Motley Fool Money - Autonomous Vehicles Hit an Inflection Point & GPT-5 Is Here

Episode Date: August 8, 2025

Autonomous vehicles hit an inflection point, GPT-5 is here, and The Trade Desk drops 38%, plus the stocks on our radar. Companies discussed:.Alphabet (GOOG), Microsoft (MSFT), The Trade Desk (TTD), Hims & Hers (HIMS), Crocs (CROX), Shift4 (FOUR), Palantir (PTLR), Axon (AXON), Figma (FIG), Reddit (RDDT), Universal Display (OLED), Montrols Environmental (MEG). Host: Travis Hoium Guests: Lou Whiteman, Jon Quast 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

We are in the heart of earning season, but autonomous vehicles have caught our attention. Motley Fool Money starts now. That's why they call it money. The best thing. Cool global headquarters. This is Motley Fool Money. I'm Travis Hoyam, joined by Lou Whiteman and John Quas. Today, we're going to cover earnings from the trade desk and Crocs.

Get our pulse on the economy. But first, autonomous vehicles have reached something of an inflection point. We've heard from nearly all of the money. the mobility companies over the past two weeks, and the theme is autonomous driving. It's not just Tesla that's talking about autonomy. Uber and Lyft made it a central piece of their earnings, releases and conference calls. MobileI seems to be gaining some traction with Volkswagen. Zook's got an approval. It needed to roll out kind of its mini bus design to more places. John, it seems like we're at an inflection for autonomy. Is that really the case today?

Listen, Travis, is it okay for me to say that I don't really like the idea of autonomy? vehicles. I think you're always going to find me. Of course, that's on brand for you, John. Yeah, I mean, I'm going to be behind the wheel of a car with the open road ahead. But I do want to be really fair to your point here about the industry reaching an inflection point. There is indeed concrete data that supports that statement. So if you look at Waymo, for example, the driverless car division of Tech Giant Alphabet. In late 2020, Waymo launched driverless rides to the general public. By the end of last year, it had completed 5 million rides. But in May of this year, it announced it had already completed 10 million. So it took four years to get to 5 million rides,

then five months to get to another 5 million. That seems like an inflection point. Yeah, and I like the fact that you mentioned Uber and Lyft here, Travis, because I think that these companies are just looking ahead, seeing the future for what it is and trying to position themselves accordingly. And I like Lyft's vision approach here in particular with fleet management. It's fleet management business flex drive. I think that if ride-haling truly moves more and more autonomous, I think it's likely that there's going to be large fleets of vehicle businesses that run fleets of these autonomous vehicles. And if you're going to do that, if you're going to put your fleet on a ride-haling app, you're still going to need fleet management. You're still going to need somebody

who's cleaning the cars, making sure the tires are inflated, things like that. Lifts, flex drive business addresses that potential need in the future. And so that's one of the reasons I do like Lyft here. Yeah, it's interesting. All these companies are trying to figure out the business model. Even Waymo has a different business model in Atlanta than it does in Austin than it does in San Francisco, for example. So we're really in this testing phase. But speaking of testing, the Chinese automakers seem to be kind of pulling ahead in a lot of different ways. They're going to be launching or, launched partnerships at least with companies like Lyft in Europe. Volkswagen is partnering with MobileI. They've got 100 vehicles, over 100 vehicles on the road. You have May Mobility.

Well, the names that we haven't brought up here are the names like General Motors, Ford, Stalantis, the U.S. Detroit auto companies. Lou, are they getting left in the dust or are they waiting in the wings with some sort of brilliant strategy that we just haven't seen yet? So, yeah, for better or worse, Detroit is sitting on the sidelines that kind of led into this play out. And to be clear, this could be for the worse. I don't think anyone has a real sense of where things will be a decade from now. It could be they are way behind. But I'm inclined to give the benefit of doubt here. For one, these companies know better than we do, the cost in what goes into autonomous. It isn't like they've had their head in the sand, Ford with Argo, GM with

Cruz. They looked at the costs. They looked at the benefits. They made a choice. I think their calculus here is that, you know, their manufacturing footprint makes them relevant. We will still need vehicles, whether they have steering wheels or not. And look, automakers for the last century have done a good job incorporating new technologies from third parties into their vehicles. They know how to do this. Travis, you know, all of these players, all these potential options, I think there's at least a chance the actual tech will be somewhat commoditized.

