In short
The episode discusses two themes: (1) the rush toward IPOs for OpenAI and Anthropic and whether their growth-at-all-costs model can become profitable, and (2) other investing “hidden gems” including restaurant and sports-franchise ideas, plus stocks on the radar.
Guests
Lou Whiteman and Jason Moser (co-hosts). Travis Hoium is the main host. No outside guest bios are provided in the transcript.
Key claims
OpenAI is catching up to Anthropic revenue via more aggressive pricing; both are paying “top dollar” for compute. Profits aren’t required for IPOs—sustained cash flow is. The compute-demand story may be a “house of cards” because debt is increasingly funding AI buildouts (CoreWeave demand tied to hyperscalers). NVIDIA backstopping debt is framed as a sign lenders are doing due diligence. Profitability and monetization remain unclear (subscriptions are limited; advertising/enterprise are questioned).
Notable examples
SpaceX IPO valuation near $2T; CoreWeave; Alphabet/Meta/Microsoft demand; NVIDIA debt backstops; restaurant segment focuses on CAVA (revenue +31%, comps +9%, 17 new stores, avg unit volume ~$3M/year). Sports-franchise segment mentions Lakers purchase (~$12.5B), plus NFL/NBA/MLB/MLS picks (Cowboys, Panthers, Vikings, Celtics, Hawks, Orioles, Red Sox, LAFC).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VOAnalyzing IPO Trends of OpenAI and Anthropic
0:45 to 3:15
Discuss the competitive landscape and growth strategies of OpenAI and Anthropic.
“their revenue because of a little bit more aggressive pricing.”
Sustainability Amid Rapid Growth
3:15 to 6:10
Explore the sustainability of growth strategies without immediate profitability.
“The market can remain irrational far longer than you can remain solvent or something like that.”
The Role of Debt in the Current Market
6:10 to 8:26
Examine how debt is shaping the strategies of tech companies amid growth.
“And I wouldn't put your money out there betting against it right now, because, you know, so you're just kind of.”
Investor Sentiments and Lessons from Past Crises
8:26 to 14:36
Reflect on investor sentiments and lessons learned from previous financial crises.
“But you tie all of these pieces together and CoreWeave says we have a bunch of demand, but that demand comes from Alphabet or from Meta or from Microsoft.”
Earnings Report Insights: Kava
15:26 to 18:28
Discussion on Kava's earnings report and its implications for the restaurant industry.
“We did get an interesting earnings report this week from Kava.”
The State of Restaurants and Consumer Behavior
18:28 to 21:02
Exploration of consumer trends in dining and the impact of economic factors on restaurants.
“I think Cava is winning because they're well managed and they have a good product.”
Investing in Sports Franchises
22:30 to 28:01
Discussion on the investment potential of various sports franchises, focusing on the NBA and NFL.
“There's a lot of options out there, but the prices are getting pretty crazy at this point.”
NBA Team Acquisition Discussion
28:01 to 32:26
Explore insights on potential NBA team acquisitions and strategic choices.
“He has just this uncanny, you cannot have a conversation with him and not walk away just fully inspired.”
Major League Baseball Team Insights
32:27 to 37:41
Discussion on the value and potential of MLB teams, focusing on personal connections.
“So maybe I could buy and manage them to back-to-back-to-back World Series.”
Major League Baseball Team Insights
37:42 to 38:25
Discussion on the value and potential of MLB teams, focusing on personal connections.
“As a podcaster, my voice is heard by thousands of people.”
Show all 17 chapters
Major League Baseball Team Insights
38:30 to 38:42
Discussion on the value and potential of MLB teams, focusing on personal connections.
“Vanguard investors own shares of Vanguard index funds and those funds own shares of the companies they invest in.”
Major League Baseball Team Insights
38:43 to 39:46
Discussion on the value and potential of MLB teams, focusing on personal connections.
“It's the perfect time to hit reset before the autumn rush.”
Major League Baseball Team Insights
39:52 to 40:05
Discussion on the value and potential of MLB teams, focusing on personal connections.
