Motley Fool Hidden Gems Investing - The World Grows More Uncertain

Episode Date: June 13, 2025

And yet, the market remains close to all time highs. (00:21) Jason Moser and Matt Argersinger join Ricky Mulvey to discuss: - Macro uncertainty and market bullishness. - A record amount of unsold housing stock in the United States. - Chime’s IPO. - Earnings from RH and Adobe. (19:11) Malcolm Ethridge, Managing Partner at Capital Area Planning Group and author of "Financial Independence Doesn't Happen by Accident". (35:00) Jason and Matt share two radar stocks: Chipotle and Whirlpool. Companies discussed: RDFN, CHYM, RH, ADBE, CMG, WHR Host: Ricky Mulvey Guests: Jason Moser, Matt Argersinger Engineer: Dan Boyd 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. Learn more about your ad choices. Visit megaphone.fm/adchoices

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From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money Radio Show. I'm Ricky Mulvey. Joining me on the internet today are Motley Fool senior analysts Matt Argesinger and Jason Moser. Great to have you both here. Ricky, what's going on? Big news is going on. Last night, Israel struck Iran's nuclear sites in military leadership. These moves have created big questions.

that go beyond the scope of the content promise of this show. Like, what will retaliation look like? What does this mean for America? And I want to set aside the business part because this is, you know, there are parts of history that exist in punctuated equilibrium. And last night was a stark reminder that our peace in the world, in America, should not be taken for granted. So before we get to the show, I'll start with Moser.

Jason, any broad reflections about what's going on? I mean, it's obviously not good news. It does sound like it's something that could be somewhat protracted. I mean, we've seen retaliation already from Iran. And from what I was reading, it sounds like Israel had essentially planned out 14 days of operations to ultimately accomplish their goal. So let's hope that it's not something that continues to escalate. It will lead to continued uncertainty, obviously, beyond the markets, just around the world. particularly when you consider our role here in the U.S. in regard to all of this, right? Now, I mean, they're saying we don't really have a role in this, but at the same time,

they're saying, well, we knew it was going to happen. And so, it just kind of gets into a back and forth that you just hate to see it. From an investing perspective, I mean, no surprise, we've seen oil prices pop on this news. We're seeing, interestingly, a flight to the dollar, I think. So maybe the dollar still got a little bit of a reputation there. I know there were some concerns recently. And then I think your obvious winners, weapons manufacturers, government contractors, whatnot, they have seen a little bit of a boost from this. But yeah, I mean, it definitely makes you think of things beyond just investing. And it's really sad to hear. Matt, anything you want to add, or we can keep it moving to the content promise of this show?

I'll just say, as investors, I think we yearn for certainty in an uncertain world. And this is just a reminder that there's so much out of our control and so much uncertainty, as Jason said. And that is one of the things you have to live with if you're an investor and a citizen of this world. Let's move to the business side. There is uncertainty. That's the key theme.

Trade uncertainty, geopolitical uncertainty, uncertainty about the job market and artificial intelligence. And yet, Matt, the Standard & Poor's 500 is still within spitting distance of all-time highs. What's that say about the market to you? I know. It is remarkable that we're so close to new all-time highs. And we have all this trade uncertainty still. We have a new one, but we have multiple large-scale conflicts now around the world that could escalate, that we don't have an end time for. And treasury yields, interest rates, are still at multi-year, if not multi-decade highs. That, to me, just doesn't feel like a stock market that should be within two or three percentage points of an all-time high.

