Motley Fool Money - The Trade Desk’s Woes & A New AI Donut?

Episode Date: August 7, 2026

As earnings season winds to a close, the team discusses what we learned this quarter and why a new jobs report may actually be good for the market. Plus, we discuss The Trade Desk’s bad week, Google’s brain drain, and the stocks on our radar. Travis Hoium, Lou Whiteman, and Jon Quast discuss: - Jobs Report - Earnings Season Recap - The Trade Desk - Value or Trap? - Google’s Brain Drain - Stocks on our Radar Companies discussed: Alphabet (GOOG), Apple (AAPL), The Trade Desk (TTD), Shift4 (FOUR), Micron (MU), Salesforce (CRM), Adobe (ADBE), GM (GM), Symbotic (SYM), ServiceNow (NOW), . 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

Would you buy a donut-shaped AI device? Motley Fool Hidden Jems Investing starts now. Welcome to Motley-Fool Hidden Jems Investing. I'm Travis Hoyam, joined today by Lou Whiteman and John Quost. Guys, we were going to get to that donut-shaped AI device in just a moment. But I do want to cover the latest news that came out just a few minutes before we started recording. That is the jobs report for the month of July. Lou, the U.S. economy, at least according to this first reading,

and these get revised over time, lost 23,000 jobs. estimate was for 83,000 jobs to be gained, but the unemployment rate fell 4.1%. The sort of strange thing here, if you are not into these market dynamics, is that the market is actually up, at least in pre-market trading. Right. Yeah, which I think makes sense because it at least maybe puts the idea of not raising rates on the table, which I think we were thinking was going to happen, because the Fed's dual mandate is fight inflation. and protect employment. All the focus of late has been on inflation.

If employment is weak, then maybe that does stall things. But really, I don't think the market is shocked by this report, because I don't think we should be. The unemployment rate is kind of a – the participation rate is the lowest it's been since COVID. So that is the denominator on the unemployment rate. So that I kind of don't focus on. I think this report and the last month, too, where it missed expectations, it's telling us what we kind of already knew.

It's not a red hot employment market. It's also not a falling off the cliff employment market. I think the employment side of the mandate speaks for a lack of action among the Fed, but watching closely. So I think the question is still the same. Is inflation bad enough that the Fed has to move, or will they just buy their time and not do anything? and maybe we got a slight leaning towards do nothing for longer. John, this does seem to be at least the short-term reaction is what is the Fed going to do based on this report.

You know, obviously inflation is still something to think about. But as we look at earnings reports and we're going to talk about big picture takeaways from earnings season in just a moment, it does strike me that some of the weakness in the economy that some companies talk about is showing up in. these job numbers. And that has been at least a little worried about what are earnings going to look like going forward if fewer people have jobs. That would definitely be a thing if fewer people have jobs. I just don't think that this report showed us enough to make us overly concerned about that in the moment. Of course, we're always looking forward and monitoring that and making sure that

jobs aren't falling off a cliff in the future, but they certainly aren't right now. I do know that from the government's perspective, it would like a, it's kind of a weird place to be. Yes, it wants a hot economy, but it also does want those interest rates to come down. And that's harder to do, the hotter the economy is. So maybe this is the middling kind of report that the government hopes for so that we can at least start not raising rates and getting them down because so much of the national budget at this point is going to interest. And so it would like lower interest rates. Yeah, that's not happening. Sorry. But I mean, I think it's a, I think it's a, important to, I think it's important to really look at these numbers and not just take the

big macro. I mean, a lot of the weakness was retail and leisure, and that is likely the World Cup reaction. Hospitality shed 40,000 jobs after the World Cup. And this is, again, heading away from the summer season. You're definitely not hiring their sports equipment jobs. Sports and leisure equipment jobs, though, were great. So I, again, I, again, I, I am very, very cautious, especially, Travis, as you say, this will be revised a lot of times. Could get a lot worse, could get a lot better. But there was nothing in here saying the sky is falling. There's nothing here that saying that things are robust.

This, again, speaks to Fed inaction. And I think, yeah, sure, the government would like to pay less on interest rates, but interest rates are fine. Interest rates are still below where they have been for most of the last three decades. Businesses can survive here. I think, I don't want to say Goldilocks because, you know, if anything, everything is glass half empty, but there is a lot of water in the glass at least. Let's turn our attention to earnings because we've gotten through most of earnings season. We still have a bunch of reports from smaller companies next week. But a lot of the big companies have reported.