“That's Q-U-I-N-C-E dot com slash Motley for free shipping and 365 day returns.”
Stocks on the Radar
40:06 to 42:01
Jason discusses a company called Quantum Computing and its market potential.
“and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.”
Exploring Quantum Computing's Potential
42:01 to 42:26
Learn about the optimism surrounding quantum computing and its comparison to AI.
“And this is a company that today is valued at around$2 billion.”
Bart's Take on Quantum Computing
42:26 to 43:08
Bart Shannon shares his humorous perspective on understanding quantum computing.
“Bart, what do you think about quantum computing?”
Firefly Aerospace: A New Contender
43:08 to 44:08
Discover Firefly Aerospace's promising business model and recent achievements.
“Bart, I'm taking a look at Firefly Aerospace, ticker FLY.”
Transcript
Automatic transcript. May contain errors.0:01Travis Hoium:We're racing to the biggest IPOs in history. Motley Fool and Gems Investing starts now.
0:09Travis Hoium:Welcome to Motley Fool and Gems Investing. I'm Travis Hoium joined today by Lou Whiteman and Jason Moser. And guys, we've had a lot of earnings over the past couple of weeks, but the backdrop of all of these earnings reports seems to be Anthropik and OpenAI racing towards their IPOs. They're trying to get as much compute as possible. They're trying to grow revenue as much as possible. We've already seen SpaceX IPO this year got to, I think it was a nearly a$2 trillion valuation. I don't know if it ever popped above that, fell back pretty quickly after that. But Lou, we did learn this week that OpenAI is starting to catch up to Anthropic with their revenue because of a little bit more aggressive pricing.
0:51Travis Hoium:They're also, I think both these companies are willing to pay top dollar for compute. So as we think about that, and I want to get to some of the neoclouts in particular in just a moment, but how should we be thinking about the growth of these companies and whether or not it's profitable? Because it does seem a little bit like they're growing almost at all costs at this point.
1:10Lou Whiteman:as they should yeah and that is and i profits are not a requirement they are not as we saw with the spacex ipo profits are not required now growth is required so they are doing what they should do uh look it could turn tomorrow but as of now there's a lot of source of capital and as anthropic and open ai go public there's even more sources of capital you need profits when the market tells you you need profits. The hard thing as a management team is, is that you don't necessarily get a exit sign three miles in advance. You don't get a warning. So you better be ready for profits when they come. But as of now, there is nothing that tells us that the market is worried about this quarter's results.
1:54Lou Whiteman:They're curious about what you're building. So go out and build something and may at long continue for these companies because I don't know when they're going to hit profitability.
2:04Travis Hoium:Jason, is that how you see this? Because it does look a little bit like I think the neoclods were a good example over the past week. The numbers are phenomenal. Lou's right. The revenue numbers are great. But every time I look at these companies, I'm wondering what is sustainable and what isn't, because it does seem like we have this exponential growth to infinity. I mean, I even saw projections that SpaceX could add 10 gigawatts worth of capacity, which would be several hundred billion dollars worth of end of customer revenue. I'm not sure exactly where that comes from, but it does seem like these companies are growing at an astronomical pace.
2:42Travis Hoium:And I'm not sure where the end of that is. Yeah. It makes me think of like, you know, that investing style GARP, right? Growth at a reasonable price. These businesses are just growth at all costs. And right now, I mean, the market is pricing these companies entirely on with no regard as far as margins are concerned. And I mean, I get that. That makes sense today. The question mark is, how long will that be tolerated? My suspicion is it will be tolerated for a while. What's that old saying? The market can remain irrational far longer than you can remain solvent or something like that. Yes, yes.
3:22I mean, this is going to, it may seem irrational and we're not exactly seeing the clear pathway to profitability? Because, I mean, you're right. All of these investments in compute, I mean, they're paying up for it, of course. But what is the ultimate return? And I think that's what we're all kind of asking. It's probably easier to see at the enterprise level right now. But my bet is if you just go take a walk down the main street and just ask a random sample of people like, hey, how is AI impacting your life today? Most people would probably be like, I don't know. I mean, maybe they use an LLM, right?
