Motley Fool Hidden Gems Investing - What Can History Teach Us About Investing in 2025?

Episode Date: October 10, 2025

What can we learn about investing in 1999 or 2007 that can be applied today? While history doesn’t repeat, it often rhymes and we discuss what we wish we would have known 25 years ago and how we’re applying that today. Travis Hoium, Jon Quast, and Jason Moser discuss: - How 2025 compares to 1999 and 2007 - What we wish we knew - Energy’s role in AI - How well do you know investing history? Companies discussed: Alphabet (GOOG), NVIDIA (NVDA), Waste Management (WM), Rubrik (RBRK). Host: Travis Hoium Guests: Jon Quast, Jason Moser 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

How does the market in 2025 fit into the history of the stock market? Motley Fool Money starts now. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Fool Money. Welcome to Motley Fool Money. I'm Travis Hoyum, joined today by John Quast and Jason Moser. And I think this is an important time in the market to take a step back and look at a little bit of context and history. There are sort of these decade-long trends that we typically go

through. And it seems like we're either at the beginning or end of one of those with artificial intelligence and all of the companies that are going crazy right now. So I want to get your guys' thoughts on kind of where we are. We all see the potential of artificial intelligence, but the internet was a massive opportunity in 1999. Mobile was a huge opportunity in 2007. That didn't stop the crashes that ensued. So what sort of historic parallels, Jason, do you see in the market today that investors can learn from? Yeah, well, I love this idea. I mean, I think there are a lot of parallels we can draw here. There are some similarities, and I think there are some differences as well. You go back to,

for example, the build-out of the internet, right, back in 1999, the dot-com crash that ensued. I mean, there's a lot of similarities from then to what's going on today, right? There's massive infrastructure build out. It's the foundation for what looks to be a new era of technology. And it's also accompanied by a lot of speculation in the markets. And we're seeing that in the form of a lot of nosebleed valuations. I mean, I'm not saying they're all nosebleed valuations, but there is some data that shows that AI-first companies today that are coming to market are getting 20% to 40% premium valuations over their non-AI-driven types of companies. And then you're also seeing some of those speculative names are garnering valuations

in the neighborhood of 200 times sales. And so, that just... And some of them have gone parabolic just in the past few weeks. Yeah, absolutely. And I mean, I understand the enthusiasm, but there was an interesting interview with Orlando Bravo the other day on TV. He heads up the firm Toma Bravo, which they specialize in SaaS software and stuff like that. The question that was posed, and it's been posed to most of us, is, are we in a bubble? He answered simply, yes. You can't have companies that are working on $50 million in annualized recurring revenue valued at $10 billion. That just doesn't work. It's not sustainable. And so, at some point, we will see that shift. But I do think there are

some differences, too, right? I mean, primarily, you look at the physical restraints of what was being built out back in, you know, 99. That was laying all that optic cable, right? Physically difficult to do, but a little bit different than really kind of the restraint today. But now we're talking about power, right? We're trying to figure out how to get the electricity and the power to really make all of this stuff run. I think funding is a little bit more realistic this time around, just because so much of it is coming from the hyperscalers. Let's put OpenAI aside here and look at the other companies, your Amazons, your Alphabets, your NVIDIAs of the world that are helping to fund a lot of this. And when you have businesses that are that big with more reliable

cash flows, I think the funding side of it seems to be a little bit less speculative than it was back then. Do you think that has changed over the past, even the past few weeks, with things like guaranteeing revenue. I think, you know, NVIDIA did that with CoreWeave. You're seeing more variable interest entities, or they're going by different names now, but it's basically, you know, doing some of these financings off balance sheet. That's what ultimately got Enron in trouble. That isn't necessarily a parallel that we want to go down, but it's one of those things where there are these small red flags that you can look throughout history and go, okay, when you start to see this happen, you should perk up a little bit.

