're mindful of like the realities that a lot of people are struggling to make ends meet, but But as an investor, that means that there's some buying opportunities. Some of those are incredible companies that are getting really cheap and they're outperforming the markets that they're in and it's macro stuff, right? It's weak right now, not individual companies that are struggling, but the industries are down and they're outperforming their industries. Now, here's the thing, some great opportunities.

But when it's macro, you don't know how long it's going to take before things normalize and get good again before you can be rewarded as an investor. I think we should be careful, too. And look, there's a lot of people suffering right now. But it's growing and that does scare me. But as far as being as an investor trying to figure out the macro economy, it's fine. It might not be fine for everyone, but it's fine. Consumer spending jumped in August, its largest jump in over a year.

Yeah, maybe that's partially inflation. Maybe that's not people are buying more. But the point being that the consumer, the collective, consumer was able to spend more than last year. I don't know at what point that critical mass breaks. And if the critical mass of consumers that are able to spend becomes less than what is needed to carry the economy, we're in trouble. But we have been predicting this now for over a year, if not longer. It hasn't happened so far. I agree, Jason, that it's really interesting to look at some of these individual companies that may be buying opportunities. But I think we need to be very

careful not to read into the macro. And I know you weren't doing this, but read into the macro based on any one company. Lou, what about mortgage rates? This is one thing. If you're looking for a home right now, you're looking at seven and a half percent mortgage rates. We bought our house in 2018, refinanced in 2020, I think it was, or this is under 3%. That is a huge change. Is that a headwind that you think is going to be impacting either the economy and or markets in the next year or two? They're higher than they have been, but they've been higher for a while, and I think it has impacted the economy. I think it's too soon to say if these latest rate levels will impact the economy more than, say, six months ago. It's definitely been a headwind for a long time.

I just don't know if, again, this is, it's time to play chicken little just because we've gone from six something to maybe seven something. I follow the housing sector pretty closely home builders is a cohort that I've been pretty bullish on for over a decade because where the demographic trends are favorable, the net migration trends are favorable, the markets tend to be undersupplied. But we've gone through this really strange period where a lot of existing homes, like the level of existing homes for sale, has stayed well, well down for years, really since the beginning of the pandemic. About half, right? Half of what it was a decade or 15 years ago, yeah. Right, right. And the pandemic really kind of exacerbated that. And what we've seen here over the past year or so is existing home inventory, a number of existing homes listed for sale, has started to really move higher. I think generally that's a positive thing because existing home sales are very stimulative for the economy. Somebody buys a used home, they're going to probably replace the carpet. They're going to do some upgrades of lighting and kitchen and bath stuff. before they really start getting into like the super expensive stuff. But those things stimulate the economy when existing home sales happen. But again, I talked about home builders.

Home builder building levels are basically at some of the lowest levels we've seen in the past five or six years. New home starts are well down. And yeah, interest rates historically or roughly like over the six or seven decade average, but man, houses cost a lot more than they did when interest rates were really around this level. So that's putting a lot of pressure on that industry right now. Yeah, a lot for investors to think about.

as we end the year when we come back. We're going to talk about the latest results from Nike. You're listening to Motley Fool, Hidden Gems, Investing. New from Nespresso. Blend wellness into your coffee routine with a coffee plus range, infused with functional benefits. Choose the coffee you love with added B vitamins, like coffee plus B12 to help support immune function,

and coffee plus B6 to keep your day moving. Or go with the flow and choose ginseng delight. Our new double espresso with ginseng extract. Whatever lies ahead, don't change. your morning. Let your morning change you. Discover Coffee Plus on Espresso.com. Welcome back to Molly Fool in Jim's investing Nike reported earnings after the market closed yesterday. And Lou, this is one that I think has been fascinating, lots of lessons for investors to learn. But the stock's down about 81% from its high, which is only about five years ago.

They said that revenue was down 4% in the quarter. But get this. Revenue is expected to be down high single digits for this fiscal year, it seems like nothing is going right for Nike right now. No, and some of it's self-inflicted, some of it's beyond their control. I mean, there's two parts of the story. One, they screwed up. They said, we don't need retail anymore. We're going to be just a direct-to-consumer. They burned a lot of bridges with very important partners, and that is still biting them. But also, I don't know if it would have mattered anyway. The world changed. You just need one good Instagram influencer to launch a brand. It's not like in the 80s where Nike could throw money at big stars and just dominate.

There is just a trillion more brands now, and you're never going to have that share. I don't think Nike is ever going to be the Nike of old. I think if investors want to look here, they need to reset expectations. It's still massive. It's still a good brand. It's going to continue to exist. It's not going to be what it was before. And just quarter by quarter, just the beatings continue.

