Motley Fool Hidden Gems Investing - Uber's Road Ahead

Episode Date: May 11, 2018

Wall Street shrugs off big earnings from Disney. Nvidia connects. TripAdvisor flies higher. MercadoLibre stumbles. Electronic Arts wraps up a strong year. iQiyi pops, while Dropbox drops. Plus, Bloomberg technology editor and best-selling author Brad Stone talks about Uber’s plan for flying taxis and weighs in on the latest from Google, Amazon, and Airbnb. Learn more about your ad choices. Visit megaphone.fm/adchoices

When WestJet first took flight in 1996, the vibes were a bit different. People thought denim on denim was peak fashion, inline skates were everywhere, and two out of three women rocked the Rachel. While those things stayed in the 90s, one thing that hasn't is that fuzzy feeling you get when WestJet welcomes you on board. Here's to WestJetting since 96. Travel back in time with us, and actually travel with us at westjet.com slash 30 years. Support for Motley Fool Money comes from our friends at Rocket Mortgage by Quicken Loans.

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But you can give them to the birds and bees From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Chris Hill. Joining me in studio this week, senior analysts Jason Moser, Matt Argersinger, and Ron Gross. Good to see you as always, gentlemen. Hey, hey, hey. We've got the latest headlines from Wall Street.

Bloomberg's Brad Stone will give us an update from Silicon Valley. And as always, we'll give you an inside look at the stocks on our radar. But we begin with the Magic Kingdom. Walt Disney's second quarter profits came in higher than expected, thanks in part to the success of Black Panther. Revenue from the studio division up more than 20% year-over-year. And, Matty, it wasn't just the studios. Parks and Resorts, the media division, they were all better than expected. And shares of Walt Disney basically flat this week. What gives? It was a great report all around. I just think, unfortunately, until this cloud

over Disney's media networks business, which did beat expectations, but, you know, growth is slowing down, profits were down. And then, you've got the Fox acquisition. I think those are just hanging out there for investors. And until those get resolved in some form or fashion, I don't see the stock making that much of a move. But, yes, I mean, the studio business, Black Panther, we've got, you know, Infinity War now, we've got the Solo movie and we've got Incredibles 2. You know, at some point, we've always talked about Disney is a hit-driven business. I mean, you can have a blockbuster one quarter and a bust the next quarter. But Disney has the ability now to really turn out a billion-dollar blockbuster

hit every quarter if they wanted to. And I just think, at some point, the company should be valued a little more based on the studio business than it has been. Yeah, I think Matty's just keying in on the point as to why Disney is such a great investment release. Because you can have stretches where maybe all of the segments of the business aren't quite firing on all cylinders. Sorry, Ron. But that just is what we're seeing is with the stock, the stock maintains the status quo until they get back down to business. And I think the Comcast vs. Disney idea with the Fox acquisition there, that'll probably play out here over the course of the next quarter. But Matty and I were talking about

this at Starbucks the other day, we just want to make sure that Disney gets Hulu out of all of this, because that really is the platform that I think matters the most. And that will enable them to put pretty much whatever content they want out there with a platform that is already in a lot of homes, that a lot of people are already familiar with. I have a Steve-type question. Do I need to see Black Panther before I see The Avengers? Yes, you absolutely do. Is that true? Yeah, you do. Take care of that. I understand, Matty, the doubts about, as you said, there are a couple of clouds that need to be cleared before some on Wall

Street feel like this is a stock ready to take off. Here's what I don't understand. the one Wall Street analyst who came out this week and talked about one of his concerns being that the studios and the parks are, and I'm quoting here, peak-like. Has this person never been to Walt Disney World? The idea that we think Disney has reached its peak in terms of its ability to charge money at the parks, that's insane to me. Absolutely insane. In terms of entertainment companies, there is no company in the world that has the pricing power that Disney has. And by the way, you got to remember, it's not just about the box office or the parks by themselves. I mean, it's just all the different

things, all the merchandise sales, consumer products, video games, Broadway shows that come out of Disney's intellectual property, and you just never can undercount that. Well, you asked the right question in the production meeting, Chris, and it's just, does this analyst actually have kids? Because if you have kids, then I think you really get it, you understand that this is a generational play. If you have kids, at some point, you're going to be enjoying this stuff with your grandkids, and it just keeps on going on. First quarter profits for Nvidia came in much higher than analysts were expecting, but shares of the chipmaker falling a bit on Friday nonetheless. Ron, you look at this stock,