I think you need to be asking the questions. I think it's no accident that this week, we really saw a lot of those maps circulating around that were showing the intertwinedness of all of these. It's just a handful of companies that are really dictating this space. You want to put some numbers around it. This is what really makes me nervous. You look at Morgan Stanley Research. They say that OpenAI itself, they make up more than $300 billion of this something like $880 billion total future contract value, right, that's tied to the spending with Microsoft, Oracle, and CoreWeave, among others. And so, you think about that in the context of the fact that OpenAI, I mean, they just generated basically $13 billion annualized at the midpoint of 2025,

and they're losing money still hand over fist. So, that's where that capital ultimately comes from, I think, is a question that investors really need to be focused in on. It's not to say at OpenA, I won't continue to grow, right? But that is a big delta that they're going to have to figure out a way to shore up. John, how do you think about this in a more historical context? What sort of things are you trying to learn from history that could maybe apply today? Well, I think historically, whenever you see something new and exciting, investors are wanting in on that and they're not wanting to miss out. And I'd say that applies to both retail investors and private equity investors. And you can kind of see that in a couple of fronts

here, that there are some companies, I think, that are preying on that, taking advantage of that, knowing that investors are willing to pay up for the excitement, the admission to the theme park. And you look at the public markets, for example, look at special purpose acquisition companies. i'm not saying that all of them are these are spacks this is what was really popular in 2020 and 2021 yeah right before we had major major pullback in so many of the companies out there these are companies that don't even have a business they're saying give us money so we can go buy a business uh many of them came forward in 2020 2021 there's been a couple of years of a lull But now this year, we have 161 that have gone filed so far this year, and the year's not even

over yet. That's as much as basically the last three years combined. I'm not saying that they're all bad opportunities. I'm not even saying that most, but I'm saying somewhere in there, the data is saying, yeah, somebody is taking advantage of a situation where investors are very excited and they're willing to pay for a lottery ticket, essentially. The same thing in the private equity space, you look at the AI private companies out there starting to do perhaps some questionable things, maybe counting some one-time deals as part of the calculation in their annual recurring revenue and doing that so that they can boost their valuations. And that increases the amount of funding that they're able to get from these private investors. And, you know, we would think

that private investors are a little bit smarter than that. But again, I mean, we all have human psychology and we don't want to miss out on something that is truly transformative in artificial intelligence. Jason, you brought up those images that are going around. There's one from the FT, there's one from Bloomberg that just show this web around open AI. And one of the things that I think I learned in the 2008, 2009 downfall of the market and the recession that ensued was things just got really, really complicated when a lot of things didn't need to be complicated, right? Like we started with mortgages. Mortgage is a fairly straightforward financial instrument, but then you start turning it into, you know, 48 different products that

you're cutting into different pieces and nobody knows where the risk is or who's holding the risk. And that's what I sort of get concerned about right now is if AI is such a no brainer and it's such a high return on investment, then why do we need all this complicated for these complicated financial structures. That, again, it's just raising red flags to me. So let me put it this way, because I think what we're trying to do today is take a little bit of our knowledge and pass it on to everybody who's listening. So if you were going to go back, Jason, I'll start with you. If you were going to go back and talk to yourself in 1999 or 2007, what would you tell yourself that you could maybe implement as an investor? Wow. Yeah. I like that question a lot. I think

if I look back to 1999, while I was investing at the time, I wasn't a member of The Motley Fools. I think first and foremost, and I'm being dead serious here, I would have told myself to get a subscription to The Motley Fool because from an educational perspective alone, I think that style of thinking, that style of investing and sort of taking that longer-term view is just invaluable. I'd also say, while it's tempting, steer clear of speculation. I mean, I think you're right. One of the big problems back in 2007-8 was just how understandable that web of financial instruments ultimately became. And I think that was a result of greed, primarily. But I also, you know, I look at today and kind of you're talking about these special interest

entities and whatnot, money isn't limitless, right? And so I think they start to make it a little bit more complicated when they need to figure out ways to raise more money. And that becomes a little bit more concerning as well. So I'd say for me, I'd steer clear speculation. These were stretches of time when some of the great businesses of our time went on sale. So stay focused on owning those high quality businesses, leave the speculating to those who think they probably know what they're doing and maybe don't necessarily actually know. John, what do you think? So, in 1999, I wasn't an investor yet. And so, it didn't really start for me until around the