We can go through the positives too as well, though. You do have a strong labor market. We have consumer spending that keeps holding up for the most part, and the AI revolution. We have all these massive amounts of tech spending that's going to change the world, hopefully in a positive of way. But Ricky, the macro backdrop could not look worse for me as an investor right now. And I guess I'm just amazed by the market's resiliency and Friday's sell-off notwithstanding. Jason, I can't tell if you were shaking your head because you just really disagreed with what Matt Argersinger had to say, or if it was because dogs were barking in the background. It's the latter. It's the latter. Okay. Okay. Yeah. I think, as Matty said,

a lot of good things there. It does feel like we shouldn't maybe be in such a good position in regard to the markets, given the macro backdrop, given what has developed here over the last 24 hours. But I guess when you look at it, at its core, we continue to see strong corporate earnings. That's obviously very encouraging. The economy, we were talking about this last week, it is still ultimately fairly resilient. I think that most recent jobs report number is starting to create a little bit more of a belief that we will see the Fed jump in there and start cutting rates in the back half of the year. If that happens, obviously, that frees up some capital with lower rates, and maybe we see more money moving around that way in

housing. But the AI conversation continues to dominate. There's just a lot of enthusiasm out there right now. I'm not complaining, but it doesn't feel like it quite squares up. Yeah, I agree. Let's move from big macro to big real estate. Matt, since you're the real estate guy, I need you to explain this to me. It's a Redfin report saying that U.S. home sellers are sitting on $700 billion worth of listings. That's up 20% a year ago and an all-time high. Another Redfin analysis found that there are nearly half a million more home sellers than buyers in today's housing market. What's going on behind these numbers? Well, can you explain it to me? Because I don't quite get it either. No, you're the analyst. I'm the host. I know. Well, what happened

to those golden handcuffs that we thought homeowners had to their low fixed mortgages or the fact that inventory has been so stubbornly low for years? I mean, what happened to all that? You mentioned it. We're seeing all-time high value of listings, according to Redfin, and that data goes back to 2012. And the number of homes for sale on the market is up 17% year-over-year, and that is at a five-year high. And at the same time, houses are sitting on the market for longer. $330 billion, so almost half the number you mentioned of home values, have been sitting on the market for 60 days or longer. So what does that say about demand?

I mean, we've assumed that demand has always been the strong factor here, and it's the supply that's lacking. But I think there are a few things going on. People may be trying to move, Ricky, like you suggested, but I don't think they're in a rush. I mean, if you look at the median U.S. home sales price, it's up 1.4% year over year. So, I think a few things. Sellers want to sell, but they're not willing to cut the price, at least enough to really move inventory. Second, that contributes to this affordability issue we've been having. especially for younger first-time homebuyers who have sticker shock.

When you compare the monthly rent for an apartment in most markets and compare that to what it costs to buy a home in most markets, the spread is hundreds of dollars, if not thousands of dollars in some cases. It's much more expensive to buy the rent. The housing supply might be getting unstuck, but maybe now we actually need to start focusing more on the demand side. If mortgage rates don't come down or sellers aren't willing to cut the price, we might still have this mismatch in supply and demand. It's just the opposite side than what we thought. Well, in a non-cheeky response, I'm in Denver, Colorado, and it makes a tremendous amount of sense to rent versus buy for me, my personal situation in this market. And I think you keyed in on it there, which is this is

all about price. Yes, sellers can want to sell, but unless you really want to sell, you need to cut the price. And until sellers are willing to do that, this is a simple supply demand game that's not going to go back in balance. So Matt, more of a personal finance question. If you are a home buyer right now, you're not used to being in a buyer's market. So for someone looking for a home, listening to the show, any advice to them right now? I would say, you know, to potential home buyers, stay patient, keep paying that relatively cheaper rent and saving for that down payment, because I do think eventually something breaks your way. Either mortgage rates come down at some point soon or sellers finally start cutting prices maybe by the end of this year and enough

to move inventory. So I think the power is getting on the side of the buyer. You just might have to be a little more patient. Up next, we're looking at big tech earnings and an IPO. Yes, IPOs are back. Stay right here. You're listening to Motley Fool Money. Stop wasting your nights on a mattress that doesn't get you experience the most comfortable mattress in the world the sleep number smart bed at the touch of a button you can personalize your comfort choose firmer or softer adjust cooler to warmer and right now save up to twenty five hundred dollars during our massive labor day event hurry into your local sleep number store today because we have your number Welcome back to Motley Fool Money. I'm Ricky Mulvey here with Matt Argesinger and Jason