Nvidia has had such a great run the last two to three years. Is that why we're seeing a little bit of a dip? Another amazing stock that I've never owned a share of. It's amazing my wife stays with me. So, yeah, up 100% this year, up 1,100% since 2015. Beat analyst estimates this time around, revenue up 66%. Really strong numbers. Beat consensus revenue estimates in each of its five segments. Again, very impressive. Now, what investors, I think, are focusing on here is the comment in the conference call that they're seeing a slowdown in demand for products for cryptocurrency currency miners, whatever that means. So, no, seriously. But they're saying that July quarter

sales of these types of products will be about a third of the April quarter sales. So, a big slowdown in the hottest area right now. That might be what investors are focusing on. Advanced microdevices also down on the news. And then, what you were alluding to, stock is pretty much price for perfection after a 1,000% increase 37 times. EBITDA is a tough number, and you've got to really put up solid, solid results. Alright, let's move on to online travel. Both TripAdvisor and Booking Holdings, aka Priceline, reporting first quarter results this week. Both better than expected, but Jason, it was TripAdvisor's stock that got the bump. You looked at this quarter. Was it that great a quarter for them?

Well, I mean, a broken clock and all that stuff, right? It's been a very tough stretch here for TripAdvisor. But let me ask you, Chris, can you put a price on swimming with pigs? Can you put a price on swimming with dolphins? I feel like Ron's question about seeing Black Panther was easier to answer. Well, I say that because TripAdvisor actually gave me the opportunity to do both of those things in the Bahamas and Hawaii. To swim with pigs? Swimming with pigs, yeah. We'll talk more about after taping. But Spanish Wells, Bahamas,

baby. Go there. It's been a very rough stretch for TripAdvisor. We talked a lot here over the past couple of years, this move they made to instant booking. They were trying to become more of an OTA, an online travel agency, like booking, like Expedia. Didn't work out so well, but it seems like there are some signs they're putting this snafu in the rearview mirror. And if that is the case, if they can get back to a place where they are playing nice with booking.com and with Expedia, who are very big spenders on the TripAdvisor platform, them. Then, there's a little bit more certainty in the business, and we can get back to growing that top line a little bit. On the bright side, this is still a very engaged

platform. They have 433 million average monthly users. That was up 12% from the same quarter last year. 630 million reviews, up 26% from a year ago. There's a lot of reasons to appreciate what the actual platform is doing. Some not-so-great business decisions, I think, put them on hold for a little bit, but they might start turning a corner here. So, investors, if you own shares today, and I do, probably worth hanging on to them to see how these guys play out. Yeah. You mentioned some of those numbers. As far as popularity, TripAdvisor is as popular as ever. It has the richest data it's ever had. The problem I've always had is just that next click. It's like, people go to TripAdvisor, you get the data, you read the reviews, you

find out what you want to do, and you click away and go somewhere else. Still very much an ad play, and that's just tricky. What about Booking Holdings? I'm wondering, to Ron's point about Nvidia, if Booking Holdings is a little bit priced to perfection. This was as rock-solid a quarter as they could have put up. Maybe the guidance scared people a little bit? I don't know. You know why they changed their name to Booking Holdings? Because these guys know how to book stuff. $25 billion in bookings for the quarter up 12%, excluding currency effects. Room nights up 13.2%. Closing on $200 million, exceeding their own guidance

for the quarter. A presence in over 220 countries. If you're going to get exposure to the travel industry in your portfolio, Priceline is a must. This is a core holding. If you look at the charts, year-to-date, one year, five years, 10 years, there's never been a bad time to own this stock, because it's such a massive network. And that really is what it's all about in this business, having that network. If you're on the side of selling rooms, you want to be a part of this network. And I think they just continue to build the business around that premise, and it's working out really well. Does William Shatner still have some of those shares that he originally got?