Great Recession. And I echo everything that... Do you remember, you weren't investing, but do you remember feeling the dot-com bubble and crash? Because I think that is an interesting... Until you actually have money in the market, it is kind of, this thing happens, but it doesn't really affect me? Uh, well, I would say absolutely not. I mean, just where we were in our little corner of North Carolina back in those days, I mean, man, we, we had dial up internet. So, I mean, we weren't even all that aware of what was going on for me. The great recession was where I really began to take investing seriously. And what I tell myself besides what Jason already said was I wish that I had just held on to my original

vintage of stocks that I invested in. I know it's 20 years later now, but I look at some of the ones that I had at the time, Buffalo Wild Wings, which is no longer publicly traded. But if I had just held on to Buffalo Wild Wings from the time I invested until the time that it went private, it was a 10-bagger or more. And I sold after it doubled. I owned Marvel back before Disney acquired it and sold around the time of the announcement. I wish I just held on to Disney all that time. McDonald's was one of the first stocks I ever bought. And yeah, maybe that's not the flashiest thing, but it's up over a thousand percent with dividends. And I know that some of the listeners are saying, Hey, well, that's 20 years ago, but let me tell you something for me,

it's 20 minutes. I just started investing. Like time goes by so fast. And at the time, right? You say invest for three years, invest for five years. How could you ever 20 years is a heartbeat. So man, I wish I could just go back and say, hang on. Don't try to get cute. Don't try to buy and sell trade all this, just buy and hold. Yeah. John, the lessons that I have learned more than anything is not selling, uh, to give you an idea of what I owned in those days that I sold Chipotle, Apple, uh, you know, these are Las Vegas sands. I remember buying for two dollars a share i think that was a 20 bagger over the next couple of years uh that i sold too early so yeah owning those companies that aren't going anywhere that can survive any sort of

downturn i would also say start paying attention to balance sheets because if companies are going to not survive it's going to it's not going to be because the revenue drops a little bit it's going to be because there's more risk on the balance sheet than they can handle so something to keep in mind when we come back we are going to talk more about this build out and where there It could be opportunities. You're listening to Motley Fool Money. You've got to try breakfast at A&W. You've got to try breakfast at A&W.

And what better way than with a delicious Pret organic coffee, starting at just $1 all day, every day, now until December 31st. You've got to try breakfast at A&W. at participating A&W locations in Ontario. Welcome back to Motley Fool Money. One of the big topics of the AI build-out has been energy, and this has gotten a lot more attention over the past couple of months. Every hyperscaler, every neocloud is looking for basically as much energy as they can get.

Some of them have made deals with Bitcoin miners. I think that's an interesting play here. Bitcoin miners spent a lot of time building out the energy they need to run their mining equipment. Now we're moving that to AI. So, John, where are there opportunities for investors in energy, or at least what should we be keeping an eye on? Well, I think that nuclear power is a big trend, and I know that people have been hearing about it, but I just think it's going to be a lot of emphasis put there. And even the emphasis that we put there isn't going to be enough. So you look at what OpenAI is reportedly wanting. They're reportedly wanting 250 gigawatts of electricity by 2033, just for running their AI data centers.

That's just one company. President Trump earlier this year signed an executive order to quadruple the country's nuclear power so it will add basically 300 gigawatts of nuclear power but so and so you look at that 250 is what open ai wants we're saying yeah we'll add 300 gigawatts of nuclear power so basically they'll take all of that doesn't seem like a lot of wiggle room there john exactly and here's the thing the order is by 2050 to have that much extra power And so President Trump is saying, well, we're going to add 300 gigawatts. Give us 25 years. And OpenAI is like, we need it now.

And so does every other company that's doing what OpenAI is doing. And so I just think we're going to have a heyday for nuclear. But even if we do, it's still not going to be enough. I want to put some numbers to this. The EIA, Energy Information Administration, which is a phenomenal source for energy information because they pull all the prices, all the capacity production, all that stuff. Between 2024 and 2028, in the U.S., there is a planned about 200 gigawatts of additions. About half of that, over half of that is solar, so an intermittent energy source.

You have to consider that the capacity factor of solar, meaning the amount of time that it produces energy on an average day, is about 20%, 25% of the time. So we're not anywhere near hitting those numbers in what is planned. And power plants don't go up, even a solar plant, which can be built relatively quickly. You're still talking many months, in some cases, years. So all that said, Jason, where are you looking for opportunities today? Right. It definitely feels like we're going to need all we can get.

