Motley Fool Money - An Investor’s Guide to 2026

Episode Date: January 2, 2026

What does the new year bring to investors? We discussed the AI trade, how the economy is faring, and why commodities may not be place to look for opportunities today. Travis Hoium, Emily Flippen, and Lou Whiteman discuss: - The AI trade- How the economy is doing- What stocks will go up and down- Stocks on our radar Companies discussed: NVIDIA (NVDA), Target (TGT), Chipotle (CMG), Intel (INTC), Lululemon (LULU), Nike (KNE), Tesla (TSLA), Alphabet (GOOG, GOOGL), Palantir (PLTR), Apple (AAPL), Amazon (AMZN), Airbnb (ABNB), Honeywell (HON), Novonordisk (NOVO). Host: Travis HoiumGuests: Emily Flippen, Lou WhitemanEngineer: Bart Shannon 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

The calendar is flipped to 2026. So where are we investing? Motley Full Money starts now. Welcome to Motley Full Money. I'm Travis Hoyam, joined by Lou Whiteman and Emily Flippin. And since the calendar has now moved to 2026, we're recording this a couple of days early so that we can have a little bit of time later in the week.

But we are thinking a lot about how we're investing in 2026, what the economy looks like, where there's value, maybe where we should be selling a little bit. So I wanted to start with a couple of different. themes and the biggest thing that we have to talk about. This has been the topic of the market for the last three years. That's artificial intelligence. Where are you looking at the AI trade in 2026, Lou?

And you can take this in any number of different directions. Is there risk? Is there opportunity? Or is this just something that you're monitoring from the sidelines and going, you know what, this is accounting for 50% of GDP growth? That's a pretty notable change in the way that we think about AI. The first thing is it's 2026 and wow, we're still doing this instead of AI. So cheers to us for that, right?

The disruption is not hit us yet. Yeah, yeah, not yet. Famous last words. So, you know what strikes me about AI? And I've been thinking about this a lot is that, you know, the novelty is over. The magic is gone. When ChatGPt first came on the scene and it was wow, it was magic. And it was all this talk about virtual friends, you know, doing all these chores for us.

And, you know, just kind of what was new and magic before is now sort of mundane. And I think the answer from here is kind of boring. I think this is going to be the year of the agents of all of this stuff. Wasn't 2025 supposed to be the year of agents? Well, it was. And maybe that was the work. But here's what I think is happening here. Again, it's not going to be the cool magical stuff.

They're not going to be planning our vacations or doing these wow tasks. But there is just all over the place. We are just at the tipping point where so many little automations, making so many little tasks 10% better, I don't think that that is what we all hope for. Maybe the virtual friend, the imaginary friend is still coming, but I do think that matters. The theme this year, if it's a theme, it's specification over scale. It's no longer just this pure muscle, do all things, but just creating small AIs that can just make life easier all over the place. I think, that is going to be the theme for 2026 and AI.

And I think there is real good news for investors there because I think that this translates to revenue and profits better than the imaginary friend on our shoulder. It's interesting you put it that way because it seems like that would just be a continuation of the last 30, 40 years in computing and software. Is that the way that you're thinking about AI now and not just we're all going to be, we're not going to have to work anymore the way that Elon Musk says, you know, because robots or whatever are going to be doing everything for us? Is it just going to be more of an incremental technology improvement,

the way that we've seen mobile phones and PCs and Excel spreadsheets and things like that and make things that used to be commonplace in the 70s, 80s, 90s become just more efficient? Is that the right way to think about AI? That's a dangerous question because it's open-ended. And I never want to say no to something if you give a long enough timeline. But yeah, I think you hit it on the head. This is how progress works. Progress is not flashy.

She, progress is not wow. Progress is incremental. And maybe we will get to that vision. I don't think it will be nearly as quickly as the pundits or the wow what you think. I think just incremental improvement is how tech works when it works. Emily, when you look at artificial intelligence, where are you looking at real business models being created? And again, where is that risk reward lie? Yeah, I love that point.