That bet will pay off. And just like they used to like add cruise control or add all sorts of things from other vendors, one day they'll just add autonomy. it does seem like everyone is at least trying to lay the groundwork. Lou, you mentioned that it isn't like GM and Ford have been completely asleep at the wheel. They did have acquisitions that they made. They just kind of decided to go a different direction than companies like Tesla have. But, look, Elon Musk has been thinking that we could fall asleep in L.A.

and wake up in New York City for over a decade at this point. And we aren't there yet. But, you know, as we think about this potentially being an inflection point, Uber launched in 2010. and it was unheard of to get into a stranger's car at that point for a ride. A decade later, 110 million people were using Uber. The company was doing 7 billion trips a year. Five years from now, will we be seeing a similar explosion in adoption for autonomy, John? You know, no, I don't think that we're going to see that same level of explosion and adoption.

I think that Uber was addressing something with a wider use case personally. a couple of weeks ago, Tesla CEO Elon Musk said, I think we'll probably have autonomous ride hailing and probably half the population of the U.S. by the end of the year. Personally, I would be surprised if it got to half of the U.S. population in five years. The reason being, and Musk did allude to this, there's red tape involved here. And for better or for worse, there needs to be consensus on the regulatory front. And in a polarized political environment, sometimes that can be hard to come by. And So I think where we're going to see autonomy taking off most is where we see ride hailing thriving right now. The denser the city, the better it is for this kind of adoption.

So I'm not going to be the Luddite here because I'm in Atlanta. Waymo is all over Atlanta. I was downtown not too long ago early in the morning. And it was just me and a bunch of Waymo's driving, positioning themselves for the day. Really freaky. And you know what? I'm starting to get used to it. I'm starting to be a believer.

And Travis, I do think, yes, we are going to see an explosion and adoption in the coming years. But I think John's right. It's not going to be everywhere. It's not going to be ubiquitous. I think the use case will remain limited or at least not unlimited, if that makes sense. I don't think we're just going the way of everybody right now. We're still a long way from, you know, riding around with vehicles without steering wheels. But yeah, I think just looking at what's going on Atlanta, I think that that can be transferred to other cities.

and I think we are going to see just these numbers go up big time very quickly from here. Yeah, I'm in Minnesota, and I saw May Mobility vehicle driving around last week. So that was a shock to me because this is not usually the kind of place where you're going to be adopting autonomous vehicles first with the winters that we have here. So, I mean, it sounds like there's an opportunity, especially if, Lou, if you're seeing this, you know, they've only been in Atlanta for a few weeks now. Yeah. And if you're already kind of getting used to it, I think that shows how quickly our attitudes

can change about technology. So, look, this is an investing podcast. And as we're looking at autonomous vehicle stocks and what people may want to be putting on their watch list, what stocks are you looking at and what metrics are you looking at for success over the next decade, Lou? So this is kind of boring. I'll give you two, though. For me, the big winner here, the one I'm interested in is alphabet, partially because seeing as believing and what Waymo is doing is really remarkable, so I'm kind of biased by that. And partially because, look, I don't know what's going to happen. I am not convinced I know what the future is with kind of how we get around. And with Alphabet, you have so many non-transportation ways to win. It feels like that Waymo