4:04It makes customer support worse to interact with. Right. I mean, so I think that's we need to sort of see that aha moment where we really understand how these dots all connect. And I don't doubt that we'll get there eventually. But until we do, you know, these companies are just going to continue to raise money, spend on growth at all costs and hope, I guess, that profits come at some point. I think the question mark for me is where do those profits really ultimately come from? Because, again, going back to just general society, most people are not paying for subscriptions to Claude or Gemini or whatever.
4:45I mean, it is just a very minuscule percentage of people that actually pay for those subscriptions. So that's not going to be a source of income. That's not going to be the solution. That begs the question, will it be advertising? Well, I don't know. It's worked out well for Google, but I guess we'll just have to wait and see.
5:02Lou Whiteman:It's hard to imagine a world where all of these companies are winners, which is really, really hard. Because even if I agree with you, JMO, I mean, look, can you imagine Google trying to charge for search, even if it's AI search? now. That's a non-starter. So it's going to have to be, you know, I don't know. And advertising, I guess, will change, but maybe stay. It's hard to imagine shorter. I mean, I've even seen these like personal assistant things and they, I don't think life or at least life for me isn't rigid enough to fit into the confines of a personal assistant the way they do them. So I think it's a real tough sell.
5:39Lou Whiteman:It is for the enterprise who can gain traction. But even then, I haven't seen anything to suggest like, oh, we are just signing a 10-year deal with Anthropic or something like that. Even that feels very fleeting, company to company. There's definitely a there there. Like Jason says, there is definitely something is involving here. There's something there. But how it turns into sustainable profits for any of these companies, I don't know. It's a weird moment as an investor because I both guarantee you, Travis, that this is not sustainable and it won't work for everyone. And I wouldn't put your money out there betting against it right now, because, you know, so you're just kind of.
6:20Lou Whiteman:Thank you. I appreciate that. Yeah. You're kind of stuck in this la la land where I know it can't last forever, but gosh, it works right now. And that's a very, very unsettling, at least for me as kind of a conservative and I'm not a YOLO guy. And it's a very unsettling place to be where you kind of don't want to, you know, FOMO if you're not involved. And you also know that there is another chapter to be written here and it's not nearly as exciting. Well, and it makes you feel good as an investor, like owning companies like Amazon and Alphabet, for example, where yes, they're making these huge investments and sure there are question marks as to the return on that investment, but at least they've got these businesses to fall back on, right?
7:07I mean, if this turns out to just not return what we all hope it will, at least they have these core businesses to fall back on, these cash cows that they've already got. Whereas with an open AI, with an anthropic, that's more of a one-trick pony right now. And it's not to say that'll always be the case. I mean, they may be able to introduce a number of of different revenue streams as well. I'm not saying they can't, but for now, I mean, essentially, they are just kind of one trick ponies in a market that seems to become just more and more commoditized by the day.
7:43Travis Hoium:Let's also bring in the risk that I think is new in the last six months. Not entirely new, but we've kind of gone to a new phase where so much of this buildup is now being fueled by debt. So you have the hyperscalers, which are now taking on immense amounts of debt, tens of billions of dollars worth of debt. Even Alphabet is now burning through all of its operating cash. It is now free cash flow negative. But Lou, we talked about the NeoClouds. They're sort of on the front lines here. And the piece that I think is so interesting is everybody is saying we have more demand than we can supply for this compute.
8:21Travis Hoium:So we have to pay whatever it takes for memory. We have to pay whatever it takes for debt. Some of those debt costs are going up. But you tie all of these pieces together and CoreWeave says we have a bunch of demand, but that demand comes from Alphabet or from Meta or from Microsoft. And that demand for Microsoft and Alphabet and Meta ultimately comes from a couple of these companies that we talked about at the beginning that are looking to IPO, OpenAI and Anthropics. So it does all seem to come back to is this a house of cards that's built on top of specifically those two companies that are still in kind of this high growth mode, but we don't know what their profitability is going to be like.
9:03Travis Hoium:How do we think about debt layering into this? Because it does seem to take the risk to a new level.