And, you know, to lose earlier comment about us still doing this. as humans not being replaced by AI yet. I think part of the reason is, is because we're willing to go out there a little bit and come here with some takes that maybe wouldn't be generated by a chat bot. And then you can hold me and Lou accountable for them a year from now when they inevitably end up wrong.

But to your point, Travis, it's not so much about creating new businesses. It's about evolving the business models that exist today. So the thing that I'm watching with AI in 2026 is actually advertising. And I think that's the midterm game for AI and AI-centered company, or companies that are looking to implement it.

It's not the data centers. It's not the CAPEX, not enterprise usage. I think it's characterized by what the MAG7 and our large tech companies are going to do with advertising as it relates to artificial intelligence. There's only two of the MAG7, and Nvidia and Tesla,

that aren't dependent upon advertising revenue as a source of sales. And I'd actually argue that Nvidia by proxy is actually really heavily dependent on advertising, given the fact that it's larger customer base needs to sell ads in order to afford the hardware, Right?

Explain that because I think OpenAI is really the big question here. And they're obviously the elephant in the room. They're the ones with, what is it, now $1.5 trillion in spending plans. A lot of that is Nvidia Chips. But they don't have that advertising business model, but do they need it? They desperately need it. And I think 2026 is the year where these individual consumers are going to start seeing ads and other integrations into their chat GPT.

And it's not just chat GPT. It's Gemini. It's any company that has some sort of large language consumer-facing model is going to need to find a way to monetize the data that they have on the people using the application, even if that comes alongside a subscription fee. And to me, that screens ads. And without businesses generating ad revenue, they obviously, to former point, can't afford hardware to continue to expand and grow their business and their data centers, which results, and by proxy, a declining sales for Nvidia. But it's not just open AI. I mean, look, you can look at meta, another

Mac 7 company. Virtually 100% of their sales are ad-based sales. Google, is like 75% plus of their sales are ads. So all of these companies are really heavily dependent upon that. And what's really interesting about the world of advertising is it's kind of a zero-sum game, which is to say just because OpenAI comes out and says, hey, you could put ads on chat, GPT now, just using that as one example. It doesn't mean that the ad budgets for companies that are buying placements suddenly increases.

They still have a finite amount of money. Unless you've built out that, that's a longer game, right? like the businesses that are built because Shopify and Facebook exist, but that doesn't happen in 2026. That's a five, 10 year story. Exactly. So hopefully, I mean, I expect the world for advertising,

demand for advertising, the advertising size of the market. That is going to grow over time, to your point, Travis. But thinking about it from the perspective of an individual business, if I'm into it, one of those businesses that just loves to advertise, especially around this time of years,

we get into tax season. If I'm into it, I'm not saying, oh, I have new places to advertise. therefore my advertising budget for the entire year has increased proportionally to the number of places I can advertise. They probably still have a set budget. Let's say it's $100 million or whatever it may be. And they say, well, maybe I put less of that with meta. Maybe I put more of that with Open AI. And that's when it starts to get interesting for how these AI-based companies are going to monetize and advertise because it's not just about how effective ads are by usage of AI. It's actually how

certain other interactions change as a result of where the money for ads is actually spent. Yeah, so are you able to extract the same number of dollars? What's the margin? I think that's going to be another one of these questions because it is more expensive to compute than it is with traditional compute. And we've seen that with margins at companies like meta and alphabet over a long period of time. One of the things that you touched on Emily that I think is interesting is are we at the

point where this AI in general is proving to be much more of a sustaining innovation rather than a disruptive innovation? I think if you go back to that chat GPT moment, you have stocks like Alphabet, dropping or going at least nowhere, despite the fact that they were growing revenue, because they thought that this was going to disrupt their business. This was going to disrupt search. It was, you know, how they make money. Are we at the point where we can say, you know what, there's going to be new businesses formed?