is kind of just the icing on the cake of a good stock, and it feels like cheating. So I like, I like that. Second for me is Uber, because again, as I said before, I do think the actual tech could end up commoditized, just kind of like with Apple and their control of the consumer and what that gives them with the phone space, having the customer already, the customer might be what everyone fights over and Uber has it already. Yeah, you know, Travis, for me, I don't know which direction this space is going to go. So I do like something that's a little bit more automaker agnostic, platform agnostic. I do like businesses that have large first-party data sets. For me, MobileEye does check a lot of boxes in that regard. In 2022, it said it had over 200 petabytes of

driving data. I'm not sure exactly where that number is today, but that's a lot of data that it can use to train these models that are so needed for really widespread adoption in the space. Yeah, and the companies that are talking about collecting a lot of data, the Teslas, the rivians of the world, MobileI is just kind of hiding there in plain sight. They are on millions of vehicles today. Their technology may be on the vehicle that you're driving. If you have something like smart cruise control or lane assist, that probably comes from mobilized.

It'll be interesting. The other one that we brought up here that I think on that demand side is going to be interesting to watch if I can just add one is Lyft. I think Uber and Lyft aggregating that demand and trying to commoditize those supply, Uber is investing a lot of money in partnerships to effectively make sure there's a dozen suppliers for autonomous vehicles and autonomous technology. So this will be fascinating to see play out, but don't be surprised if this is bigger than we all think a decade from now. When we come back, GPT5 is here. This is Motleypool 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. The day we've all been waiting for is here. GPT5 has arrived. Sam Altman compared this to the difference between the iPhone pre-retna display and post-retna display, which made me chuckle because I couldn't tell you which version of the iPhone that was. And we're early in chat, GPT5, I've already found a few flaws in the few questions and I've been able to answer.

But the benchmarks that they're comparing themselves against, tell us that this is a huge step forward. John, do you believe it? I would love to answer with a simple yes or no here, but I think that an answer requires a little bit more nuance than that. So in the GPT5 demo, one of the things that the presenters did was have it explained the Bernoulli effect. That's something important for aerodynamics. in GPT-5's answer, it wasn't completely accurate.

Now, the parts that were inaccurate weren't necessarily GPT-5's fault. It's a common, repeated, wrong answer out there. And so AI can only do as well as the input that it's been trained with. And so if you get a wrong input, you're going to have a wrong output. That would seem to be the case there. Just minor thing. But I don't want to undersell this tech either. So while they were doing this demo, they created a language learning app for French, kind of on the fly, made like a little game.

And Duolingo stock actually took a hit during this demonstration because it was so fast. It was so effective. And so, yeah, in some regards, I would say that GPT is a step forward here, but it's not necessarily a game changer. You know, Travis, I chuckled too at Altman's kind of comparison because I do think it's telling that we're using vague kind of other product comparisons. And that's what we're gunning at because, look, he's marketing the product. He's trying to capture the imagination, as he should be. Do I believe it? I mean, I believe it's better than what came before, and I believe the next iteration will be better than this. The important thing is, is that do customers believe it? Because Open AI needs

customers. As a consumer, I personally have found models that I like better. As an investor, I can't buy into Open AI even if I want to. So I'm not going to waste too much of my personal. processing power, trying to figure out the rate of progress. I think everybody's making progress here and we're all just kind of racing towards the unknown. So it's better, and it will continue to get better. End of story. There are a dozen companies that this is relevant to one that we've talked about recently is Alphabet. Google Cloud grew 32% in the most recent quarter. They're actually running some of ChatGPT now. Gemini, which is their competing app, is up to 450 million monthly active users. ChatT

CPT said they were at 700 million weekly active users, so we can't ever have apples to apples numbers. But is this the kind of improvement that is going to stop a product like Gemini or maybe make a impact on Microsoft's productivity tools as they sort of make their way into Enterprise, Lou? So, first of all, I don't know what to make of these user numbers. I have to be honest. I mean, for Open AI or anyone, I am constantly getting nagging pop-ups when I'm in Excel, telling me to use co-pilot. Does that make me an active user? And every Gmail I get, I get a summary that I basically ignore. So am I an active Gemini user because of that? So, I mean, these numbers, I believe, again, are made for effect. That said, there's definitely stuff going on here.

