Motley Fool Money - Is the AI Bubble Popping?

Episode Date: October 23, 2026

Is the AI boom running out of steam, or is the market simply taking a breather? Travis Hoium, Lou Whiteman, and Jason Hall discuss growing concerns over AI spending, SpaceX's ambitious expansion plans, and signs of weakness in the American consumer. The team also makes bold predictions about the future of AI, Apple, Rocket Lab, and Netflix before highlighting two stocks on their radar. Travis Hoium, Lou Whiteman, and Jason Hall discuss: - AI Bubble Fears - SpaceX's Spending Ambitions - Consumer Spending Weakness - Over/Under - Netflix's Growth Challenges - Stocks on our Radar Companies discussed: Meta Platforms (META), SpaceX (SPCX), Alphabet (GOOGL), Microsoft (MSFT), Amazon (AMZN), Tesla (TSLA), General Motors (GM), Deckers Outdoor (DECK), Nike (NKE), TJX Companies (TJX), Meritage Homes (MTH), Rocket Lab (RKLB), Apple (AAPL), Netflix (NFLX), Intuitive Surgical (ISRG), MSCI (MSCI). Host: Travis Hoium Guests: Lou Whiteman, Jason Hall 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

He's the AI bubble popping. Molly Fool Hidden Gems Investing starts now. Welcome to Molly Fool in Gems Investing. I'm Travis Hoym, joined today by Lou Whiteman and Jason Hall. Guys, we've got to start with the big topic of the week. We had something of like a mini meltdown yesterday with tech stocks, with AI-related stocks. Jason, are we starting to ask questions about is there actually going to be return on this investment? Is this just the market taking a breather?

How do you interpret this when you have one of these days where it seems like there's a lot of things that are down and a lot of conflicting reactions from the market and its participants? I think most investors have probably been asking for the past three years. Is there going to be like a real return on investment? But a lot of us of whether it's indexing or just by owning the biggest companies already have been tied to AI, whether we necessarily wanted to be or not. I think Muse is actually like a perfect case study of like winning, leading to losing, but then eventually maybe winning again. Explain that,

because I think this is really interesting that this was a hit product, but it may actually mean that Meta's financials get worse before they get better. Yeah, and especially for something like Muse, because one of the things we've heard a lot about and we talk a lot about, and it's actually one of the things that makes like

the Neo Clouds, compelling is because like they've built infrastructure for like this high intensive compute to make it work better and more efficient. A product like Mews is an AI agent. Every instance has to have a virtual machine like a computer with a CPU and memory and storage to be able to do the stuff for us that a really good AI agent should be able to do. So like you give it access to your email, you give it access to calendar, other things you wanted to do. It has to be a computer to do that. Right. And that's just higher intensity computing. And by the way, meta is not making a dime off of users at all.

So as the product becomes more popular, well, you can pay for it. But that's true. They do like for the highest end users, they do have some tiers, right? But the vast majority of people aren't touching that. Right. What do we know, 10 million downloads, like so fast to reach 10 million downloads.

I think we're making too big of a deal about that, you know, saying it was so much faster than Open AI was and so much faster than Claude was. But yeah, those were like years ago when people didn't even know what those things did, we're at the point three years later where this is kind of more mainstream. You've got two and a half million active users. If they 10x that number over the next year and they could, and they're still not really monetizing it, it's going to take a heck of a lot of like all this CAPEX money that they're spending for infrastructure

and then OPEX costs to run that infrastructure before the monetization model really, really kicks in. Yeah, and we're not going to know for quite a while. it's going to be a little bit like reality labs. Okay, great story. We're going to have to invest a ton of money. You're not going to know if it actually pays off. You know, until maybe 2030, maybe even 2035, Lou. It is interesting to me that so much of the discussion today was about,

hey, is there really an ROI on this investment? It seems like a question we should have been asking ourselves quite a while ago. Well, that's a funny thing about the markets. We have been asking that questions. It's so often it's not something new or novel. that moves to the stock market. I mean, sometimes it is. Like, say, a pandemic comes out of nowhere,

but a lot of times it's just things that we know suddenly matter to the collective, I don't know, you know, the investor base. I would know you said a day, but we're heading, we're not closed Friday as we tape yet, but we're heading to for the NASDAQ down over 5% in two weeks. So this is more than just, you know, a few bad days. This is turning into a trend. The one thing I'd say is we kind of just had our fun with meta.

