Motley Fool Hidden Gems Investing - The Hottest IPO of 2026 Will Shock You

Episode Date: July 27, 2026

Memory has been hot in 2026 and that was no different today. China’s CXMT went public and gained nearly 500% on its opening day. We discuss the IPO along with NVIDIA potentially guaranteeing hundreds of billions of investments made to supply OpenAI. Travis Hoium, Lou Whiteman, and Tyler Crowe discuss: - NVIDIA’s OpenAI Guarantee - More NVIDIA Investments - A Hot IPO - Memory Gets More Crowded - Merger Mania? - Case for Smaller Acquisitions Companies discussed: NVIDIA (NVDA), United (UAL), Delta (DAL), Norfolk Southern (NSC), Union Pacific (UNP). Host: Travis Hoium Guests: Lou Whiteman, Tyler Crowe 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

it's monday and jensen wong is making big deals motley fool hidden gems investing starts now welcome to motley fool hidden gems investing i'm travis holland joined today by lou whiteman and tyler crowe guys we're taking over the monday show today so this we can bring some heat uh and over the weekend we got some interesting news tyler that jensen wong and nvidia again making potentially massive deals. This time, the reporting from the Wall Street Journal is that they are going to

basically backstop potentially a $250 billion project. I even saw $500 billion thrown around that OpenAI would like to build. Somebody's got to guarantee those debt payments, those lease payments,

and NVIDIA apparently seems to have raised their hand. Yeah, well, you know, to the point we're all kind of having the substitute teacher energy today with the three of us doing the Monday show.

The funny thing was, is I feel like that Wall Street Journal article kind of buried the lead, too, because not only was NVIDIA saying they're going to guarantee that $250 billion, that's just for the build out of the facility and had nothing to do with the chips. And then it was like, and it could potentially also be another $350 billion in chips on top of the equity stake that NVIDIA has already invested in. What's a half trillion dollars between friends? I mean, it really the numbers now almost seem like they're just made up. But I'm about to go $11 billion or something like for all these deals here. And again, this wasn't the only deal that was announced today. NVIDIA is on a real heater here. On top of the OpenAI deals that were announced, it was obviously smaller because these were smaller companies.

But NVIDIA also decided to deal with thinking machines, which was a new startup kind of coming out of those, like the the open ai genesis of people who started early on as well as i always pronounce print mispronounce his last name uh ilia ilia satskiver satskiver uh a super micro uh safe super intelligence awful name dude get a better name either way like all three of these companies are just basically getting nvidia money thrown at them right now and so a lot of money going out the door really kind of, you know, we're going to touch on this like that circular accounting thing is starting to come back up again, which does give some people who have been around a little bit longer, some, some nervous feelings. Lou, this reminds me a little bit about the

discussions that we've had about Eli Lilly. Hey, when the times are good and you've got a high valuation, you've got cash, try to build a remote around your business. Eli Lilly's buying other pharma companies, NVIDIA is making sure their customers are staying afloat. Yeah. I'm glad Tyler didn't say bender. They're not on a bender today. They're on a roll, right? But maybe we'll see. It might turn into a bender. Here's the good news for NVIDIA shareholders is that there's enough cash there. This is not a bad balance sheet. So the debate here is whether or not the stock works or the stock doesn't work from here. It's not, will the company fail? I don't think we have to worry about that. And look, there is a way that this all works out fine.

The way is AI is everything we think it is. It generates all the revenue that we've seen in projections. Revenue solves all issues. If all these companies can pay back all of this debt that they're taking on, NVIDIA's got nothing to worry about. But obviously, there's a lot of ways this doesn't work out. You know, Tyler mentioned the circular funding. The obvious comparison here as vendor financing in the 90s. I get the concerns. I get why that's scary. But let's just say balance sheets are a lot stronger than in the 90s, back to what I said before about NVIDIA. And this feels like a different business environment. In the 90s, we were financing fiber being laid that was 90% not being used or even more. We were building excess capacity. We weren't building for what

we need today. Well, to be fair, we are building data centers that don't yet have chips in them. So we're not seeing the supply hit the market quite yet. Yes, but data center vacancy rates are near record lows. I think right now the assumption, I mean, we see all of these companies making deals. SpaceX is selling off its data centers wherever, whoever needs it. The Neo clouds are all out there. There is a lot more today demand for data centers than there was for this fiber back in the 90s. Look, whether or not it all works out, I don't know, but I think that's an important distinction to remember here.