Yeah, this is. still an exceptional, incredible business. And as investors, it's easy to anchor on seeing the stock down 80% think, man, this is just a dog. It's still a wonderful business. But everything's different now than it was 10 or 15 or 20 years ago. Western markets are very mature. You know, you go back that long ago and people weren't wearing like athletic shoes in the same settings that they are now. So that that pie has kind of grown as big as it is. It's basically GDP growth now, right? and so anybody that's scoring faster than the market, they're just taking share from somebody else. That means that really Nike's been playing a lot of defense in its core markets for a lot of years already.

So you put those two things together, and investors just really, you have to have the right expectations about a company like Nike. And I don't know that those expectations were very aligned four or five years ago, three years ago. 2024 kind of when everything peaked and the valuation also kind of peaked as well. as a rule breaker, don't get me wrong. I'm very happy to pay a premium valuation for a company that the common belief is that it's just wildly overpriced. But there has to be an enormous opportunity on the other side. And that's just not where Nike's business is right now.

So just be mindful of that. And it can be a perfectly fine business. But it's at the point you've got to pay a good valuation or you're just walking into underperformance. Jason, how do you think about what? We talked a little bit earlier about consumers where they're spending. certain consumers are doing well, certain consumers are not. It seems like Nike is heading in a negative direction.

If we look at other stocks in the space on holding Decker's Outdoor, those stocks are down as well, but they're growing. Are those the kind of opportunities that you're looking at is, hey, the market's kind of throwing all these brands out, but there's some winners here somewhere. Yeah, the thing about Decker's that's so interesting is that their success is a product of acquisition. They started off as a flip-flops company, and they acquired up. Ugs and they acquired, what's the sneakers, their running shoes?

Hoka. I think they developed that internally. Yeah. And Hoka is actually, I think this year is going to pass Ugs as being the larger business. So it's pretty incredible what's happened. And they're both still relatively small. Ugs is kind of mature, but Hoka, there's still growth potential there for those businesses. But at some point you get to a critical mass, right?

We saw this with Under Armour, which was the growth darling for a decade. and then it hit a critical mass. There were a lot of stumbles the company made along the way, trying to reinvent itself. The things Lou talked about with managing your supply chain and retail relationships and all that kind of stuff, and it's so important to manage those in relationships to get your products in front of consumers wherever they are

and grow as quickly as you can before you get to that critical mask. I think there's some risk-reward opportunity with a company like Decker's especially on. I'm not so sure. I know it's a big fan of you, so I'm kind of trolling you a little. We'll see where these brands go in the future. When we come back, we're going to play over and under. New from an espresso. Blend wellness into your coffee routine with a coffee plus range,

infused with functional benefits. Choose the coffee you love with added B vitamins, like coffee plus B12 to help support immune function, and coffee plus B6 to keep your day moving. Or go with the flow and choose ginseng delight. Our new double espresso with ginseng extract. Whatever lies ahead, don't change your morning. Let your morning change you.

Discover Coffee Plus on Nespresso.com. Welcome back to Motley Fool, Hidden Jems, Investing. Guys, I want to play a little game called Over, Under. I'm going to give you a number. I want to know if you think things are going to be higher or lower, five or so years from now. Let's start with the company we just talked about. That is Nike.

Nike stock currently actually trading for about $33 as we're recording. It was 35 at the close. Yesterday, Jason, in 2030, is Nike stock? going to be higher or lower than $35 per share? Higher and I'm going to say it's going to be closer to 50. Okay. Yeah. So, Travis, you're giving me a keg or what, 1.18 here or so I think on that.

Low expectations, but over the last five years, this would have lost by a wide margin. Yeah. I think it's higher. I mean, even 50 is that that's not probably a market beater. I think it's both higher and not a market beater. It's funny. I am a growth investor, but I look. could accompany with negative growth and a price to earnings multiple on a four

basis. It's still 23. And I would have taken the under. I'm surprised neither of you did. The reason I think it's going to be higher is, and again, there's the difference between where it starts and finishes and how you get there. I think things are going to be really bumpy along the way. But I think they're going to get to a point where they're going to kind of normalize things

and things have their advantage. Even if their margins do continue to erode a little bit, they have massive power as a buyer, right? And they get some leverage from that. So I think that's going to help. That scale is going to still benefit, and I still think it's going to be a really profitable company. And I think investor expectations will change a little bit along the way, too. And it's going to kind of come to just a happy medium where it's going to be fine.