I think we need to wait because with all respect to meta and with all respect to even SpaceX and what they're doing with the neocloud, we've only heard from the kids table. We haven't heard from the adult table yet. And you're talking about alphabet, Microsoft. Amazon, even Microsoft, yes. I think that we will get a better read on sentiment on how this is going next week when the adults report. There's a lot of room for the alphabets of the world. and all these guys to kind of both recommit to AI to say AI, we see the long-term ROI,

but also we don't need to just boost our CAP-X to the roof. We're steady as she goes. It's working, guys. Just give us time. I don't know if it'll be enough to kind of say stocks go higher, but it could calm the room. Now, we could have a disaster next week. I can't predict the future. We could have Alphabet going, oh, my God, we have to spend this, that, and the

other. But look, what do you think would be a positive reaction or get a positive reaction from the market? And what would get a negative? Like if Alphabet says we're increasing our spending, are we at the point where that's going to get a negative reaction or is it the opposite? I think, I think a huge increase in spending is going to get a negative reaction. I think the best case scenario for this week for next week is a calming in the markets because, look, some of these companies, they are now spending all of their cash flow. But Alphabet really isn't topsy terms. yet. They are, you know, they are pretty close to just spending the cash that's coming in and augmenting it with some pretty good bond deals. They are fine right now. If they say, again,

steady as she goes, we don't have to like boost things to the moon. We don't have to, I mean, both SpaceX and Meta talked about, yeah, we're borrowing more, baby. I don't care what it costs. Meta even came up with a new version of stock just to raise money, among other things. This is silly season for these companies. There is a real chance to kind of just get stability. We'll see if it happens. But I think there's at least a chance that this turns out to be a blip and not a just the beginning of the end, depending on the vibes from next week. Jason, I do want to touch on one of the companies that Lou mentioned, that is SpaceX.

Such an interesting position for SpaceX because they have had a ton of growth in their AI business. They're effectively a neocloud at this point, I think maybe the largest neocloud. But if you listen to that conference call, Elon Musk is talking about building potentially 20 gigawatts next year in 2027. Ballpark, we're talking about somewhere around $500 billion to a trillion. And he says that the payback is a year. So you're looking at potentially $500 billion to a trillion.

of new revenue, how do you interpret that? Because Musk has a history of sort of these audacious statements. But we're now talking about even if that isn't hit, and it's $250 billion in new revenue and spending, these numbers are getting astronomical. And it seems like at least for now, for a day, the market said, hey, awesome, this is great. I think the stock was up 10% the day after earnings came out.

And then suddenly it dropped because the market's going, Wait, is this really good? Is this compute shortage going to last if we're going to spend a trillion dollars on Kappex next year just from one company? So the Musk comments are easy. So, you know, you kind of mostly answer the question yourself, how many Tesla semis are in operation? And we've been hearing about that for a decade.

The new roadster, we've been hearing about that for more than a decade. The cars that are appreciating assets. Right, yeah, exactly. Yeah, right. So we're, we know musks. And, you know, I don't think he exaggerates. I think he sets wildly ambitious and unrealistic goals with intent and that intent. Because even when the company falls short of its goals, it's often still wildly disruptive what it does and still a first mover in a lot of cases.

And there have been failures, too. We've talked about the solar business and how that just hasn't panned out how it was expected to. but I think the directionality of Musk's comments are probably the most important thing and that this is a very real priority. We know, let's look beyond SpaceX at Tesla with the Optimus Robotics business and so many like real world things

that I think this is all tied together, right? I think that's the real core. And here's the big thing. Even if SpaceX somehow managed to drop 500 billion in Kappex next year, And let's assume that that's $500 billion combined between Tesla and SpaceX, because they're going to be, a year from now, they're going to be one company. I'm convinced that that's going to happen. Is there going to be enough investment in the grid to power them?

Well, they may just do it themselves. They said they're going to be effectively building gas turbines or some of the critical components themselves. I think so there's probably a piece of that. Yeah. Yeah, they're going to stay in that business up in less than a year too, huh? Right. Right. Well, wait.

The directionality. Go ahead, Lou. But there is something interesting here, though, I think, of these comments. And it feels like, because, again, it's so hard to nail down timelines with Elon sometimes. But there are two, we kind of talked about this during the way, but there are two very different visions of the future. And someone's going to be wrong here. Elon's talking about how the price of compute is just going to keep going up and up and up. So that SpaceX is intentionally signing short-term deals to take advantage of the pricing power that they expect to have six months a year down the line.