I believe he did. I don't think he did. I don't think so. I think it got out at a very low price. OUCH! Coming up, two recent IPOs making headlines and Wall Street really seem to like one more than the other. Details next. This is Motley Fool Money. Welcome back to Motley Fool Money. Chris Hill here in studio with Jason Moser, Matt Argesinger, and Ron Gross. Shares of iQiyi, the Netflix of China, got a boost this week when the company announced that its new partnership with JD.com is already paying off. What's the story, Matty? Yeah. So, they just signed this the end of

April, this partnership with JD.com, which is the second largest e-commerce company in China. They kind of merged together their JD Plus' program, which is their prime kind of program, and then iQiyi's membership program. And they've already added iQiyi 1 million subscribers in about a week's time since signing that deal. You can see how that's paying off. They ended March with 61 million subscribers. I really think by the end of 2019, so the end of next year, iQiyi itself could have over 100 million paying members. I was going to say, this is a company we talked about before it went public. You were as excited about the prospects of this company as any company I've seen coming into

the market. How do you think they've been doing? Obviously, early days in terms of being a public company, but how do you think they're handling it so far? Well, I mean, nothing but good news so far. I mean, they had great first quarter results showing, you know, I think it was 57% growth in year-over-year revenue in the membership business, which I think is going to be the key business going forward. The question is, can they maintain that leadership in online video that they have right now in China? And I think partnerships like the one they have with JD are going to be pivotal to that. They've got a licensing deal with Netflix. And by the way, Golden Slacks gave them a buy rating

this week on a $23 price target, so that doesn't hurt the stock. Dropbox, the cloud storage company, out with its first quarterly report as a public company. Profits, revenue, and guidance all came in higher than Wall Street was expecting. And Jason, it just wasn't good enough. No idea. I followed the Goldman-Slaggs. Yeah, listen, I said when Dropbox went public, they were talking about this a quarter ago, and when they went public, I didn't want to have any part of it. And I stand by that. I mean, it could be a decent business maybe in time. And they turned in a respectable quarter.

Top line was up 28%, still not profitable, of course. Paying users of 11.5 million compared to 9.3 million a year ago, that's good, too, because really, when we look at their paying users as a percentage of overall users, it's still so tiny, it's like 2%. And so, you've got a business here with slowing revenue growth, that paying users is such a small part of the total base. There's no real competitive advantage. And the market's paying somewhere around 11, 12 times sales for a business like this. And if you're going to pay that kind of a multiple, they need to be growing faster than they are. So, I suspect we probably see this stock pull back some more here in the coming year. And maybe

there's a point where it becomes a little bit more interesting, but not right now. I understand why they went public. I understand the rationale there. But I was skeptical just because they're wading into a forest filled with giants. When you just think about all of the massive tech companies that are doing cloud storage, it just really seems hard for any upstart company to get any sort of toehold. I think that's the right observation. I mean, when you look at this space and you look at companies like Microsoft, Alphabet, Amazon, all doing that same kind of stuff. And to be clear, Dropbox uses Amazon's cloud storage for part of their infrastructure. Yeah, you

got to see something really special there, and I just don't see it with them yet. Fourth quarter results for Electronic Arts came in higher than expected, capping a strong fiscal year for the video game maker. Ron, shares of EA up about 25% in the past year. This is a solid report. They continue to put up really good numbers. Beat expectations. FIFA, Battlefield, The Sims continue to get it done. Their digital business, which is very important, let's get people out of the stores and let's get them downloading games, up 18%. That's solid. $2.4 billion share of purchase program announced. So, everything looks good. But the big threat, as we discussed last week with Activision, is these new Battle Royale

games, with Fortnite being the preeminent one. They're gunning for market share here. And as our friends at EA said, we don't see it as a threat. We see it as an opportunity. So, good luck, guys. I'd say good luck, indeed. I think in the short term, with all the attention on Fortnite, I think it does kind of hit EA sales in the near term. But the one thing I'll add to what Ron said was, you know, Fortnite and other games have kind of created this whole, you know, allure of esports and competitive gaming in these battle arenas.