9:09Lou Whiteman:Right. Debt is a fantastic tool, assuming you pay the debt back. And many of fortunes have been lost on that second part, right? I mean, that is the thing. We all are living in houses, today thanks to debt. So, you know, there are really good uses of debt. This is a house of cards or it's a solid foundation that all depends on whether or not they can come through. They don't even really need profits here. All of these companies, they don't need profits. You just need sustained cash flow. You just need to be able to sustain that revenue. For investors, you need the profits. But for the lenders, all you need is just cash coming in the door.
9:48Lou Whiteman:And I mean, we can get there's other companies doing this, but like for the neoclouds, the good news is, is that there's a lot of demand for compute power outside of AI. So there is a fallback. If you build it, they will probably come. But will they come to the extent that we are planning for right now, when we are kind of at maximal stage with AI? And also, will there be any pricing power as far again about an investment? It sounds like what I'm talking about is if you just build it, it's out there. That's how commodities start getting formed. So, you know, I think price and power. So I do think there will be winners and losers.
10:26Lou Whiteman:I do think you have to tread carefully, but I don't know if we are set up for the worst case scenario where just everybody defaults in their loans, because I do think I see cashflow. I just don't know if I see profits, which as an investor at some point, unless I'm just investing in the lenders, I need to see profits as well.
10:45Travis Hoium:Yeah, Jason, the other piece that came out this week was NVIDIA backstopping a bunch of debt from a number of institutional providers of debt. And the way that just in very simple terms, they're kind of cutting up the risk profile the way that you do with a credit default swap or with securitizations of mortgages where there's somebody who's first in line, second in line, third in line. And NVIDIA is saying, hey, we'll be last in line. We'll make sure you get your money back. Just keep buying our GPUs. It seems like we're entering a new phase with all this debt and now with even the supplier saying, hey, we'll backstop this.
11:23Yeah, well, I mean, that's that's been the big question mark for a while, right? It's just sort of the interrelatedness of all of these different entities, these different companies investing in each other to try to ensure each other's success. And ultimately, it's like, well, where is all of the money going to come from? Like with an NVIDIA, for example, at least we know they have this deliverable, right? Their technology is something they can deliver on, and that should continue for the foreseeable future. But, you know, I look at these neoclouds, for example, and think, well, consolidation, I think, is ultimately going to have to happen, right?
12:02I mean, it just doesn't seem to make any real sense unless there's some sort of differentiation that you possess. I mean, the cost of compute is going to continue to come down. And these these neoclouds that are that are riddled with debt and have these sort of questionable capital structures that that's going to kind of come to the surface. Right. The tide's going to go out and you're going to see who's swimming naked. and uh and so my suspicion is we'll see some consolidation in in that sector over the course
12:35Lou Whiteman:the next several years can i and maybe i'm too positive here but can i give you the positive
12:41Travis Hoium:big macro spin we need a little positivity yeah because i mean again because because the obvious
12:45Lou Whiteman:what we're dancing around is what happened the last time that debt just got overwhelmed the system that was 2008 i think i can squint and read nvidia coming out and doing this publicly as a sign that the lenders are doing their due diligence, that there is a need for NVIDIA to do this because there are people asking the right questions or there are people aware of all of these things. They're not oblivious to all of the issues. I look again, it could still turn out terribly for some of the specific companies involved. But as a as someone who just doesn't want to see a repeat of 2008, I do think there are at least some signs that we have learned from those mistakes.
13:28Lou Whiteman:And that's a very good thing, if so.
13:31Travis Hoium:Lots for investors to think about, but you know, it will be exciting when we finally do get the numbers from OpenAI and Anthropic, hopefully later this year. When we come back, we're going to turn to some good news in the restaurant industry. You're listening to Motley Fool Hidden Gems Investing.
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15:25Travis Hoium:Welcome back to Motley Fool Hidden Gems Investing. We did get an interesting earnings report this week from Kava. I'm sad to say we still don't have Kava where I'm at. I hear such good things from you guys.
15:38Lou Whiteman:That's the opportunity, JMO.