What I would say is, I know we are very early in this race. There is no winner yet. I don't think anything Open AI did this week makes them a winner. Yes, Chad GDP is some really impressive numbers, but Microsoft and Alphabet have what Open AI can only dream of. Reliable conduits to the end users. All those things that I said are annoying today. They can get a lot better, and they are sitting there right in front of me. They don't have to market that. It is already right there.

I'm not going to predict the doom of co-pilot or Gemini, even if this is as amazing as Altman says it is. We're still early in the race, and Microsoft and Alphabet have advantages that OpenAI just don't. Yeah, I agree with Lou here. look, even if GPT-5 is an order of magnitude superior than everything else out there, these big tech giants aren't just going to take that lying down. They have already invested so much in their AI products that they're going to keep doing that. And so it's not going to derail the other tech companies as far as their own roadmaps,

including Elon Musk's XAI. So I'm not sure in the end which platform is going to demand the most, Users, which one's going to make the most money. I think right now everyone's still just trying to build and push the envelope as far as they can. Yeah, the reports are that the next Gemini, which would be three, is kind of waiting in the wings for Open AI to release this. Well, the other piece that we heard this week is that Open AI's employees in a secondary offering are potentially going to be able to sell their stock at a $500 billion valuation. Now, we don't have all the financial information that you would give from an S1 that's just, free IPO. But based on what we know, John, are you a buyer at that price? Absolutely not, Travis. Mostly because I'm not 100% sure that it can deliver 500 billion in shareholder value. You think

about these AI models. Do all of these AI models out there kind of reach the same capabilities for the end user? If they do, then there is somewhat of a commoditization risk and consequently a lower profit margin risk over the long term. So Open AI, congratulations, congratulations. Open AI, on everything you've done so far. I'll use GPT-5 for things here and there, but I'll invest my money other places. Yeah, kind of what he said. I know kind of harping on valuation, many of fortunes have been missed because you're too caught up in valuation, but I want to see more results and more what the meat is here before I can look past evaluation. I believe in AI. I believe in the future. I believe there are so many ways to ride the coattails of AI and benefit from

its continued process. Kind of like what we said about mobility, there are so many better diversified bets. I'm not going to pay up and pay a high valuation for a concentrated bet on one system. It's just too early for that. Let's get to an early look at earnings before our next break. As we've gone through earnings season, we haven't gotten a lot of warning signs about the consumer, but Crocs reported earnings and the stock dropped 29%. Tariffs were part of the story.

CROCS inventory was part of the story, but what was the takeaway that we need to take from Crox Big Drop this week, John? Well, Travis, I think the story here is really specific to Crocs. I don't think it's so much of a tariff issue. In reality, management had laid out previously a worst-case scenario for tariffs for the business, and based on where the policy is at right now, the business isn't facing the worst-case scenario, so that's good. Inventory is a little bit high for Crox, but,

they were basically trying to get the inventory in before some of the tariffs took place. And so it's not really a big concern. I think the big story here is that Crocs acquired a company called Hey Dude, a shoe brand called Hey Dude back in early 2022 for $2.5 billion. It still really isn't living up to expectations. Profits haven't improved as they've hoped. And now Crocs had to take a Goodwill impairment charge of $737 million. that stinks for shareholders because it means that Crocs overpaid for Hey Dude back in 2022.