This is going to be an opportunity for entrepreneurs, but it's not necessarily going to destroy a whole bunch of older tech businesses. is the way that we saw disruption when, let's say, Google and meta Facebook came around that really destroyed kind of the newspaper business. Is that the right way to think about it, at least where we sit today? I definitely think it is. And what's so interesting about where we sit today versus where we sat even 20 years ago when we were going through the dot-com crisis, right, then boom of the internet, is that companies

and their leaders and their decision makers are not unaware of the threat of disruption. I think everybody has become more aware. disruption almost implies the idea that you're being taken aback by something that you didn't see coming. AI isn't so disruptive because we have companies that could see the future, so to speak, but solve the existential threat and then decided to innovate around it. So it's, to your point, much more sustaining than it is disrupting for these companies because they're investing in it. And they can invest in it. That's the big thing. Like with the newspapers, they didn't have the resources.

These companies have the resources to throw out the problem. Whether or not it makes everyone 100% a winner, I wouldn't say that. But I think that's the big difference is that so many of these companies have these virtual money printing machines that they can throw at the problem. Well, and the constraints seem completely different. If you're a newspaper, you had a geographic constraint. That was your monopoly. You know, Google's playing in the world, the global economy. AI is going to do the same.

It's just a different shift, it seems like. Lou, I wanted to ask you about robotics because this is one of the things that we often talk about with AI. And it's sort of this amorphous thing in the future. I-Robot was the way to play this for a while. Obviously, that didn't work out. But there are sort of these moon shots that are happening, you know, whether it's at Tesla, you know, one of the companies I think is interesting that's still private as figure, is humanoid robots, you know, is that going to be something that's going to start impacting the economy, whether we're buying them as consumers or businesses are adopting those kind of products? So at least for 2026,

I'm still very skeptical about the dancing robots. I don't think, I mean, this is going to be The videos are pretty funny to be funny. Oh, yeah. I mean, they're awesome. But this is going to be similar to my boring answer on AI. I don't think this right now is about Rosie the Robot from the Jetsons making us eggs or doing our dishes. But the great thing about AI, and I think we're going to hear a lot about robotics. We'll get to this in my radar stock, even just a tease.

But the great thing about AI is that all of these robotics that we have and all this automation we have, We're mostly single function machine, one task machines. And AI gives us the ability to make them multifunction machines and to do more with the existing technology. Again, I don't think that ends up with, you know, a robot butler in 2026, but I think all over the automation world, what we can do with automation and what we can do with what we've already invest in is just going to really accelerate. and that is a huge productivity thing. It might not be fun for consumers, but it's great for us as investors because it does, I think, over time, move the productivity curve. I know.

I'm looking for a robot that will clean up after my kids. So when that comes out, I will be an early adopter. When we come back, we're going to talk about the economy and what we think about jobs and where spending is going in the future. You're listening to Motley Fool Money. What does leadership really look like on the power of advice, a new podcast series from Capital Group, you'll hear from athletes, entrepreneurs, and executives who've led on the field, in the boardroom, and in their communities. It's not about titles. It's about impact.

Discover what drives them and the advice they carry forward. Subscribe and start listening today. Published by Capital Client Group, Inc. Welcome back to Motley Fool Money. We talked a little bit about AI, but look, none of this works. And all the spending in AI doesn't really work if the economy tanks. And there's some signs of strength in certain places, signs of weakness in others. So, Emily, where do you see the economy going into 2026? What's good, what's bad, and what's just worth watching as the year plays out? Well, I think I, like the average person, is very confused about what we're seeing today, which is to say that the data that we have is painting two entirely different pictures. If you just take the reported data at face value, it shows strong,

real GDP growth that's rising and accelerating, driven largely actually, by consumer spending, right? Inflation, while still higher than what the Fed wants, it's well-managed and it's inching downwards and we're easing back to those Fed targets. And the economy is still adding jobs and mortgage rates have eased. But when I say that, I know the average listener is probably going, excuse me, that's not the reality that I'm living right now. And underneath the data, I think we have a lot of confusion. There's economists and even members of the Fed themselves that are doubting the data, which is to say that not the numbers are inaccurate, but not paying the full picture, saying that inflation can be.