15:39Travis Hoium:That's it. That's exactly. Come to the Midwest. But Jason, they had some pretty good numbers. Traffic was up. Spending per ticket was up. There's been a lot of struggles in the restaurant industry. So is this at least sort of a green shoot that maybe things at least in certain pockets are getting a little better? Yeah, I think so, to a degree. I mean, there are, the restaurant business right now, it's obviously very difficult. We're starting to see lines blur between traditional fast food, right, and fast casual. I mean, the menu prices for traditional fast food are really starting to creep up there.
16:16I mean, going to get like a value meal from one of these McDonald's or Burger King or whatever, that's just, it's not cheap anymore. And so I think the fast casual restaurants have a little bit of an opportunity right there to sort of keep keep close, at least in regard to pricing while offering a higher quality meal. Right. And so Kava really rhymes with Chipotle. I think I mean, it was a good quarter. Right. I mean, the revenue up 31 plus percent. That growth was fueled by a 9 percent increase in comps. They opened 17 new stores. They are seeing, as you mentioned, traffic up. That was better than 5 percent.
17:03Um, another interesting data point that I found, uh, regarding the quarter, they, they saw their average unit, uh, volume, right? The, the, the average unit volume for their restaurants now hit, they cracked$3 million per year. Right. And that's, that's up modestly from around 2.8, 2.9 million recently, but that is on par with Chipotle now. Now, I think the caveat there is that we need to recognize the fact that Cava only has a handful of stores compared to the Chipotle, right? I mean, there's something like 350 Cavas versus 4 ,200 Chipotles. Now, that is, I think, at the end of the day, an opportunity.
17:47You mentioned you don't have them out there in Minnesota yet, at least where you live. And so maybe there is a nice runway of growth because, I mean, as a consumer, and I think Lou would agree, we do like what Cava has to offer. It's not terribly hard on the wallet. And it is something that I think could continue to grow for some time.
18:09Travis Hoium:Lou, is this one of those things where people are just eating a little bit healthier? Maybe McDonald's not doing quite as well. I know I own shares of Portillo's. That's not doing particularly well because those beef sandwiches apparently are falling out of favor to a salad bowl at this point.
18:25Lou Whiteman:Salad sounds good. Look, I'm biased here, but I mean, I don't know. I think Cava is winning because they're well managed and they have a good product. And look, it's early. These growth stories don't last forever. But I do think, you know, it's a reminder that leadership matters and concept matters, that not all restaurants are the same, to your point, Travis. The other thing, and I know I don't want to, like, you know, stomp on any, you know, big narratives, but can we get over this GLP-1 is killing restaurants narratives? I believe in GLP-1s. I believe in that. But you're going to have to do runs of clinical trials to figure out why it doesn't stop us from craving Mediterranean, I guess.
19:02Lou Whiteman:I do think that it's overstated. I think what's going on with restaurants is a little bit of macro. It's a little bit of oversaturation. Maybe it's a little bit of GLP ones. But earlier in the year when we had all of these restaurant stocks that were struggling, it was just GLP one is stopping everyone from eating. I think that that is one of those just kind of the narrative overwhelms the evidence things. And I think good restaurants can still win is what we learned from Kava.
Read the full transcript
19:29Travis Hoium:Lou, do you think that pricing pressure is going to be a challenge, whether it's on people spending money elsewhere? Grocery costs are still going up faster than wages are. Same thing with energy prices at this point. Is that something to at least worry about a little bit if you're a restaurant investor?
19:44Lou Whiteman:Sure. And I think it always is on both sides, that their cost and whether or not consumers can afford it. And again, a well-run company can get through a downturn, but it might. I'm not going to predict earnings next quarter, given what's going on in the macro.
20:01Travis Hoium:It will be interesting to see what happens with restaurants. Always an area that I would like to invest more, but it's such a tough space. So don't find a new Chipotle every day. When we come back, we're going to go shopping for sports franchises. You're listening to Motley Fool, Hidden Gems, Investing.
