Motley Fool Money - Apple’s Headset Strategy & Tesla’s EV Sales Windfall

Episode Date: October 3, 2025

We discuss what Apple and Meta Platforms see as the future of tech hardware and whether or not Tesla’s latest delivery boon is a peak for the company. Later in the show, we play over/under before covering the stocks on our radar. Travis Hoium, Lou Whiteman, and Emily Flippen discuss: - Apple’s headset strategy - Tesla’s delivery numbers - Earnings trends to watch - Over/Under Companies discussed: Apple (AAPL), Alphabet (GOOG), NVIDIA (NVDA) MercadoLibre (MELI), Delta (DAL). Host: Travis Hoium Guests: Lou Whiteman, Emily Flippen 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

Our smart glass is the future of technology hardware. Motley Fool Money starts now. That's why they call it money. The best thing. Cool global headquarters. This is Motley Fool Money. Welcome to Motley Full Money. I'm Travis Hoyam, joined by Lou Whiteman and Emily Flippin.

We're going to jump right in today. And the big topic I thought for this week was Apple, at least reportedly, kind of pulling back on their lighter vision pro headset. They're going to be moving in the same direction. looks like as Meta has with their rayband glasses, kind of this AR technology. Emily, what are your thoughts on sort of this whole space and where Meta and Apple fits into it? I'm incredibly disappointed by Apple here. I mean, look, Apple invested a lot of time and resources into convincing all of us that

the future was in these lightweight, daily wearable glasses that were the visionary of spatial computing. And then a year later, just backtracks. And it's not clear to me if this is like a desperate pull for them to say, oh, no, me too, when they see the innovation that meta is doing and literally the metaverse, or if this is just throwing stuff at the wall to see what sticks. But in my opinion, I just am so incredibly bearish on pivoting towards heavy-duty VR classes when it seems like we have years and years of evidence coming out of meta, that consumers just do not want this. it seems like a space where they're throwing stuff at the wall, and we don't know exactly what's going to stick. But at least we know that kind of these lightweight things are going to stick a little bit. So that seems like a little bit of the move in the right direction, Lou.

But it seems like this is a money-losing proposition for the foreseeable future. We should say that this is one report, and we don't know what's going on, really. Apple has, what, $65 billion in cash? I feel like they can do both. But look, the cynical take here is, I can't figure out to spin is meta was right or Apple is really that desperate, right? Because, you know, the way, this seems like it's validation of everything that is doing. In a way, it's Apple, are they really just, they need a something? I kind of agree with Emily.

I see more potential in the Vision Pro. There's also more of a chance of an outright flop. I just, I don't get the obsession with glasses right now. And I'm kind of worried to see everyone pushing in that direction. One of the things that was interesting when the Vision Pro came out is, look, I've been in the VR space for almost a decade now. And what was unique about it is it was almost like an AR pair of glasses while actually being VR. I mean, the pass-through was better than we've ever had in any other device. So it seemed like they were, even at that time, moving towards this sort of AI future.

but the technology wasn't quite there yet. They hadn't kind of miniaturized things enough to get to even where Meta and Rayban are with their current glasses. So, you know, maybe we were headed this direction all along. And like Lou said, they're kind of walking and chewing gum at the same time. So they're probably doing both of these things. But they're maybe now saying, hey, look, the Vision Pro has kind of been a flop. And people are at least a little excited about these sunglasses or these glasses from meta. you know, Emily, is that maybe the right way to think about it?

They're seeing what's going to work and what's not, and they're seeing meta success. They've always been a follower. They're never usually the first company to release a device. So maybe that's the right strategy. That's a really generous interpretation, I think, Travis. I think this is an issue. I mean, really, I think it's an issue of bloat. And I say that as somebody who is a fan of Apple.