I just point to, you know, EA is no slouch in that. I guess in the last quarter, 18 million players engaged in competitive gaming using FIFA 18 and Madden NFL 18. That was up 75% year over year. So EA's got a good footprint in esports. A lot of companies do, and I just think that is an emerging trend you want to watch, for sure. I want to go back to something that Matty said when we were talking about Disney, and particularly the movie studios, and it's a hit-driven business.

And one of the things that popped into my mind was John Carter. Do you remember the John Carter debacle? Yeah, just the huge write-down. And the more Disney keeps putting out hits from the Marvel Universe, the further in the rearview mirror John Carter becomes. And I sort of feel like Electronic Arts and Activision Blizzard, just as Disney has gotten smarter and better about making blockbuster movies, it kind of seems like EA and Activision Blizzard, they're also in a hits-driven business. And it seems like, collectively, they're doing a better job of it. I think that's fair.

There's no way to get around that. The digital kind of subscription business has helped to smooth revenue somewhat. Microtransactions, where you can buy $5 here or $10 there to upgrade your suit or your gun or your weapon, has helped also. But I think you're right, it still is a hits-driven business. Yeah, yeah. And I think what you're seeing now with a lot of these companies is fewer titles, fewer newer titles. And as Ron said, just relying on those really popular core titles, but just augmenting them with all those digital additions, which just boosts the profitability for all these games. Shares of Latin American e-commerce giant MercadoLibre fell 3% this week after

first quarter results fell way below Wall Street's expectations. Matty, just from a headline perspective, the miss seemed much bigger than the drop in the stock. Right. So, there's a little confusion, though, with the results from MercadoLibre this quarter. They adopted a new accounting standard, which requires them to, their shipping costs or shipping subsidies for free shipping and things is now being rolled into net revenue. it was in cost of goods sold. It really has no impact on the business, I mean, in terms of gross profit, but it did hit the revenue number, which came in at 19% growth year over year, which is a far cry from the 30%, 40%, 50% revenue growth we've been seeing. Again, it's just an accounting

change, but I think a lot of, it certainly affected the headlines in terms of what people perceived of the quarter. I would say of the metrics I care about and what I think investors should care about, everything looks great. You have items sold, which is sort of my rough proxy for normalized revenue growth, up 50% to 80 million items in the quarter, gross merchandise volume of 34%, unique buyers of 28%, and then total payments transactions across Mercado Pago, which is their PayPal system, up 69% to 74 million. The one thing I'd say I'm worried about, in spite of all these great results, is just that Argentina now is in the news again. Hyperinflation, recession, you know, Argentina is still a big chunk of Mercado

Libre's revenue. That's something to watch in the coming quarters. Yeah, Matty and I were just wondering a little while ago, if perhaps Amazon got into the middle of that Flipkart deal with Walmart. Keeping Walmart, I think, focused on Flipkart, and maybe keeping their eye off of, perhaps, Latin America. What if, maybe over the course of the next few weeks here, because now Walmart is committed and they've got a big deal they've got to get through, maybe Bezos jumps in there with MercadoLibre, and there's some kind of relationship or possible acquisition tied up there at some point? It would be a nice concession prize to not getting Flipkart, for sure.

Where else should we be looking for the next battle royale when it comes to e-commerce? Because last week on the show, we were talking about India and the battle for Flipkart. Obviously, Latin America is an important market. Is there anywhere else where you find yourself looking or maybe trying to look into the crystal ball and see where Jeff Bezos and the folks at Walmart are looking? Well, tough to say, but I would say if we go to China, someplace where Jeff Bezos and Walmart really can't look, I think there's an interesting battle going on right now between Alibaba and JD.com. We talked about JD with their deal with iQiyi earlier. I feel like JD has the better model that's going to win

in the end. And JD is about an eighth the size of Alibaba. But it's just interesting to see these two companies go together and the partnerships that JD is doing with iQiyi and with Walmart, by the way, in China. Before we go to the break, I want to say that if you are going to be in the Washington, D.C. area at the end of this month, we are having a listener meetup. This is going to be on May 30th here in Washington, D.C. Well, across the river in Washington, D.C. We'll send you all the details. Just email us, radioatfool.com for our listener meetup, May 30th. Radioatfool.com. Drop us an email. We would love to see you out. All right, guys, we'll see you a little bit later in the show.