If you look at Amazon, Amazon is saying, we want to extend these deals out as long as we can. We have meta still saying, like, look, if we build too much, we have excess capacity, we'll just lease it out because we think there's going to be a lot of excess capacity. We can wiggle. Somebody's wrong here. Either the price of compute goes up from here or it doesn't. SpaceX is making a big bet in one direction. Others are making another.

I'm fascinated by, I'm not smart enough to know who's right. I don't honestly think they do either. But it's really interesting to see one big company Zig while others are zagging. And we'll see how it works out. Yeah. If you want to know what's been going on in the market over the past week, this is the debate. This is the debate that the market is having with itself. Is who is right?

Is this a short-term profitability play? Is this something that we can invest in AI at the scale of trillions of dollars for many, many, many, many years to come. We're having that to pay with ourselves, so we'll see where things end up over the next couple of quarters. Final thought that I think people need to have in their heads about this.

Name a single disruptive technology ever that's remained inflationary for the long term. I mean, energy, maybe. No. But, no. Okay. Put me on the spot. I can't think of it off the top of my head.

But that's my point. There really aren't any. And I think betting, that this is going to be different is risky. Yeah, he's also predicted that some of these assets are going to be more valuable in the future in the past and that hasn't worked out either. So we'll see how things play out. When we come back, we're going to get to the state of the consumer.

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A limited number of VTFs are subject to a service fee of $100. See details of Fidelity.com slash commissions. Fidelity brokerage services LLC, member NYS EPSIPC. Welcome back to Miley Fool and Jems investing. We are early in earnings season, but a couple of companies caught my eye this week. Decker's outdoor essentially said that their sales are kind of stalling out, low single-digit growth for Hoka in particular, which has long been their big growth brand. GM's results were pretty meh.

Sales volume is declining. Some of those bigger vehicles which really drive their profitability, not selling nearly as well as they were a year ago. And home sales plunged to a low for this century, since some of these numbers were being recorded. Lou, is this a sign that consumers are weaker? Is there anything new here?

Did we kind of see this coming? It's very hard. to read micro and macro. And I would just caution against that. I mean, partially because I think we're seeing what we want to see. Yeah, I think that things are harder than they were. So when we see, we tend to clamp on to data points in individual earnings reports that kind of, you know, confirmation bias.

Yeah. I could paint a picture the other way that GM reported stable sales at a time when auto prices have never been higher and feel good enough about themselves to announce a massive buyback, even though their business is one of the most capital intensive on earth, that's not the sign of a bottom. You know, Decker's, you know, one company stalling, sure. But here, this is what I also know. Consumer retail sales grew by 4.9% in September.

So there is a micro macro thing going on here where individual brands are saying we are not so sure about our future. But for now, the consumer is holding up. I do think things are going, we're getting harder, not easier. If nothing else, I think the easy growth is gone for these companies. But that doesn't necessarily one-to-one equal that we are headed for a recession or a huge consumer slowdown.

Bottom line is, I think as investors in individual companies, we have to watch these things, but it's dangerous to read really like broad macro trends into anyone earning report. Jason, what do you think of what we've learned? in the past couple of weeks. So it's, I mean, I think we're seeing continuation of a trend that for some time, we've seen another discretionary consumer discretionary categories. The restaurant industry has taken it on the chin for multiple quarters at this point.

A lot of retailers are struggling. If you own any restaurant stocks, it's been a really tough, you know, year or two for a lot of those companies. Right, right. It really, it really has. And that's carried over to other categories too. talked about, you know, one shoe company. We've talked a lot about Nike on this show and the challenges that they've had.

So we know there's business challenges there, but then there's also industry challenges, right? I've talked a lot about TJX companies, for example. They highlighted last quarter that traffic was flat. That's a business that almost always reports growing traffic. Now, it's the outlier. It's outperforming most of its peers. So, like, to loose point, it's human nature. Like, we gravitate towards where our bias is, but also we're, like, wired to find risk

in the patterns. That's, like, how we've evolved as a species. With that innate wiring, it doesn't really service as well in the modern world because we see noise where we might think that there's signal. And as investors, that's really dangerous. So I just kind of try to fall, like, to just basic principles of trying to be. to find opportunity inside these pools of risk. Because often there is, there are great businesses that the cycle's not favorable or the macro is not favorable. And instead of trying to precisely