Moser. Fools, we had a big IPO this week. I can't remember the last time that happened, but also the internet has atrophied my attention span and memory. But let's talk about the one that happened, and that is Chime, Jason. This is a company that offers banking services, but is importantly not a bank. Don't call it a bank. They do high-yield savings. They do some interest-free payday loans. And the stock rose 37% on its first trading day. Seems like investors are excited about the IPOs again. Yeah, I guess that is the case. I mean, in the first quarter of 2025, we definitely saw an increase in the number of deals. There's some reports that showed a 55% to 76% year-over-year rise here in the U.S. And total proceeds from

these offerings also increased. There is this feeling that private equity firms are looking to start divesting some holdings, which ultimately leads to more IPO activity. I think we could see in the back half of 2025 and going into 2026, I think we'll continue to see this modest enthusiasm in getting IPOs coming back to the public market. We have some companies to look forward to out there. I think Stripe is a big name that folks are paying attention to. Klarna is one. They've kind of put it on hold for now. But yeah, I think with Chime, I think the one thing to keep in mind is, remember, this IPO and you get the company value today at $10 billion, $11 billion, $12 billion. That's down from like, it was a valuation of $25 billion at their last fundraise in 2021. So

that valuation has certainly come down, which is just, I think, something to pay attention to. Modest enthusiasm is the key theme that I think we should dig into. I really like that phrase, Jason. When you look at the business of Chime, the fundamentals, this is a company that handled $121 billion in transactions over the year before it went public, 8.6 million active users. And when you look at the financials on the S1, you can see that nice trend line as this business scales closer to operating profitability. I know you don't like to jump into an IPO. You're patient. You like to wait and see what's happening. But is the business itself here, is this interesting to you? It could be. I mean, I think fintech

certainly is a fun space to follow. As you noted, this is not a bank. It partners with a couple of banks in order to be able to provide these services, the Bancorp Bank and Stride Bank. There is the FDIC angle there, which is encouraging. I think the one thing to keep an eye on with this business is the way it makes its money. Ultimately, it makes most of its money just through card interchange processing fees. Essentially, it's a card company. On the one hand, there's an interesting growth profile here that could be in play. Again, looking at that valuation, how far it's come down from 2021, you do have to start asking yourself in regard to the growth prospects there. On the flip side, if you're looking for a payments

company that's making its money off of card swipe fees, you got Visa and MasterCard out there right now. Those companies have just really been lighting it up here lately. There are a lot of qualities that I think make this a compelling business to follow. You've got co-founder, Chris Britt, the CEO of the company, and Ryan King, another co-founder who's a director, they're still with the company as well. So you have that skin in the game, which is always an attention getter. So it's definitely one that I'll be paying attention to in the coming quarters. But you're right, Ricky, I think investors likely should exercise patience here. And let's see exactly how they behave as a publicly traded company.

For newer listeners, Jason did something there that you should do anytime you're looking at a new company. That's key in on the fundamental value drivers. How does this business make money? How does this business make more money? In the case of Chime, it is those processing fees, something that you want to pay attention to. Let's get into the earnings rundown. We will start, Matt, with RH. This is the aspirationally priced furniture retailer that sells inside of stores that occasionally look like Scooby-Doo mansions. But the important part is that the company reported a surprise profit and the stock jumped 20% this morning. What'd you see in the results? Well, a few things, Ricky. It was a good report. And a shout out to CEO Gary Friedman,

who I think is the only CEO that can quote Pablo Picasso, Warren Buffett, and Teddy Roosevelt in the same shareholder letter. Y'all love that. But yeah, a few things. I mean, they maintain their full year guidance as well, which is something few, I'd say, consumer-facing companies have done this earnings season, so that's good. One thing I am a little bit worried about, revenue grew 12% year-over-year, nice growth there, but inventories up 26% year-over-year. Now, they've opened some big galleries over the past year, they're opening more. That explains some of the inventory build. But generally, you don't want inventories to grow faster or so much faster than revenue over time, that can lead to trouble.