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22:29Travis Hoium:welcome back to monthly fooling jams investing we like to have a little bit of fun in this segment with investing and this week with the news that bob eiger former ceo of disney and josh kushner who runs thrive capital one of the most successful venture capital firms over the past decade or so are buying the los angeles lakers for somewhere around 12 and a half billion dollars what's a few billion dollars between friends uh but that got me thinking if you were going to invest in a sports franchise and you were doing this just for investment purposes, not because you necessarily love that specific team, what would you be buying?
23:04Travis Hoium:There's a lot of options out there, but the prices are getting pretty crazy at this point. Not that they always haven't been very high. Jason, I want to start with the NFL. If we're going shopping for NFL teams, are you going bargain basement? Are you willing to pay up for one of the big franchises? Man, you know, there are so many different ways to look at this. I did a quick search and just by the numbers, you look at the Dallas Cowboys, they're the highest overall return on investment historically. I think Jerry Jones bought them in 1989 for something like$140 million. The team is now, I think, valued close to$16 billion.
23:41So I kind of wonder if maybe, I'm not sure how much juice there is left to squeeze there to be honest with you particularly given the team's lack of success through the years uh at least over the past you know couple of decades probably you know i could i could i could be a local here in in uh virginia and say i'd want to go with someone like the ravens or the commanders or they'll always be the redskins to me um but i grew up in south carolina travis so i'm going to go with the carolina panthers because i think football in in the carolinas is beloved, right? You're getting down there in SEC country, but you're also benefiting from two states, North Carolina and South Carolina.
24:23They both love the Panthers. So I think you just have a tremendous opportunity there. The team, I think, is still somewhat reasonably valued. It's like$8 billion today. I think there's plenty of opportunities. I'm going Carolina Panthers, and you're asking about who you want as CEO. Yeah, I also want a CEO. Who's running this operation? Well, I love, I love watching football, college, NFL. It's great. We're getting to that time of year. I'm excited. I'm the CEO of this bad boy. Wow. I mean, I would love to do something like that. That would be awesome.
24:56Lou Whiteman:You know, what's fascinating about this is that this is like the two sides of a market because JMO and I have similar kind of life experiences and same kind of seeing the North, seeing the South, and we have jumped to opposite conclusions. one thing that really struck me i used to live in the north and i would hear nfl fans make fun of uh franchises in the south well they just don't like football because the falcons games are empty or whatever and down in the south it's and college fans make fun of uh college teams up north like uh you see they don't like football up there because rutgers doesn't draw and look at georgia So like, I don't know.
25:35Lou Whiteman:My life experience is you are never going to be the big dog in the Southeast if you're an NFL team. So if we're talking NFL, I'm heading for the North. Green Bay is the stereotype answer. Buffalo seems to have a rabid fan base. But Travis, I am just going to do a shout out to your hometown. All I saw when I was up there recently was, I don't even understand Skull. Skull? Yeah, I don't know. have to explain that to me offline but uh i i love that the new stadium looks like a viking ship too i so i am i am enamored with that i am going north here and i'll take the vikings baby
26:14Travis Hoium:you know jason talked about regional dominance look at a map of the united states by the way i also thought it was funny that that you were saying that rutgers was north which is about where Omaha is at from a North South perspective. So I don't consider that very far North.
26:30Lou Whiteman:Boston College doesn't draw either. God, now we're going to get letters.
26:35Travis Hoium:But you want to talk about regional dominance. You've got not only Minnesota, North Dakota, South Dakota, Nebraska. You can go into Wyoming, Montana. You've got a long ways to draw from here in Minnesota.
26:47Lou Whiteman:Well, sure, territory, but you're still getting like one Chicago suburbs where the people travel.
26:53Travis Hoium:Fair enough. But we got a lot of land. No, the other piece here is they built a phenomenal facility, their practice facility, and we were at training camp. They do a great job with that. Kids love going. It's five bucks. Five bucks to get the kids in. Oh, man. Get them excited about football. So love the shout out there, Lou. Who's running the team now?
