Motley Fool Money - Expectations Over Results

Episode Date: November 22, 2024

The market yawned at Nvidia’s 94% growth and cheered as Williams-Sonoma posted year-over-year declines. It’s all about expectations.  (00:55) Jason Moser and Emily Flippen discuss: - How Walmart is thriving while Target struggles with “decelerating discretionary demand.” - Market expectations affecting the reactions to Nvidia’s strong quarter and Williams-Sonoma’s seemingly weak one.  - Snowflake’s strong report and what its new deal with Anthropic means . (19:03) Adobe CFO Dan Durn walks through how the leading software company for creatives is approaching AI tooling and monetization. (34:35) Emily and Jason break down two stocks on their radar: Tesla and C3Ai. Get a two week free trial of 1Password at www.1password.com/MOTLEYFOOL Visit our sponsor at www.landroverusa.com Stocks discussed: TGT, WMT, WSM, NVDA, SNOW, PANW, ADBE, TSLA, AI. Host: Dylan Lewis Guests: Jason Moser, Emily Flippen, Dan Durn Engineers: Rick Engdahl Learn more about your ad choices. Visit megaphone.fm/adchoices

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It's the most wonderful time of the year, unless you're target. This week's Motleyful Money Radio Show starts now. That's why they call it money. The full global headquarters. This is Motley Fool Money Radio Show. I'm Dylan Lewis. Joining me over the Airwaves, Motley Fool's senior analyst Jason Moser and Emily Flippen. Fools, great to have you both here.

Hey, hey. This week we've got the rundown on how one of the leaders in AI is prioritizing projects, all eyes on Nvidia's earnings and a look at retail, and that is where we are going to pick things up. Red in the chart this week for Big Red, Jason, shares of Target down 20% after the company reported third quarter results. What did you see? Well, that was a big move for sure, particularly for a company like Target, obviously a large retailer in the space. But it's challenging. I mean, it's challenging time for consumers and clearly a challenging time for some retailers. We've certainly seen in regard to Target. We saw, what, a 2% decline,

an average ticket there. So people are going to the store, but they are spending less. And for me, I mean, I mean, that really kind of goes back to something Brian Cornell was talking about in a call there where consumers just continue to spend very cautiously, most notably in discretionary categories. And that's a problem for Target, because if you think about Target, I mean, we compare something like a Target to a Walmart. They're very similar, but they are a little bit different, right? And I think Target doesn't necessarily benefit from the grocery side of things like a Walmart would. And so when we hear about headwinds in discretionary categories, that's going to be a really big problem for Target. And the other thing that they really suffered from, you remember,

We've been talking about the dock worker strike over the last several months. That was short-lived, right? But it was something that actually could have gone on longer than it really did. The thing is, Target prepared for that by bringing a lot of inventory in, right? They really kind of stock their shelves in order to make sure they didn't witness shortages. Ultimately, what that ended up in was just a little bit of bloke there, right? In Brian Cornell, again, he referred to this sort of idea. that they were a little bit fuller than usual, and they just don't operate so well when they're

as full as they are, or when they have as much inventory as they do. And I think that ultimately played out in the numbers. But it also, I mean, listen, Target is, they're dealing with some serious competition here in this big retail space. You're talking about companies like Walmart, Costco and whatnot, and certainly targets feeling the pressure. Let's talk about that competitive landscape a little bit, because if you were to focus just on Target, you would have a very specific view of the consumer and what's going on here. But Emily, over at Walmart, we don't necessarily see it playing out the same way. No, in fact, you'd wonder if these two companies were operating in the same environment where Target stumbled. Walmart

is just running straight ahead. And you'll notice that traffic growth is only marginally better for Walmart. I think they had around 3% traffic growth versus 2% traffic growth for Target in the quarter. But stains or sales growth is really where Walmart is starting to shine. Their same store sales growth in the quarter was above 5%. If you compare that to Target, Target was under half a percent. So incredible business there for Walmart. But I do think that just these numbers alone don't really paint the right story. Now, obviously, Walmart is attracting higher earners who are a little bit more cost conscious.