They did, however, generate nice free cash flow, $34 million in free cash flow in the quarter versus a loss of $10 million a year ago. And so the business is sound and the profit was nice to see for the quarter. When you look at Friedman's commentary, I think when he was talking about tariffs is that when he uses the Pablo Picasso quote of every act of creation starts with an act of destruction. What a mind, what a mind behind RH. I know. But you mentioned tariffs, a slow housing market, RH still predicting double digit sales growth. And we've talked about the slowing housing market. What's that say to you about RH? What's that say to you about the economy? I think it says to me that RH, and we know this, is a very unique company. It's an

outlier in its space. I don't think I can glean any big insights about the economy. I think it's an outlier brand. It's aspirational. It's got a very loyal member base of buyers. And so I don't think it gives me many clues about the economy, but it does tell me that RH's business is very sound and that it's holding up very well in a lot of uncertainty. So for newer investors, this is a letter that I would encourage you to read because Gary Friedman is a wonderful writer. It's actually a fun read. And it is also a time for you to exercise your skepticism radar. And here's a part that sort of got my skepticism radar going, Matt. And it's when he said, quote, Our debt is reflective of a washtub bet on ourselves. We repurchased 60% of our outstanding

shares that greatly benefited our long-term shareholders post the publishing of Mr. Buffett's letter in 2016 to 2017. He goes on to say that he makes these big repurchases when he believes the stock is undervalued. Then here's the key part. In addition, we believe another washtub bet is to play offense in the current environment by increasing our membership discount from 25% to 30%. Wait, what? You just went from repurchasing more than half of your existing shares to talking about a 5% increase for a membership discount. What is this guy saying, Matt? He says he's unconventional. That's what he's saying. And I have to say, when you take on a lot of debt to buy back stock, and their net debt, by the way,

is almost twice where it was before the pandemic, you better be right about the business. And so Freebin's making a big bet on his business. Like he said, they've got a lot of real estate, They've got assets, they have inventories, a nice quarter of free cash flow. So the debt right now is probably pretty manageable. Just watch out if the business falls off, though. And the membership discounts going up 5%. We'll also call that a washtub bet. Let's quickly move on to Adobe earnings. JMO, Adobe reported yesterday, this is a rare bird that is actually raising guidance right now. What did you find in the results? Yeah, I think the results were better than the market would have you believe today. Stock down

a little bit after the report, and there seemed to be at least some minor questions regarding deceleration in subscription growth and remaining performance obligation growth into the back half of the year in quarter four in particular. But as you noted, they raised guidance all the way around, which is very encouraging. The quarter was a good one. Revenue was up 11%. Earnings per share, $5.06. In raising the guidance, I think that's really encouraging. they raised a midpoint of $20.60 per share, which puts shares now at around 19 times full of your estimates. They're going to grow earnings this year about 12% from a year ago. So that multiple makes sense. That multiple sounds low for a business that has historically commanded

a higher valuation. But that's ultimately why that is. So then you just have to ask yourself the question, is this company going to be able to continue to grow? I mean, the big question, the big question for, about the growth is AI. What does AI mean for Adobe? Can creators get to good enough with free and other tools? And Adobe's response seems to be, if you want the best tools, you still come to Adobe. We have this product called Firefly, where first time subscribers to Adobe grew by 30%. Are you buying that explanation from Adobe? To a degree? Yes. I mean, there are a lot of tools out there and Adobe is considered to be one of the leaders in the space, but there's no question its competitive position is under more attack today. And we're