We've heard from, you know, a lot of the companies that are in the Motley Fool universe that are very popular. You know, the trade desk reported last night. We'll talk about them in a moment. Shopify. Lou, as you look at the earnings season, what are your big picture takeaways? Obviously, AI is something that we're all thinking about, talking about how much is that spending happening,

but was there a way that the market was reacting that sort of told the story of the quarter to you? I think the story of the quarter is resilience. Yeah, we're focused on AI, but the rest of the economy, the rest of the companies reporting, are looking okay. I think outside of software, A lot of the big movers were in software.

But if you look, banks really strong, airlines, surprisingly strong. There's just a lot of success stories outside of the tech trade. I just did a quick count this morning, 45 companies from the S&P 500, probably more, that raised full year guidance in this quarter. Analyst estimates for S&P 500 earnings per share. So kind of a wider index, not company specific. There are up 3% since late June, just the consensus has. things are doing okay. There's been a lot of volatility. There's been a lot of gloom and doom on the AI trade. That is where our attention is. But I think if you go to flyover country, baby, or if you go like kind of off of the center of attention, I'm not saying, again, but kind of similar to the jobs report. I'm not saying things are great, but they're not bad. Yeah, John, what has been your takeaway looking at earnings this year?

You know, I don't know why they call it a consensus estimate because it seems like we're always expecting a different number. What is interesting is that what Lou is saying is absolutely correct, and I think that the word choice that he just had of resilience was an excellent choice. And yet there are some interesting reactions where a company is perhaps beating that consensus estimate. And yet it almost is like the market expected it. And the reaction is either very little to the positive. And I think of many of the top AI trade stocks in that bucket, many of them showing numbers that were. And or even ahead of what the consensus estimate was or even internal projections. And yet the reaction from the market is kind of, you know, a 5% gain or something like that.

That's kind of interesting to me. And then some companies that are outside the AI trade, seeing their stocks get hammered 10% or so, even though the number's coming in better than expected and raising that guidance. And so there is an interesting reaction. I don't know if that's, you know, it's just anecdotal. I don't know how pervasive that trend actually is. I haven't done the numbers on that, but there are a large number of companies that are coming in better than expected, and yet not all of those stocks seeing the benefit from the market.

And so do with that what you will? Yeah, John, do you think that part of that is still the disruption story? I just think about a company like Uber. Uber reported this week pretty good numbers. You know, they're growing their bookings over 20% year over year. They said they're going to be in 15 cities with autonomous vehicles. And yet the stock was down. And the biggest thing that always sticks out to me is investors just have questions about,

are they just going to get crushed by Waymo? Yeah, I think that's definitely part of it, right? We're investors and we're thinking about the future. We're not thinking about the last three months. And for some companies that the disruption question is on the table, it hasn't satisfactorily been answered yet for investors. So Uber is in that bucket? How much is AI innovation going to drive driverless technology forward and then disrupt the business model?

That's the question that investors are asking. I think of other companies such as financial technology, enterprise software, these sorts of things. There are companies that are delivering good numbers, and yet the existential question is still on the table, and it hasn't been satisfactorily answered, even with the last three months being good. Yeah, a company like meta fits that bucket to me as well.

Didn't satisfactorily answer, how are they going to make money on all of this AI spending? So lots of questions yet to be answered for the rest of the year. When we come back, we're going to talk about this AI donut that OpenAI is reportedly developing. You're listening to Motley Fool, Hidden Gems, Investing. You just found out that your sales team is at risk of missing quota. Don't panic. Just ask Rippling AI.

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Ready to rule your business? Head to rippling.a.i slash fool to get the only AI built to give you full and take complex actions across your entire organization. That's R-I-P-P-L-I-N-G-A-I-S-O-L. Sign up for exclusive access today, rippling.a-I-S-Fool. Welcome back to Motley FoolHillian, Jim's, investing. The big topic, as we prepared for the show over the past 24 hours or so, was this new device that Bloomberg is reporting that Open AI is developing, you know, if you've been following this, Open AI has been stealing people,

people from Apple for years at this point. Johnny I've joined the company with acquisition of his startup. This has become now a lawsuit between the two companies. But what in the world of those people actually making? That is what a lot of us have been wondering, because oftentimes a new piece of hardware comes with a new technology paradigm. Lou, the piece of hardware that they are reportedly making is a hockey puck-sized donut with a speaker.

some moving components. I don't know exactly what that means, but is this the kind of thing you're excited to jump all over? Well, first of all, we should say that Johnny Ibe is not involved to the lawsuit. Open AI bought that company,

Fair and Square. But since there's lawyers running around everywhere, we should say that. But yeah, look, Travis, if you're like me, you can't walk down Main Street in your hometown without hearing someone say, gosh, I love AI,

but I just wish there was a $300 device that'd carry around my house to interact with it, right? Right? That's what we all want? So you're a little skeptical. Well, look, we do have a device that we carry around our house to access AI. And it works really dangone well.