Inflation is obviously on everybody's minds. People are still feeling the pain. And Walmart noted that households making six figures or above who are responsible for three quarters of their customer gains, over the course of the past quarter. So you can see how that would theoretically steal from customers that would otherwise go to Target. But I'm still not convinced that Target

has some sort of systematic issue here. This is what we always see between these two businesses. When people feel cash strapped, they trade down to Walmart. And Walmart gets the benefit of having a third-party e-commerce site, of having health care, right? The sales of DLP1 drugs, for instance, were beneficial to Walmarts in a way they weren't for Target, all of these other businesses that make them look good

when the environment and the economy is a bit tighter versus Target has a lot of discretionary items. That's typically their spend in merchandising for Target has historically been strong. So the fact that Target tends to do better in expansionary environments, I think should not be lost on our listeners because this quarter, in my opinion, is not writing off Target for dead. They do have their job cut out for them, but I do think the holiday sales could be surprisingly where they shine. You're right. It is officially Mariah Carey season. We are talking holiday sales. It is holiday season. And that's top of mind for a lot of people.

When you look at the results together, Jason, what do you think they're saying about the expectations we should have for retail as we head into that all-important Q-4? Well, I mean, certainly the holiday season is a big time of year for everyone. I mean, I think when you look at something like a Walmart versus a target, I mean, one of the things that comes to mind here is just the advantage of scale. And when you think about Walmart, I mean, I mean, Walmart's basically 10 times the market cap of Target. And it's basically seven times the sales of Target. And so, I mean, scale really does matter when it comes to this line of work. And obviously, we see Walmart benefit from grocery. But again, I mean, I think the common theme, the thread, right, regardless of the companies, they're all talking about this cautious consumer, right?

the consumer just continues to spend very, very cautiously, and even more so, consumers are looking across platforms to find deals. So they'll go to a Walmart and then they'll shop around, right, to a Walmart or to a Target or to an Amazon or wherever else it may be in order to see if they can find a good deal. So I do think we will see that cautious consumer theme continue to play out here over the course of the holiday season. This is something that's not only coming for the big box companies. We are seeing it show up. Retailers across the industry, moving us up market just a little bit.

We have fresh earnings from William Sonoma this week. And Emily, if you showed me the results and then asked me how I thought the market would react to these results, I would not have guessed that shares would be up 20% after the report. Yeah, absolutely incredible reaction to William Sonoma's quarter. And I mean, good luck trying to reconcile the narrative we just painted with Walmart and Target with the share price results for business like William Sonoma. But I will just quickly mention, while William Sonoma, for anybody who's unaware, owns a host of brands that tend to be a bit more high end. So it doesn't really make sense. Then wire shares up 20 plus percent.

If we're all not purchasing things and going to Walmart instead, it's all in the expectations. I mean, expectations for William Sonoma have been low, persistently low for a while now. this quarter saw comps only declined 3%. Now, I know what you're thinking. Three percent decline in comps. That sounds awful. There's been a 10% contraction in a revenue, total revenue over the course of the past year. But all of this represents a slowdown in the negative growth, which I guess is a good thing for investors. And to give credit where credits do, you know, obviously I'm taking some shots here at William Sonoma. They are still positive in terms of their cash flow, and they're using that cash flow to buy back shares. Their bottom line tends to grow faster than their top. So actually

earnings per share did grow in the quarter. So it's not like this business is completely going into nothing. They also pay a pretty nice, pretty well-covered dividend. But you still have to ask yourself, man, what is the future for Westel? What is the future for William Sonoma? Where is the place in this world? Because if the, I guess, concerning purchasing patterns of Americans continue, I think William Sonoma might have a target in front of them, literally, in terms of their next quarter. For the shareholder perspective, a little bit less the consumer perspective, there was a period where William Sonoma, I think based on those expectations, was down below 10 times earnings. It was very cheap on a historic basis. We are now looking at a company that is well above 20 times earning, much more in the zone that it tends to trade in.

And yet, we are not seeing top line. We are seeing that negative growth rate slowing, Emily. Is it a bit of a watchout below type moment for William Sonoma? I should really knock on wood when I say this. I'm inclined to say yes. And interestingly enough, it's not because I actually think the business is doomed. I actually think they have a fair amount of opportunity in front of them. They play it correctly.