seeing encouraging numbers with things like Firefly, like you mentioned, and how it's bringing AI into its portfolio. I just think the question really is, is this a business where AI makes it better, or is this a business where AI displaces it? I think it's the former, but again, we're going to have to see the numbers, and that'll tell the tale here in the coming quarters. We're going to see Jamo and Matt a little later, but up next, we're taking a look at Cybersecurity with Malcolm Etheridge. You're listening to Motley Fool Money. Welcome back to Motley Fool Money. I'm Ricky Mulvey. Malcolm Etheridge is a managing partner at Capital Area Planning Group, a boutique financial planning and investment management

firm. He's also the author of Financial Independence Doesn't Happen by Accident. Etheridge caught up with me earlier this week to chat about the state of cybersecurity and why investors may be a little too pessimistic about Apple's future. Malcolm, an under-discussed story that you brought to my attention is that virtually all the top officials at the Cybersecurity and Infrastructure Security Agency have departed the agency or will do so in this month. That was according to an email obtained by Cybersecurity Dive. The latest spending bill that's going around slashes the budget for this agency by about $500 million. It currently spends about $3 billion a year. This is all new to me. What is the

cybersecurity and infrastructure security agency, and what does this mean for the cybersecurity companies you follow? Yeah, it's really one of those things that we as American citizens don't really want to have to know that it exists. Frankly, I probably hear more about it and talk more about it just because, you know, in my day job running a wealth management firm, a lot of the clients that we work with happen to be executive level folks at some of the most important, largest companies in cybersecurity. And so, you know, as I'm having dinners, playing golf, whatever casual conversation, these kinds of things tend to come up. And so the way to think about CISA though, is they are the foremost or the most important cybersecurity agency within the US

government structure. So the DOD is the largest that people would typically think about, but CISA kind of runs the show. So they coordinate with companies like Microsoft, Google, Amazon Web services and share information back and forth to make sure that each other is aware of bigger threats that are coming at us from state agencies, more specifically our adversarial countries that actually sponsor a lot of this cyber warfare that happens. And this overall bill actually does add spending. It adds deficit spending, but there are some cuts going on. This is one of them. Are there any companies you think in this zone in the cybersecurity area that are particularly prone if there are federal spending

cuts to cybersecurity? Well, so one of the things that I think is interesting, I started investing in standalone cybersecurity companies about three years ago, started making a case publicly about this on shows like MFM and others about the opportunity to invest in these companies. And one of the reasons that I made that case was because at the time, the Biden administration had about $13 billion set aside for cyber defense. And there was talk about the importance of increasing that number, which meant that any standalone cyber firm that existed at the time was going to be bidding for contracts to help defend the different U.S. agencies. Because all of our infrastructure, as you can imagine, is just years and years behind where it should be.

And when I say our, I mean the country's. And so the DOD specifically was kind of leading the charge, along with CISA, trying to get to what's called the zero trust environment, which is sort of the standard today as far as how we're supposed to interact with our technology inside of an entity. And so all of the different standalone companies, your CyberArks, your Fortinets, Okta, all the smaller ones, in addition to Palo Alto, CrowdStrike, Zscaler, names like that, were looking to be bidding on those bigger contracts. And that was how they were going to grow top line revenue. It just so happens that Palo Alto Networks is one of the largest suppliers of those services to the government today. And the government deciding, at least

showing its hand with what's happening with CISA, which I should assume means that that's going to be their stance with all the other agencies with future bills. The fact that they're reducing that expected spending at a time when they should be ramping up how much they plan to spend means that you have to investigate a little bit closer or listen to the earnings calls a little closer for some of these companies. And I've even heard as recently, Zscaler's call, I'll use them as an example, they spent a decent amount of time talking about how much of their business does not come from the government, sort of just to say to potential shareholders, nothing to worry about over here. Yeah. And a lot of these cyber securities at this time of federal spending