We can use it to search. We can use it to play word or we can do whatever we want. It's got a great battery life. It fits in your pocket. It's the phone, all right? That is what we have to be better than to compel people to buy a new $300 speaker. Yeah, I guess it's going to dance around when it's talking to you. I don't get it.

I really don't. I mean, the good news, bad news for Apple shareholders here, if you were putting into your models a huge windfall from just the profit sharing that Apple is going to get after there's a settlement on this intellectual property thing for all of the Open AI revenue they're going to generate from hardware, you may be disappointed here because I don't think there's going to be a lot of profits to share here. This is a device because Open AI needs a device. I don't think this is solving a problem anyone actually has.

Yeah, do you see this any more positive, John? Well, no, not for the donut-shaped item in particular. You know, Bloomberg reporting that it's going to be donut-shaped so it can sit on a nightstand or a counter, but I checked my nightstands and counters this morning, and there are many non-donut-shaped things sitting on them. But I'm actually in the market for an AI hardware device right now. I'm looking at some very strongly that are recording devices.

They will record conversations. They will transcribe those conversations and then provide AI summaries and action points automatically in an app. That to me has utility for myself personally having multiple jobs, having many conversations with many people throughout the day. I do forget things and I have to take physical notes. That would be simpler. There's no screen. You can have it out on the table as far as moving parts. There's a physical toggle switch.

I would imagine that's what OpenAI is looking at with their own device. But here's the thing. The one set I am looking at, the utility is debatable. So I'm debating that in my mind, but it's also coming in at a third the price of what this item is. You look at Apple strategy over the years, that premium pricing that they demand, that has a reputation behind it, a hardware reputation that open AI does not have. And so how is it going to charge a premium pricing on its own AI hardware device right out of the gate when there are other devices out on the market? at a much lower price and aesthetically pleasing as they are. So this, I don't think, is going to gain traction.

To me, it's the Amazon Firephone. Yeah, Lou, the thing I always think about with a lot of these AI technologies and the potential devices is the paradigms that we've gone through in the past. And it seemed so clear to me, you know, when the PC first came out, you know, the mid-80s or 90s, whenever you got your first PC, that was such a big difference from a typewriter.

And then when mobile phones came out, especially smartphones, you went from, okay, now I got to go to my computer to access to the internet to, oh my gosh, there's a screen that has all of this stuff available to me. And the world is my oyster. I have such a harder time making the same leap with some of these AI devices. Is that that sort of 10x, it's got to be 10x better to actually replace a phone? Is that what you're indicating here? This is both Apple's greatest success and greatest failure as a growth.

company now is that the phone is really good. That's exactly it, Travis, is that to change consumer behavior, you have to give the consumer something they don't have today. And I don't know why the donut versus your phone makes things any better than it was today. So yeah, I just, look, because we need to is not a good reason. Yeah. It has to be because it's worth it for you, the consumer, or the consumer won't buy it. All right, let's move on to a big earnings report that happened overnight. That was the trade desk. And John, this is one of those companies that has always been loved by the market until

12 or 18 months ago. And then things really went off the rails after this recent earnings report, at least in pre-market trading and post-market after the report came out, shares were down somewhere around 20% off about 90% from their high. What went wrong at the trade desk? Well, it's execution. You look at the last three quarters. We had 12% growth in the first quarter, only 3% growth in this quarter and forecasting

potentially a 12% drop in revenue in the upcoming quarter. This is supposed to be a huge growth business. The market is expanding that they're in. And so this is an execution thing. And Jeff Green, CEO, coming out of the gate here and blaming the macro conditions, something outside of its control. And I'm sorry. I want to highlight that because I listened to at least the first half of the call, and he spent 10 minutes talking in detail about all of them.