But I'm concerned about their investments in e-commerce. These aren't brands that have naturally transitioned to an e-commerce model. And the fact that we're sitting here, it's almost 2025. Talking about their need to move to an omni-channel approach is that. absolutely mind-boggling to me because this business, in my opinion, is behind on the infrastructure and digital investments they needed to have made to this point. And I think if they're going to keep these brands competitive, that's going to require a fair amount of CAPEX in front of them, that it's possible the market's not pricing in. And interestingly enough, that's my main

concern to them. How are they going to meet the consumers where they are today? Because I don't know they have so far. All right. Coming up after the break, we've got tech earnings, including the one we've all been waiting for in VINVIDIA. Stay right here. You're listening to Motleyful 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 Full Money. I'm Dylan Lewis, here on air with Emily Flippen and Jason Moser. We are right back on the earnings beat.

And we've gotten used to some huge moves, some huge market reactions from Nvidia's results over the last year. Guys, I'm amazed to say it, but this wasn't even the lead story for us this week. Jason, are we now in Nvidia Normal when it comes to some of these earnings reports? I like that perspective there, Nvidia Normal, right? It does seem like we've kind of at least caught up. I mean, this is a $3.5 trillion company at this point. I mean, these things just don't keep growing forever. Now, with that said, I mean,

Invidia just remains a company that's in a terrific position, right? Tech is in high demand. Invita products are in high demand, and supply just isn't able to keep up, right? So when those are the case, I mean, hey, listen, economics work out very well for you. But, I mean, the numbers were very encouraging, right? Revenue of $35.1 billion.

It was up 17% sequentially, up 94% from a year ago. And when we think of Nvidia, clearly we're thinking of AI, first and foremost. And I think in regard to AI, the primary focus there is on data center. And data center revenue of $30.8 billion. It was up 17% from a quarter ago, but up 112% from a year ago. And cloud service providers remain such a massive. massive part of that performance. They said I think the cloud service providers

were approximately half of data center sales with that revenue up more than two times from a year ago. Now, I mean, it's not just data center. I mean, obviously, Nvidia does other things very well. Gaming revenue was up 15% from a year ago. We saw professional visualization that was up 17% from a year ago. and then even automotive revenue performed very well.

It was up 72% from a year ago. I think it's sort of status quo for this business, right? They just keep doing what we all expect them to do. The Blackwell technology continues to do very well. Demand, they said in the call, I quote, that demand is staggering. And the hopper demand, I think, is going to be what drives this business

over the course of the next year, at least of the next several quarters. but ultimately they're guiding forth $37.5 billion in revenue for this coming quarter, that would represent growth of about 70% from a year ago. So again, just a company that continues to present just amazing growth numbers. You know, I always can't help but think about the amount of pressure that Jensen Huang must be under when running Nvidia. And it's actually almost becoming a concern for me as an investor when I see quarter after quarter after

quarter of consistent marginal earnings beats from a business, especially of this size, because the pressure to beat earnings now, moving forward for Nvidia, and all of the world's eyes on them, as what has now become the operating system of the world, that is a risk factor that I actually think we're starting to need to incorporate into our expectations moving forward. These are the problems that you have when you're growing only 70%, only 94%, you're over there. Well, I feel like, Dill, I mean, if somebody's going to say like, hey, Jason, what would you advise the CEO of Nvidia to do? I mean, listen, I can't give them much advice, but you know what? I think I would start getting in the business of sandbagging,

set expectations even lower because, man, I'll tell you, the world is expecting the world from this company. That's a free tip there, Jensen, courtesy of Jason Moser. Staying in the lane of tech, we have some fresh results from Snowflake this week, and Emily, shares up 30% after the report. It seemed like the market was pretty happy. what the company had. Granted, I do think similar to William Sonoma, although entirely dissimilar to Wyoming Sonoma and a billion other ways, the expectations for Snowflake were a bit lower heading into this earnings report. So when they came out with nearly 30% sales growth, and then remaining performance obligation growth of like 55%, that's effectively their backlog. So business

is accelerating. There was just so much to like in this quarter, especially because for so many different tech businesses as companies are spending on Nvidia and AI and such. The question is, how does Snowflake continue to grow its customer base? And they're doing a great job proving that they can continue. And I do think that Snowflake's platform is going to increasingly become table stakes for enterprises across the globe. They're proving that out, but I can't help.