predict what's going to happen with the macro or like the near term cycle, getting it directionally right by buying those great companies like TJX or in home building, it's an ugly time in home building, Maritage Homes has long outperformed the industry. They're just a better operator. They're in the right markets. You find those businesses when everything's beaten down. You buy the ones that are built to do fine when things aren't great. And then when things get better, which they eventually will, they're going to outperform again. As an investor, I think that's probably the better focus than living too deep in the macro where we're just going to be so based on finding whatever supports our bias anyway. Lou, one of the things that I always think

what too is that we've been talking a lot about inflation and interest rates. And those two things are related, but they're also headwinds for consumers. What is interesting with some of the data that's coming out now, particularly in autos and homes, and the reason that those are so interesting is they drive a lot more than just the initial sale. There's a lot of employment that's involved. There's raw materials that are involved. But there's a lag between interest rates going up and home sales falling off a cliff. It seems like we've seen that over the past few months. But, you know, that is something that was in the works six months ago, a year ago. So are we just seeing kind of the fruits, the negative fruit from some of these pressures that have

been building for quite a while now? Yeah. Well, look, again, we talk about this a lot, but the consumer isn't just one person. And for every drip, another household falls into distress or so. And so, yeah, I think it does build up over time. The other thing is there's a lag on normalization, too. We don't yet know if housing has fallen off a cliff because there's sticker shock right now and it will continue or if we will normalize these mortgage rates. And in six to eight months, we saw this before when there was an initial uptick higher. Eventually, people just adjusted and housing sales sort of stabilized. Yeah, if you need to sell your house, you have to figure out the market clearing price.

So you adjust. You lower the price by 10%. Right. So again, I think it's hard to read. You know, Jason's right. You can find good companies. You can also kind of, I think the real hack is find companies that can survive cycles and just ride the cycles, which I know is even harder still. But look, I don't think things are great.

I also don't think the sky is falling. I think we're just in this weird in between where it's a slog, but especially on the stock market, side. I think we can force our way higher from here. It's just not going to be like early days of an upturn. Gag, yeah. And as much as the markets are near all-time highs, a lot of these areas that we're talking about with consumer goods are have really struggled. So maybe opportunities there. More from Jason and Lou in a moment. You're listening to Mountly Fool, Hidden Jims, invest. Introducing Fidelity Trader Plus, the next generation of advanced trading from Fidelity. Customize your tools and charts and access them seamlessly across desktop,

web, and mobile. For faster trades, anywhere you go. Try the all-new Fidelity Trader Plus. Learn more about our most powerful trading platform yet at Fidelity.com slash trader plus. Investing involves risk, including risk of loss. Fidelity brokerage services, LLC, member NYSE, SIPC. Welcome back to Motley Fool and Jems Investing. In this segment, we'd like to have a little bit fun with investing. So let's talk about what the future of some of these companies we've talked about look like. We're going to play a little game called Over, Under, get some predictions from Lou and Jason.

Guys, let's start with SpaceX. Lou, over or under $500 billion in CapEx for SpaceX next year. This number is coming from Elon Musk himself. You know what? I'm tempted to say over just because how much of it is just integration expenses too? How broad do we go with CapEx? Look, I think Elon to the extent that he has the money to spend, will spend it. And I think he's proven that.

I don't, I'm not convinced of where they'll get it from, but I'm not going to bet against Elon Musk's ability to raise money. Yeah, we can't, we can't include the M&A CAPX of whoever's eating who in that deal, Lou. Nice, nice try. So, but yeah, I don't really have much to add, even assuming the merger happens, I think it will. and we're talking about a combined cap X number.

I think it's way under that, but it's directionally, it's still going to be a really big number. So you think under $500 billion, they won't get to, because that would be right around 10 gigawatts based on the current estimates for what it costs.

And that was the low end of what he thought that they could build in 2027. Yeah, refer to my prior statements about everything Elon has ever said about when they're going to do great big things. Okay, let's look at the estimates. This is not coming from Elon, but Jason, And the market is expecting $290 billion worth of revenue from SpaceX.

Do you think that's low or high? No, I think that's reasonable. So are they going to beat it? I think it's a push. It's going to be around there. They'll beat about $1. How's that sound? Over by $1.

Lou, what do you got? Over or under? I'm going to take the under just to take the other side. I, you know, look, so much of it is just what is neocloud pricing because so much of their revenue is, I keep saying this, but this is a neocloud with a space hobby. And so that is the one data point. We talked about this earlier, but will pricing a year from now be what it is now? I don't know, but just for fun, I'll say no.