Here's the macro conditions. And this is why Nike isn't spending more and all these kinds of things. And I was going, this is excuses. This is always a red flag for me as an investor. Yeah, I'm sorry. This doesn't pass the sniff test here. You know, he normally comes out with long monologues talking against these walled garden businesses of meta platforms, alphabet, and Amazon did not mention. Walled Gardens on the call, and I believe that that was very wise on his part because you look at

those numbers, all of those growing by double digits at much higher revenue bases, whereas the trade desk is projecting this shortfall, this deceleration, this decline in revenue in the upcoming quarter. To me, that is an internal problem of execution. You also look at other companies that do have a lot of overlap with the trade desk. The trade desk is very heavily weighted towards consumer package goods and cars in their advertising mix. Not a one-to-one, but there are other companies in the space, ad tech, Magnite and Pubmatic reporting double-digit growth. Even companies like Zeta is posting very strong growth rates.

And so to me, this doesn't pass the sniff test from Jeff Green in the trade desk. I think the Wall Garden is winning. And yeah, I mean, I'm not going to just say execution is nothing management to do. But the internet is getting more closed off. If the Trade Desk has always said, we have a solution for that, we're not seeing it. And look, guys, I don't think this gets any better. I keep hearing that AI bots are going to do all their shopping for us, if not actually buying.

I'm a bit skeptical there, but I do think more of this is going to bots. Do bots respond to advertising? Is there, like what world does that play? But let's talk about Green for one second. You know, you mentioned like the, his statement, the quarter didn't meet the standards, but it has reinforced the belief that we are focused on the right opportunities. I think that has to ring hollow for investors at this point. That was maybe something you did three or four quarters ago when first bombed.

Green needs to move upstairs. I know he has nearly 50% voting power, so we're not going to activist here, but his voice is no longer resonating on Wall Street. He needs to go become executive chairman. Hopefully he can do a better job finding a CEO to a did with finding a CFO, given how long that's taken and how many things. But we just need a new, if Trade Desk is going to have a chance here, even if the strategy is right, even if it is just all of the macro headwinds against them, even if you can see that, there just needs to be a new

face of this company for Wall Street or things aren't going to change. Lou, do you think that the fundamental dynamics of advertising in this digital age have changed in a way that is going to make it really hard for the trade desk because there are companies like John said who are doing well. I think the trade desk is having trouble adjusting to the internet as quickly as others. And that isn't to say they can't, but right now it's not happening. When we come back, we're going to play value or value trap. You're listening to Motley Fool Hidden Jems Investing. This episode is brought to you by Accenture.

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We'd like to have a little bit of fun with investing. So we're going to play a game called Value or ValueTrust. We're going to ask John and Lou whether these companies are a great value for investors or whether this is a trap that looks really cheap but doesn't end up being that long term. The first stack we're going to talk about, we just covered a little bit. That is the trade desk. But Lou, I want to know, is this now a value? We were just going over the numbers during the break. $5 billion enterprise value.

The price earnings multiple on a forward basis is 6.6. By the way, all of these companies have a forward PE under 15. So theoretically, they could be values, but is this a trap? Fool me once, shame on you. Ful me twice, shame on me. At this point, I am not going to see value here until I see some articulation from them that they know how to solve the mess they're in. Right now, I think it's a trap or it's too risky to try and catch this fallen knife.

John? Yeah, I agree with that. Value trap for now. I mean, you point out the forward earnings multiple, but I would assume that that is actually going to go up here in in the coming weeks because the guidance showed that we're going to have a revenue decline. We don't know how long that's going to last and the margins are getting pressured. So I don't think it's as good of a deal as it looks. It's kind of a show me story at this point. All right. If you're going to have traps, I do want to hear what companies are more

attractive in the space. I'm going to just throw one out because I think one that I have been interested in recently I've been adding to my position to is Zeta Global. Here's a company that's growing almost 50% year over year. But John, Lou, what's on your radar in this area that is more attractive?