be understated, either due to the government shutdown or reporting metrics, tariff impacts are yet to show their true teeth. Layoffs are actually accelerating. Powell himself said that the jobs data could be overestimated to the extent that the U.S. has actually been losing jobs to the majority of 2025. So this is to say, it forces me to watch a lot more than I probably would want to when I head into 2026. And what I'm having to do is look at ancillary data, right? Large-scale layoffs, which companies are required to report. That's a great indicator of the job market. credit spread or delinquencies show a lot about the average consumer as we expand to that K-shaped economy here in the United States. And obviously, K-X from big tech companies. I mean,

these in my mind are kind of like the canaries and the coal mine of the economy when you can't or won't or otherwise have doubts about the reported data. What is that K-shaped economy? We talk about that a lot. But can you just explain what exactly that is? Because I think that will be important as we go throughout the year. A lot of people have summarized it as like the declining middle class. But in effect, the way that we have seen the economy grow and expand over the course, especially over the last couple of years, but you can even expand it over to the past few decades, is that the rich get richer and the poor get poor to an extent. And the people in the middle, so the average American who hasn't seen wage growth that matches

inflation is effectively getting poorer and poor. And so the big earners and the big spenders have been doing a lot to keep the economy afloat, which helps these reported numbers look good at face value because there's a subset of high spending, high-earning Americans that are doing well. But a majority of Americans, those people who aren't seeing those raises or those increases are continuing to get worse year after year. Yeah, I saw a recent stat that something like the top 10% of spenders actually come for almost 50% of spending. So there is a have and have-nots. Lou, what are you thinking right now? Well, yeah. And again, we have to kind of put everyone in buckets because we can't look at

the individual. But really what we're talking about here is there's a lot of pressure on some people, but a critical mass of consumers are still employed, still spending, and really we make decisions based on our own checkbook. And so as long as that critical mass is there, whether or not it's a carve out of a middle class or something, I think those are all worrisome things to talk about. But the bottom line is that as of right now, there are enough people spending to keep things going. The question is, where from here? Does all of the job talk and all of these negative signs, does it build on itself slowly swallowing more consumers and breaking down that critical mass? Or do we see inflation ease, which kind of helps with the jobs?

And all the sudden, you know, employment picks up and that critical mass kind of gets us through to the other side. It's really, really hard to know that. I think both are possible. You mentioned the data. The other thing right now is that, look, I don't even think you need to be a cynic to question the data right now. They are saying that they are making methodology choices, which might be correct. There has been forever debates about how we do economic data. But when you do that, when you make changes, it makes apples to apples comparisons really hard.

So I don't even think you have to be a conspiracy theorist to say, I don't know how to read the data. And that makes life a lot harder for us who are trying to have an opinion or a prediction of where things are going. Lou, you may raise an interesting point about, I think about this like a snowball. You know, in 2008, 2009, when the economy got really bad, you'd have to go back to 2006, 2007, to see the start of this. And how does that play out? Let's just talk about that downside risk. You know, layoffs, it isn't one layoff announcement tells us that a recession has begun or something like that. It's this trickle that becomes uncertainty for executives.

I remember sitting listening to the CEO of 3M in, I believe it was 2008, saying we don't know where the bottom is. And so we're just going to cut as much as we possibly can because we don't want to be, you know, SOL when we do hit that bottom, is that sort of the risk is that this snowball starts. Maybe AI spending cuts back and we just don't know where it goes. Inevitably, we always swing too far in either direction, right? So, yes. I mean, I think the risk, when we started 2025 talking about the Boiling Frog economy, that everything's fine till it's not. And I think, you know, heading into 2026 is just going to be that same theme where everything right now from an economic perspective, from a Wall Street perspective, is good enough. Wall Street doesn't have to act with Main Street. You know,

that's one of the first lessons you learn. The stock market is not the economy. The stock market has kind of priced some of this pressure in. It's all fine until it isn't. And to your point, when this critical mass, when we stop seeing just enough people doing their economic activity, keeping things going, that's the point where we're in trouble. And by then, it's probably too late to avoid at least some impact. Definitely a lot to think about with the economy and AI in 26. When we come back, we are going to play a game called Up or Down. You're listening to Motley Fool Money. The old adage goes, it isn't what you say. It's how you say it. Because to truly make an impact, you need to set an example and take the lead.