I'm sorry, I have to say it, and not to be the pessimist in the room, but the stock-based compensation here is out of control and it has not slowed down. This is a maturing company and they're still spending more. more than a third of their total revenue on stock-based compensation. It's patting their cash flow. If I see one more adjusted number out of this management team, my head just might explode. Jason, are you going to pile on or are you going to take the other side of that one? I'm not going to take the other side. I think she makes a great point. I think it's something worth keeping an eye on for all investors. I mean, another company that stands out to me.

I thought about this because I was putting together some notes recently on Cloudflare. Cloudflare, just performance has been tremendous here over the last several years, business-wise, but when you look at the stock-based compensation, I mean, that has represented the lion's share of operating cash flow. And if you even look over the last 12 months, I mean, it really has been most of operating cash flow. Now, it's worth noting, that is starting to pivot, right? We're starting to see that change. And I think for investors, that's just something to keep an eye on. It's one thing for early startups for businesses that are just getting involved or getting established. We expect that. But as they mature, you definitely want to see those numbers pivot. And that SBC, you want to

see the number come down. If you're going to stick with the optimistic tone a little bit, there is an AI horn to toot for Snowflake. In addition to earnings, they announced a partnership with Anthropic, was the owner of the Claude Large Language model. They'll be bringing those models to Snowflake on AWS. Emily, this is LLMs in the cloud, very in the weeds. Give me a hand. What does the average investor need to know with the development like this? Oh, I love this. This question is a huge question. I think we're kind of out of precipice right now, which is, are we going to go with one single giant LLM that does everything or lots of tailored LLMs that do lots of little things? And I think Snowflake is very much in the second group of that.

And I love seeing this partnership because it shouldn't be, at least for the time being, too capital intensive for this company. So it's a low upfront cost with a high opportunity to deepen engagement with their customers and generate revenue from the partnership alone. So I think it's smart. I think we're headed to the latter. But, I mean, we're not writing off the former. It's still possible.

And if that were to happen, Snowflake would need to iterate. All right, wrapping us up on the earnings beat. We also had results from cybersecurity firm Palo Alto networks this week. A bit of a head fake as the market reacted to the results we saw. but looked like a pretty downbeat reaction only to recover and wind up up for the week. Is that encouragement from the company's guidance, some processing on the earning side? What were you seeing, Emily? Well, you could tell that management was disappointed with the market's response

because they've been in the process of kind of transforming their business, trying to get away from being just a firewall provider to truly being this platform. And they believed this quarter with 14% sales growth was even faster services growth. So lots of software, annualized recurring revenue growth here that is great from, their core customers, they feel like this was a testament to the success of an initiative they launched earlier this year that resulted in a lack of fanfare from the market. I still think it's maybe too early to be taking the victory lap platformization is kind of the standard. They're not the first ones to the game despite management's insistence that everybody is copying them and they were the

first. I'm pretty sure a few companies beat just to the punch there. But I do think this is great to see that they are growing ARR per customer and acquiring larger customers at an increasingly expedited pace, all of those directions pointing in the right way. Plus, a rising tide lifts all boats in the cybersecurity industry. Is platformization a new buzzword we need to be watching out for in company earnings calls? Is this one we need to have on our radar? Well, it's one that Palo Alto, certainly watching out for. They said it was use, what, 50 times more frequently this year versus last? I'm like, why are you collecting that data? What are you doing? You got to have it handy just in case. All right, Emily, Jason, we're going to see you guys a little bit later in the show. Up next,

Invidia, not the only company grabbing AI headlines. Adobe is at the forefront of how a lot of end users interact with technology. We hear from their CFO, Dan Dern, about the company's approach to developing and monetizing AI. Stay right here. You're listening to a mountainful 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,

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With AI front and center in 2024, we wanted to hear from the leaders in the space about how they're building tools and the frameworks they're using for allocating resources to the technology. This week, Adobe CFO, Dan Dern, join me to talk through the digital shift the company continues to see, Adobe's creator-friendly approach to AI and how we want shareholders to grade the company's efforts. I'm excited to be talking with you because Adobe is probably one of the companies that is most at the forefront of so many major trends right now that the market is focused on. Heavy digital presence.

