Motley Fool Money - Warren Buffett Is Making Big Buys Again

Episode Date: August 15, 2025

Warren Buffett bought $1.6 billion of United Health stock in Q2, inflation may be ticking higher after all, and play “Ohh, No! or Let’s Go!!” Travis Hoium, Lou Whiteman, and Rick Munarriz discuss: - Inflation is a boogeyman again - UFC gets a $7.7 billion deal with Paramount - Buffett makes a big buy - Stocks on our radar Companies discussed: Lululemon (LULU), TKO Group (TKO), Rigetti Computing (RGTI), Eli Lilly (LLY), Reddit (RDDT), Celsius (CELH), Crocs (CROX), Alphabet (GOOG), NVIDIA (NVDA), United Health (UNH) Host: Travis Hoium Guests: Lou Whiteman, Rick Munarriz 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

Warren Buffett is making big buys again. Motley Fool Money starts now. That's why they call it money. The whole global headquarters. This is Motley Fool Money. I'm Travis Hoyam, joined by Lou Whiteman and our Disney expert for today, Rick Muniarez. United Health stock is up 10% this morning after Warren Buffett and some notable hedge fund managers disclosed positions. Paramount is private again, but making big deals in the content game.

But first, we do have to talk about inflation. Inflation has been the boogeyman from the market for months. Tariffs were supposed to lead to higher costs, which haven't materialized yet. But that boogeyman did peak its head out this week. Thursday, PPI, or the producer price index, increased 3.3% versus a year ago as food, energy, and machinery costs went up. Lou, I want to start with you. Is this a blip, or is this actually something to worry about? as we think about inflation for the rest of the year.

So this is, I'm continuing with my boiling frog economy sort of thought here. We want inflation to be a light switch, right? We want it to match the headlines, what we see on TV. It's just inflation here or inflation not. But in reality, it's a slow creep. And taken together, we had the CPI, too, which didn't show any real uptick, but PPI did. So consumers aren't seeing it, but producers are. It suggests that there is this slow creep higher of expense.

and it may be the consumer hasn't felt it yet, but I think it's still really an open question of whether or not they will. My answer is yes, the consumer will feel this, and the PPI hinted at that. Rick, this is something that I think is a little bit confusing. So PPI is the producer price index. That's going to be what people making stuff are seeing from inflation costs. But the CPI includes things like housing. So how is this dynamic something?

that we need to kind of think about maybe a little bit differently as investors, where, you know, PPI could be that leading indicator that tells us what inflation is going to look like a few months from now, but isn't going to necessarily tell us if housing costs, for example, are going to go up. That is part of the problem. But again, overall, as a leading indicator, or in this case, a bleeding indicator, the fact that CPA came in fine, PPI came in hot two days later, that, to me, that's problematic. And I think this is a, it's going to be very tricky. everyone was assuming that the Fed was going to cut rates next month. But I don't know if it's too soon to have a soundtrack for the month ahead. But I think Green Days wake me up when

September ends is probably a good way to get through what should be a very volatile month in September as we work out this inflation news. Yeah, that really is the topic of the day, is those Fed rate cuts, it seemed a few days ago that that was a done deal, that if inflation was relatively low, we weren't going to need to keep rates high. Rick, where's your head at with rate cuts? Is that something that you even think about as an investor? Because it's definitely something that's helping buoy stocks over the past couple of weeks. I think there's almost an obligation to have like a very small, just a small downtick in the Fed with their interest rates. But I don't think it'll be the three cuts.

Is that just because everybody's calling for it? Is there an economic rationale behind it? I guess that's what I sort of struggle with is we are seeing inflation. if that's really the concern, then I don't know why cutting rates would be the right thing to do right now. But then, you know, if you're cutting rates because the economy is weak, then that should be bad for stocks. So it's like this strange tension in the market. Yeah, prices going up while the economy is going down. There's a scary word for it. And I don't mention it, but it starts with a stag and it ends with inflation.