I mean, ultimately, Apple is still a hardware business when push comes to shove. So they have to be on the bleeding edge of whatever the new, exciting hardware accessory is, even if that ends up getting commoditized because otherwise, they could lose their position as one of the largest companies in the world. So I understand the desperate need to be there. If that is on to something, Apple needs to be right there too. But here's the problem when you have so many extra billions of dollars in cash flow is that it really does allow you to be, to lack discipline with where you choose to invest your CAPEX. And I wish there was more focus coming out of the Apple management team. And again, to your point, you don't

exactly know how many resources are being put behind this larger version of these AR, VR, VR, glasses. But I really do think that it's disappointing to see them spread out their attention when the Vision Pro hasn't lived up to its potential yet. And there is potential there. They might be a little early, but if they invested more time and resources into convincing consumers about why this would be an addition to their everyday life, then that can actually be on to something great. And my concern is that when you do two things poorly, you do nothing well. And I wish they would just focus on doing one thing well. Here's a question, and I don't know if this end up being bullish or bearish, but the Apple value proposition from the start was always, it just works, right?

And in a way that was tech for the normals, for the normies. And I'm a normie, so I appreciate that. And I am not, I am yet to be convinced that the normies want these glasses, that there really is the market that they think there is. I mean, to me, I don't see it doing anything right now that you can't do in your phone. So it's an accessory to the phone, not a replacement. The watch is too. The watch is done pretty well, but the watch is half the price of these. So, I mean, do we want a... The watch is also nowhere near the market share that the iPhone is.

Right, right, right. It is a niche product. And do we want an accessory to cost as much of the phone? I doubt it. So the glass half full is Apple really sees a chance to do what they did with the iPhone relative to the Palm Prix and all those. And they really have come up with something that is that next step. Glass half empty is that this is going to just be like the watch

and be just another product out there that can't move the needle. When in theory, if they get the Vision Pro right over time, that could be a whole new product category. And this is again, like, what are we, are we swinging for hits or swinging for home runs? Because this feels like going for a base hit, and kind of giving up on the home run swing. Do you think the combination, I'll start with you, Lou,

do you think the combination of artificial intelligence and kind of these improved, these different form factors? Usually the technology revolutions, the disruption that happens, it comes with a new form factor. So the mainframe, the PC, the smartphone, brought about all kinds of new winners, new business models. We've been talking about new form factors, an AI for quite a while. The pendant didn't seem to stick. It seems like glasses kind of has a chance.

But then you run into this strange, I don't know if it's an uncanny valley where I can see some real value in, look, I can see in our recording. I can see your names. And sometimes I look down there when I'm reading the outro, right? Just to, I don't know why. I just do it. I'm meeting new parents with my, you know, as my kids go to school. I know I've met you before. I know you said your name. But I can't remember if it just popped up on my glasses, that'd be great. On the flip side of that, if we're constantly recording everything all the time, that seems like a pretty dystopian vision of the future. So it seems like we do need that killer app, and we're just not there yet,

and nobody's quite figured that out. Is that a fair critique of sort of this next trade issue? It's almost like we're in the Apple Newton phase of the industry. We're 10 years too early. Let me give you a more subtle critique because I'm not going to go dystopian, although I see that. I see the fear. But look, we talk about what a distraction the phone is when you're driving, when you're walking down the street, whatever. Maybe, yes, if it just popped up Emily's name, if I couldn't think of it, that would be a help.

But 90% of the things, be it directions, watching Netflix for gosh sakes while you're driving or something, all of these things that seem to be obvious use cases, that just doesn't seem like a good idea for me. So again, it does feel like that, yes, it's a neat accessory onto the phone. But largely, the reason this is the next big thing is, I think, because no one has any better ideas, not because it is a great idea. That's an interesting way to put it. I'll just quickly tap off by saying, yeah, I wish Apple was okay with being second in some cases.

And I think when you look at the success of the smartphone, Apple wasn't the first company to come out with a smartphone, but they waited for the proof and the pudding there with Blackberry before they entered the market and destroyed it. And the same is true for smart watches, right? They waited for Garmin and others to come out, Fitbit, to show the demand for watches and then said, okay, let's take this market that already exists and let's crush it. The market doesn't exist right now for these glasses. And I think that's part of the problem that Apple's running up against. When we come back, we are going to get to Tesla's phenomenal delivery numbers for the third quarter of 2025 and see what the future looks like. because this may be a peak for a while.