So it's all hands on deck. And I think that the key is going to be focusing on every resource available. I think in regard to AI specifically and sort of the capabilities that it's driving, I think that the overwhelming demand is going to be on those reliable or firm energy sources, right? The stuff that's on 24-7 that's easily distributable, right? And so renewables are one thing, but I think for AI-specific stuff, we're going to be looking at nuclear, natural gas, and hydroelectric primarily. We saw Google earlier in the year made a deal to provide some early-stage capital for elemental power to prepare some nuclear sites here in the U.S.

I think those were what, those small modular reactors. And I think the other thing to think about longer term, and I'm talking about longer term, Travis, but think a decade out. There's an interview with Jeff Bezos this week that I was fascinated by, because I actually could totally see this happening. I mean, he was talking about data centers in space, right? Essentially- That sounds crazy, by the way. It sounds crazy. It does. It sounds like, huh? But if you think about it, they're already trying, right? They're already in the process of trying to figure out how to make this work. Now, that solves two key problems, right? You get the limitless resource of solar

up in space, and you've solved your- Yeah, suddenly that becomes a base source energy as opposed to a variable. Exactly. And you solved your cooling problems as well. So, it kind of knocks out, you kill two birds with one stone, so to speak. So, I think that's pretty interesting to think about just further out. So, just keep an eye on that. I don't think that's pie in the sky stuff. I think that's actually pretty legit. And then beyond that, I looked at other companies in the value chain that sort of enable smart usage and monitoring. And the company I've talked about before called iTron that does that. They help their customers sort of safely and securely monitor that critical infrastructure and power

and water. So you can look beyond the providers and look to those value chain adders as well. Do you think that the rise in electricity prices, which again is getting more attention this year, I've noticed it with my electricity bill, Jason, is that a pending problem in the U.S.? Because if AI is what's raising the costs for the average person, seems like an issue. Consumers will not like it. I can guarantee you that. I mean, I noticed the power bill difference when the winter hits here in Northern Virginia, and it basically doubles. And if we see things going beyond just your typical seasonality, I think that's going to be a real problem. Yeah, that's something to keep an eye on because,

you know, regulators do play a pretty big role in this. Who's going to get the electricity? What are people paying? And that is that's not just an economics process, although the economics could help with justifying some of these investments to something else to keep in mind is that, you know, energy costs are important. And if prices are going up, people are going to put more money into the ground. When we come back, we're going to see how well Jason and John know their history of investing. You're listening to Motley Fool Money. 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 Pratt first at A&W. At participating A&W locations in Ontario. Welcome back to Motley Fool Money. i want to know how well jason and john know their market history so i'm gonna i'm gonna ask you guys a few questions and see who knows the answer john i'll have you go first here what what was the date of the 1987 crash and as a bonus how much did the dow jones industrial average drop on that day oh and i assume that you're wanting more than the year 1987 yeah yeah i would like i would you you can give me the day of the week uh any any information is well it was on a monday right

and what color was this monday john oh yeah well there we go i've heard black monday uh i would think it's in october but i don't remember jason do you know the date i actually do know this one it's october 19th 1987 and how much did the dow drop what are your guesses is there do we have like a little wiggle room here i know it was it was like 20 it was a little bit more than 20 but i don't think it was 25 it was kind of somewhere in the middle between 20 and 25 oh that's good john do you have an exact number 12 okay 22.6 percent drop for the dow jones industrial average but the other thing that's interesting with that historically is the dow was what really got all the attention back then yeah yeah it was not the s&p 500 we don't talk much about the dow anymore

But it was those 30 stocks. That's what was reported on the nightly news. That's the numbers that everybody knew is what was the Dow doing. Dan, it's interesting to think about the difference between the Dow and the S&P. You know, we talk about, like, they definitely tried to modernize the Dow to a degree. It's a little bit more up to speed now. But there's also that difference between, like, the stock price weighted index, like the Dow Jones. Do you want to explain that? Because that is a really weird thing about the Dow. Well, yeah. Essentially, you're just looking at one index in the Dow where it's basically