Throw on a 5% dividend yield, too, which looks pretty safe right now to me. Yeah. They're still making money. But you could have said the same thing about Under Armour a handful of years ago where you keep looking at and going, ah, this is a great value. This is a great value. And it just keeps declining. But we will see where things end up.

All right. I want to talk about Netflix, the company we're going to talk. but in just a moment. How many NFL games is Netflix going to have in 2030? Part of the context here is there's some outs in the NFL contract towards the end of this decade. So 2030, 2031, Lou,

are they going to have more or less than 12 NFL games per year? I'm going to just try and be that guy here. I think the answer is probably over, but I'm going to say under because I'm not sure how much value all of this. dry. Again, this is, again, they're experimenting. I'm not sure they're going to say at the end of day, this is the property, this is the level of spending. We need just to keep our existing subscribers happy. So it wouldn't surprise me if they, they're still in live sports. They're still doing other things. But they've just said, you know what? NFL, it's not worth the cost

given that everyone's already subscribed anyway. The problem with 12 games is if you think about what they're doing, so there's Monday night football right now. There's Thursday night football, which are just kind of, they're like, there's reasons. to watch them. Of course, you know, big competitor has the Thursday night

games over on Amazon Prime. But the content, the games that they have are very special events around the holidays, that kind of thing. And I think that gives them

almost like a guaranteed amount of audience. You start getting into double-digit numbers and you're running out of reasons for people to watch beyond it being a team that they root for,

right? And I think that's one of the challenges for the number getting that big. So for that reason, and the fact that we're only talking four or five years from now, I'm taking the under. I'm thinking probably closer to where they are now.

This one's going to be really interesting to watch because the NFL, I think, thinks they're going to get a big raise if they opt out of some of these deals. And I don't know who's going to pay it. The other piece of context here, and I think I've talked about this on the show, but that Netflix, the Christmas game that you were talking about,

Jason, that was a Vikings game, my home team. I was eating lunch while the game was going on. Netflix is a streaming company. I figured I'll just go watch the game when I, when we're done eating. And Netflix of all places,

the game just disappeared. Yeah. It was like we went backwards. It was like we went backwards to if you miss the game live, it's your toast. It's crazy to me that they're spending hundreds of millions, billions of dollars on this live entertainment and you don't even get the benefits of streaming.

Yeah. And to your point about like what's going to happen with sports leagues and kind of read area what I said before. Netflix is good at experimenting. They're willing to try things. And I do think there's value in live sports to keep people on the platform. But most people are already on the platform. So there's limited added revenue right now.

I mean, ads and maybe a couple of people who just don't watch anything but sports. But they are what? They're trying wrestling. They're trying tennis. They're trying boxing. They're trying soccer. They're trying everything. I would be surprised if they determine given their needs that the most expensive sports property in the world is the best use of capital versus other things.

Well, you mentioned soccer, I think, you know, if you want to expand in markets you're not already mature in, maybe the most popular sport in the world and other markets, maybe that's where you can win. Yeah, that'll be interesting. I'm fascinated to see how this streaming world plays out in sports. All right, let's talk about autonomous vehicles. Jason, are we going to be over or? under the number of human rides versus autonomous rides in, say, 231, five years from now, are we going to have more human ride sharing or more autonomous ride sharing? It's still going to be human.

I just don't think five years is long enough to get to enough of a critical mass in areas where the bulk of the rides happen. New York City, as an example, L.A. I just don't think we're going to get to the point where the regulatory thresholds, which are really the big ones to pass are going to get to that point. If you were to say 10 years, I would absolutely flip my answer, but I just don't think five years is enough. Throw in the fact that, look, I mean, we are a very big country.

And by Uber and Lyft zone numbers, 20 to 25 percent of their rides originate or end rural areas. So that is, and which seems to me is going to be the last ones to go. So that is, that's a huge bogey to overcome, even if it's, even if those urban areas that, well, they're solving for right now, like Atlanta, even if it dominates there, which seems unlikely by 2030, yeah, we're going to get there. We're not going to get there this fast. Lou, don't you think that autonomous vehicles are going to expand the market? I mean, I think this is one of the things that's always really hard when, you know, taxis was one business, but Uber's

business became 10 times bigger than taxis because now it's suddenly accessible. You know, I'm in a suburb of the Minneapolis area. I would never call a taxi out here. But an Uber, I use on a regular basis. So isn't it possible that one of the tailwinds, it's not just taking share from existing ride sharing, it's making the pie bigger in some of those densely populated areas. I think we've seen this with in San Francisco even in Austin. So you think that people, so you wouldn't have called the taxi, you are going to call an Uber and you'd call the Uber more if it didn't have a driver? Absolutely. Okay. So I doubt it's enough to move the needle. I really do because there's only so many rides. Look, over time, I mean, right now, if you have a car, why are you doing this? It's because