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That's a full year to wear it and love it. And you will. Now available in Canada, too. Don't keep settling for clothes that don't last. Go to QINCE.com slash Motley for free shipping and 365-day returns. Quince.com slash Motley. One of the other big pieces of news for the week was Tesla had a phenomenal quarter. Deliveries were 497,099 vehicles.

That was a 7.4% increase from a year ago. The problem is the $7,500. tax credit ended at the end of the third quarter. So, Emily, is this going to be kind of as good as it gets for Tesla, at least for the foreseeable future? I think it's a fair statement. I do think two things can be true at once, which is that this was a great kind of delivery month they put up, but it was also this deadline sprint that you mentioned for people to place orders before the tax credit expired. So if I had to estimate, I would imagine that we're probably looking at a softer fourth quarter here, despite how strong the third quarter was in terms of deliveries. But at the same time,

I'm still really bullish on the entire EV sector, especially in the United States, but across the world. And I think the rumors of its death, so to speak, have been greatly exaggerated. There's a lot of people out there, a lot of investors who think that without government incentives, demand for electric vehicles just won't be there. And it's an interesting argument, and it's one that I think we're going to get some more evidence towards or against as we see these tax credits expire. But big picture, we've seen higher interest rates, and that softens demand for more. expensive cars. EVs are still on average, more expensive than more traditional vehicles, and you still need to have the installation and charging options. And a lot of people choose to finance those

if they have them installed in their house. And of course, with higher interest rates, less people being willing to finance at higher rates. So there's a lot of factors that are going against EV adoption right now that are unlikely to persist over the long term. And so that's the sort of thing where I'm like, okay, it's great to see a strong board from Tesla. I am not expecting that to persist for Tesla or any other EV maker, I think Ford CEO was just commenting earlier this week that he expects EV market share to drop by half for this foreseeable future. I mean, crazy numbers. But when I zoom out 10 years, I'm very not worried about electric vehicles here. Here's the interesting thing to me. These are the times, autos are very cyclical.

And these are the times when historically, the big giants of the industry, basically Detroit through most of the industry, they've used their balance sheet to muscle out competitors. When pricing becomes a problem, when affordability becomes a problem, and Ford today still has that great captive auto finance unit. GM is rebuilding theirs where they really can offer you a deal you can't refuse. And someone else who's smaller, in this case, a Rivian, you know, back in the day as others, just can't afford to. On paper, Tesla is better positioned to do that than even the Detroit companies. They have a great balance sheet. However, Tesla, unlike all these companies, also has a huge long list of things other than consumer finance

they want to put their money to. So I kind of feel like, to some extent, Tesla's near-term destiny is kind of in their own hands. If they want to minimize the blow of the tax credit, I think they have the wherewithal to do that. I don't know if for long-term investors, that would be the best use of their capital, though. But I mean, I do think it's an interesting moment. in terms of like the big picture for EVs, for me right now it makes sense that hybrids are where it's at because I think hybrids offer you a better deal. And I'm biased because I have a hybrid. So maybe I'm saying that. To me, the future of EVs is not tied to tax credits. It's not tied to what Elon Musk thinks when he wakes up in the morning. You tell me how and when that Model 2 hits

the streets. And you tell me if that Model 2 really is a $25,000 car. And I will tell me how, and when that Model 2 hits the streets. And I will tell you what I think Tesla, the near-term future for Tesla EVs are. Similarly, all of these companies, Ford has a pickup truck that's a very similar value proposition. Tell me whether or not those actually can be made at profit in any time soon. And that, I think, is going to be the answer to the question of how quickly and how strongly we see EVs take off from here, not a $7,000 tax credit. Well, why are we so focused on Tesla and Ford? When we actually already have evidence, that is the case, BYD out of China has been making profitable, low-cost electric vehicles that are getting worldwide adoption. We don't see them a lot here in the United States because of our own tariff regime and

lack of importing there. But I do think that we have evidence that this battery company, originally a battery company, now a big car company, can do it. There's no reason to believe that others can't eventually get there as well. But that evidence exists. It's just a matter of, to your point, Lou, how quickly. Absolutely. Speaking of companies that are growing in EVs, I think this one's fascinating. General Motors, do you know how much their EV growth was year over year? In the third quarter? 105% to 144,668 vehicles.