I just said the walled garden. I mean, give me an Amazon just because I get a lot of things going on there. But that works for me. Yeah, I agree with Lou. I mean, go with the ones that are working for sure. Meta platforms will be at the top of my list. But Zeta is at the top of my watch

list, the one that I need to do more research on. Let's talk a little bit about Shift 4. This is in the payment space. And some of these companies, I mean, PayPal, you can throw into this as well, have gone from being sort of market darlings to incredible value stocks. Forward price to earnings multiple is 7.4 for Shift 4. But after they reported earnings earlier this week, shares fell almost 20%. So, John, I know this is when you follow a little bit, is Shift 4 today, value or value

track. Value all day long. And if you are a shift for shareholder as I am, you are used to the market just dogging on the earnings results that are consistently good. And this is a company growing at a very high growth rate and doing so profitably, not really any dilution to shareholders to speak of. I think that this is a company that is going through a little bit of a transition as it kind of expands into more international markets. The financial technology sector is extremely it's not just unloved, it's hated by investors right now. So that's going against it. But you look at the business itself. This is one of the few companies in the space putting up growth and profits. Yeah, but I mean, I guess toast. I don't know. This feels so commoditized to me and it doesn't

feel like everyone could be a winner. I'm not sure I really like any of these in the long run. I don't know if this is a value trap as in there's anything really wrong with the business, but I don't find it a compelling investment. I'd buy toast before I'd buy shift for. Yeah, both companies that I have on my watch list, I have not bought either of them. But I actually like the case for both of those. All right, let's talk about one that has been, and the talk of the market over the past year or so, that is micron. Shares are actually down 26% from their peak. But if you look at the forward price earnings multiple, it's still just six.

So, Lou, with everything going on in the memory market, is Micron a value today or a value trap? This to me is a good textbook example, if I ever after to go back and teach a college class about why there is no one financial metric that you should focus on and make all your decisions based on. Yes, that's a great P.E. But this is a commoditized business and the commodity is red hot. So is that sustainable? I don't think it is. I still think that this is a value trap.

I know Micron. I actually sort of like Micron better than any of their competitors because I think Micron has made more of an effort to differentiate itself and actually try to break out of a commodity trap. I'd rather be late on this one buying in, though, because it's still just, I know the history and memory, and I know how this story ends. It's not the first time that Micron has been valued this cheaply. In fact, I think in a lot of the past cycles, it has been valued at under 10, I know for a fact has been valued at under 10 times forward earnings many, many times in the past.

I would say, though, even though I agree directionally with Lou, I would say, I would, say this is a value stock. And the reason being that I would say it is a value stock is that I think that the red hot commoditization or the red hotness of the commodity right now is going to continue for several years more. I don't think that this is a short boom and bust like it's been in the past. I really think that there is so much to be done in the AI space. Memory is still such at a, there's such a shortness of supply that I do believe that Micron is able to maintain its pricing power for, I would say, the next three years, at least. I've got a little quiz for you because the last time that memory was this hot was early in 2000, the year 2000, 26 years ago.

John, do you know how far Micron's stock fell from its peak in mid 2000 to its low? And I've got that at late 2008. I would imagine it's over 90% because it took it, I think, 20 years to recover and hit recapture highs. Yeah, 98% drawdown, 98.2% to be exact. This is one of those markets that, yep, if you get it right, you can have a 10x stock like we've had over the past 18 months or so. But, man, if you get the timing wrong, this can fall apart really quickly.

So this does make me a little bit nervous as an investor. All right, let's talk about Salesforce. this is another one of these companies that you would think has a lot of staying power but has had trouble in the market. John, is Salesforce a value today or a value trap? It's a value trap, in my opinion, for a variety of reasons. But as you look at what this company is doing, I think that it is taking on a huge risk as it tries to change its business model from a per seat business model to a per task business model. When you integrate AI tooling into your product,

but then you start charging per task, you're really not looking too much different from just the direct AI tools that are available themselves because you're paying for tokens when it comes to a coding AI agent. So I don't think that that's a smart move. I think that there's a lot of aggressiveness here with high goodwill on the balance sheet. And yeah, it does look cheap,

but I do wonder about this business long term. So for that reason, I'd say value trap. I'm probably more bullish on the business's survivability than John, but I'm not really compelled to buy in here. I'm pretty lukewarm on value, value trap. We have decelerating growth. We have a lot of headwinds. And as John says, there's a lot of debt,

just a lot of garbage on kind of on the balance sheet. I also, my fantasy in this world is to see Slack disappear. and since the attacks, you know, so, so, I mean, I'm kind of rooting against them for that reason. But I feel like this is likely just going to be not get worse, but not get a lot better for a while. Lou, anything in this space that does intrigue you? Not particularly. I do think there is a path for, and it might be a company that John is going to talk about on the radar, but I do think that companies are going to emerge that can actually package in use. use AI to actually sell AI value to enterprise customers.