You guys are in the AI conversation and really leading what's going on in that space as well. before we get too deep in anything, I'm just curious. What is the atmosphere like at the company right now? It's a great time to be at the company. I think the best place to start is maybe explain a little bit about who we are. We're the creative digital content company with our creative cloud business. We're the digital document and digital workflow business with our document cloud business. And we're the digital interface between a company and its customers with our digital experience business. And against the backdrop of this pivot we see happening in the global economy, where global economy is moving from being global economic growth being driven by oil and gas for the better part of a century to increasingly being driven by digital content and data. I call it digitalization of the global economy against the backdrop of digital content and data fueling global economic growth. Any one of those businesses that we have would be a great company.

Having all three of those businesses under one roof, I think, makes us a special company. And I think there's a strong sense of the moment inside of the company. There's a vibrancy. There's an energy. It's palpable. You can feel it. So it's a great time to be at the company at this moment. I think one of the main things that people are focused on with digitalization and tech right now is artificial intelligence.

So why don't we talk a little bit about that? I think there are some folks who look at your company and say Adobe is probably one of the company's most poised to benefit from the proliferation of AI and Gen. There are also some folks who think, oh, this is a little bit of a threat to a business that has had really clear ownership of a space for a long time. How are you guys approaching that market? Generative AI is this incredible opportunity that we have in front of us. When I think about the mission of who we are as a company, we're going to change the world through digital experiences. And when I think about AI and generative AI, it only expands the three massive opportunities that the company is exposed to. We're going to unleash creativity for all.

We're going to accelerate document productivity. And we're going to power digital businesses. AI only expands those three massive opportunities. And I can't think of a better company to be at that leverages this technology again to fundamentally change how people live their lives and also how companies compete in their markets. It's a great time to be at Adobe. You were talking about expanding there. And I've heard the thought that things like generative AI could take a lot of the creative tools that you guys make available.

and make them more accessible to people who have less technical skills. I mean, thinking about this conversation that we're having right now, our engineer will be editing this in software that I'm not well versed in, but there are probably a lot of people who have creative ambition, but maybe don't have the technical skill set yet. Is that a pathway that you see for new customers or maybe meeting some markets that you're not currently meeting? Absolutely.

That's going to be a byproduct of the technology we see being increasingly adopted out in the market. But I think it's even broader than that. But let's start with that democratization of access to the creativity process. I think we're in the golden era of creativity. Creativity is no longer just a process that's accessible to the creative pros in this world. These technologies that we're increasingly adopting are lowering the barrier to entry for a broad cross-section of people to now be safe. successful in the creative process. So there's a democratization of creativity that is underway.

When I think about the creative process, up till now, the most important and valuable skill or the commodity that a creative professional has is their time. What is the surface area of ideation they can explore before they find that spark of magic that they take further in the creative process? and really bring to life what is in their mind's eye into the digital world. These technologies are now going to just make that ideation, that exploration, far more expansive. And creativity is a uniquely human characteristic. Ingenuity, uniquely human characteristic.

Generative AI isn't going to replace human ingenuity and creativity. it's going to augment it, it's going to amplify it, it's going to make the creative people, the creative participants even more productive than they've been in the past. And they're going to find that spark of imagination faster and in higher quality ways and then have more time to bring it to life in the digital world. And so I get really excited about the pervasiveness of these technologies and the way they have to potentially amplify and augment that uniquely human characteristic called creativity. When we hit these inflection points, there tends to be a tension between being first in this

market that has a lot of green space and wanting to make sure that you are being mindful of the legal, ethical considerations, particularly with something like AI generated content. How are you guys balancing that with what you develop and roll out to users as products or as features or tools within your software? Yeah, so this is where it's really great to be at a company like Adobe. We take our responsibility to the community very, very seriously, and we've got a differentiated approach to how we're bringing these technologies to life. We're going to do it in a responsible, commercially safe way. So what do I mean by that? If we take a look at the AI stack, there's three elements to the AI stack. There's data, there's models, and then there's the interfaces that our customers know and love that defines their day-to-day workflows. And we're a participant and a leader in each of those three elements. From a data standpoint, we don't train on our customers' data. We only train on data that we have our, IP rights to and we compensate the contributors of that data to our model training.