The Equinox EV, which is kind of their entry level, $35,100, I believe that's less than you can get a Tesla for today. So it does seem like the dynamics have shifted quite a bit. What will be fascinating, you know, they're still focusing on big trucks. and SUVs. I mean, that's where the money is made. Even though Tesla used to be high margin, their margins are now lower than the traditional automakers today. And it's probably because they're not making these expensive trucks and SUVs, which are selling like crazy today. So, you know, this is going to be fascinating because it does seem like one thing that's going to be consistent is the market will probably not be growing as much as it would have had that $7,500

tax credit remained. And therefore, it's going to be more competitive because there is more supply coming into the market. The one caveat there, I would say, on just looking at GM numbers, is I think the dealer model provides more incentive to try and get move metal before the tax credit disappears, because as soon as it's on location, that's the dealer's problem, not the onemakers problem, and the dealers don't have that balance sheet to put the work. So they wanted to move that metal. But we'll see. If it holds up, that's great for GM. I want to get your thoughts on, We have the end of the third quarter just happened this week on Tuesday. That means the earning season is going to be coming very soon. Emily, what are you looking at for this earning season

as it starts next week and the week after? I'm actually looking for companies that are very obviously sandbagging with guidance. And I say that I think we all kind of expect for guidance this quarter to come in weaker. It was that case last quarter. We are living in a really uncertain environment now. So it makes sense that not only are companies expecting their profit margins to be squeezed, especially with the weak consumer spending, they don't know what's going to happen with inflation or tariffs, whatever the overhang may be. But I always love it when a company's management team is always a bit more pessimistic than I am. And sometimes I can be a red flag, but sometimes I can also be a buying opportunity.

For instance, I think about Dutch bros, who when you look back at their business at this point last year, kept guiding for low to mid-single-digit same-store sales growth. So much weaker than what they were putting. putting up because management was just that uncertain about the cannibalization that'd be happening with their business or consumer spending. But quarter after quarter, they just kept hitting it out of the park. They only recently raised guidance. But that mismatch, in my opinion, between a really conservative management team and a really strong business where I can see their path to our performance, even more than maybe management can, can be appealing. Because

if you see shares fall really dramatically based off of weak guidance that you think is a hurdle that can be easily passed, it can be a buying opportunity. It's so funny you say that because I was thinking the other day. I was like, I'm more excited about the opportunity to go shopping this earning season than normal. I do think that that's, yeah, we're ripe for it, I think. All the conditions are there. As far as what I'm looking for, I'll go big picture. I'm focused on margins just across the board. I'm really curious how much the macro is eating into margins. We know there's tariffs out there. We know that the consumer is struggling to get a feel for how much. that companies are eating it. I think I'm really, I'm more interested in looking at margin change over time than I am even like revenue growth or earnings growth. I want to know not what happened in the last three months. I want to know what to expect the next three, six months to come. And I think that that is at least a little bit of a window into what's going on out there. Lou, do you think tariffs is going to be a bigger topic of discussion or less

than it was over the last two quarters? And I'll say maybe the second quarter, because first quarter was a lot of, like, we have no idea what's going on. Second quarter, companies have kind of gotten their heads around it. Third quarter, now we're really in it. Are we going to hear a lot about it or is it going to just be kind of in the background? I think we're going to hear a ton about it, but I think it's going to be in the guidance side because we're in the holiday quarter now. And I think that that's going to be front of mind.