I think we're still going to be constrained with supply, and that's going to push the pricing higher in a year. Two years, a different story. But what's demand? I think it's going to continue to grow. Yeah. Maybe. At what price seems to be a critical question that we always forget to ask with the, is that of course there's more demand. There's infinity demand.

at $0, but at $50 a megawatt, how much demand is there? I think they have three deals right now. A lot of questions to answer. All right, let's move on to another full favorite rocket lab, Lou, currently in a 66% drawdown, a lot of that is because of delays with their neutron rocket

over or under March 1st, 2027. I don't know if that's the appropriate date, But that's where I said it over or under when they're going to actually launch that. So basically, will they get it off by the end of the first quarter? I'm going to take no. They will not. It will be the second quarter at best. Yeah, I think I agree.

Peter Beck, I think maybe some of the perception is that he just kind of allows things to happen on the timeline that makes sense. I promise he is pushing the teams hard to aggressively move forward. but he's also a lot more pragmatic about the realities. And we think about what they're dealing with now, pushing the original, like they're expected to launch before the end of the year. And they pushed that timeline because they had some flaws in the carbon fiber for making the rocket. And, well, they were using new equipment that had never existed before.

And when you solve old problems, you create new problems. And then you solve those new problems, and then you have other new problems to solve. and that's very, very complex. So there's so many law of unintended consequences, things that are going to happen. I think it'll happen before the internet next summer, but I think March 1 is probably too aggressive.

Yeah, I think delays is always the common thing. We've seen the same thing with SpaceX with some of their launches, but the iteration is happening extremely quickly for both of those companies right now. All right, let's talk about the most popular new product. This one surprised me. I think if you order an iPhone duo right now, You're not going to get it until, what, February, March? So Jason, over or under 20 million iPhone duos sold in 2027.

So the first thing that made me want to scream way, way under was Dan Ives' call for 25 million. He is wildly optimistic and wildly bullish about Apple most of the time. And about everything. Yeah, no, that's true. That's true. And there's parts of that you kind of love, but it's also like, yeah, come on, pal. What do we think here? But what do we know?

We do know, like you said, they're selling them out as quickly as Apple can get them into stores. I think it's going to be under, but it's going to be close. And I honestly, I think probably the thing that's going to limit it is supply chain. They just can't make them quick enough. Yeah. Is that the case? Well, it doesn't seem they want to. I mean, the last I saw is that Apple has increased its component and assembly orders by about 44%

but that's to about 14 million units. 20 seems to be a stretch. Like Jason said, I have no idea what the demand is. It's so hard to read early adapters, right? And it's so hard to extrapolate that. Just because, wow, there's a group of people who are willing to pay for it. Does that mean all of us normals will? We'll say.

But I do think that Apple, in maybe being conservative, they aren't going to go that far out in their supply chain wrap up. So I wouldn't think they get there. Let's talk about a company. We'll touch on it in just a moment as well. Netflix, expecting a little over $2.5 billion worth of ad revenue in 2026. Lou, are they going to be able to double that in 2027 to over $5 billion? As a Netflix user, I'm afraid they might.

I'm going to take the under just because it's so. You're going to have to bump up to the next super higher extra tier. Look, it's going to take all of Ted Sarandos's, I don't know, management skills not to, because we'll talk about this in a second maybe, but they are just in this malaise right now. And the easiest way out of it is assuming that there is demand for ad placements on their platform. And I think there is, is just load up with ads and juice earnings that way. I hope they don't.

But I fear it might be closer to that $5 billion than I'd like as a consumer. I think one of the reasons Reed Hastings never wanted to. to bring an ad tier is because he understands the incentives. You add the ad tier. And what's happened is that's become the most, the ad tier users are more valuable because the value of the ads than the premium ad free tiers, which means that you can push up the price of the premium tiers.

Maybe some of those customers will fall into the ad tiers and they'll become more valuable, even though they're writing a smaller check every month. So I think the combination of that kind of messed up incentives and the fact that they're expanding ad tiers into multiple new markets next year is probably going to result in them being able to hit it. I was trying to think of this if this would change our view on Netflix and what we're going to watch in our house. But to be honest, most of the Netflix this watched in our house is late at night when my wife's eyelids are closed.