The silver lining here is that it's a non-cash charge. It does impact the second quarter headline numbers. And I think that investors were a little bit spooked by that. But in reality, it didn't really make any money changes to the business. So there's at least a little bit of consolation in that. As always, people on the program may have interest in the stocks they talk about in the Motley Fool, may have formal recommendations for. 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. See our full advertising

disclosure. Please check out our show notes. Next up, we are going to get to the trade desk, which is down almost 40% on Friday and we're going to play buy, sell, or hold. You're listening to Motley Fool Money. These days, I'm all about quality over quantity. Especially in my closet. If it's not well-made and versatile, it's just not worth it. That's honestly why I love Quince. The fabrics feel elevated, the cuts are thoughtful, and the pricing actually makes sense. Quince makes high-quality wardrobe staples using premium fabrics like 100% European linen, silk and organic cotton poplin. They work directly with safe ethical factories and cut off the middlemen, so you aren't paying for brand markups or fancy stores, just quality clothing. Everything they make is built to hold up season after season and is consistently rated 4.5 to 5.5.5.

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The biggest news to end the week was the trade desk. As we're recording early on Friday, shares are down 38%. They reported a 19% increase in revenue from a year ago, guided to 14% growth for the third quarter. There's a lot going on and a tough comp to 2024, which included political ad spending. But the market obviously didn't like what it saw. So why is that, John? I've got a hot take for you, Travis. I believe that investors are starting to question whether

the trade disc can compete in the age of artificial intelligence. I'm not saying it can't. I'm saying that the investing community is starting to question it. So for years, this business has consistently delivered red hot growth above expectations and it was consequently rewarded with one of the highest valuations ever for an advertising technology stock. Fast forward to now, The company is transitioning to its AI platform called Kaukeye. Now, CEO Jeff Green says that three quarters of its client spend is already on the Koki platform and that it's delivering way better results for its customers. Green went on to talk about how much everybody loves it, but here's the problem.

Revenue growth is slowing down big time. Meanwhile, there are other companies using AI in advertising such as Apple Levin or Reddit, where the growth is still red-hot. And so I think that investors are starting to wonder, is the Trade Desk's AI really as good as management says? And so that ding in the confidence is bringing down the valuation. So I'm one investor that is not ready to hit the panic button, not by a long shot. I still think the Trade Desk is set up to really, really well to be a winner in the space.

But look, not all as well. Clearly, I think we knew this was not going to be a winner-take-all category. The competition looks fierce. a little company called Amazon. I think we've heard of it. They're involved in making deals with some big trade desk partners. History shows Amazon isn't really that fun to compete with. So suddenly, you know, we're looking at a company in a highly competitive market, growing revenue at 19%. That's fine. 19% is good. But given the factors, is 19% growth worth 50 times forward earnings, which is where they were before today? That's a tough question. I think that's

the question investors are asking themselves post-earnings. As an investor, me personally, I'm holding on, but given the valuation, given the risks, given the kind of uncertainty about how many people will be in this market and how tough it'll be, I'm not in any rush to add to my position, even down 30%. I'm still watching and waiting. They reported that dreaded word deceleration in growth. That's one of the things that when you look at stocks that are kind of going out of favor with the market. it's often coincides with their revenue growth. Maybe it's still being positive, but going down compared to what it was. And their compound revenue growth was almost 50% over the past decade.

So definitely a little lower than that now. We do like to have some fun in this segment. And after a massive earnings week and some huge stock moves, I wanted to get an idea of where you're at with some of these companies. So we're going to just play buy, sell, or hold. Let's start with a company that we've already talked about here. John, where are you at with Crox? Yeah, I think that Crox stock is.

a buy if you're playing the long game, which I think you should be if you're an investor. The shoes are still very popular. The profit margins are down, but they're still quite good for a shoe company. And the stock is absolutely cheap. The company's paying down debt. It's buying back stock at these cheap stock levels. And so it's stagnating sales, right? There are stagnating sales. This does point to maybe over the near term, over the medium term, the stock might not do much, but those strong profits, the cheap stock price bode well for holders who are willing to be patient. I'm a sell, or really, I'm more, I would never have bought. I own pairs of Crocs. I like Crocs, but consumer retail is so hard. I'm not good at spotting trends. I have nothing bad to say about