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With seven terrain modes to choose from, terrain response to fine-tuned your vehicle for the roads ahead. The Range Rover event is on now. Explore enhance offers atrangerover.com. Welcome back to Motley Fool Money. In this section, we like to play a little game, and we're going to see what Emily, and Lou think about some specific stocks. I'm going to call this up or down. The idea here is, do you think these stocks are going to beat the market in 2026 or not? I have 12 stocks on the list, and I have asked them to split their votes 50-50. You can't just say everything is going to beat

the market. Lou, I'm going to have you go first with arguably one of the most important stocks for the stock market because it is the biggest piece of the SMP 500. InVIDIA, are they going beat the market or not in 2026? An object in motion tends to stay in motion. I have them beating the market. Now, look, the huge caveat here, they've been going up well, well in excess to the market. All they have to do is go up probably 7, 8 percent to be. I think Nvidia might do less well than it has the last few years, but still beat the market.

That's a fair take, but I have to take the other end and say they'll lose to the market. And the only reason is, look, I'm rooting for Nvidia here, but to counter-lose point about an object in motion, and typically, historically speaking, the largest company in the world is not the largest company in the world when you zoom out to a three-year time period. And Viti has already been the largest company through the majority of 2025. I can't help but think 2026 is probably going to be a high bar. Let's move way away from AI to a potential falling knife. Target, Emily, beat the market or not? Beat the market.

Look, I've been meaning to buy Target for the better part of the last year. I'm happy that I dragged my feet on that. I intend to make that purchase at some point in earlier, 2026. but I think they didn't get the merchandising strategy right. And if discretionary spend comes back, they're well positioned. So I'm going the other way just because I think there can be a turnaround, but it's going to take more than a year. And in this context, I think one year is too short of a time frame. I'll also say, look, retail is really, really, really tough. Nobody has an inherent right to exist. Ask Sears. Even Coles, some of the problems. I'm worried about Target long term,

and I don't think even if they do recover, it will be as quick as 12 months. Let's go to another popular stock. Chipotle, Lou, are they going to make a comeback in 2026? I think this is a tough, tough year for Fast Casual. Again, I'm not going to write them off, but I have Luz here just because I think that there's a lot of choppiness. I think in general, Fast Casual, there's just too many people chasing this audience now, so it's hard for any of them to really, really thrive.

That doesn't mean it can't be a good business. long term, but I'll take them losing this year. I think Chipoli has a tough year this year because they're coming off some really strong comps in the post-pandemic period. In 2026, their comps are going to be a lot easier of a hurdle to jump over, and I think expectations are too low. So I have them beating the market. What about another one that has confused me?

I mean, this one could be up 100 percent or down 50 percent, but Intel, where are they going, Emily? Oh, this is such a hard one. I have a tepid lose to the market because when I look at the chip space, I just don't know if they're the leader that they need to be to sustain market beating performance. But it's a tepid lose. It's a tepid lose. Yeah, and I have a tepid beat because I don't know what to think, too.

And it's weird to live in a world where I'm not sure we even need Intel. Imagine saying that 10 years ago, you know, but I do think they have the backing of the full faith and credit of the U.S. government. They have that just closed the investment in VINVVIA. I do think there is wind at their back. long term, I'm not sure I want to own this. I don't know where they shake out, but I think it'll be a better 2026 for them. What about another consumer company? And this gets to what we talked about earlier.

What are consumers doing? Are they spending or are they not loo-lou lemon? So this is another one that I need to caveat that to me a year, it doesn't tell the whole story. I think they do beat. I think, you know, whatever momentum comes out of this proxy fight and the new CEO, I think there will be encouragement. I worry about this company long term as far as getting its mojo back. But I think for 2026, there probably vibes go its way. I'm a lot less worried than Lou.

But I do agree that I think Lulun beats over the course of the next year. Now, there have been a lot of macro changes that have impacted them, both in terms of competition and fashion trends. But there is no doubt in my mind that Lulim can work out their merchandising strategy. And I don't think that their brand has deteriorated to the point where it hurts their sales. Lulun's stock is down 45% over the past year. think that would have been a shocker coming into the year. We'll see if there's some value there 15 times earnings.