So I don't want to go there. It is, I think, important, Travis, to your point, that, you know, this whole dual mandate we talk about with, you know, both inflation. inflation and jobs. The scary thing is, like Rick says, that the job market doesn't look terrible, but it doesn't look great. It feels like the best I can figure it out, there isn't mass layoffs in the economy, but no one's hiring either. So I think there is the beginnings of an argument to cut rates on the job side. That's really hard to do with the inflation. And again, I continue to believe that the Fed doesn't want to be stuck at zero or anywhere near zero. So I continue to think that we probably will get a cut, but the Fed is much less anxious to cut than investors

are anxious for the Fed to cut. What does this ultimately do for the stock market, Lou? Because the last time that we had inflation was 2022. The numbers went up really quickly, but things are also very different back then. I mean, you had auto companies could raise the prices of vehicles by $10,000, and there was no supply. So people just had to pay whatever the price was for vehicles. It seemed that way, for everything. I mean, I remember going down the chip aisle at the grocery store, and it seemed like prices had doubled from the last time I was there. That's probably not where we are today. So there may be, whether it's tariffs, whether it's higher commodity costs, there may be higher

costs, but is there a difference between the inflation that we saw a few years ago and the potential for maybe three, four percent inflation being sort of the norm, Lou? Yeah, it's going to be interesting to say. I think that is the potential. And it's, you know, It's hard to be overly bullish about this, right? Taken literally the PPI and CPI together would suggest bad news for margins because the companies are seeing higher prices and they're not passing it on. I think that they will pass it on over time. I think the, if not bull case, the non-bear case from here is that if this is gradual enough

that we can adjust and we aren't going to get a shock to the system and that maybe there won't be a market panic, but it does feel like at best, even if you're trying to make a bullcase, trying to figure out earnings growth from here, that this cost is going to be a headwind and maybe lower margins because of it is going to be a headwind for the second half this year and into 2026. Yeah, and let's keep in mind that the tariffs were announced a little over four months ago. It seems like an eternity ago, but the prices that we're seeing in stores today were not set in April. Retailers are making their plans months and months in advance. What I have to wonder is, is Christmas time? The holiday season is that going to be really when we see

inflation start to hit? Rick, I don't know if that's something you're thinking about as we go towards the end of the year. Hey, are we going to see a little bit higher costs? And maybe should I front run some of my shopping? Maybe time to start thinking about that. Yeah, some layaway. shopping, Louis, investing. Yeah, I think it's as an investor, as a consumer, yes, as an investor, these events don't normally correlate. I mean, you were talking about when prices spiked in the inflate, like when the pandemic happened, that we had this. I remember what I was paying for a 12-pack of Diet Coke was very different in 2019 and early 2020 than it was when aluminum prices and all these other things were factoring to play or when there used to be a McDonald's dollar menu and

it really was a dollar menu and then it just totally changed. And the market was fine with that. stocks appreciated over that time. So I don't think it's necessarily, the market may not have negative reaction to this, but as consumers, we will probably feel a pinch. Speaking of prices going up, we are going to see higher prices for sports content. I think that's probably pretty clear. ESPN is going over the top with their app. I believe it's next week that's actually coming out. But the big news this week, we've talked about ESPN and Disney cozing up with the NFL on the show over the past couple of weeks. But the big news this week, Rick, was the UFC making a $1.1 billion deal per year with Paramount. What do we need to know about this?

Because this seems like Paramount is now going to be kind of the UFC app. Yeah. So you sort of figured, hey, Paramount Plus, it's almost like a bottom feeder of the premium streaming services. You know, once in a while, it'll have a hit show. But it's not something that's just totally driving the platform. And Paramount itself was having issues. Again, that's it's gone through all these transformations. The fact that it was able to sign this seven-year, $7.7 billion deal, that's quite a jackpot pull. To me, this is the kind of thing where, while it does, it helps paramount. I don't think it helps consumers necessarily when they have to keep, you know, this movable feast to find content. But I do think it is, it's interesting. But I don't

know what it's in the best interest for UFC. I mean, I saw, I saw what Joe Rogan had to say. I saw what a lot of fans used about MMA were saying after this. But I don't think this is what the sport needs, the UFC needs to draw a larger audience. Yeah, I want to put some numbers to this, and this is from Ariel Hohani, reported that the social exposure for ESPN, 300.8 million followers across Twitter, Instagram, and I believe was TikTok, Paramount CBS, 32 million. So ESPN has 10 times the reach. If you're UFC, you have to think about two things.