Travis, I've used this with you before. There's the Boiling Frog analogy, that, you know, tariffs are not a light switch. It's just over time, suddenly, whoa, what happened? the holiday season seems like if I was a CEO, that would be front of mind for me at the holiday season. And so I think you'll be hearing about it a lot in the guidance. It is going to be fascinating to see what companies can, who has pricing power, who doesn't, who has to, like you said, eat those tariffs and who is able to pass them on to customers and where they're impacting a lot to learn over the next few weeks.

When we come back, I'm going to have Emily and Lou take an over our under position. and a bunch of predictions for the rest of the year you're listening to, Maitley Full 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. You have to adapt to whatever comes your way. When you're that driven, you drive an equally determined vehicle, the Range Rover Sport. The Range Rover Sport blends power, poise, and performance. Its design is distinctly British and free from unnecessary details,

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Welcome back to Motley Fool Money. Today we're going to play a little game called Over Under. I'm going to give a prediction about something that's going to happen in the economy or the market. And Emily and Lou are going to guess whether they think there's going to be an over or under. So let's start with the topic that we discussed earlier. Meta's glasses. They sold about a million pairs of these smart glasses in 2024. That's a pretty big number.

My question is, are they going to sell over or under 5 million units in 28? Emily, I'm going to have you go first, over or under 5 million. Yeah, I mean, I feel like this will come as no surprise for anybody who listened to the first half of the show. But I have to go under here. I just don't see the use cases for it on Medis side. And when you look at Medis Financial, I mean, this business spent more on CAPEX in the last 12 months than the business generated an operating income. in operating cash flow in all of 2022.

I mean, they are just throwing money at the wall. And it's amazing to me how much money they're investing into various things, but nothing is sticking with consumers. And ultimately, you can't force a consumer to come out and buy a new product if they don't see a use case for it. So it's amazing to me that they even sold a million units in 2024. That is peak hype, in my opinion. And unless something really sticks here for meta,

I expect that number to actually fall over the course of the next years. Wow. Okay. I am going to use Emily's words and come to the conclusion that over. Because, yes, Zuck needs this. And Zuck is more than willing to spend money. And Zuck is still sort of hurting about Metaverse. You may just give them away. I mean, I wasn't going to go quite that far, but since you got there, I don't think that profitability. I mean, I'm glad we're talking volume. We're talking units, not profitability or success here. Yeah, I don't think we're under the delusion that these are going to be profitable in the next three years.

My guess is he's going to move these darn things, come higher, high water. This will be interesting because I do think the adoption of the VR space really hit a wall. But glasses are different. Glasses are a little bit more passive. They're not quite lower cost, which is, I think, interesting, $800 for these new display glasses. But there's definitely a market for it. The other thing to think about, too, is if you bought one in 20, 24, when are you going to want to update that? If there's not a lot of new, new features,

that could be a headwind too. So we'll be fascinated to see how successful or unsuccessful meta is moving into more of the glasses space. Let's go to the overall economy. I want to get your thoughts on mortgage rates. And the reason that I think this is important is, housing is a huge driver of the economy. Huge portion of our money is spent on rents, on mortgages, provides tons of jobs, and higher mortgage rates, at least than we've had over the past decade, has been a real headwind. Fed funds rate is coming down. The rate that the Fed controls is coming down.

The problem is the longer-term rates that drive mortgage rates and the borrowing rates for companies is not coming down kind of at the same rate. So right now we have a mortgage rate average of about 6.3%. a year from now, do you think those mortgage rates are going to be over or under 6%. So down just slightly from where we are today. Lou, I'll have you go first. Yeah, we're getting a real-time lesson in the limits to the Fed's power. Wait, there's just so much going on other than the Fed that's driving these long-term rates. I am going under, and I'm not sure it's a good thing. I am all over the place.