So maybe an ad tier is a great addition because nobody knows if we're really watching them anyways. All right. Let's look at the hyperscalers, meta alphabet, Microsoft, and Amazon. Jason, in 2025, they had $200 billion worth of free cash flow coming in the door. Those four companies alone. Next year, 2007, is that going to drop to zero over or under? So if you're saying the over, if the over is that it's going to, going to be less than zero, maybe negative free cash flow.

Yeah, under, under zero would be, would be negative. Yeah. So then I would, I think, I do think that there's a very good chance that they're going to be negative next year. We get to 2028. No, I'm not so sure. I think we're going to start to see some tapering off and maybe some like, would that tapering off be because they spend less on CAPEX or we're starting to see a payoff and there's a growth

in revenue and operating cash flow? My answer is yes, Travis. things? Maybe. I think it's by 2020, you have to start seeing both. Here's the bigger number I want to put out there. This is a big. We're talking about those negative free cash flow numbers. They can afford it because these companies last year generated over $600 billion in operating cash. And so far through the first half of this year and we started to get some third quarter results, that number's growing. So a lot of it, that KAPX spend that's bringing free cash down is operating cash their spending and not just issuing more stock and taking on debt, though both of those things

are going to happen. Yeah, I'm basically with Jason here. I think it's going to be negative in 2027, much less likely to be negative in 2028. I am more on the spending comes down in 2028. I think we're already seeing signs that you don't have to spend on the latest and greatest to get real productivity. That could actually turn. flip the switch in 2027, but I doubt it. But I think that there is going to be a perceived less need to spend by 2028. And that's going to bring down some of the totals. All right. Final question for you guys here in this, the context here, we've talked a lot about artificial intelligence and all the investments that is going into that. But Dylan

Patel, who runs semi-analysis, said in a recent interview, as far as AI's impact on the U.S. economy, if AI revenue is only $3 trillion in 2013, then yeah, we'll have big problems. So, Lou, 2031 over or under $3 trillion in AI revenue in the U.S. So I was trying to put context into this, and it's hard because everybody's got a different number, but the total annual business and enterprise software sales in the U.S. right now. Depending on who you ask, is definitely under a trillion dollars, anywhere from like 700 to 900 billion. I know this is total so we could have consumers. That's a lot of money for consumers.

I just don't think the pie is that big, even if we can do more with AI, even if, I mean, we're talking about a world where even if we replace all of our workers with AI, so we just like, you know, transfer a utopia, labor spending to AI spending. it's still hard for me to get to get to $3 trillion within like five years. So I am very much of the under. And read into that and the prediction that went along with it, as you will. So let's go with a bigger number, Lou. Let's go with US GDP.

Yeah. I'm going to extrapolate a little bit. The most recent data we have is roughly call it $33 trillion. So let's say we're at $34 trillion. $35 trillion in 2013. Actually, no, let's just start from the $33 trillion we're at now. So how much of that $3 trillion in 2013 is revenue that's offsetting something else, like labor costs or other software costs, and how much of it is true, just gains in

productivity, like net adds to the economy? So what is stealing from somewhere else and what is making the pie bigger? Exactly, 100%. And I mean, we're talking 8% of the economy, either way for the entire country. I have to take the under. Here's the thing. If this happens, holy moly inflation. The Fed did not tame inflation.

Yeah. If this does happen, this is what I keep coming back to in trying to think through all these things is, as Patel said, if we don't hit $3 trillion, we got problems. But if we do hit $3 trillion, there are a whole different set of very, very big problems for... Paul Volcker, call your office. Yeah, for very real people. It means likely that a lot of people have lost their jobs to AI.

So we'll see how this plays out. But hopefully that's helpful in putting this into context. If you are an investor today, when we come back, we're going to get to the Stock Center radar. You're listening to Motley Pool, Hidden Gems Investing. New from Nespresso. Blend wellness into your coffee routine with a coffee plus range, infused with functional benefits.

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As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have four more recommendations for or against, so don't buy ourselves stocks based solely on what you hear. All personal finance content follows the Monty. Fool's editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. All right, guys, before we get to the Stocks on our radar, I wanted to touch on Netflix.

Netflix had a bit of a rough week. Jason, not growing as much as they used to. Maybe they need to lean on ads. It seems like engagement in the U.S. is not what they would like. What do you take away from this week? The thing I've been thinking about with Netflix for a while now, Travis, is how many times can Netflix just be a winning disruptor? It disrupted traditional video rental, we know. Then it disrupted its own mail order business with streaming.