uncertainty, there is a lot of excitement about what artificial intelligence means for the needs for cybersecurity as spoofing becomes easier, spear phishing. We were talking before we started recording about how it's easier. It just becomes immensely easier for adversaries to fool companies and people. And I think that's one of the reasons you're seeing a lot of these companies, including Palo Alto Network, Zscaler, CrowdStrike, at or near all-time highs. And it's a lot of that excitement around artificial intelligence, or maybe not excitement, but recognition of the need for cybersecurity spending. But I know you've become more bearish on this space. Do you think there's something that investors are missing with that story? Well, I'm not necessarily bearish on

the space. I'm hesitant to cast such a wide net and say anything calling itself AI security, cybersecurity with an AI tilt, we should throw money at it without really investigating, right? If you think about just not that long ago, anything online calling itself abccompany.iot, right, Internet of Things, was automatically a thing that investors were throwing money at because that was the new wave. That was where we were going as far as technology is concerned. Then 2022, maybe, anything.ai, all of a sudden, investors are just throwing money at it. And so I hear stories of people who are doing, you know, Control F and doing chat GPT searches for how many times did this company mention AI on the earnings call?

And that's the thing that they're using to determine whether they should invest in this company or not. And when we hear companies talk about using AI in their cyber defense capability, that doesn't necessarily mean much of anything, right? So where we talk about what AI has allowed bad actors to be able to do, there's this new thing called a zero-click attack, which basically is a text message that comes to you or an email that comes to you that you don't even have to interact with it the way you do with a phishing scam. You don't need to click on a bad link. The fact that you opened it and it's in

your environment, it now can talk to the AI agent inside of whatever that device is. So if Siri was a little bit smarter, it would be vulnerable to this. So maybe Apple is at an advantage by being at a disadvantage with their AI component so far, but Microsoft Copilot is an example. Every one of the large language models has their own version of a Copilot, which is vulnerable to these types of zero-click attacks because the AI is the thing that's acting as if it's you coming into the environment and telling it, give me access to this information because I am Malcolm. Give me access to this set of data and then share it with Ricky because I am Malcolm and I normally will share that information with. And so that's what we have to be concerned about and guard

against. That is what a lot of these cyber companies are using AI to help defend against, but not everybody. Right. And so just because the CEO gets on the earnings call and says AI or we've struck a new partnership with X, Y, Z company doesn't necessarily mean that that's where your dollars as an investor should go. In cybersecurity, where are your dollars as an investor going? Have they changed? Yeah. So right now, the only two companies that I own as a direct cyber investment are CrowdStrike and Zscaler. The reason being, one, I do believe that when it comes to AI, those two companies are leading the charge as far as being able to build to meet that AI-enabled bad actor who can run these attacks at scale. But separately from that,

I like the flex model that both of them have adopted, which both CEOs say was born out of a request from their core customers. Hey, we don't want to have to go through a procurement process over again from scratch. Each time you want to add an additional module that you have to offer, it's a pain in the butt. Can you give us a way to flexibly move between one product and another on your platform? And both companies said, hey, listen, sounds reasonable. Let's throw some some capital at figuring out how to solve it. And both have rolled those flex models out very recently. Z-Flex and Falcon Flex, I think is what they both call them respectively. So I think that's a place where both companies will grow their annually recurring revenue, which is the

core target financially that they are telling shareholders to focus on. That is a story I can buy into and I love. I sold out of CIBR, the First Trust Cybersecurity ETF recently because I noticed that the underlying holdings inside of that ETF are no longer cybersecurity focused the way you'd want them to be. The top five holdings in there were CrowdStrike and Palo Alto, yes, but also AVGO, is that Broadcom, is the number one holding at a 9% to 10% weighting, depending on which day you look at it. Also Infosys, also Cisco. These are companies that, yes, they tangentially have an AI component, they have exposure to AI. And by mandate, this particular ETF doesn't require the majority or all of your revenues to come from cybersecurity-related activities. It just has to

be one of your service offerings. But because of the way it's structured and the growth that has happened in legacy tech or old tech, whatever you want to call it, that's really gotten the holdings inside of that ETF out of whack. So if you're looking for something like a pure play. Something like BUG is probably a better way to play it. But then you're investing directly into small caps, and that might not be where every investor wants to be. So all that to say, I've decided rather than go the ETF route today, I've pivoted to just owning the two lead horses in the race, and then I'll figure it out from there. A good reminder for people to check under the hood when they buy an ETF, because the headline might not always be what you're getting.