That's a very differentiated approach versus what others are doing. When you think about the models, we've got decades of experience that give us real differentiation in the market when you talk about things like imaging, design, vector, video. And so where we can differentiate ourselves based on those decades of experience, We're going to produce first-class, world-class models. But again, we're going to do it in a responsible way. We're co-founder of initiative called Content Authenticity, where we've created the baseline open-source technology around content credentials. Our tools automatically embed these content credentials into the content that's produced.

It's like a digital nutrition label. so those that consume the content can see where it came from and can trust the veracity of the content. So being a leader in building models and bringing them to life in a commercially responsible way, I think is really important. And so when we think about IP protection, when we think about content authenticity, when we think about digital nutrition labels, And we think about natively and deeply embedding these technologies, again, into the surfaces that our customers know and love and defines their day-to-day work product. They're more likely to adopt these technologies knowing that they're safe and respectful of the ecosystem. We don't scrape data. We don't train on our customers' data.

We don't infringe on other people's IP, and we indemnify our customers. for the safe use of the models. Our approach is very differentiated in the market. And again, it's great to be at Adobe and know that you've got a very ethical, responsible market participant at a time of a major inflection like this. One of the things I really wanted to get your take on

was there's this question right now out in the market, I think about a lot of AI spend, where we know at some point we'll need to see return materialize, both for end customers and for companies that are heavily investing in AI applications. How are you guys thinking about the amount of leash that you want to give projects internally, knowing that there will be a pay the piper type moment for some of this stuff? Yeah, so here's the, and I'll talk out of both sides of my mouth on this for a second, because I sit in a unique seat inside of a company where I have to have that spark of imagination

to work at a great company like Adobe that is capable of innovating and doing great things, but you've got to overlay discipline in the process. And the natural tension and balance between those two concepts is really where the magic comes to life within technology companies. Innovation is our lifeblood. We need innovation. The industry defining categories, the industry defining platforms, the products, our customers know and love and the feature sets, the rich feature sets that make them successful,

is really why our customers keep coming back to the Adobe ecosystem. The way in which we do that, the discipline we apply, is really, really important. What I'll often say in an environment like this, where there are so many interesting things to apply our attention and resources to. A company like Adobe, there isn't anything we can't do. We've got the customer relationships, the product portfolio, the industry defining platforms and products, the geographic distribution and footprint, the financial performance. I don't say this arrogantly, but there isn't anything we can't do given who we are as a company

except one thing, and that's everything. So let's prioritize. Let's think very, very clearly about what is going to make our customers successful. Let's narrow the aperture around those must-win initiatives, and then let's sharpen the execution crispness around them. What happens in a moment like this is velocity of innovation will go up and execution crispness will go up. And this is what you see from Adobe right now. I think our innovation engine, it's second to none, but it's moving with the velocity that's probably faster than at any point in the company's history. I really love what I see in terms of the velocity, the innovation, and the execution out of the company.

Really proud of the hard work and what this team is doing. companies that will get distracted by, quote, shiny objects in this environment try to do too much. And then you see the execution crispness atrophy. And right at a moment when a company should be fast, they become slow. This is the real danger in an environment like this. So while the spark of imagination is lit and what the possibilities, you know, entail, It is an amazing time to be at Adobe, but we're going to be disciplined. We're going to have a very clear sense of prioritization, and we're going to invest and execute against the most meaningful opportunities and make sure we have a velocity with the way in which we execute right now.

I guess on that, you're talking to an audience here at The Fool who follows the company, and I know there are a lot of people who will listen to this that own the stock. what's the rubric that you'd like to be graded on when it comes to the development and the commercialization of AI? You may have touched on some of these things and some of your answers already, but I'm curious, are there any kind of specific things you think this is really our target here and this is the way we want shareholders to be looking at our plans in this space? Well, ultimately, I think it comes down to having a customer-centric approach and making your customers successful. If you bring this innovation to life in a customer-centric way and make them successful, you see the simultaneous benefits of revenue growth, bottom-line profitability, and the cash flow that's derived from that equation.

And so ultimately, I'd like to see that customer success manifest itself in the top-line growth and bottom line profitability of the company. That's the ultimate proof point that we've gotten it right with our customers, all at the same time doing it in a commercially safe way and a responsible way that's respectful of the community of creators out there that we serve and the employees who have a very strong ethical underpinning, being responsible. while driving customer success is a really powerful combination. Listeners, if you've got someone we should interview for the show, let us know. Shoot us a note at Radioat Fool.com.