Tyler, one of the things I always remember hearing is, well, it's not really a bubble until you start seeing debt involved. We've now seen debt. We've seen special purpose vehicles. We've seen guarantees of other companies' obligations. What should we be watching to potentially indicate that, you know, this isn't necessarily sustainable because we've been talking about this circular financing thing for quite a while now. Well, as far as I've seen so far, and obviously in part

because it doesn't seem like either Anthropic isn't doing these kind of deals or they're being much quieter about it, which may be the smart thing to do. But it seems like a lot of these circular finance deals that we have heard about kind of all tie back to open AI in one way or or the other and sometimes when you hear a lot of this like you know ai bubble sometimes i most want to say it's more like an open ai bubble because it it's so much of this you know creative financing you know these circular finance deals metas you know off balance sheet deals a lot of these things seem to or especially oracle too with a lot of like the debt financing they're doing to build out. A lot of that is tied to these IOUs that OpenAI has out in the field out there

somewhere. And it's starting to look like the briefcase from Dumb and Dumber, where when they open it up, instead of a million dollars, it's just a million IOUs. Yeah. To bring Oracle, that was the one that I was thinking about as you were talking. Oracle shares, since they signed that huge deal with OpenAI, $300 billion worth of remaining performance obligations that was announced in late 2025, their stock is down 63% since then. So the IOUs are great, but you also need that confidence in the market. So we will see if that maintains with NVIDIA backstopping a lot of its own customers. When we come back, we're going to talk about the latest IPO in the memory market. You're listening to Motley Fool, Hidden Gems, Investor.

You gotta try breakfast at A&W. And what better way than with a delicious Pratt Organic Coffee, starting at just $1 all day, every day, now until December 31st. You gotta try breakfast at A&W. At participating A&W locations in Ontario. Welcome back to Motley Fool Hidden Gems Investing. we have the hottest IPO of 2026 hit the market in the last 24 hours. It's not SpaceX. It is CXMT. This is a company that most of us had never heard of until a few weeks ago,

but it's a Chinese memory maker, the number four memory maker in the world. We talk a lot about Micron, SK Hynix, and Samsung. Those are the big three. This could be number three as early as next year because they're raising a whole bunch of money to expand their DRAM capacity. and the market's not reacting positively on the U.S. side. But this stock was up almost 500% today. Yeah, not bad for one day, right? And yeah, it was over in China. So we can't, I guess we can if we really, really want to try and play it.

But it's not easy for us to play. But look, in theory, this is kind of bad news for all of those other players. We've talked about memory is very, very commoditized over time. And this is, like you say, this is an expansion IPO. The company already existed. but they're raising a ton of money to build out capacity, which should impact the supply. In theory, though, because look, we still don't know if customers like Apple can buy products from CXMT. The Pentagon classifies this company as a Chinese military operation. The Department

of Commerce has not blacklisted it yet, and we don't know that they will. I know Apple is lobbying for it, but wait, this would solve a lot of our problems. So we'll see. But, you know, Now, look, this is this is another company that's out there. They are expanding. It should I mean, there is the rest of the globe, even if U.S. buyers can't can't access it. But this is, again, part of the big picture and memory that you really have to watch before you buy into these companies. Tyler, you've been following the energy markets for a long time, and the commoditization of memory looks a lot like the energy markets where you add a whole bunch supply. It impacts prices. This is one of those things I've been hearing for months. You know