And for me, that's something that's attractive as an ETF for cybersecurity, especially this is a space that I know I'm less knowledgeable about. And it's hard for me to parse through the earnings calls and say, okay, so is this one the best at using AI agents? Or do I want zero trust? Or do I want a holistic approach like CrowdStrike? And that's been to my detriment since a lot of these companies have done fabulously well. One other story I wanted to hit with you is Apple. They just had their developer day. We got liquid glass and it was a lot about the user experience. But what did you think of developer day or where Apple's at right now? Yeah. So Apple is in a tough spot in the sense that we are looking to them and we as investors

are looking to them and saying, what's next? And so you listen to Mark Zuckerberg over at Meta talk about what's next. And it sounds fascinating. Or you listen to some of the smart folks over at Alphabet talk about what's next. And it's fascinating. You see these new partnerships that are being struck with OpenAI and all the different companies that they've either committed to acquiring or partner with. And you look around and you say, well, where's Apple? Apple is usually one of the loudest voices and one of the trendsetters, if you will. And so we as consumers don't really have a consumer-facing AI tool yet that satisfies that. Most of what we've done with AI so far for the last three years since ChatGPT hit the scene has been at

the enterprise level. It's a workplace tool. And so for Apple, maybe the liquid glass reconstruction is meant to mirror what the vision goggles will show you. And there's a goal to kind of tie those in together because we've been told a few times by some futurists in the space out of Silicon Valley, that the physical device is no longer going to be the way that we interact with apps five to 10 years from now. And so maybe for Apple, this is a bridge, right? I get you used to the interface of the liquid glass, and then everybody will put on the headset and feel less out of place. Maybe, I don't know. I don't know anybody internally on that team who's told me anything. But in the meantime, investors are looking and going, yeah, but, right? Like that's

not exciting to me today. That's not enough of a reason for consumers to line up outside of an Apple store the way they were in 2007 to say, I got to have that next device, right? However many iPhone owners there are in that number that are supposed to be upgrading all at once and what they refer to as the super cycle, the super upgrade cycle, that hasn't come to fruition because Apple intelligence wasn't really what we were told it was going to be. I personally got the iPhone 16 only because I was holding a brick of an iPhone 8 or SE or whatever it was. And I literally needed a new phone. But for most people, they looked at it and went, eh. So for Apple, they really need to be able to tell a compelling story about how they are going to participate

in the next leg of AI-enabled smartphone device interaction, whether it's the MacBook or the iPad or the watch or anything else. And they haven't yet. But I personally have gotten to a place where I feel like we've been saying that about Apple for the last two years. We saw with quote unquote Liberation Day when tariffs were enacted, the freak out moment there. We saw as the president of the United States was attacking the CEO of Apple, Tim Cook, on Twitter, what happened to the shares there. We saw at last year's WWDC where everyone was underwhelmed. And then again, this year. All that taken together and the lack of movement in the share price in one direction or another leads me to believe we've reached peak pessimism on Apple shares. So I as an investor

actually just added to my position in the company earlier today before we recorded. So that's why I'm allowed to share it with you without violating our trading rules. But I think personally, this is about where we go as far as Apple shares are concerned, because all the bad news is out there, and investors still seem to be sticking with it and giving Apple the benefit of the doubt based on what they've been able to do for the last 20 years. And perhaps a underappreciated capital allocation story. They've been aggressively taking shares off market, and they still, I think, have a $100 billion buyback plan. Good place to end it. Malcolm Etheridge, appreciate your time and your insight. Thanks for joining us on Motley Fool Money. As always, people on the program may