measured by the value of the stock price itself. Yeah, the number. So, if you have a $100 stock, it has a 10X weighting of a stock that has a $10 stock. Right. Whereas with the S&P, it's market capitalization weighted. So, you're actually talking about how heavy the whole company is. Stock price can be a function of anything. I mean, stock splits and whatnot can change it. So it is just interesting to see that difference there and how that ultimately plays out in the way those indices perform. Yeah. And back then, that was a big reason that a lot of stocks typically were kept, you know, with stock splits and things like that between somewhere around $30 and $100 per share. Once you hit $100, you would expect a

stock split to come. We don't really think about that anymore because we have fractional shares and all that stuff didn't exist. Yeah. And I think didn't, if memory serves, I think when Apple Apple joined the Dow and didn't it actually split its stock in order to be able to facilitate that membership? I feel like that might've happened. That is a historical question. I do not have the answer to. Speaking of big tech though, and maybe I'm giving things away here. What was the most valuable company in the world on January 1st, 2000? Jason, I'll have you go first here. this is this is dot this is dot com bubble uh so lots of options there are a lot of options was it um global crossing i don't know honestly just i feel like that's a john i would guess cisco

you know that's that would have been my guess cisco was the most valuable company in the world for a short period of time but that was in march of 2000 on at the turn of the century the turn of the millennium it was microsoft microsoft that was the really most valuable company in the world so interesting parallel to where we are today microsoft was the most valuable company in the world that is still one of the most valuable companies in the world but if you would have invested in microsoft at the beginning of 2000 and held it for the next 15 years you would have basically the same amount of money i was gonna say the balmer years didn't didn't treat shareholders very well yeah and so it's you know there's there's a couple of things

Their business actually did fine during the 2000s, but end of the 90s, early 2000s, the price that you were paying was extremely high. And so multiple compression, meaning the price to earnings multiple or the price to sales multiple, was going down over that period of time. So instead of multiples being a tailwind like they've been for a lot of stocks over the past couple of years, it was a headwind for Microsoft. So, again, just something to think about as we kind of think about the market today. Pets.com gets a lot of attention in the dot-com bubble.

Do you know when Pets.com IPO'd and what its highest market cap was before falling apart? John, I will have you go first. When was the IPO and what's the highest market cap? Oh, how should I know? uh let's i mean let's you want more than the year right um let's say actually you might not get the year right so i know right i mean i feel like this is a high bar i'm gonna go with uh june 12th 1995 and i'll say peak valuation was 50 billion see yeah jason i'll give you a guess here but these numbers surprised me. Yeah, the IPO, I don't know. So, I'm just going to guess March 1997.

Valuation-wise, I know, given the valuations that we see today, you would want to say something like $50 billion or $50 billion. I get that. But I think, actually, it was really, especially at that time, this was even big at that time, I think it was something like $450 million, $500 million. dollars. Wow. Wow. So you guys are both way off for the, for the timing. Their IPO was February of 2000. Uh, so yeah, it was way, way later than I would have guessed. But Jason, you're almost exactly right. $400 million was their top market cap. And what's, what I think is interesting about that is that is the name that we all remember from the.com bubble, but it wasn't all that big of a company. No, no. Well, I mean, at the time it was, I mean, considering what you're looking

I think today's prices, that would be still less than a billion-dollar market cap. I literally guessed 100 times more than that. They had, obviously, a very short-lived campaign as a publicly traded company. But yeah, that was like the quintessential internet stock, right? Just advertising at the yin-yang, found a clever brand with that little sock puppet puppy, and they were just selling stuff on the internet like, this is the way we do it, and just making no money in the process. But it's interesting how we gave Amazon so much leeway to build out that concept, and yet your pets.coms in the world just never really stood a chance.

The lesson that I take from that one, because you're right, Amazon has become obviously a household name everywhere. But if you would have just waited, if you would have just said, I'm not going to invest in the internet, I think is a huge thing. But 1999, I'm just going to say, you know what, I'm going to let things play out a little bit. And you just waited even until 2002, 2003, 2004, 2008, when you knew who the winners were. That was actually a great time to invest in even a company like Amazon. That's a really good lesson. Okay, this one's fun. How many users, OpenAI has 800 million weekly active users.

so how many users did aol have at its peak and then i have a follow-up jason so users as how many yeah how many subscribers so that would be like basically households okay okay we were we were we were sending discs around yes yeah in those days yeah and i mean that's the like open ai 800 million weekly some odd user like 20 million paying subscribers like they got to figure out a way to shore that up aol i have no idea households uh 125 million john well i want to change my answer now uh i was going to go with eight million and here's why i mean you had other companies you had juno you had net zero you had all those and the trend started but then eventually we switched off of those things so i was going to say eight million

Yeah, John, I could be spectacularly off. Yeah, the answer, John, you're actually pretty close. $25 million was their peak. But here's the follow-up. When did AOL shut down its dial-up service? John, do you have a guess? I think I know this one. It was earlier this year.