Coming up, conversation about the latest in Silicon Valley with bestselling author and Bloomberg tech editor Brad Stone. Stay right here. You're listening to Motley Fool Money. If you've got the money, honey, I got the time. Welcome back to Motley Fool Money. I'm Chris Hill. Brad Stone is the senior executive editor at Bloomberg Technology. He's also a bestselling author whose latest book, The Upstarts, comes out next week in paperback.

And he joins me now from San Francisco. Brad, thanks for being here. Hey, Chris. Thank you. Consumer technology, very much in the news. So let's start with Uber. Earlier this week, you interviewed CEO Dara Khosrowshahi. And the big headline is Uber's plan to launch a fleet of autonomous flying taxis in the next couple of years. And the money quote for me is him saying, we think cities are going to go vertical in terms of transportation, and we want to make that a reality? Yes, it's a little hard to imagine. And Uber has been talking about this for a few years,

and frankly, sort of other companies. You know, Larry Page has been privately funding a company called Kitty Hawk that has very much the same vision. But what Uber has done is they've kind of brought this nascent industry together, and they've created some kind of specs for what the vehicles should look like. They should have four passengers and a pilot for the airports. They call them sky ports. They showed off some architectural drawings. And then they're leading the charge and working with the FAA, which, as you can imagine, Chris, is a little bit worried about some of the safety implications. So they say that they'll start certified testing in 2020. Dara felt comfortable with that timeline when I talked to him yesterday at the Uber Elevate Summit.

But it's hard to imagine. I mean, I think that there's going to be so much that's going to have to change in terms of air traffic control and the access to pilots and people's just comfort with these personal electric aircraft. Well, one of the other topics that came up that seems like a much more achievable step in a shorter amount of time is the idea of Uber doing food delivery by drones. That just seems like that's going to come before I step into a flying taxi. Yeah, we're pretty close to that. And, of course, lots of companies are working on that, including Amazon and Alphabet. and the Department of Transportation has been running a kind of program to allow testing of these kind of drone deliveries. And basically they gave a green light to a couple companies, including Uber,

which is working with the city of San Diego. And Dara on stage with me yesterday at Uber Elevate said they had won that contract and they were going to start testing. And, you know, of course the world has been waiting with bated breath for hamburgers delivered via the air. And now before too long we're going to get to try that out. So, Kostra Shahi has been CEO for, I guess, close to a year or so. How much permanent damage did Travis Kalanick do when he was running Uber? Or is Dara on a glide path to wipe away any damage that was done? That's a good question.

I mean, I think in terms of the brand, very little permanent damage. You know, Dara said the right things. This is a company that's showing a kind of sufficient amount of modesty these days. And if you look at the numbers, you know, they obviously did have some customers abandon them. But, you know, worldwide, you know, not significant. But, you know, and then if you look at it from the business side, you know, the troubles at Uber allowed all of these competitors to raise money. to build on advantages in places in the world like Southeast Asia, where Uber had to retreat

from. And I think in that respect, it probably did impact the company. I mean, not, you know, fatally, but there are parts of the world now where Uber is less welcome or competitors are more entrenched. And it's partly because of, you know, Travis and how he ran the company for many years. Obviously, if Uber were a public company, we'd have a much better gauge on the health of the overall business. They're a private company. So you tell me, what is the current state of Uber right now? They lose a lot of money. Dara has acknowledged that. They lost $4.5 billion in 2017, which is an extraordinary amount. But they've raised a ton of money. And he says he's bringing the company to profitability and getting out of places like Singapore and China and Russia

as they have done over the last couple of years is going to improve the balance sheet. You know, they have a lot to do in, you know, in satisfying drivers, and that partly will work against improving profitability. But, you know, it's also a rapidly growing business, one of the fastest we've ever seen. And so, for that reason, it's kind of hard to measure. What is the likelihood that Uber goes public in the next, say, three years? I think, well, Dara has come out and said that 2019 is the target for an IPO. That was one of the first things he said as CEO, and I think, you know, I think his investors and employees will hold him to it. So, also this week, Google had its annual developer conference, and when I was at South by Southwest earlier this spring,