And I do think there's a path here. I don't think Salesforce is the best vehicle for that, but I do think that that's coming. This is going to be such an interesting case study in the disruptors and the legacy companies because it does seem like, you know, Salesforce, the trade desk, they are serving some of those bigger, older companies that don't necessarily have the disruption mentality. of a lot of the competitors. All right, let's talk about another one that we have talked about a few times on this show. Always seems to be a bit of a value.

That is Adobe. John, Adobe's shares are currently trading for just 10 times earnings, and the stock's in a 62% drawdown. Is this a value or a value trap? Oh, I hate to be negative Nancy here, but I'm going to go with value trap again. And the reason I'm going to go value trap is I am seeing concerns over growth. I am seeing concerns when it comes to margin.

We have ongoing questions in leadership. And then there's also the prioritization of the freemium model. This is what management is saying it wants to focus on, get these free users into the ecosystem. But to me, that's kind of moving the wrong direction. It signals to me that the space is becoming, the creative space is becoming more competitive due to just superior AI tooling that is out there. And so I do wonder about this business. I'm not ready to buy into Adobe at this valuation, even though it does look attractive.

I took a flyer on this one, so I have to say value. I mean, I get the risks, and I think they're real. I am still skeptical that the people really using Adobe are going to switch over anytime quickly, especially with Adobe working on their own AI tools and trying to make their own tools. I get if AI tools get really, really good, there's going to be a lot of corporations saying we can save money here, But with tokens, will they, stuff like that? I do think that there is a runway for Adobe to figure it out. The management turnover is unfortunate time and giving everything that's going on. I mean, look, a person who's done a great job and it's been their decade. So I get it. But that's unfortunate. But I do, I have hope for this one.

So I'll say value. All right. I want to quickly touch on one of the companies that has actually outperformed the market over a period of time and also outperformed its high profile competitor, Tesla. That is general motors trading for just six times forward earnings. Lou, I'm going to let you go first because I know you're always my negative voice in my head when it comes to automakers. But is this a value? Have they actually got this figured out with a reasonably good strategy and autonomy too?

They do. And it's still not good value to me because this is just such a cutthroat business. I mean, they are very good at what they do. But I am a long-term focused. And at best, with an automaker, you trade. cycles and I'm just not interested in doing it. Their margins stink even when things are going well. This is just like there is there is no more complex supply chain in the world, not even any of my defense contracts, anything like that than the automakers. This is just

this is just you're asking for trouble if you try and go long term in an automaker. So every time it looks appealing it's this is just Lucy in the football all over. over again. Yeah, I would agree with Lou here is that maybe the stock kind of looks attractive, but for me, the automakers, the businesses never look all that attractive to me. And so that is why I am disinclined to ever get into GM or others. I have looked at Ford in the past, and just at the end of the day, I don't love the business. And so for that reason, even when the stock does kind of look attractively priced, I stay away. Now, of course, you point out, this has been a stock that has been gaining. So I have been missing out here, but it's just not one that I am

attracted to because of the business. Always one of the toughest debates for an investor when you see a stock that looks cheap. But the question is really is it long term? Hopefully that is helpful in understanding some of these cheap looking stocks today. When we come back, we are going to get to the stocks on our radar. You're listening to Motley Foolie Hidden Jems investing. This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales, using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting

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I did want to touch on one of the bigger topics of the week, and that is Alphabet, losing a bunch of its best researchers, people who have been there. Jeff Dean has been there for, I think it was 27 years. This is not the first time, John. They have lost some of their major talent, but this is now a trend over the past six months or so. They're showing really good numbers at GCP, but the existential question seems to be getting stronger for Alphabet. Is this is AI going to be disruptive if they lose their smartest people? What do you think?

Yeah, I don't know what to make of some of these announcements of the departures from Google talent. With Jeff Dean in particular, he's been at Alphabet so long. You have to imagine that he's accrued somewhat of a nest egg. And who can blame him for going out and starting his own company to pursue something at this point that he wants to pursue? I mean, that's what I would be tempted to do if I was in his position. So it's hard to fault him too much for that. You look at some of these companies, too. I mean, Anthropic losing some talent, yes, but also gaining some talent from Google as well.