Coming up next, Emily Flippin and Jason Moser are back with some stocks on their radar. Stay right here. You're listening to Motley Fool money. As always, people on the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for or against. There's no personal anything based solely on what you hear. All personal finance content follows the monthly. Motley Fool's editorial standards and is not approved by advertisers.

TMF only picks products. It personally recommend a friends like you. And we are back. I am Dylan Lewis, joined again by Emily Flippen and Jason Moser. As we tape, we are just a few short days before Thanksgiving. And so before we get over to our usual radar stock segment, in observance of the holiday, I need to ask, what are your radar plates for Thanksgiving dinner? Jason, I know you are a foodie.

You are Mr. McCormick. What are you looking forward to eating? Well, listen. I'm going to spatchcock the turkey on the treger. We're going to have some good smoked turkey there. Listeners know that I love peanut butter stuffing, but the problem with spatchcock turkeys, you can't really do that. Another tip, fried okra. I know that seems like a southern summer dish, but it works very well for Thanksgiving. I'm excited. That sounds pretty good. It might have to stop by your house. Emily, what are you looking forward to? Well, there's one dish that I love so much that I actually don't allow myself to make it any other point of the year, because I have no self-control.

roll. And it is like this cranberry dip that you pour over cream cheese and use crackers to dip. It's a side dish. But it is incredible. I'm sure there's a million recipes out there for it, but I can only have it this once. So that's the thing I'm looking for to the most. Hey, you have to celebrate the holiday in traditional form, right? Whatever that is for you, you got to find it and you got to make space for it. Exactly. All right, let's get over to stocks on our radar. Our man behind the glass, Rick Engdahl, is going to hit you with the question. Jason, you're up first. What are you looking at this week? Well, let me just C3, a company we've talked about before on this show, Ticker is AI. It was a heck of a week for the stock. I mean,

it's up around 30% on news that they have expanded their partnership with Microsoft in order to accelerate enterprise AI adoption. As a reminder, C3 AI, it's an enterprise AI software company. They ultimately provide a platform that enables their customers to design, develop, and operate enterprise AI applications at scale. Now, while there are still some questions I think in regard to how AI is ultimately going to impact us at the consumer level. It does feel like there are a lot of opportunities there on the enterprise side that really does play right into C3's wheelhouse. It's worth knowing this is not new news in the sense that these companies have been working together for a while, but it's encouraging to see that they've expanded their relationship.

It does really speak to the value proposition that C3 holds in that value chain. So I think it could Bo-Welf for its future. Rick, a question or a comment about C3 AI? C-3-A-I, ticker-simble AI. They make AI for companies who need AI. Is this a real company? This is a little on the nose for me. I was expecting a C-3PO question, Rick.

I'm going to defer to answer your question later. Seems legit, Rick. I don't know. That was a total non-answer. Emily, what's on your radar this week? Tesla's actually on my radar this week, and I've been spinning a lot of times, spinning my wheels about the impact

that President-elect Trump's policies may have. on the company on the good hand. They're talking about reducing regulations for the cyber cab. On the other side, I think removing the consumer tax credit may hurt EV adoption, but even more concerningly, over a quarter of Tesla's operating profit is generated from the sale of tax credits to other vehicle manufacturers. And I have this lingering fear that removing the consumer tax credit may incentivize the government and states to remove their other tax credits, which actually maybe could hurt Tesla.

I'm probably throwing this out of proportion, but it's on my radar. Rick, a question or a comment about Tesla? Any concern that Elon's overcommitted? I mean, he's got a lot going on, right? I think the more overcommitted, the better. He just runs a few companies and does a couple different things, right? Rick, which one's going on your watch list this week? What was the first one again?

3D something, yeah. C3P. Yeah, I'll go with that. It's safe bet. I think it's where the market is these days. Emily Flippin, Jason Moser. Thank you for coming and bringing your radar stocks. That's going to do it for this week's a monthly full money radio show.

Show's mixed by Rick Engahl. I'm Dylan Lewis. Thanks for listening. We'll see next time.