Google's entire presence was about the Google Home Assistant. And at the developer conference, that assistant was front and center with an artificial intelligence voice that was making phone calls, making restaurant reservations. And this was not – not to pick on Apple, but this was not the Siri voice. This sounded completely human. And I'm wondering what your reaction was when you first saw that. well as with so many things in silicon valley um it was it was sort of introduced to the world without perhaps sufficient forethought because yes they they they presented some eerily human like voices they even said that you could customize your assistant with john legend's

voice the voice of the singer um and then they showed they they showed um a part of google assistant called duplex which could be like call a hair salon and make an appointment for you And, you know, and then they played that, and it was, you know, the voice of sort of fooling the phone attendant at the hairstylist, and it creeped a lot of people out, you know. And it was because here you're using a technology to kind of fool a human. It's funny that they're calling it dupe-plex because you're duping people. But, you know, there's been a little bit of a counter-reaction to it, and people are sort of horrified, as my colleague Mark Bergen has written about. And, you know, I think it's like Google, another example of Google kind of marching ahead with technologies that maybe people aren't quite ready for. It does, however, if you put aside the creepy voice stuff, it does seem like Google may have raised the bar in terms of utility for this device.

And I remember when we talked last year, one of the things you had mentioned was you and your family have an Amazon Echo in your home. We got a couple of them. And maybe this has changed in the last year, but at the time you had said primarily it was being used for entertainment, for music and that sort of thing. Right. How much, if at all, do you think Google and what they unveiled this week will enable them to cut into Amazon's very large lead in this market? It's a good question. We might not know until the holiday season. I think Amazon's advantages in the market have less to do with, kind of ironically, the features.

I think, one, Amazon's got the most powerful distribution system out there, which is its own homepage. Its relationships with companies like Best Buy, which Amazon is at least as well-positioned as Google. But then I think people want these devices to just do a couple of basic things, And, you know, playing music, getting the weather, getting the time, setting a timer when you cook. My guess is if you looked at the sort of future usage, it's a pretty steep curve. And so, yeah, Google's probably beyond Amazon in allowing the device to do different things. But I'm not so sure that's going to really matter. And I'm not so sure that a lifelike voice matters.

You know, we'll see. Amazon also has that first mover advantage. And, you know, Alexa is sort of synonymous with the category. You know, while the Google Assistant was a second comer, it's got a kind of a lamer name. And it's got a lamer – people criticize the wake word, and I'm sympathetic with that. Like, just saying, OK, Google, or hello, Google, is a little bit of a clunky reaction. Speaking of Amazon, Amazon was reportedly in talks to buy India's leading online retailer, Flipkart. Walmart finalized its acquisition.

Walmart now has the majority stake in Flipkart. You know Amazon well. Was Amazon really trying to buy Flipkart, or were they just trying to drive up the price? I wondered about that, too, because the regulatory challenge of Amazon, the No. 2 player in India, buying Flipkart, the No. 1 player, that was always going to be tough. But, you know, they like to be in the middle of those deals and, yes, to drive up the price or maybe to create some kind of headache for Walmart. So I suspect that perhaps they didn't have high hopes for winning that battle.

Walmart, you know, 77% stake in Flipkart. They spent $66 billion. It's going to blow a hole in their balance sheet for the time being. But it really cements this move on Walmart's part, you know, from a focus in the West and in Europe to the East and in India and China, these high-population, high-growth markets. And it's Walmart and its CEO, Doug McMillan, really putting a stake in the ground and saying, if we're going to stop this Amazon juggernaut, we have to move into some of these developing markets and compete.