you have to think about how much money do we have coming in the door. This was probably the biggest check they were going to get. But you also have to think about how many people are going to be watching us? Do we want to be MLB and sort of be somewhat irrelevant to the younger generation? Lou, this is a real tension for these companies who are trying to play two games at once here. Yeah, yeah, absolutely. First of all, I got to give some credit to Paramount Plus. For those of us who do enjoy second and third tier English soccer,

they are already a go-to app. So enough with this UFC only. But Travis, it's a good point, but there's a few things to consider. Unlike what MLB has done with Apple TV and MLS has done with Apple TV, there is a quote-unquote over-the-air component here, right? Or the old-fashioned. Paramount brings CBS and some other outlets, so it's not just all behind the paywall.

I don't think it's just going to disappear off its face to Earth. And I think it's also fair to say, look, we can't compare it. to what has been. ESPN is changing too. This idea of just all access everywhere from anybody is going away. Things are going behind paywalls. It's just a question of whose paywall are you going to? I don't think this is a move to irrelevance. I mean, if anything, you know, Disney's deal, it was a double dip for UFC fans because you had to subscribe and then pay-per-view. Pay-per-view goes away here, which is a benefit for the fans. But I think comparing it to, you know, five years ago, deal, which included a lot of just over the air or on your cable box for free, I don't know

anyone, ESPN or anyone, that is really going to highlight that going forward. So I don't think it's hard to just say, well, what we had five years ago was better. To lose point, Travis, I think that the whole, the CBS angle is interesting, because it won't all be on Paramount Plus. Once in a while, they'll have kind of like, you know, content available freely through CBS, which is a great way for the UFC to remain relevant. But to me, this is still, it's Billy Joel giving his, giving up his residency at the Maddo Square Garden for an exclusive engagement and an eccentric billionaire's bunker. This is going to be a problem because, again, this is CBS of 2025. This isn't CBS of 2015, 2005 or the 1980s, this is not the same reach that CBS used to have anymore. It is a changing

media landscape. So I don't think that this is what UFC needs beyond just the instant pay they have the $1.1 billion a year that they'll be getting in the whole process. With thinking about what these companies are bundling together is interesting too. You're right. CBS is going to have some of this UFC content, but it's going to be along with their other flagship content, which is CSI and content that, you know, young males who are typically going to be the UFC watchers are not going to gravitate towards the same things on CBS. So does that name, CBS, mean anything to them? Fox is kind of running into the same thing.

They announced that they're going to be at least an option to bundle in with ESPN for an additional $10 a month. But Fox is trying to sell Fox One with some college football games and Fox News, which doesn't necessarily make a lot of sense together, at least. It seems to me, if you're trying to build a streaming service, at least the Disney Plus, that's for families, Hulu, the general entertainment, ESPN. It's just sports. All these other ones are kind of mishmashing everything together. But am I overthinking this, Lou? Maybe. I mean, the truth is we don't know how it's going to end up.

My pushback on Rick's analogy and kind of what you're saying is, I don't know if ESPN is Madison Square Garden going forward either. I think the days of, like you said, the CBS, the over the top, it's going to be there for the NFL. It's going to be there for your college football game of the week. But I think increasingly, wherever you are, you are going to be in some sort of a limited access pay-to-play world. And so why not max out the money?