So what's going to happen in the economy in the next year? But I am increasingly worried, I think, and I think that there's going to need to be more and more aggressiveness. And I think housing is a natural place for both politics and policy to get involved here. So I don't want to go too much under there, but I have a feeling will be eventually pushed downward one way or the other. It might be a hot take here, but we're sitting at about 6% right now. And I think the general expectation is that the market can't handle, the housing market can handle these high rates for very much longer and that the Fed is going to continue to cut rates, which eventually, hopefully,

even though there is obviously a disconnect here between what the Fed is doing and what lenders are doing, that will eventually come down. But I have to say over. I think mortgage rates are going to be over 6% in one year from now. And the reason is, is because I don't actually think we're going to get as many rate cuts as the market is expecting. And I think that tepidness is going to pull over into the market for mortgages. And the reason I say that is because a lot of the inflation data, despite the fact that it has cooled off. And it's come down, although obviously not to the Fed's target rates, I expect that will probably heat up as a lot more of these price increases from tariffs are passed along to consumers in the back half of this year. A lot of that evidence has shown that

companies so far have eaten the price of these tariffs. And that is eventually, that dam is eventually going to break. And in my opinion, that's unfortunately going to impact interest rates. I do think it is interesting that we have not really seen. We've been. talking about this on these shows for months. We have not really seen the impact of tariffs yet. You know, the inventory cycle for a lot of these companies is not a month or two. So if tariffs went in place, you know, April 2nd, it's not like you're going to see that in stores, even in June. They were planning in April for now, for the holidays. And so this is when we're going to see those price increases. I mean, I have kids. We're buying stuff for them all the time. And you're seeing those

prices go up, I'm interested to see if that impacts consumers. So, Emily, is your point, just that the market is going to say, you know what, sure, these rates are going to come down short term, but long term, they're going to have to go back up to fight inflation. Yeah, I think it's going to be a combination between a weaker labor market and inflation here, that is going to put the Fed in a bit of an odd position. And ultimately, I think whenever you see broader economic concerns in combination with the dynamics that we're seeing in terms of the housing market today, I would just be surprised if rates fall that dramatically within one year. I hope I am wrong. I do tend to be a pessimist. And I like to be pleasantly surprised. So I hope a year from

now we're sitting here in October 2026 talking about our nice four to five percent mortgages. But that feels like a pipe dream to me these days. You know what's fascinating in Emily? I'm kind I'm kind of pessimistic too, but I think in the near term, it's easier to play games with it, and in the long term, it eventually comes back to bite you. So I'm kind of focused on the one year, too, but who knows? That's what makes market, right? All right, let's quickly do an overrunder on the number of Fed rate cuts in the next 12 months. Emily, it sounds like you're going under three. That's where I'm going to set the bar. But is that officially your call?

Yeah, it is. In fact, I'll tell you what, in the next 12 months, I will even go further. I think we have maybe one rate cut. So the market is pricing into this year. You don't think that's going to happen in 12 months. I don't. I've talked about this on Motleyful money in the past, I believe. I think I expected one rate cut in September, which we got. And despite the fact that, you know, all of the blind polling here from the Federal Reserve does indicate that even the people on the panel themselves expect a number of rate cuts over the remainder of the year, we don't have, obviously, with the government shutdown, our most recent jobs data, and inflation has not moderated. I can't emphasize this enough. It has not moderated to the extent that the Fed wants it

to moderate. It's still well above their target rate. We've actually seen it accelerate on a month over month basis. And there's a fair bit of evidence that despite the fact that tariffs have not had the impact that I think a lot of economists and investors fear to this point, which is wonderful, that that shoe is, in my opinion, likely to drop towards back half of the year. Again, I really hope I'm wrong here. I really hope mortgage rates come down. I really hope we have three rate cuts, but I'm betting on one rate cut in the next year. Yeah, I really hope I'm wrongger. Because for the record, I agree with, if you want me, I play pundit. I agree with everything I mainly said. I was reluctant to even cut the first time. I'm scared about that. And I don't want