Airbnb, one of the companies featured in your latest book, is still a private company. And it's been around for 10 years. When you and I had talked previously, you had mentioned that Airbnb reminds you, in some ways, of Amazon. Amazon's path from when it got started to when it went public was about two or three years. Are investors going to have a chance anytime soon to own shares of Airbnb, or are they hell-bent on remaining private? I think the CEO, Brian Chesky, is just stubborn about this. He sees the future of Airbnb in sort of dramatic, epic terms. And, you know, he sees it not as a home-sharing company, but as a travel company. And so, you know, he's put off an IPO for this

year. He said that. He recently, you know, he's made some executive hires. He promoted Belinda Johnson to COO. And, you know, and then he's been working on, you know, expanding the portfolio, you know, creating, you know, actual kind of Airbnb homes that the company, you know, builds and manages itself, and then moving into other things, other services for travelers. And those efforts are so nascent. So, you know, if they want to show investors that there's something more than a home-sharing company, you know, they still have a lot of work to do. So I don't see an IPO for Airbnb anytime soon.

Last question, and then I'll let you go. What are you watching these days? What is a technology on your radar that has you curious to learn more? I mean, I think, you know, AI just so dominated Google I.O. this week, and it wasn't just duplex. You know, it was Gmail writing, you know, writing emails, suggesting words for people. They displayed a new tensor processing unit, a new AI chip. They added AR to maps and added AI to picture sharing. So Google will automatically make suggestions on editing your photos or who you can share it with.

And so they seem somewhat trivial, but it's incredibly fascinating technology that's being added to all different kinds of services that we use every single day. And, you know, it also comes with these companies gathering more information about us and then also pushing the envelope with what society is comfortable with. So to me, you know, it's as fascinating a time as ever to cover this tech environment and how people feel about it. His latest bestseller, The Upstarts, is out in paperback on May 15th. So pick up a copy. Brad Stone, appreciate the time. Always great talking to you. Thank you, Chris.

Good talking to you. Coming up, we're going to dip into the Fool mailbag, answer a couple of questions, and of course, we'll give you an inside look at the stocks on our radar. You're listening to Motley Fool Money. Hey, quick word about Rocket Mortgage. So maybe you're not buying a house, and maybe you're not looking to refinance your mortgage. But if you are, if you're doing either one of those things, you should really check out Rocket Mortgage. Because when you're making a big financial decision like that,

You want to be as confident as you are at your job, in your everyday life, and Rocket Mortgage is going to give you that same level of confidence when it comes to buying a home or refinancing your existing home loan. It's simple. Rocket Mortgage allows you to fully understand all the details so you can be confident that you're getting the right mortgage for you. To get started, go to rocketmortgage.com slash fool. Equal housing lender, licensed in all 50 States, NMLSconsumeraccess.org, number 3030. 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. Welcome back to Motley Fool Money. Chris

Hill here in studio once again with Matt Argersinger, Ron Gross, and Jason Moser. listeners weighing in this week from Benjamin West, who writes, please, please, please cover the Redfin conference call. It's the most fun I've had listening to a conference call since Tesla's. You tell me, Ron, Redfin CEO Glenn Kelman, not exactly a household name. Did he make some headlines? He said a few things. One, he said, with regards to new competition, and this is a real estate company that's really attempting to disrupt the real estate industry. With respect to new competition, he said, quote, bring it on. So, you know, it's a little bluster there. But, you know, the company, it's doing well. It hasn't been public that long, really less

than a year. Went public at 15. Stock's at 22 now. Certainly in growth mode still, and will be for quite some time. Revenue up 33% for the quarter. Market share, they continue to capture market share, but they're still only at 0.73%. But, again, it's a huge industry, So, that's a meaningful number. But gross margins fell. They continue to be unprofitable and not cash flow positive. You know, call me crazy, I like profits. Our Twitter handle for the show is at Motley Fool Money. You can follow the show and hit us up with questions like this one from Josh, who writes, why doesn't Motley Fool Money ever show Trade Desk any love? It's a Rule Breaker recommendation. Where is the love?