what? This time is different in the memory market. And I don't know, this is now a fourth supplier that's going to bring a lot of capacity online. You start having four, five, six suppliers. That's how you get to commodity pricing. You're no longer an oligopoly. One thing that management teams at commodity companies, whether it be oil and gas or mining or production of solar panels, basically anything that's commoditized like that management teams there do tend to be pretty good at shooting themselves in the foot with overcapacity when things are a little too exuberant so it's not like you know i feel like you and i have had too many conversations about this over the years yeah it's quite a few of them um look if i'm going to squint hard enough and try to be like okay

maybe it's not that bad the the thing that you could justify here is the fact that uh cxmt doesn't really make a high bandwidth memory chip to the technology specifications that Micron is making these days or SK Hynix, basically the things that are being used in data centers. And there is the argument to be made of Micron and SK Hynix and all these other memory companies

are just going to push into high bandwidth memory because they have the capacity, they have the technology, they have the data center demand And all that lower commoditized, you know, to a lesser degree, some DRAM, but not as severe, but also down into the flash memory level. A lot of that stuff that is getting left behind, the consumer electronics and all that stuff that we're hearing these nightmare scenarios of iPhone prices going up, people can't get Nintendos and Xboxes because memory is going to go away. You know, the theory is, is like a company like CXMT can backfill some of that with the lesser technologically demanding sort of product. maybe that's the case the one thing that you do have to you know keep in mind here this is a

chinese memory company they are going to want to get into high bandwidth memory there some other presentations are saying within two to three years they're going to be able to replicate more or less like sk hynix's capacities about three years ago in terms of the technology so you know there's a runway here it's hard to tell and i find it kind of fascinating where we're looking at this particular their equity raise of like $10 billion, and they want to surpass Micron. But Micron has said they're going to spend $250 billion over the next 10 years on capacity expansion, too. So it's not just like, oh, yeah, this is going to be the Chinese silver capacity's fault, too, because everyone else is doing this, and they're going into their respective niches. So it goes back to what we were talking

at the top here with NVIDIA. It's like, if we do believe that the current spend rates are sustainable, and that the power demands, the compute demands, and everything maintains its current trajectory, then overcapacity may not be a problem. But those are some pretty bold assumptions. Whenever it comes to technological advances like this, there is going to be something that's going to make it cheaper, more affordable, less demanding on compute. Something along the way is going to come around to make that better. And that would, more than anything, be a bigger fear for these in commoditized esque type things like memory chips whatever lou there could be a potential upside here that's if this brings more of that commodity that dram supply to market that

means that electronics whether it's whether it's apple i mean this is you're you're filling a hole that there is in the market whether it's apple's products whether it's nintendo's products or just everywhere else the dram goes could help pricing which is actually good for consumers and there should be some other investment opportunities as well right there's a reason apple's would like to do business with them because this is capacity now when you need it um here's the other thing too is hopefully again the data center is all this and more but there is a risk that micron and some of these other companies are kind of abandoning their core customer these kind of simple memory users as they chase the data center and that could bite you if supplies apple isn't

going to say oh micron yeah you kind of left us hanging but if you won our business now we'd be happy to come back to you well is it tsmc in this same scenario you know hey we don't really want to talk to intel but if you're if you're not going to make our chips that we need to make our products we gotta talk to intel yeah right there's just a lot and again we don't know how this plays out so this is hard and not really predicting future but there's a lot of room for unintended consequences this year that I think is worth watching. Unintended consequences may be the term of the rest of the year, because I have a feeling things aren't going to go quite as planned on the market. When we come back, we're going to talk about potential merger mania coming.

You're listening to Motley Fool Hidden Gems Investing. And what better way than with a delicious Pret Organic Coffee Starting at just $1 all day, every day Now until December 31st You gotta try breakfast at A&W At participating A&W locations in Ontario In Toronto, every arrival is a statement

And nothing says it better than this Cadillac Optic was the number one selling luxury EV in Canada for 2025 Find your rhythm across a seamless 33-inch display and an immersive 19-speaker AKG surround audio system. This city demands agility and Optic delivers with precision to make every drive extraordinary. Let's take the Cadillac. Find out more at CadillacCanada.ca Luxury sales claim based on S&P Global Mobility Canadian New Vehicle Total Registrations for calendar year 2025 for the Cadillac definition of luxury. Welcome back to Motley Fool and Gems Investing. To say the current administration has a different approach to mergers and acquisitions than the previous administration in the U.S. is, I think, an understatement. We've gotten very little pushback on some of the latest mergers, including Paramount buying Warner Brothers Discovery, at least on a federal level.