rate cuts. I'm worried about inflation. But again, I think politics plays into hear this, and especially as the year goes on with the Fed, I think market dynamics kind of is providing pressure. Officially, I would push the three. I think we are at three, but if anything, if you force me not to push, I'm going to take the over. That scares me a bit, but I do think that the pressure on the Fed to cut rates is only going to accelerate as Powell steps away and as other changes and as just kind of assist the situation, I'm afraid we are going to deteriorate some from here. Lou, I did allow you to push on that one, but this one, we're going to make things a little bit more difficult. Invita is the most, invidia is the most valuable company in the

world, $4.6 trillion market cap, Microsoft for 3.9, Apple, 3.8 trillion. My question for you, is Nvidia going to be over or under the 1.5? So basically, are they going to be first or are they going to be lower than first? Most valuable company on January 1st, 2030. So you have a little over four years between now and then. Are they going to maintain this ranking? Any good gambler has to take the field on that. And I'm going to take the field and say under. However, Nvidia is a pretty good choice to be there. It's a great company. They have staying power. But now, if you're going to get me every company or Nvidia and have it play out four years, I'll take everybody else. Yeah. Unfortunately, if you look historically speaking, companies that are the largest in the world when you zoom out in a five to 10 year period don't tend to maintain that positioning. So I have to agree with Lou here that I think is probably got to take the under. That being said, if anybody can do it, it's Nvidia. And so this would be, and you hate as an investor to say, you know, this time is different, but this could be the exception to the rule.

We'll end on this one. I want to get your S&P 500 picks over the next 12 months. Over or under 7,000. And as we're recording, we're at about 6750. So I'm giving a little bit of a gain, 5% gain or so. Do you think a year from now, we are over under 7,000 on the S&P 500, Emily? So this is an interesting question because I think everyone in their dog will tell you right now that the S&P 500 is overvalued. The market is overvalued. We have all of these headwinds. Consumers are feeling hurt. I mean, the government, as we are talking, is literally shut down and the stock market is up. The market doesn't make sense. Exactly. There is this real disconnect that's happening between the American consumer, the American economy, and I guess general vibes of the American

people here versus what we're seeing in the market. So I fear that the irrationality to some extent can maintain over the course of the next year because it hasn't made a lot of sense to this point. That being said, I can't get behind why that would be. So I have to take the under. I think it's less than fine. In fact, I think the stock market's probably down from where we are today a year from now. So, again, I hope I'm wrong. And pessimists sound smart. Optimists tend to make more money. So I'm staying fully invested regardless of what my short-term prediction is for the

markets. But it's hard for me to rationalize how the market could go up from here, given the factors and the headwinds that we're seeing in the broader economy. I mean, it's hard to disagree with that. And I've been all doom and gloom when we're talking about the Fed and stuff. But here's the deal. I do think that it's quote unquote priced in. I think one of weird things is Liberation Day was such a shock.

that we kind of just normalize that or, you know, we kind of kind of became immune to that real quick. I am more confident that we aren't going massively in one direction or the other. I think it's going to just be a grind, but I'm going to take the over. I think that we can just grind along almost regardless of what's going on on Main Street for a while. When we come back, we will get two stocks on our radar. You are listening to, Montley Fool, Full Money. What does leadership really look like? On The Power of Advice, a new podcast series from Capital Group,

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so don't buy yourself, stocks, base. 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 of the interesting news items for the week is Spotify, founder and CEO, Daniel Eck, is stepping down. He is going to be replaced by co-CEOs, Gustav Satterstrom, and Alex Nordstrom. Emily, this has been a phenomenal run for Spotify and for Act over the past three years. I think they've kind of solidified their business model, but going with the CEO, the co-CEO

strategy seems to be a trend too. So what did you take away from this announcement? I was really disappointed by this announcement because as you mentioned, Travis, while it looks good for Spotify or the last couple of years, it wasn't always the case. And when Spotify first went public, part of my conviction behind the business was the way that Dan Eck talked about the company being very focused on the long term. And investors can, forget that there is a period for Spotify there, a very long period where investors were very pessimistic believing that Spotify would never be able to get its gross margin above 30% because of the limits in the caps on the way that the licensing agreements for music operated. And Dan Eck had a really

impressive long-term vision for what the Spotify platform could be. And he really did execute well on that, raised prices when it was appropriate while expanding into things like audiobooks and podcasting, of which so many people, even internally in Spotify, were very skeptical. about his investments there. And Eck kind of led that initiative. So it's disappointing to see him leave, even though he will stay on his executive chair. I don't love co-CEOs in general, but I will say if anybody can pull it off, it's possibly this pair. They saw Nordstrom and Sodersome have already acted kind of together as co-presidents of Spotify. They seem to have different expertise, one more product, one more operational. So hopefully they'll find a way to marry in that sense.