Jason, do you have a... I was going to say, you would think they did this 15 years ago. A decade ago. It just happened, like John said, very recently. I think sometime within the last year, they actually stopped the whole thing. It was last week. Wow. Yeah.

Yeah. I would love to meet the guy who was still using it like two weeks ago. Who was shocked that their internet was shut down. That one person. Okay. I got a couple of quick ones here. At its peak, how much was invested annually in the U.S. telecom build out? The thing that I wanted to bring in here is we talk about the dot com bubble bursting.

But in the late 90s, there was really two bubbles. There was the internet bubble, so the companies that was a sort of a valuation bubble, and there was basically an investment bubble where telecoms were investing a lot of money in building out the fiber that Jason mentioned earlier. But what was the actual number that they were putting in the ground? This is just in the U.S. What is your guess, Jason? Annual number, so annual peak.

$100 billion. John? Did you say million or billion? Billion. Oh, man. I was going with $10 billion. Yeah. Again, could be spectacularly off.

Jason, you're about right. $118 billion in 2000. And I believe we've only passed that number in two years since then. So interesting that the telecom build-out was basically hockey stick growth rate, and then it just plateaued. Yeah. The other one that we're not going to get to that is sort of a similar is Apple in 2007 built sold one point four million iPhones. Two thousand fifteen that got up to two hundred thirty one million and then essentially plateaued. So the question, you know, for all of these businesses is when do you hit that plateau?

Because that's when you could potentially run into problems. OK, here's the one I wanted to end on quickly from January 1st, 2000 to March 2000. 2000 how much did the qqq nasdaq 100 rise and then my follow-up is how much did it fall over the next six months john so what how much did it go up in those first three months how much did it go down in the next six i'm gonna guess for going up i'm gonna guess it went up 15 during those three months and then i believe there was a 50 drawdown from there jason yeah i was gonna say 20% for the first one. And then for the next six months, uh, from that point, I think it fell probably March to September, March to September. I would say it fell probably a good 60%. Up 18% in those first little less than three months. And then over the next six months fell

71%. So up an escalator out a window is, is the way that we kind of talk about this. Well, hopefully that was good context for people Because I think we can always learn from history Whether things repeat or not They typically rhyme I think that's how the saying goes When we come back We will get to the stocks that are on our radar

You're listening to Motley Fool Money The legend lives on from the Chippewa on down At the big lake they call Gitche-goo-lee The lake, it is said, never gives up for dead When the skies of November turn gloomy With a load of iron ore 26,000 tons more Than the Edmund Fitzgerald weighed empty

That good ship and true was You gotta try breakfast at A.W. You gotta try breakfast at A.W. And what better way than with a delicious Pret Organic Coffee, starting at just $1 all day, every day, now until December 31st. You gotta try breakfast at A&W. At participating A&W locations in Ontario. 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 Motley Fool 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. One company I want to bring into the discussion, we've kind of high level talked about history and AI. But Google had some interesting announcements. Open AI is obviously getting all the attention, but Google Enterprise, Gemini Enterprise was announced this week. Jason, what did you take away from that? Yeah, a few things, I think. I use both Gemini and chat GPT interchangeably,

probably use Gemini a little bit more. I wasn't terribly surprised to see the announcement because this is kind of an arms race. And I think it speaks to Google's ability to respond to market forces and competition. And I think also the real advantage that it has, and it's already massive user base, and the powerful business model, not to mention just customer mindshare, right? I think ChatGPT absolutely is doing a great job on the customer mindshare. But kind of going back to earlier in the show, when we were talking about 800 million some odd weekly users, only 20 million really of those uh are subscribers and and i think that is just a big hurdle for a company like chat gpt to overcome and the reason why google doesn't have to worry about it so much