you're planning on drinking or parking is terrible, right? So, I mean, it feels like the de-use case is already there. Over time, well longer than your 2030, maybe I can see, actually, I do think probably likely that today's standard quo where there's one car for every person over 16, that ends. And you see that, you know, it takes market share that way. But by 20, 30 consumers drastically changing their behavior because of this, I doubt it. All right, Jason, over or under $30 trillion companies in 2030, so four years from now, there are currently $16 trillion companies as of the last time I looked. Are we going to double that in the next four years?

I don't think we're going to double it. I think it's probably going to grow, but I think it's only going to grow by maybe a half a dozen. Lou? I mean, haven't we been talking about how the market's been going up forever and it's due for correction and all that? And yet we're going to have all that. I'm going to take the under. I think, you know, over time, but again, short time frame and there is risk of downside. There's only, I think, three companies that are even over $800 billion right now. So there is a lot of heavy lifting to do by a lot of companies to get to double.

Yeah, a lot of those companies that are worth over a trillion dollars today, there's a lot of growth already priced in. So if there's any sort of slowdown in growth because of AI spending or margin compression, that could be potential headwinds for those companies. All right. Final one, Jason, is Anthropic going to be over or under $150 billion in revenue, which would make it one of the biggest software and tech companies in the world by 2028. So just two years from now, is it going to hit that bogey? I'm going to take the over. I'm going to take the over by one penny, though. Price is right here.

Yeah, I mean, the growth rates is extraordinary. I talked about that before. Went from, what, $4 billion in revenue last year. It's probably going to 10x that number this year. There's definitely headwinds, but the sheer advancement in, like, utility I've seen just as a consumer with AI tools in the past year has been extraordinary. And I think we're going to continue to see that happen. And I think Anthropics are going to be one of the winners.

I'm going to take the other side just so we make both cases because I'm Obviously, who knows, right? Right. Look, we have declared the winner in AI four or five times in a couple of years, and they've always been- Maybe in the last couple of months. Right. Right. And right now, Anthropic is riding high.

We'll see if that has continued or if it's, but yeah, I, maybe, but it seems to me that likely there's going to be seven or eight more flavors of a month before, you know, before anyone really gains traction. So to bet that the winner right now or the momentum player right now, still has momentum through 2028. I'll take the under. It will be fascinating to see if they're able to move beyond coding, which was really the thing that drove their growth late in 2025,

early in 2026. And that's one of those areas where I don't think we've ever seen the adoption rate of a new product the way that we have with coding, where it went from zero to 100%. And I think if you're in that industry and you're not using AI, you're falling way behind, I don't know that that diffusion happens nearly as, fast with other products in the real world. I still get funny looks when I ask people if they've

tried Muse. So we'll see how the consumer adoption plays out over the next few years. We're to come back. We're going to get to the stocks on our radar. You're listening to Motley Fool, Hidden Jem, Invest. My name is Siaia, and I live in the most beautiful place on Earth. Seven months ago, I blew up my life, and a lot has shifted since then. Everyone is moving forward. I'm still working on that. And that's me. Welcome to Ice Cove. Where are the penguins?

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To see our full advertising disclosure, please check out our show notes. All right, I wanted to get to Netflix, guys, and one of the interesting comments that came out from their co-CEO said that they are not growing as fast as I want us to. Netflix stock has had an up and down a couple of years, and they still grown at 16%.

That's a pretty solid number, but Lou, how should we interpret that as investor? This is probably a stock that a lot of foolish investors still hold. Yeah. Well, I mean, I think when someone tells you who they are, you believe them, right? But how is Netflix going to grow from here? I mean, they could try, I don't know, mail-order DVDs, maybe. Would that work? Is that a good idea for them? Does stop those old machines. Yeah. But look, I mean, even what, look at what they've tried. They're, apparently, I'm told every time I log in,

I can do gaming on there. Never tried it. I've tried it. It's more difficult than you might think. Well, yeah, I can imagine the podcast some other things. But look, those are just included in the existing subscriptions. So much of what they do now is to make sure we stay attached to them, not trying to expand the pie. This happens to mature companies. You know, Netflix grew up. Growth has slowed because, at least in the Western Hemisphere, most of the people who want it have it. I don't know if there is a good answer other than if I'm an investor, I'm hearing the CEO say that.