I don't know. Is that a value or a value trap? We'll have to see. That'll be a fun one to talk about. Along the same lines, Emily, is Nike going to make you come back? This is almost the same story, but just a different brand. It is to an extent. And I have different answers here.

I think Nike loses to the market. My concern with Nike is I actually don't see any desire to innovate to the extent that they need to to edge out the competition. And when I see companies like On Holdings, just continuing to eat Nike's own lunch, I get really worried about the long-term viability of the brand. Yeah. And look, it's just a different market. It's so much more of a crowded market. To me, I think the company can be fine and the stock can not be fine. And so I'm lose to. I think that this is just running to standstill, so to speak. It's wild to think that Nike has become a little bit like Under Armour for us when we shop for gear for the kids especially,

that's Nike's where you find good deals. That's not, that's a tough spot to be in if you're in the consumer space. All right, let's go to AI, robotics, electric vehicles, autonomy, whatever you want them to be. Emily, is Tesla going to beat the market or lose to the market in 2026? Okay, this is where the time frame catches up to me here because here's what I'll say about anybody who's investing in Tesla. You're not doing so because you think it's going to do well in 26. You're doing so because you think a decade, two decades, 50, 100 years from now, Tesla's going to continue to be an innovator that is leading the way in whatever it may be, robotics,

cars, you name it. So I actually have Tesla losing to the market over the course of 2026, and the reason is pretty obvious, in my opinion, we've seen a decline in demand for electric vehicles, a lot of tax credits have rolled over. There's a lot of stiff competition from international sales especially, lots of near-term headwinds for Tesla, but does that change anything for the long-term investor? Probably not. Spot on. I don't know much to add. Tesla, there's a lot of headwinds for this year, but I don't think that affects the bull case at all, so I'm losing too. Are either of the two of you going to be in a robo-taxie with no safety driver in 26? No. Personally, probably not. That's the theory, though, is that they're supposed to be doing that, well, supposed to be at the end of

this year, but... Well, 2027 is always just around the corner. It is. Next year is always just around the corner for Tesla. All right, Alphabet. This was the surprise one that beat the market in 2025. Lou, is it going to do the same in 2026? This is kind of similar to NVIDIA for me. I think that they are a leader and I think they will remain a leader. And so I'm going to have them beating. But I don't think it's going to be a wow beat. I think a lot of that catch up was this year. But I don't think advertising or anything they're doing is going to fall off a cliff. And I do think that there are. a pretty good bet to just beat what I think could be a boring market in 26. I completely disagree. And I love that. I have Alphabet losing to the market because I do think that advertising risks falling off a cliff in 26. Now, they've been heavily investing in Gemini and their own AI ambitions, which is important. But what they're doing is fighting to retain the three quarters of their revenue that comes from advertising. They need that to succeed. And

they need no competition to take even at the margin a portion of other ad sales. And I have a lot of reasons to believe that in terms of the ad revenue that's going to be headed towards Alphabet in 26 is going to be less than what it was in 2025. Emily, does that extend over to a company like meta too? Certainly does. And Meta, I will say, the difference between the alphabet and the metas of the world is that meta has better click-through rate ROI for an advertiser than a lot of alphabet platforms withholding YouTube. That's the wildcard, in my opinion. We don't have a lot of data about how well ads convert on YouTube. You have to imagine pretty darn well, considering the performance of Alphabet, but that could be the saving grace here. I have to throw in one of the

most talked about stocks on the market, trading for 111 times sales. Emily, will Palantir beat the market this year? Well, what a read. You have to say that right before. I about to tell you that I do think Palantir is going to beat the market. And my reasoning, is not sophisticated. It's not based off the fact that I think it should be trading for 200-time sales. It's that I see no fundamental changes in their core client base in government spending over the course of the next year. I have no reason to believe that there'd be a re-rating on the stock and the near term. The vibes will remain high. The vibes are high. I think Emily has the right answer there, and I just still can't get my head around it. So I have lose just because I just, on all the history of me

looking at stocks, I don't think there is a valuation that was harder for me to understand. And so I'm just going to assume that it's not sustainable, although, as Emily says, I don't know what's changing. Yeah, historically buying stocks at a hundred times sales doesn't work out well. It has for Palantir's investors. So it has confused me. And hopefully for them, I will be wrong again in 2026. So to another popular company, I want to give you a couple stats here about Apple.

over the last three years, the revenue has grown at a compound annual growth rate of 1.8%. Their price to earnings multiple is 36. And yet, over that period of time, three years, their stock is up 110%. Lou, are they going to continue their market beating ways? I think they will. And again, I don't think it's going to be like a crazy great year. But I do think that they are finally sort of getting AI right, which is let's just get someone's AI on our phones.