have interests in the stocks they talk about, and The Motley Fool may have formal recommendations for or against, don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. Advertisements are sponsored content provided for informational purposes only. To see our full advertising disclosure, please check out the notes in our podcast description. Up next, Radar Stocks, you're listening to Motley Fool Money. ever find. Welcome back to Motley Fool Money. I'm Ricky Mulvey, joined by Jason Moser and Matt Argesinger. It is time for Radar Stocks. Each week, our analysts pick a stock catching their

attention, not just because they think it will go up or not only because it could be catching their attention for a variety of reasons. And our man behind the glass, Dan Boyd, will hit them with a question, concern, or a backhanded compliment. We'll go with J. Mo first. What you got this week? Yeah, taking a look at Chipotle, CMG is the ticker. This is a stock I've owned for many, many years. I anticipate owning for many, many more years to come, primarily because I like the food. But it's also a very well-run business. To that end, though, the stock has had a lackluster year to date, down about 15% as we've got new leadership in place there. We don't see it all that often when they announce a new offering at Chipotle. It's every once in a

while, but it's worth noting when they do it. I thought this was interesting news. They're bringing a new dip to its menu, Adobo Ranch, Ricky. It's the first new dip since the company introduced its queso blanco, and it will be available starting on June 17th. I think it's just going to be something to watch and see how it's received. Typically, when they bring something new to the market, it's usually well-received because it's backed by a lot of data. They're not batting 1,000, but pretty darn close. Now, I'm not much of a ranch guy myself, so I'm probably not going to be trying this. But I do know that people love them some ranch. And so, I think, like I said, new leadership there in CEO Scott Boatwright. He's got some

big shoes to fill taking over for Brian Nicol. And bringing new things to market that sell are going to be very important. So, this will be an early litmus test, I think. dan question about chipotle its ranch offerings or a comment about jason moser's pronunciation of queso blanco uh no comment there ricky i am a chipotle shareholder and it's done very well for me but i will say i'll go on record and say that ranch is terrible and people that have to dunk all their food and ranch have the palate of children and should be ashamed of themselves whoa i mean In power ranking of condiments, there is ketchup number one, maybe a good mustard, nice relish on a hot dog. Ranch can be there, and it doesn't have to be for everything and every time.

But, Jason, it is a nice offering when you go to Chipotle. Let's go to Matt before we get too deep into the argument. Matt Argesinger, what you got this week? Ricky, I'm going with Whirlpool, ticker WHR, obviously leading appliance maker here in the U.S. So earlier this week, the Commerce Department announced that increased steel tariffs would also apply to consumer appliances such as dishwashers, refrigerators, and washing machines. Guess who makes a lot of those here in the U.S.? So under the new rule, imported home products will be taxed an additional 50% depending on how much steel they contain. So U.S. manufacturers like Whirlpool have long complained that Chinese and other foreign-made appliances have avoided tariffs on their products,

which are often made with relatively inexpensive parts and cheap labor making whirlpool's products less competitive this is a positive development if you're a whirlpool shareholder dan question you were talking trash about this company before we started recording but any questions or snarky remarks about whirlpool well i want to be honest with the listeners here ricky when matt brought this up as his radar stock today i thought it was a hot tub company and i was about to disparage it because, come on, who's buying hot tubs in 2025? But now that he's mentioned that it doesn't make hot tubs, it actually makes important home appliances,

maybe I'm thinking it's a good bet. 8% yield, 8% dividend yield, roughly. That's good to watch for the dividend investor. Dan Boyd, what's going on in your watch list this week? Well, I'm already a Chipotle shareholder, and I'm very happy with them, so I'll go with Ripple. Ooh, a twist. That's going to do it for this week's Motley Fool Money radio show.

I'm Ricky Mulvey. That's Jason Moser. Matt Argesinger. The show is mixed by Dan Boyd. Thanks for listening.