Matty, I think the love is on Wall Street, because on Friday, shares of Trade Desk were up about 40%. Amazing move. But I think part of that has to be related to short covering. Coming into the report, about 9 million shares, or 20% of Tradeash's outstanding shares, or about a third of its float, were sold short. That's according to S&P Global Capital IQ, so I think a lot of those shorts are covering today big-time. But when you have that many shares sold short and you crush expectations, and they did, you're going to get a move like this. I mean, the forecast was for $73 million in revenue in the first quarter. They reported $85.7 million. That's up 61% year over year. They

were looking for adjusted earnings of $7.5 million. They did almost $19 million. And they raised guidance sharply for the remainder of the year. I don't follow the company close enough to really know this, but I feel like management had to be sandbagging a little bit on these expectations. Or otherwise, they just had an amazing, unexpectedly great quarter. But this is programmatic advertising, and I think it's getting more and more prevalent over things like mobile and video. And Trade Desk is a leader in that. And until Apple and Google change the way we're tracked along the internet, I think Trade Desk is going to do just fine.

You see, there's sandbagging and golf. Bad. Sandbagging and investing is good. Good. Let's get the stocks on our radar this week. And our man behind the glass, Steve Broida, is going to hit you with a question. Ron Gross, you're up first. What are you looking at this week? Steve, do you like tires? No, I'm just kidding. I got Healthcare Services Group, ticker HCSG. housekeeping and nutritional services for 3,500 facilities, such as hospitals, retirement homes, nursing homes.

Really long history of profitability. Recently expanded into food services. It's a very fragmented industry, but they're kind of the big guns here. They've increased their dividend for 58 consecutive quarters. That dividend now stands at a 2% yield, and I think the stock still has some nice upside to it. Steve, question about Healthcare Services Group? How did you find this thing?

This is a recent recommendation in the Total Income Service. Jason Moser, what are you looking at? Sure. We're going to jump back down to Georgia for Ameris Bancorp, ticker is ABCB. A little $2 billion market cap bank there that just keeps on growing. And it's really been a story of total assets. The FDIC saw this as a worthy partner back in the days of the financial crisis to kind of help cleanse the banking system of bad business. And so, they've grown that total assets base from around $2.5 billion in 2010.

It's going to be about $11.5 billion by the end of this year with a couple of acquisitions that are rolling in. Just a well-managed little bank. I mean, at the time, you'd have been crazy to invest your money in a small-cap Georgia bank. That was ground zero at the time. But, man, these guys have really made it work. The stock has just been on a tear since that financial crisis, up about 400%. And I really don't see any reason for it to stop. Steve, Ameris Bancorp?

When we hear a lot about this war on cash, is this bank affected in any way? Hey, they have ATMs, Steve. They have ATMs. Matt Argersinger, what are you looking at? I'm going to be a bit of a homer. I'm sticking with MercadoLibre, ticker M-E-L-I. I think you've got to take a look if you haven't in the past. I mean, it's down almost 25% from its recent high. Recent results were outstanding, and I know I talked about Argentina. I'm a little worried about that, but I think management strategy of really focusing on free shipping,

payments, user loyalty, even if it's costing margin in the short term. You just want to take a look at it. And, you know, Jason said it. I think Amazon lost out on Flipkart. MercadoLibre is sitting out there. Shiny trophy potential. Steve, question about MercadoLibre? When we talk about shipping in Latin America, who does this shipping? Is it a national postal service like we have here, combined with private shippers? Wow. I believe there are national postal services like we have in the United States, But for MercadoLibre, they use a kind of a network of commercial private shippers that go between countries in Latin America for a lot of their shipping.

Three very different businesses, Steve. You got one you want to add to your watch list? I think I'm going with Ron's weird healthcare. Nothing weird about it. All right. Ron Gross, Jason Moser, Matt Argesinger. Guys, thanks so much for being here. Thanks, Chris.

Thank you. Again, drop us an email, radioatfool.com, if you have stock questions. Or if you want to join us for the listener meetup in Washington, D.C. on May 30th, that's radio at fool.com. That is going to do it for this week's edition of Motley Fool Money. Our engineer is Steve Broido. Our producer is Matt Greer. I'm Chris Hill. Thanks for listening.

We'll see you next week. Thanks for watching!