is because they've got a business that's that's funded by this powerful advertising model not to mention it's it's a growing cloud business as well and i mean now like when you look at google in this space like they're kind of the total package right i mean what's that you call a full stack player i mean yeah so the a few of the things they announced it kind of pulls gemini into applications uh and this is this goes into gcp google cloud platform and that is actually a profitable business i think that's something you know as investors we should we should highlight that open ai is losing money they're not public yet but this is a huge growth business for google and for alphabet and it is now profitable as well and so the idea here is i think the idea here is

this is going to be an enterprise play, along with, hey, you know what, if Gemini as a consumer app wins, great. Yeah, well, I think this shows a couple of things, right? I mean, this technology at its core is totally replicable, right? I mean, basically, all they need is the resources and the time to be able to do it. I think the thing that's not necessarily replicable is sort of the power under the hood, so to speak, with what Google has built through the decades. ChatGPT is just not there yet. It's not to say they can't get there. Don't get me wrong. But I'm just saying that it's a much younger company that still has a lot to prove. And so, from that perspective, again, I mean, I look at something like a Google today and I think,

wow, you know, I mean, they're doing a lot of really neat stuff. I think ChatGPT is doing a lot of really neat stuff, too. But I think we're going to see at some point, OpenAI is going to have to resort to some sort of an ad-supported model in order to be able to continue generating that revenue, or they're just going to have to come up with a way to grow that subscriber number, which is just so small today compared to what Google has just on an ongoing basis. The 800-pound gorilla in the room that we always continue to overlook. Let's get to the stocks that are on our radar. John, I'm going to have you go first. What is on your radar this week? On my radar right now is a company called Rubrik. That is ticker symbol RBRK. This is a

small cybersecurity company. But what I like about this is that it's not trying to prevent attacks. Its business model is assuming an attack has already taken place and it's going to get your business back up and running in a fraction of the time. And so you think about that. That's really an interesting counter positioning when it comes to maybe what your crowd strikes of the world are trying to do. And so that's really interesting. It trades at about 15 times its sales. You look at its annual recurring revenue, it's up 36%. That's a good growth rate. Gross margin has jumped to about 80%. Those two things right there signal to me that I don't think it looks terribly overvalued. It does generate positive free cash flow despite being a young

business. It has a net cash position. It's adding new customers at a good pace. But with only $2,500 spending $100,000 a year, I think there's plenty of room to grow that. Net dollar retention is over 120%. So it's existing customers are spending more of our time. I really like its co-founder and CEO Bipol Sina. He really values this mentality of basically innovate or cease to be a business. And so that could make things a little bit volatile. But I think it's going to also potentially make it a key innovator here in the cybersecurity space. So it's definitely one on my radar and what I'm watching. Dan, what do you think about Rubrik? So, I do like the company, John, but I have a question about what they call themselves.

They call themselves a zero-trust data security, and zero-trust doesn't exactly make me feel good. Yeah, that's an unfortunate way to talk about it in the trade. All right, Jason, what is on your radar? Yeah, something we've been doing here on the website recently with the analyst team, it's something we're calling the analyst stream. And a couple of days a week, we're taking a topic of the day and all just offering our spin on it. And today, Friday, we've got safety stock pitches for folks. And so, a stock that I recently purchased from my own portfolio with safety in mind is Waste Management, ticker WM.

As the old saying goes, your trash is my treasure. And we certainly produce a lot of trash here. but waste management. They own or operate the largest network of landfills in the U.S. and Canada with 262 sites, making it the top dog. They also benefit from a growing recycling segment, renewable energy segment, and healthcare solutions business too. Because if you remember, they just acquired Stericycle last year. I think given the nature of the market there, trash is pretty reliable. I think holding onto this one for a decade or longer makes a lot of sense for investors. Dan, what do you think about investing in garbage? I mean, garbage isn't going

anywhere, gang. We're not going to stop making it. It's going to be something that we're going to have to deal with forever. As the kids say, Dan, it true. All right, Dan, rubric or waste management, which one is going on your watch list? Like I said, garbage ain't going anywhere. We're going to go waste management. I like that dividend too. We are out of time this week. Thank you for listening to Motley Fool Money. We'll see you here tomorrow. We'll be right back.