But the devil's always in the details. And it's scary when you have a founder's CEO leaving the help of a great company. Everything in my gut makes me want to hate the co-CE structure. You know, you just need one person in charge. I think I need to get over that, though. We've seen it in a lot of companies. I do think, look, the CEO title has always been vague. It means different things in different companies. It's too much for one human being to do all the work of a big company. Average tenure of CEOs is falling, so you need to have a lot of talent there. I think if you look at this case, and I think it's a, there's a good. There's a good. chance it works. I think the idea of just we're almost just recategorizing what we call people

and when inevitably nobody was multitasking everything and everybody had different roles anyway. I think what's evolving more is just how we describe these things, not how companies work. You need the right people. You need well-defined roles. You need maybe a founder as executive chairman to play referee if needed. I think it can work and I need to be less scared of it. So hopefully for the best year. It has been interesting to see Netflix has done a similar thing where they have different expertise. It does seem like kind of a two-headed dragon at the top, and these companies are so big now that maybe that makes sense because it's a huge job to fill. Let's get to

the stocks that are on our radar. We're going to bring in Dan Boyd from behind the glass. Lou, I'm going to have you go first. What's on your radar this week? Dan, I'm looking at Delta Airlines, ticker D-A-L. They kick off transport earnings next week, Thursday, I think, should set the tone not just for airlines, but could provide insight into the consumer, into big macro and all that. Baseline expectations is that corporate travel is holding up better than tourists, international is steady, and premium products are in demand. If that proves true, that is really, really good news for investors, not just in Delta, but in United too, which I think Delta and United, probably the best stocks in this sector, very curious to hear what

they have to say and what we can read into the entire sector from them. Dan, what do you think about getting into airline stocks? Now, Lou, you are a Georgia guy. So how much of this is blind homerism? I haven't lived in Georgia that long. So none? You're saying none is blind. No, no, no.

I don't believe it. I don't believe that for a second. Dan, as someone who flies Delta regularly, I have all the reason in the world to hate them. Trust me. Fair enough. All right. Emily, what's on your watch list? Well, hopefully a stock that generates a little less.

hate than Delta Airlines. I'm looking at Mercado Libre. The ticker is M-E-L-I. Mercado-L-L-L-A shares are down about 15% this week because this e-commerce bohemoth that operates in South America looks like it's getting a bit of renewed competition from Amazon, Amazon announcing that in their attempt to expand their presence in Brazil, they'd be waiving additional fees for sellers and fulfillment by Amazon throughout the country over the holiday season. And in my opinion, And this is a great buying opportunity, Dan. You have to listen to me here because Mercado Libre has been there, done that. C-limited with the Shoppy app, tried to move into Brazil and Latin America, South America a couple of years ago, and got absolutely trounced by Mercado Libre. Mercado Libre has by far

the biggest lead in the space. I couldn't be less concerned for the lead they have here. And with shares off around 15%. I mean, what's a better time to be buying? Dan, Emily is going with a long-term winner compared to the troubling industry in the airlines. What do you think about Mercado Libre? I mean, she said, you have to listen to me, Travis. So I guess I have to listen to Emily now. Let this be a lesson to ask for what you want in life. So what's going on to your watch list?

Is it officially Mercado Libre? It's definitely going to be Mercado Libre. I think the price point might be a little too good to ignore these days. For Lou Whiteman, Emily Flippen, our production leader, Dan Boyd, and the entire Motley Fool team. I'm Travis Hoyam. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.