TKO is going to be fascinating to watch because they're playing both sides, WWE, signed with ESPN and obviously UFC, which they also own, signed with Paramount. So they're kind of playing all of these cards here. Next up, we are going to talk about some of the big buys from the biggest investors in the world. You're listening to Motley Fool Money. The old adage goes, it isn't what you say. It's how you say it, because to truly make an impact,

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shares of United Health are up 10% on that news. What do you take of it? Yeah, I think especially with United Health, a lot of people, even in the weeks leading up to this, my whole social view is erupted with UNH is just so cheap right now. How can this happen? How can this be? But there's usually a good reason why stocks are this out of favor. And in this case, you know, it's Warren Buffett being a contrarian at a time when there seems to be a lot of contrarians out there. I mean, it's encouraging if you are a long-suffering United Health Care, investor, but to me, it's not one of my favorite picks that Warren made this past quarter. Lou, the other thing, Buffett, and we should mention Greg Abel. Greg Abel is going to be taking over as CEO,

so he definitely has his fingerprints all over these moves. We don't necessarily know exactly who's making the final calls there. But the other thing that he was buying was housing stocks. This is something that I think a lot of people have been bullish on for a long time. Is this again, is this again, a play on interest rates? Is this a recovery of the economy play? What could they, what could be going on here? So, Travis, full disclosure, I'm not Warren Buffett. And, you know, me questioning his stock picks, it takes a lot of hubris. But I am a Berkshire Hathaway investor. And look, I'm really underwhelmed by this. Everything you're talking about. Real quick, United Health care, that scares me, because health care is changing. And I don't think anyone knows how this will end up.

And I don't think it's a given that yesterday's winners will be tomorrow's winners. This feels like it has all of the potential to be a falling knife you don't want to catch. And then you mentioned the home builders. I think this is a logical play on big macro. We need more homes over time. But the headwinds in this industry are still very, very strong. At best, this is early. I want to know, if home builders look attractive today, why not just get back into repurchasing?

why not initiate a dividend? As a shareholder, you know, I'm not going to question Warren Buffett. I'm not going to like just go hide, you know, run away and have a temper tantrum. But this is very underwhelming kind of the moves they're making, both buying and selling. Rick, the other one that they did sell is T-Mobile. You know, that was one that you brought up, I think that is interesting. But a lot of little moves at the margins, buying more Pool Corp, you know, New Corp, just some with as much cash as they have on the balance sheet, they could be buying stocks like crazy. They could also be continuing to raise more cash as they can generate a pretty good income just

from treasuries. But what is the overall takeaway from at least Buffett's moves? And he's kind of mirrored a lot of the big hedge funds this quarter. Yeah. And I think you mentioned it. They have a lot of money. They didn't put anywhere close to all of it to work, which is just a very cautious stance, which I think is probably the right approach right now. I'm not necessarily a fan of all the moves that Berkshire Hathaway made, but they do make sense to me. Some of them do. But again, not a full commitment. It wasn't necessarily a very bullish move by still keeping the cash horde so large. Lou, what are your final thoughts here? So this is intentionally provocative, and I am not selling Berkshire Hathaway, but I look at all this

and nothing is going to move the needle, right? I mean, selling Apple, as much as Apple's gone, Well, they could go out and buy one of the big tech companies like Alphabet seems to fit a lot of the things that Buffett likes. But they're not. And that's kind of my point. Increasingly, you know, like I say, I'm not, I'm not dumping the shares. But why bother? If this is what the portfolio is going to be, then maybe I should just buy a total market index and get a little bit of a dividend on the side too or something. I feel like that there needs to be just something more in the quarters to come. It doesn't need to be overnight. You don't want to be not patient with Warren Buffett and Berks. hour, but it feels like that this the status quo quarter after quarter of, you know, just nibbling at the, you know, at the edges, I don't know how long that's going to go on. He's been kind of complaining about having too much cash to invest for quite a while. And we're getting to that point where unless he finds another Apple idea, it's a tough position to be in. Next up, we're going to be playing, oh, no, or let's go with some big stock moves. You're listening to Motley pool of money.