And a lot of people don't really realize, then it disrupted its own streaming business and a lot of its content providers when it went big on starting to create much of its own content. Now, here in the past year and a half, it's disrupted its paid subscription only model by adding a more profitable, ad tier? Is it facing a death is maybe too strong of a word, but like just a steady erosion of consumer appeal. Over the past decade, look, there's just a lot more ways to consume video content that didn't really exist in the same way. We're talking about formats like Instagram and TikTok and then production methods like user create a content. That's a huge deal, of course, as we know on YouTube. These things are alien to Netflix. That's before we've been. even talk about mobile gaming. They've tried to, like, get into gaming and that's just been kind of a

middling business, too. So I think the big thing I've come to, Travis, is that just Netflix doesn't seem to have any, like, clear answers to any of those things. The problem isn't them. It's us. And Netflix is what it is. They've been treated like a tech company from most of their existence. Turns out they were, have, and still are a media company. The good news is there's a lot of people who like to invest in media companies. The bad news is it isn't necessarily the same people that like investing in tech companies. We are seeing what happens with mature companies that have innovated, that have disrupted, but they're still at their heart, members of an industry. The shareholder base is turning over. That's choppy. That doesn't mean Netflix is a disaster

from here. It's just a different profile of a stock from here. And I think that's going to take time for the markets to get used to. We should go through on a future show about where we rank some of these streaming services, because now as we're talking about it and thinking about it, I'm not sure Netflix would even be in my top three at this point and what we're watching in the house. So not where they were even just a few years ago. All right, let's get to the stock center radar and bringing in Dad Boyd from behind the glass for his thoughts. Jason, you're up first. What do you got? All right. Here's a fun one we haven't talked about in a while. Intuitive surgical ticker ISRG. This of course is one of the leaders first mover top dog in robotic

surgery. This is maybe the, really the first time in its history, it's faced, like, legitimate competition. But it continues to win. We just got earnings from it recently. Mid-teens, procedures growth. That drives that recurring consumable sales. Placed 546 of its Da Vinci systems. That's like its legacy core thoracic surgery system. 56 of its ion systems, which is its endoluminal system. That's 28% more systems in some. than it did in the same quarter a year ago. It has 13% more robotic surgery systems operating now than it did a year ago. Procedures growth 15%. The math says that even with competition emerging, surgeons and healthcare systems continue increasing their usage of the company's surgical

systems. Traged for about 55 times earnings, 40 times cash flow. It's not cheap. It's never cheap by traditional metrics. This is a classic rule breaker, but these levels, they still represent some of the most attractive we've ever seen from the company, or at least in the past decade. Dan, what do you think about robots doing surgery? I mean, I like hearing about competition in this space, right? Like iron sharpens iron, so I don't know. Maybe they got a bright feature ahead of them. Yeah, this is a space that I stock that I wish I would have bought a long time ago when Molly Fool started covering it. Lou, what do you got for us? So, Dan, I'm going a different direction. I'm going with shares, taking a look at financial data firm, MSCI, ticker, you guessed it, MSCI.

Had a great week, shares up nearly 10 percent after the company delivered a solid top and bottom line beat. So what does MSCI do? They run more than 300,000 equity and fixed income indexes. They license them the mutual funds, ETFs, make money off of that, sort of a publishing business. They also sell a lot of analytics tools for risk managers. They have a pretty good suite of AI tools for professional investors, kind of to modernize the business. So you have this great stable index business that is generating a lot of cash,

and I like the way they're investing in analytics, investing in tech. These tools are going to be table stakes in years to come for our industry as AI plays a more important role. Stock is priced at 30 times earnings. There's some growth priced in. It's not cheap, but I think MSCI is a big, long-term winner for here. everything we're talking about with AI, everything we're talking about it coming in and playing a

bigger role of businesses, they're going to play a big role in that. Dan, when Lou pitched this, I know you like a company where the name and the ticker are exactly the same. I do like that a lot, Travis. I like a little bit of consistency, as we all well know. I also like that Lou used the words great and stable in his description of MSCI. Those are some good words. All right, what's going on your watch list this week? MSCI or Intuitive Surgical? As much as I like robots and I don't really, so sorry, Jason, but we're going to go with MSCI this time around. I know so many words.

Congratulations to Lou for Lou Whiteman, Jason Hall, and Dan Boyd behind the glass. I'm Travis Hoyum. Thanks for listening. We'll see you here tomorrow.