the shoes. I think Johns makes a good point on the companies, but there's some games that I'd just rather sit out for me. Crocs is one. I'd rather just not get involved. with. Yeah, price to free cash flow for Crocs now is at five. So this is about as cheap as stocks get you would think, but maybe that's a value trap in the making. Let's talk about a company that I've had on my watch list for a long time, but never actually bought Shift 4. Lou, what do you think? I'm a sell here too, Travis. And I can't figure out how any of these companies in this space can differentiate themselves. I get that they're sticky once they're installed because who wants to rip out one system and put in another. But a lot of their core

customers, these are businesses with pretty high failure rates, so you still get churned, even if they are sticky products. I feel like this could end up being one of these sectors and shift four, one of these companies where it always has potential and never quite lives up to it. So, again, I hate to be boring here, but I'm just sitting this one out too. Wow. Our second stock and my second disagreement with my friend Lou, but I'm going to rate shift four as a buy here, you know, down over 30% from its 52 week high. I think that it's down right now because investors are a little bit spooked by some of the things that they saw. So it just made a $2.5 billion acquisition of an international fintech company called Global Blue.

It seems that the recent quarterly numbers were kind of impacted by that. Investors also seem spooked that the chief financial officer abruptly resigned. That can be something to watch. Sometimes that is a warning signal. But I think if you look at the quarter, if you look at the guidance, things actually. actually looked great with its customers. I don't really see that high failure rate, especially with the ones that are very large venues. It really has focused in on those very large venues. Many of the NFL teams now are partners with Shift 4. Trading it just two-time

sales in spite of its very robust growth. I think this is a buy and hold. Next, let's go to one of the more controversial stocks in the market. Hymns and hers down about 20% this week after reporting earnings, Novo Nordis, which was a former partner, filed a bunch of lawsuits, although not against Hems and HERS that we know of right now. Lou, what do you think of this one? So I'd really like to buy this at some point, but to be honest, down 20% is not enough for me. I am going to wait until we work out this GLP drama.

Compounding pharmacies come with a lot of risk, but there really is an opportunity here to be part of a much-needed transformation in healthcare. I get the appeal. I thank Hims and hers, if they do it right, can be part of the answer. but between valuation and the potential for long, drawing out legal battles, I'm punting for now and it's on my radar list for one day. John, what about you? You know, the fear of missing out is strong with this one, but at the end of the day,

Hems and Hers is a company that I don't really feel like I understand. I don't really follow the drug companies, so I know you have an opinion here, so I'd really be interested in what you have to say. Yeah, this is one of the interesting earnings reports from the week because if you're a short-term investor or a bear, there's something to like, if you're a long-term investor and maybe a bull or a bear, there's something to grab onto there as well. The results weren't great. I mean, I think that goes without saying because their core business essentially dropped slightly in the quarter. But the long-term story here, the disruption that Lou mentioned,

is, I think, stronger than ever, they're adding more and more products. They're bringing lab testing in. They brought up memberships, bringing in longevity, next year. I think this is the kind of health care platform that's going to be very disruptive and the opportunity is just too big to ignore. Very high risk. That I think goes without saying because Lou is right, compounding businesses are, you know, tend to kind of fall by the wayside every now and again. But the fact that Novo Nordist has not sued him's and hers despite all the things that they have said about the company and their partnership and their operations, I think tells us that maybe that's not a battle they actually want to fight. So I'm a hold, but this is, you know, a stock

that I have a pretty big holding in. So I would love to actually see it drop more and buy more. But speaking of expensive and popular stocks, let's get to Palantir. This one just always amazes me. I thought 100 price to sales multiple was going to be high, but we're well over that. Lou, what do you think about Palantir today? Yeah, sell reluctantly because I love the technology. I'm fascinated by the company. but the stock is up more than 500% in a year. Palantir is still about 50% government revenue. And look, government revenue just doesn't grow fast enough to justify that valuation. It just needs to be commercial.