And I do think that will help support, maybe not this huge super cycle, but continued sales. Apple is the definition of fine. What an inspiring call from Lou. I wish I had more. I mean, I wish I knew what the next big thing was, but I think Apple just will continue to be Apple. That's the safest prediction I'll make. Fair enough.

Emily. I completely agree with Lou. I think Apple beats the market. Maybe it's a bit higher conviction than Lou has, though. If I don't think Nvidia is going to be the largest company in a year, I think it's probably going to be Apple. And for all the reasons, Lou mentioned, Apple, I think out of all the MAG7 companies is the most disciplined with its capital management, they haven't over-invested in AI, but they also haven't been sitting on their hands with regards to it. The upgrade cycle is still really strong for this company, and they're not heavily dependent upon, you know, services or advertising more so than they're in hardware.

And I think it's a lot easier to motivate consumers to upgrade, even in the environment we're operating in as opposed to heavily relying upon software. Yeah, I may help Apple in 2026, a computer, a new iPhone. probably on my list at some point in the year. Lou, what about Amazon next year? Again, I have this as a beat. In part, Travis, because you made us even our beats and misses, and this was kind of the one I was on the fence about. So I will say I'm kind of on the fence.

Amazon has a lot of CAPEX and a lot of their business, and they have a lot of low margin. But AWS is just AWS, and I think that's enough to drive this truck forward. I also have Amazon as a beat. I'm now doubting myself as I think about it. I mean, the logic at the time when I want to consider this is Amazon is well positioned, regardless of the market environment we're operating. And AWS does generate a sizable portion of their operating income.

That's enterprise spending. Consumers generally go to Amazon for low-cost goods when they're shipping or changing where they shop. Amazon still gets a big portion of that. I do have some concerns for Amazon in regards to their CAPEX, though. And a muted free cash-fell year could be bad for them. Yeah, they also have a huge advertising business. That accounts for a vast majority of the profitability for the retail business. Yes, around 10% of sales and that retail business is low margin to begin with.

So the margin that's coming from ad placements is good for them. But I will say those are ad placements that I think, again, convert really well for the people who are advertising on Amazon.com and other platforms that I see less existential threat from versus the search engines. All right. Emily, are you seeing value in Airbnb or will this continue to be? a market loser. I unfortunately view it as a market loser over the next year. I do hope that I'm wrong, but there's a couple of headwinds that I have some skepticism built in for Airbnb. They change their

policy in regards to upfront payments for a lot of their member base. So they get this strong, high margin interest income on revenue that they collect at the time of booking, even if they end up having to give that back to the person in case of cancellations or refunds. And that margin has been really profitable for them. Interest rates are coming down. And, which is hurtful, but they also change that policy. So less people are paying up front, which also impacts some of their high margin revenue. I don't see any other massive tailwinds here that would cause their sales to otherwise be market beating.

And I don't know where they're going to make up for the margin on that. So in my mind, I think it's a great company and probably fine as an investment, but I don't view it as a market beater in the next 12 months. Yeah, I mean, I'm biased because I just came from an Airbnb. And I had all of the eye rolls that you get when you're at an Airbnb, just all the little things. But I think I've only said it best. There's another one of these just love the company, love the business, but I don't know where market beating growth comes from. So I had them losing to the market. When we come back, we are going to talk about some more stocks on our radar. You're

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about and the Motley Fool may have formal recommendations for or against, so don't buy our sell stocks based solely on what you hear. All personal finance content follows the Motley Fool's editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. One of the things I wanted to bring up quickly here at the end is commodities. This has been a hot topic over the past month.