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After earning season, we have some big stock moves to talk about some companies who are performing pretty well, but their stocks are down. I want to get an idea whether these stocks are, oh, no, they're really in trouble. Or is this a back the truck up moment and let's go? So those are your options, Lou and Rick. The first stock that I want to talk about is one that always seems to look like a value. Shares are down another 10% over the past month. That's Lulu Lemon, but revenue was up, 7.3%. Of course, that revenue growth rate has come down, but net income was down. Rick, are you an oh no or a let's go with Lulu Lemon stock right now? I'm a let's go, but not with an exclamation point at the end. To me, Lulu Lemon is,

it's not the same growth stock. It was 5, 10, 15 years ago. That is not the Lulu Lemon you're getting now. It's a more competitive landscape and athleisure. You have the tariff concerns, which are weighing on just about everybody. But again, I think the fact that the valuation here is at a point, yes, it seemed like a value stock and almost a value drop that's sort of tripping people up. But I do think that Lul Lemon has, we'll appreciate from here. And it's a good, it's a good buying spot here. I'm, oh, no. And I hate to be because it's quality stuff.

And I really do believe in the stuff. It's a never reflection on that. But I do feel like this was a bit of a fad company. And this isn't just a one-quarter thing, Travis. This has been trending in the wrong direction for a long time now. there are more affordable options that have at least pretty good quality. That's always bad news. I don't know.

I'm not convinced they can get it back. If I got to break the tie here, I have to agree with Lou. The local Lou Lemon store, which was kind of in an upscale mall here, closed and became an ALO store. I think, and maybe I'm saying all these names incorrectly, it's not really, I'm not the target market there. But that is just sort of shows that they are not necessarily the brand that they, once were. So a little warning signs there, even though the stock is pretty cheap at about 14 times earnings. We talked a little bit about the changes in streaming where UFC and WWE are going. The market has reacted positively to TKO Group, who owns a lot of this content. Shares are up 13%

over the past month. Revenue was up 10% last quarter, net income nearly double. That's before really any of these new deals kicked in. So Rick, is TKO Group a little bit too rich? Oh, no, or are you, let's go with their shares? Yeah, so I'm going to go with the let's go, and I'm not excited over the TKO deal with Paramount. I think it's bad for consumers in the short run, bad for the league in the long run, and eventually bad for TKO investors in the long run. But I get it. Live sports continues to be that one thing that's sort of defying gravity amongst the media network. So it's great to be in that driver's seat with two very strong products out there.

that people demand to see. So I think the company is doing fine, and I think, yeah, it's a let's go. Near term, I'm a let's go because there is a lot of money coming in and that's good. But I'm a long-term investor. And long-term, I'm, oh, no, because I'm going to call it, guys, this feels like a top for sports fees. There is a gold rush going on right now among sports leagues as these streaming services try to just grab territory. I think for a lot of these leagues, it'll never get better than this. And I think, you know, certain properties, NFL maybe will sustain, but I don't think it gets any better than this deal.

And so for long term, I think you've got to adjust down over time. The stock looks expensive at 110 times earnings, but forward P.E. ratio is 34. Rick, the thing I wanted to ask you about is these new deals that we're talking about, TCO typically doesn't have the same cost structure as a lot of bigger, leagues who have unions where there's a revenue share with players, are they going to actually be able to push their margins higher? So they double their fee from moving from ESPN to Paramount. Do they get to keep that extra $500, $600 million? Or is there going to be some sort of

work stoppage on the horizon? I think you've answered the question right there. Yes, they're going to keep it initially. But down the line, again, if the money's coming in, the talent will want to get paid. And obviously, we've seen the WWE over the year where you can dump talent if they ask for too much, if they want too much. But I think it's a different story now. So, yeah, it is something that I still think margins will overall improve. I think they know this. And I think they will reward their talent and their content producers in the process. Let's move on to quantum computing.