That's going to take a while. If they can sustain this pace, if they can keep doing what they're doing at this valuation, they will be in rare company. Again, I feel like such a Debbie Downer, but if you have these gains, sell and maybe get in later, I just can't be a type to chase as this high valuation. Yeah, I mean, it's up 1,500% in the last three years. I agree with Lou. This is an opportunity to sell, in my opinion. You look at the valuation over the last year. It was already high, and now it's up another 400% over just the past year. The thing for me, really, with Palantir,

is it's valued at $430 billion right now. You've got to figure that the company needs to return, what, 12%, 15% a year to outperform the S&P 500 over the next five years. I don't know if it has enough growth to do that over the medium term here. So, yeah, for me, it's a sell. Yeah, Pallantir trading for 124 times sales. They have a five-year compound annual growth rate of 31% right now. Those are backward-looking numbers, and we're expecting strong growth in the future. But let's go to another expensive stock trading for 29 times sales, but a higher growth rate of 32.3%.

That's Axon Enterprise. this has been a phenomenal winner for a lot of fools. John, where are you at with this? Yeah, it's going to sound like I'm talking out of both sides of my mouth here. I said sell for Palantir, and that's mostly valuation. Here, it's a high valuation, but I'm going to say buy axon. There is valuation risk. Yeah, as you mentioned, maybe the highest valuation multiple it's traded at in over a decade.

The difference here is that it's valued at $70 billion. Its backlog is growing faster than revenue. Its addressable market is expanding with government contracts with international markets, with just even new opportunities such as drones. And it has few competitors, really few true competitors. So I say that Axon stock remains a buy at the high valuation. Just be aware that that is a risk. Yeah, I echo everything John says. I'm a buyer here too, kind of despite my better judgment. Just kind of to emphasize a couple things. Their ability to not only continue to reach out to new customers, and there's a ton of every law

enforcement agency in the world as a potential customer, so a huge number, but also to layer on products. It used to be tasers, then tasers and body can, then adding software and now street cameras, just their ability to not only find new customers, but to sell more to each customer. It's a great business. It's highly valued, but I'm a buyer. Yeah, their growth has just astounded me, and it's one of those lessons in not selling your winners. I think I thought the stock was expensive. At $100 per share, right now, we're almost at $900 per share. So just hang on to those winners as long as they're performing well. I want to go to a company that didn't report earnings this week, but we got a recent IPO.

The stock is up over 100% since its IPO, at least the IPO price, but the drawdown, so since its peak as a publicly traded company down about 36%. Figma, Lou, where's your head at with Figma? Is this a buy, sell, or hold? So I'm happy to say, as a policy, I do not buy IPOs for at least six months, so I can sort of punt that way. But I'm very intrigued by this. The funny thing is, you know, Figma is right now, we kind of call it Adobe competitor Figma. My gut is five years for now, they will be highly successful. And that part of the business, I don't know if it would be an after thought, but it would be so many other things. I like the optionality here. I like the way that management, this is another Peter Teal, like Palantara, Peter Teal incubated company. They've already said,

we're going to use the proceeds to do whatever we think is best. It's kind of like just handing a pile of cash to smart people and seeing what becomes of it. I'm very intrigued. I'm going to call this a cell, and I'm reluctant to do that here because Figma to me does have some really good numbers. 78% of the Forbes 2000 use its services. Revenue is growing at 48%. Its gross margin is over 90%. Those are fantastic.

But what I can't do here is fully account for the risk that artificial intelligence presents to a platform like this as an investor. And so circling back to what we talked about with GPT5, it just created something out of just some prompts. And so is AI going to disrupt? this kind of a business, I'm simply not tech savvy enough to know for sure. And so that uncertainty with the AI risk, I'm just inclined to stay away. Let's go over to social media. We heard from Reddit this week and the stock has jumped. John, are you at a buy sell or hold with Reddit today?