So you have somebody such as John Jumper, who is a big part of Google's Alpha Fold. And I really think that alpha fold is a really important thing that Google is doing that we don't talk about enough, trying to figure out how proteins fold. And I think it's going to be revolutionary for medicine and more. But jumper leaving Alphabet for Anthropics. So Anthropic is also gaining some talent. And so, yeah, I mean, they're losing talent, but they're also gaining talent because all the chairs keep, or people keep jumping from one boat to the next. It makes sense because changes happen in this space so quickly that, businesses and models kind of take new directions. And so it makes sense that as talent is looking at where its own ship is sailing, that as they change directions really quickly, that I'm going to jump on a different boat that's more in the direction I want to go. This is all just, I think, you know, parlor gossip. I don't think it's investable.

I think, I don't think it really tells us anything we don't know about the frontier models. We don't know that Google doesn't have a fit to present stake in whatever Dean's doing next. Yeah, they did say that they have a stake. the company and then it is going to be running on GCP. Okay. And, and, you know, so they're moving, they're moving some of the more speculative stuff off balance sheet. That's okay. I, as an investor, it's just kind of go play your games. The other thing that's so interesting is Google was the company that, you know, the show Silicon Valley was kind of making fun of being the place that you just go to work and

collect a giant paycheck. But now we're, now we're really worried about, you know, losing specific people. So it does seem to be the market kind of talking. out of both sides of its mouth. I think the thing that is undeniable with Alphabet and Google in particular is this is, the company has more and better infrastructure than any of these other companies, whether you're talking about hyperscalers or the startups, Anthropic is building its business on top of GCP. So a lot for investors to digest, but I don't think Alphabet's going to go anywhere.

All right, let's get to the stocks on our radar. John, I'm going to have you go first. What are you looking at this week? Yeah, I'm looking at service now. this is ticker symbol N-O-W. I am not a big fan of enterprise software stocks, generally speaking, but this is one that stands out in my opinion. This company is embedded across many important businesses around the world,

doing just some customer service management, some information technology service management, just some really boring stuff behind the scenes. But it is really embedded, and this whole space, I believe, is poised to be disrupted due to AI agents. And Nvidia CEO Jensen Wong saying that Service Now is actually at the forefront of deploying AI agents.

If you've tried to build an AI agent on your own, you realize how difficult it is. If Service Now can make it easier for businesses, I think that gets adopted. The company is still growing at over a 20% growth rate. You look at the remaining performance obligations, still growing at an over 20% growth rate as well. Trading at around 30 times forward earnings, not particularly cheap, but not unreasonable given that growth. So service now is one that I'm looking at.

All right. We need our thoughts from Dan Boyd behind the glass. Dan, what do you think about service now? Yeah, service now is one of these companies that just kind of does stuff in the background. And y'all, you know I love that kind of stuff. The companies that nobody knows quite what they do,

but they must do something really important. It's got to be important, right? Especially now. Service now. Now, now. All right, Lou, what are you looking at this week? Dan, I'm going to give you something where I do know what they do. but you can't see it every day.

I'm looking at warehouse automation company Symbotic, ticker SYM. Company beat on earnings and revenue this week, but Wall Street was disappointed by the guidance. They're kind of a lack of enthusiasm around the guidance. Stock traded down about 10%. Dan, I think the market has this one wrong. Symbolic is methodically building its business. They added a really important new customer,

Southern Glazer, a big beer and wine distributor in the quarter. Symbolic is conservative in the way it books future business. It's basically just bolting in one warehouse at a time on these big things, even if they're going to get 30 eventually. So that kind of understates to guidance some. I think there's huge growth potential here. And Dan, I'm convinced there's a whole new generation of warehouse automation that's actually going to create a lot of value coming out of his AI wave.

Symbolic has a big role to play here. Stock's not cheap relative to current business, but I'm bullish that that current business is going to grow from here. And this one is really intriguing to me. Dan, what do you think about warehouse robotics? Okay, so I've never worked in a warehouse, but get this. I'm looking up symbotic, and apparently their robots can travel up to 25 miles an hour, which, again, I've never worked in a warehouse, so I don't know how all that stuff works,

but it seems very scary to me to have a robot blasting around at 25 miles an hour while I'm trying to walk to the bathroom. That's why the bathroom's got to be separate. The robot bathrooms are separate, so you're fine. Okay, Dan, what's going on your watch list? I'm going fast robots. Let's go symbolic. All right, congratulations to Lou. Thanks, everybody. See you here next time.