Rigetti computing shares are up another 31%. The stock is just absolutely on fire. But revenue was down 42%. Not that that really matters because it is not. not, this is sort of a pre-revenue company. Net income was negative, so that growth is kind of irrelevant. But Lou, is this a, oh, no, or let's go? I mean, I really want to say neither, but that's cheating. But look, they hit every buzzword in the world. They are cloud. They are AI. They are quantum. Yeah, I don't know what any of that means, Travis. And I refuse to,

maybe it's just a solid investing. But for me, if anything, it's an oh, no, let's see actually what you do and how you make revenue from it and what the profitability is. is then maybe let's talk, but for now, just I can't. My brain's not big enough for this. Yeah, I'm going to go with, oh, no. And to me, it's not that, it's not the numbers. So, Travis, the stock up 31%. You see revenue down 42%, the income growth negative. Those are scary things, but you're not buying into Raghetti computing for what happens in the next quarter or even the next year. This is a future story on quantum computing, which is going to continue to grow. So it's a long-term play, and I don't want to focus too much on this.

But, yeah, valuation-wise, even looking a couple years out to when it becomes more a reality, I'm not convinced. I'm going to go, oh, no. $0.8 billion market cap, despite not really proving out a business model. I just struggle with those, but it continues to go higher. Let's move over to Healthcare Eli Lilly's shares are down 11% over the past month, despite a 38% increase in revenue. In income almost doubled.

Lou, oh, no, or let's go? I'm a cautious, let's go here. This probably wouldn't be my first choice here. But I'm too old to believe that this is just a one-hit wonder, that it's just Zepbound or nothing. This is a really, really good company that, yeah, opportunities and risks involved with JLP ones. But I think, I mean, I wish they had a better dividend.

You can actually get better dividends out of some of these that are maybe more attracted to me. Just 0.9% today. Yeah. But I do think that we are getting overly caught up in that one product. I guess they need to build out the rest of a pipeline and actually do more. But I think they have an end. This isn't, again, it's not an enthusiastic let's go, but I would rather, I'd rather walk towards this than away from it. I'm also a very lukewarm. Let's go.

And again, seeing the revenue and the earnings growth right now, that's right now. This is a company that's basically in a two-company monopoly right now. There's a lot of companies fighting for this space. And while there has been good news for Eli Lilly and for Novo Nordisk in that some of the other treatments of sort of like it basically fumbled on their way to the end of the phase three finish line clinical trials, I do think that Eli Lilly is still attractively priced here. And again, when you are successful and you're making a lot of money, you will find ways to buy acquis.

You will acquire growth if you can't make it in-house. Reddit is one of the hotter stocks in the market up 64% over the past month. I've completely missed this one. So revenue has jumped 78% when they were public. I didn't think they would be able to post those kinds of numbers. And now net income is positive. Rick is Reddit stock and oh no at this valuation or let's go. Yeah, I'm going to say, oh, no for the stock, but I'm a big fan of Reddit.

So I think the company itself is great. to me, it's impressive how when the company was going public just a couple years ago, this was a matter of, no, this is terrible. It's not going to be able to be monetized. These communities of communities, they're going to basically have a revolution. And it happened early on with API and other stuff that were, just other issues that were happening. But I think Reddit is the stock itself, I think, has extended itself, over-extended the reality of the situation and the fact that there will be monetization challenges

once we get to that point, which will probably happen sooner around later. So I'm an, oh, no. Yeah, I am too. I love the platform, but oh, no, we've just seen it with so many of these, whether there's Twitter, Pinterest. The monetization is hard. They might have some levers to pull, but I want to see it to believe it. I didn't have you, too, as Reddit heads, but I guess here we are.

Their content continues to end up everywhere in artificial intelligence, so it seems like that will be a tailwind as these AI companies try to figure out how to get up-to-date information. Apparently, Reddit is the best place to get it right now. Now, let's move over to the company from Rick's neck of the woods. And what I have sitting next to me is a can of Celsius. Stock is up 25% in the past month. Year over year revenue growth is 84%.

That does include the Alina new acquisition. That income is up 28%. Rick, if things turned around and is this a let's go? Yeah, so I'm going to go with Let's go. I mean, the stock is more than doubled this year. So it's one of the many surprises stocks that are more than doubled. And again, it's all, it's not organic growth. but the Celsius brand after three quarters of negative growth did grow 3%.