I'm surprisingly in the buy camp right now, Travis. This is one that I didn't expect to be here, but I was just looking into this company here recently again. One of the interesting things is it's one of the few social media platforms out there right now where pricing on its advertisements is going up. So it has over 100 million people visiting its site every single day. That's already a huge base of users that very high potential. And if you look at its average revenue per visitor to the site, I would say that the platform is quite under monetized.

And so the demand for its ad slots are going up as evidenced by the higher pricing in the most recent quarter, that can sustain a strong growth rate for a long time and also strong profitability. So I'm calling ready to buy. I just don't know about the, I agree with you, it's undermonetized, but this strikes me. We saw it with Twitter. We saw it even with Pinterest. It's like I feel like solving the undermonetize intonization problem is harder than I think it is. And so I'm probably a sell here. Love the platform. what they're doing, but I don't know if they'll be able to solve that problem. This continues to be a key piece of data for a lot of the AI companies. If you look at the

source data, whether you're looking at Gemini or ChatchipT, it always comes from Reddit. So it seems like there is sort of a sustainable business there. But I agree. This is a hard one. Next up, we are going to get an idea what stocks Lou and John have on their radar. 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. 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, allowing its raw agility to shine through. It combines a dynamic sporting

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on your radar this week? Yeah, on my Radar is a company called Universal Display, ticker symbol, O-L-E-D. This company is really high up on my watch list right now. It holds a ton of patents in the OLED display space. It has, so that gives it somewhat of a competitive moat. It has very strong profit margins because it does kind of have a monopoly on this technology. Right now, what makes it interesting is that it's developing the next generation of OLED products. That should make everything better looking, more energy efficient. And the device space is somewhat cyclical, but eventually there should be a major upgrade cycle. That should benefit Universal Display's business and consequently, OLED stock. I'm not sure when

that's going to happen, though, so investors do need to be patient here. But here's the thing, it's a mid-sized company, and it has a great balance sheet with over 500 million in cash, doesn't have any debt and it does pay a modest dividend. So there's plenty of reason that you can be patient with this one. And John, what does O-L-E-D stand for? Organic light-emitting diode. Dan, what do you think about universal display? Okay, so John, quick question for you.

Does this company actually make anything or are they really just a patent holding company? Yeah, so they're basically licensing the technology and selling the supplies needed to make the stuff. Okay. Interesting. Thank you. Lou, what's on your radar this week? So I'm looking at a company called Montrose Environmental, ticker M-E-G. So this is a roll-up of small, local, environmental cleanup and monitoring companies. Stock is down 20% over the past year, in part due to some company-specific operational issues. And in part, look, the political climate right now, guys, it's not perceived to be like more stringent towards environmental regulations, right? But here's the deal. The company reported this week, a big top and bottom line beat. They said full year guidance at a range well above the consensus estimate. They have a ton of patents here,

including patents, to take microplastics out of water, so they have a lot of ways to win. And honestly, a national company, instead of Monpa companies, when you're dealing with big national corporations that have environmental monitoring needs all over the country, I think there's a real appeal there. Sub-billion dollars, got to get it right, but I think this could be a big winner and a growth opportunity. Dan, what do you think? I mean, you made a good point in there, Lou. Environmental regulations aren't exactly on the upswing these days. It seems like we're about to go weapons free on water. So do you really think in the next five years this is going to return on anyone's investment? So, Dan, let me give you the other side of that. Kind of the stripping away and kind of the

federal government being active in trying to set environmental regulations actually could remove a lot of the uncertainty of every little small town trying to set their own hurdles. So it actually could speed the process, maybe not in ways that environmentalists want. But if anything, it could work out in their favor. All right, Dan, which one is going on your watch list? You know, as much as I think that environmental stuff is important and a good investment in the future, I just don't know about the next few years. So we're going to go OLED, baby. Oh, yeah. For Lou Whiteman, John Quost, Dan Boyd behind the glass and the entire Motley Fool team. I'm Travis Hoyum. Thank you for listening to Motley Fool Money. We'll see you tomorrow.