And I'm thinking, okay, maybe I need to set my expectations accordingly. You think about the like the continuum of Netflix's existence. It disrupted video rental blockbuster. Then it disrupted itself with streaming. And then it disrupted the industry when the company decided to start financing and producing most of its own content instead of just relying on. on third parties. And then it disrupted its own business model after years of hearing the founders say we will never have advertising and added an ad tier. And then it's tried, you know, it's a great

experimenter, Lou, like you were saying earlier on the show, is they've tried things like gaming and other little things. But I think what we forget is like the broad industry is very mature. There's some opportunity in other countries as the internet becomes more of a thing and streaming works and people gather disposable income. But the way we, The other part of that is the way that we consume content and spend our time consuming content has changed in ways that structurally Netflix isn't built to be able to do. Well, and the supply, too. You think about, you know, the kind of content that goes on YouTube, that just fundamentally doesn't work on Netflix for a random person to just set up a camera and start a channel. And YouTube is basically the, it's a Netflix in scale already, right?

And it's massive. Then you have Instagram and TikTok and all of those other things that are in our pocket filling time. And it's tough. I interviewed David Gardner recently on another podcast, the original rule breaker. Netflix is still his biggest stock in his portfolio, but he was clear. It's not a rule breaker anymore. This is a rulemaker. It's a stalwart dominant player in its industry.

In some ways, I mean, that's incredible, right, in terms of the cash generation. But it also makes it maybe a little bit more at risk of disruption in ways that kind of erode its advantages. And it's from content that didn't exist a decade ago. Yeah. This is the Hill All Die on. They just need to buy up all of the studio and streaming assets of Disney, create one massive broadcasting company, license all the IP back to the theme parks,

and just do that. I mean, it's not going to happen, but that is, we're just, you know, it's over. The growth story is over. It's okay. It's still a great company. But unless you're going to get into creative destruction,

I don't think there is a path for the growth. earth he wants. The only pushback I have there is in streaming, in the world of streaming, can there be one app that rules them all? And, you know, I've got little kids. They can't, go ham on the Disney app. They can't, they don't have free reign of Netflix or YouTube. And I think that's important for consumers. I don't think there's ever going to be just one, because if you think about Apple, Amazon, other companies that are involved in streaming, it serves a different purpose in their business is maybe a top of the funnel or a little bit of stickiness, but it's not the core business that has to be the profit driver.

So as long as those other businesses exist and they're going to, it's going to be really tough for consolidation just to be the only way to win. And we've seen that they're interested in that, but it's got to be on terms that they are willing to pay for the assets that they want to own. And I don't think anybody at Disney is going to be interested in what you propose there, Lou, certainly not regulators. All right, let's get to the Stock Center radar and get Dan Boyd's thoughts from behind the Glass. Lou, what do you got for us? All right, Dan, I am looking at Accenture, ticker ACN, and it's been a tough

year for the consulting giants, investors fretting that they will be less needed, and especially their high-price services will be less needed in a world where CEOs can just go on Claude to get advice. But look, shares of Accenture were up more than 15% this week after the company beat estimates gave upbeat guidance. The good news is the sky is not falling. Reports of Accenture's demise were apparently premature. I still do have real questions, though, about whether AI is going to cut into billable hours over time and make their key cost talent more expensive. This stock has been on a short lease in my portfolio. I'm happy for the gains, but honestly, I don't see enough in this earnings report to take it off that short leash. Accenture remains on notice, Dan. Dan, what do

think about the consulting business today? I mean, Lou brings up a couple of good points. I think CEOs and companies are going to go with the cheapest possible option when it comes to consulting. And if Accenture doesn't adapt with the times, then they might be in trouble. The spreadsheet business is not what it used to be. Jason, what do you have for us this week? I love it when I find stocks that are set to win from enormous secular tailwinds. And Care Trust, retick, ticker CTRE is one of those. The aging of the American population is at a bit of a cross-execor. and making sure we can support and care for that aging population. Care Trust went public as a spinoff 12 years ago.

Investors in that spin out, they own a 10-bagger. Here's where it gets interesting going forward. It only owns a little over 400 properties in the U.S. That's less than 3% of the total senior housing properties out there, and it wins because it's a consolidator. About a third of the facilities in the industry, there's like 15,000 of them. But a third are owned by small operators that only own one or two. And then another half are owners that own three to 20.

That's right in Care Trust Sweet Spot to acquire. Most of those owners, Dan, they're baby boomers. They're looking for exit strategies for those businesses. So these are great trends. This is a proven capital allocator and acquirer. I think investors that want to keep getting market crushing returns should look at care trust going forward. Dan, what do you think of Reets in senior housing?