Obviously, 84% was all basically the Ilani Liu lifting. But I think they found themselves a great brand. And more importantly, was that their profitability came in a lot stronger than expected. So this was a company that was able to integrate with Alani Liu in April. And just in three months, was able to make it very profitable and help on the bottom line. I'm definitely, I think as far as the stock has gone, I do think that there's some potential upside, at least through the next three quarters here. Never, ever underestimate America's desire for carbonated tang, all right? Because, yeah, this is Let's go.

I personally, I can't stand the stuff. People just drink water. But I do think that, yeah, that Rick's right. I'm a very lukewarm, let's go. I think they have their momentum back. It's one of those I feel at least a little bit better about myself drinking Celsius than a Mountain Dew. I don't know if I really should, but I guess I'm the average American.

Let's end things with the company that I think Rick and I are licking our wounds on. Crocs is down 16% over the past month. Revenue was up a little bit. Guidance was really weak. Is this an oh-no moment for Crocs or such a good value that it's let's go? Yeah, I'm going to say let's go. And I get it. There are holes in the shoes. There's holes in the stocks. There's holes in the company. And the hey, dude, things should have been a hey, don't acquisition. but add it all up together. And this is, hey, Crox is the kind of company that when it does take a hit, history tells you get back in. This is not a flash in the pan, a trendy, one-trick pony. They find ways to become relevant here and abroad. It's an international play too. So I'm bullish on Crocs.

And when the stock sells off, I think it's usually a good opportunity. History tells us to, you know, slide in some comfortable shoes. Yeah, I mean, I was skeptical about this one. I sort of get it, though, guys. I might be a tentative let's go or I find it intriguing just kind of as value over value trap. I still don't like buying into consumer trends and that still scares me. But they have reached a point where I don't think they're going out of business. So maybe I need to get a little, maybe I need to try a pair on, Rick. I was at Vikings training camp yesterday and there was a bunch of kids running around with no shoes on and I was trying to figure out what was going on and they were trying to play football in crocs and decided that it was better to just take their shoes off.

So apparently the kids are still wearing crocs. Next up, we're going to talk a little bit about chat GPT's latest update and get to the stocks on our radar. But you're listening to Motley Fool Money. Some of the best lessons don't come from a classroom. They come from experience. On the power of advice, a new podcast series from Capital Group, you'll hear from CEOs, investors, and founders about how they built careers, took risks, and reinvented.

themselves. If you're starting your own journey, this is the kind of advice you won't want to miss. Available wherever you get your podcast, published by Capital Client Group, Inc. 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, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. The big news in AI for the week was chat GPT getting an upgrade to GPT 5. Rick, is this something

or nothing for either chat GPT or the rest of the tech space right now? Yeah, to me, this seems to be that rare case where the pick and shovel plays are more impressive than the blueprints. An upgrade that makes GPT stronger, deeper, and less buggy, great. But this doesn't necessarily a race that I'm going to be racing to buy Microsoft for this 49% stake in Open AI. This is still a very race with a very blurry finish line. To me, the safer catch-all plays continue to be the Nvidia's, AMD's, and even, oh, no, even Corweave of the world than the actual companies behind the platforms.

Corave has taken a hit. Are you worried about their depreciation schedule? This is something we don't talk a lot about on the podcast, but, you know, how long you're expensing those GPUs, which may just burn up in a couple of years, seems to be really important to investors right now. Yeah, it's accounting. It also may be, it's a commodity game at the end of the thing. But again, I still think that these are the plays that are going to do better right now until we decide the platform that comes out on top. Yeah, Corweave scares me for just what you said. The one thing on chat GPD, I'd say is that the chatbots are getting all the attention, because

that's what people are interacting with. And so some of this, like, wow, I don't think the chat was this good. But we're talking about the consumer. It's the enterprise of what is what matters. So even if it isn't as warm and cozy or whatever with the chatbot this time around, if the programmers think it's better, that's probably good news for the company. It is going to be interesting to see how this all plays out. The company that keeps coming up in this is Alphabet. So they are the other big competitor with Gemini. The interesting news to me this week was that Oracle, who is Open AI's part. partner on these massive Stargate data centers announced that Gemini is going to be on