So, Tyler, you had some interesting thoughts of this could lead to a boom in M&A activity, at least over the next couple of years as companies go, hey, these deals that we couldn't get done may actually get through and may actually get through pretty quickly. Yeah, these things have been bubbling up a little bit to the surface in recent months, especially in industries where it almost seems like consolidation was never going to happen again. Talking about the Warner Paramount deal was obviously one. We're talking about railroads with the Norfolk Southern and the Union Pacific deal that seems to be working its way through, which, I don't know, Lou, I think probably four or five years ago, we would have thought that is just unheard of, that nobody would have done that. And then just this earlier today, again, all of us just kind of opened up the Wall Street Journal this morning and said, hey, that's kind of interesting. There was talks that United Airlines basically contacted the CEO of Delta Airlines and said, hey, what do you think about merging now? Some sort of, I don't know, deal of equals. The fascinating thing, though, is I think it wasn't a couple of years ago under the Biden administration, the idea of the Spirit and JetBlue merger happening was like, no, we can't do this. This would be awful for competition. And then all of a sudden the, you know, the top two or top three in some combination are in the airlines is just going to sneak together and it's fascinating to me. It seems like a very unique period in time where probably under most other, I feel bad saying this because it sounds like it's very political, but under most other administrations, this sort of stuff would get a lot of blowback. but they're it's like if we can do this now it'll be a lot harder for them to try to pull us apart when you know after we've already been together so it does feel like a getting while the getting's

good sort of vibe with uh m&a i don't want to be a wet blanket here because i love m&a that was you know i cut my teeth on m&a so but uh look ceos are not all knowing they are reading the same press clippings we are and they're daydreaming and they are seeing if it's time to be opportunistic The administration talks about being more M&A friendly, but let's look at the actual results here. Paramount Warner Brothers Discovery, despite the green light from the feds, they've put that on hold for a year. That's an eternity in corporate time. That is just misery right there. Union Pacific, Northern Southern, Northern Southern are sort of on their way, but they again, they're at least a year away and things are about to get more difficult with them. I think when they actually go to the customers and ask these deals are still iffy at best. I think that we'd have to just like CEOs can read the press clippings coming out of the election and say, hmm, maybe it's time. I think they're watching this too. And that might slow the roll. These are some pretty big deals, though. What do you think about potentially smaller deals? And I'm thinking back to Amazon was not allowed to buy iRobot. Like, what about those little, you know, the tech industry in particular always used to have these kind of tack on acquisitions, a couple billion dollars here, a couple billion dollars there. Do you think that is potentially opening up? It's always a pendulum. It's probably always more open than it was. But again, I do think that the states are sort of opening their mouths now, too. And again, this isn't a political show, but there is almost more motivation for the states to be overly aggressive right now. As a CEO, before you put capital at risk and time at risk and management bandwidth at risk, you want certainty.

You don't just care about the DOJ. I mean, in my part of the world of defense, little deals are getting DOJ attention that we never saw attention before. I think that, yes, in general, we are more permissive now than we were a few years ago. But I don't think that this is a new golden age for M&A. We'll see how this plays out, but there's definitely more to discuss as we get into earnings season. So we will be back tomorrow

with more certain that this is the week that I think the earnings season really starts for a lot of us who are following a lot of stocks. So this week and next week, be sure to tune in to Motley Fool Hidden Gems Investing.

As always, people on the program may have interest in the stocks they talk about, and The Motley Fool may have formal recommendations for or against. So don't buy or sell stocks based solely on what you hear. All personal finance content follows The Motley Fool's editorial standards and is not approved

by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. For Lou Whiteman, Tyler Crowe, and Dan Boyd behind the glass, I'm Travis Hoyum. Thanks for listening. We'll see you here tomorrow.