Gold outperformed the S&P 500 this year. Emily, how are you thinking about commodities going into 2026? I'm not thinking about commodities in 2026. And maybe that's a hot take, but I think it's a mistake to assume that just because of commodity moves, it's a recession indicator, right? The classic example is the inverted yield curve, which is what predicted 10 of the last three recessions. I mean, there's so many different factors that impact commodity pricing. Some people may view gold as a safe haven, but silver and other commodities are obviously have industrial usage. Demand for gold was driven largely by central banks recently. So there's so many different factors

here. And I don't view them as investment so much as for an individual investor, a panic button in a lot of places, even though core demand is driven by lots of other factors. So when I look at the actual track record, which is episodic at best and misleading at worst, it's not something that makes me want to pay attention. Yeah, agreed. I think if anything, it's geopolitical. And we don't have to get into that now. And it doesn't mean the end of the world. It doesn't mean the end of a dollar. One piece of advice, though, I don't know if it'll continue or not. But if you do think so, just buy the metals, buy the ETFs. Don't, I've seen so. I've seen so much. many people saying it's time to buy the miners. Mining is really, really hard and mining stocks

traditionally have not gone well. Please, please do your homework. Just buy an ETF with the metal. If you believe in the metal, don't just start buying penny stock copper mines or silver mines. Please. Yeah, this is a much more complicated area than a lot of people think. And there are people that spend their entire lives just looking at metals, whether it's gold, silver. So yeah, maybe not something for everyone to just jump in, but definitely something to watch in 2020. We like to end the show with stocks on our radar, and I'm going to give you some thoughts. Lou, you are up first. What's on your radar this week?

All right, Travis. One of the stocks I find most intriguing heading into 2026 is Honeywell, ticker H-O-N. For a while now, this has been a great group of businesses that somehow haven't worked together as far as stock gains. Times are changing. Honeywell has already split off its advanced materials business. It's now Solace, I think it is, that's already trading publicly. This year, 26, they will separate the remaining businesses, Airways. and automation into two independent companies.

These are all very interesting businesses on their own. I'm kind of hoping, thinking we might see something similar to what happened at GE, another multi-year disappointing conglomerate. Split itself in three. We saw the strength of these businesses and the parts have all kind of taken off. Honeywell and its many pieces I'm really watching in 2026, really, really intrigued. If I have to pick one, Solstice, Honeywell Automation and Honeywell Aerospace, which one should I be looking at?

You know, we talked about robotics before. The automation business is a lot of the kind of tools behind that. That and aerospace are probably the two that I might want to add to my portfolio one day. Emily, what's on your radar? Okay, I know this is going to be a hard sell for you, Travis, but hear me out. Novo Nordis, the ticker NVO is on my radar. This is the Danish drug maker who's best known for making Ozympic and Wagovi. And there's so much skepticism on this company right now.

A lot of it earned, but I think at this point has become entirely overdone. They are losing to Eli Lilly in the interim, and there's issues around reimbursement, obviously really expensive. But I do think that Nova Nordis has one of the most effective methods of weight loss on the market today with a strong pipeline of new drugs and a lot of potential fewer treatments associated with some gluteide, which mostly still has on her patent. So I think there's opportunity left in front of this company that investors are just writing off. So GL-1s are about half of Nobonduris' revenue.

As more and more of these products hit the market, we've got the oral product coming. It just seems like there's more and more competition. Is that a worry that both sales growth and also margins are going to be impacted negatively? That's certainly what the market is pricing in today. But I will say the reason why those concerns exist around competition and pricing is because demand is so high. There are so many people that can benefit from these drugs that don't have access to them. So prices should and rightfully will come down. but I still think demand will be there for Nova Nordisk.

Emily, I'm sorry, but with Honeywell getting at least, you know, splitting off that automation business, I'll give Lou the nod here, but I'll at least take a look at Nova Nordist, an interesting space for 2026. That's all the time that we have. Thanks to Emily and Lou and Bart Behind the Glass. I'm Travis William. Thanks for listening to Motley, Four Mon.