Oracle's cloud. Meanwhile, some of ChatGPT anyways is running now on Google's cloud. So it seems like even though they are the biggest competitor in the company that everyone thinks is going to be disrupted by OpenAI, they seem to find their way into these markets. So is that a reason to say maybe the easy answer is just like Rick said, some of these bigger companies like Alphabet, Microsoft, InVIDIA. What do you think, Lou? I do think there's a risk that even if AI goes as planned, there's some sort of commoditization effect. So, yeah, I do think that that's at least something investors need to watch. And Nvidia should, like Rick said, Nvidia should work out fine, even if that happens, right?

We like to end the show with stocks on our radar along with some comments and questions from our producer, Dan Boyd, behind the glass. Lou, you are up first. What is on your radar right now? So, I'm looking at QXO. And yeah, Dan, I know, sponsored by Sesame Street, right? But no, QXO is a building products roll-up. It's in its early stages. Just one deal so far. But the person behind the roll-up, Brad Jacobs, he's done this before. His last two companies, they are two of the top 10 best-performing Fortune 500 stocks in the last decade. So there's a great track record here. QXO reported earnings and revenue, both topped expectations this week. They say they're in tracted double EBITA beacon roofing supply their first acquisition. I'll be honest, the stock

looks fairly valued right now, but QX's goal is to use M&A to be five times as large within a decade. A lot of risks there, a lot of dealmaking, but an intriguing track record, I'm very, very interested in how this plays out. Dan, what do you think about QXO? I think that it's great that the spirit of Ron Gross is still here at Motley Fool Money. We've got old economy, Lou, coming at us once again. Lou, here's a question for you. Brad Jacobs, he's successful, sure, but can he please start an interesting company? You know what? The funny thing is, some of the best investments are outside of the interesting space. And thanks for the compliment. Ron Gross, may you long live on this show.

Rick, what is on your radar? Yeah, so I'm going with BBB Foods, ticker symbol, T, B, B, B, B. It's a fast-growing deep discount grocer in Mexico. And you're thinking grocery stores, Mexico. It's gone from zero stores 20 years ago to no more than 3,000 right now. Posted great results this week. Revenue is up 38%. Largely on expansion, it added more than 500 stores, but comps were up nearly 18%. You don't see double-digit comp very often, especially when it's stacked on top of double-digit comps from a year ago. So this is a company that's a low-cost product, razor-thin margins, but it's able to make it work. operating profit is great. Just an overall solid growth stock that's really not really outside of most radars, really is outside of most radars to investors right now. Dan, how do you feel about investing in grocery stores in Mexico? Grocery stores in Mexico is a little bit daunting. I'm not going to lie. Grocery stores, of course, have razor-thin margins and are just sort of, I don't know, maybe not my favorite kind of investment. But as they say in Mexico, Elke no Ariyeska, no Ghana.

So, Rick, my question to you is Mexican food. What's your go-to? I'm a good fan of chimichangas if you have to get done to actual Mexican food. But yeah, no pain, no gain, no risk, as you mentioned before. Dan, what is going to be added to your watch list, QXO or TBB? You know, as much as I like to make fun of boring companies, I do like boring companies, Travis. But I'm quite interested in TBBB. So I think I'm going to be. going to go south of the border with Rick Mignaras today and put TBB on my radar. Rick, have you shopped at a BBB store?

No, they are only in Mexico. I have not been in Mexico in about 10, 12 years. So I said, no, I have not shopped in it. But it's a deep discounter. I get it. Dan, the 12-year-old boy inside of you is really upset that you think getting a new roof is boring, but going to the grocery store is exciting. Good point, Lou.

For Lou Whiteman, Rick Minyara, and our production magician behind the glass, Dan Boyd, in the entire Motley Fool team, I'm Travis Hoyum. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.