27:12Lou Whiteman:So I want creative disruption because you don't want to start over, but you want to manage an existing business in new ways. and my go-to there is alan malawi the former head of ford who is just a great ceo of like look he
27:29Travis Hoium:did not is he going to travel from san diego to like he did when he was running for him he probably
27:34Lou Whiteman:wouldn't want to and i mean is alan i don't know i think alan's still with us isn't he but he is he did such a great job of ford basically just kind of running the existing business but also thinking about you know not like just resting on the existing business i think that's what the nfl needs in general. I'll tell you the other thing about Alan Mulally, and I had the very good fortune to interview him on the floor at the North American International Auto Show in Detroit, I don't know, back in 2012. He has just this uncanny, you cannot have a conversation with him and not walk away just fully inspired.
28:13Like, I got to believe he would just have a football team just chanting at the bit, ready to go from day one. He is just one of those guys, get you seeing everything glass half full.
28:28Travis Hoium:All right, well, I appreciate the shout-out. I think the Vikings would be a good buy, although they probably want a lot more than they paid for the team a decade or so ago. All right, if we are looking at NBA teams, the Lakers are now off the table, but Jason, who are you looking at? So, I'm not the biggest NBA guy. I mean, thankfully, I got to grow up in the era of Jordan, watch the Bulls dominate, which was a lot of fun. But one of my best friends growing up, and this is down in South Carolina, he had moved there from Rhode Island. And so he brought with him his love of New England sports. And so we grew up watching a lot of Celtics basketball.
29:07And I think for me, I would look at the Celtics as a really fun opportunity to buy. I think it's the fourth or fifth highest valued NBA team, fifth maybe highest valued team in the league today. I think there's still some opportunity there, particularly given the rich history, just this hardcore diehard fan base. Yeah, there just seems to me a lot to like about the Celtics. So I think I'd go with them.
29:36Travis Hoium:And who's running the team? This is what I really want to hear. Oh, I've got to go with Shaq. I always loved Shaq as being a part of Papa John's right back in the day he was on the board or whatever and he's like his brand is all about fun i mean shack is just uh such a character and obviously an intimate knowledge of the game i think i think he would be he would be a very astute uh and dedicated ceo so that's that's my pick it seems like he could be the kind of innovator that jerry bus was with the lakers
30:03Lou Whiteman:what 40 years ago or so uh so i love that uh lou who do you got so i'm i'm going homer here but i living in Atlanta for 20 years and seeing the way this city loves basketball unfortunately Atlanta hasn't the Hawks haven't given them much to root for until maybe recently Jeffrey maybe but uh I do think that this is at this I know this is the hometown fallacy but there is a just pot of gold waiting to explode here if you look at joy look Travis there's a really good player up in your neck of the woods that came from just just around the corner from me Anthony Edwards Jalen Brown uh uh kcp a lot of great players from this area i am going with the hawks i'm gonna run them right and i'm gonna turn this thing into a gold mine because this city really really loves this basketball you remember how electric the days were when spud webb was playing there yeah i so i wasn't there then but yeah dominique is still i mean dominique is still around a lot when you games it's a look this city is built for basketball i think we actually run a league out of a downtown thing just a small little like a summer league and it's amazing the people you get to see going through there it's this this is a basketball city to just the all the football talk we forget about
31:20Travis Hoium:it it does it seems interesting with the nfl you could almost buy any one of these teams and you'd be just fine with the salary cap and you know people the fandom is kind of dispersed financially you probably do just fine with any of the teams but with the NBA you do have this local people either care or they don't care and these companies are either or these these franchises be either relevant or they're completely irrelevant you know think about like New Orleans I I'm sure that's a very valuable franchise but there's no way that I would want want to be want to be buying that at this point all right let's end on this major league baseball lou i think you have a few more thoughts with mlb if you're buying a franchise what do you got i mean so this one is the most
32:02Lou Whiteman:personal and i have to buy the baltimore orioles and figure out how to do it although i do like we have the carlisle guy david rubenstein owning them now but uh look i'm not gonna say this is the best buy but i just there's tradition there there's a rabid fan base the whole washington thing is behind us. I'm going with my heart here. I'm buying the Orioles just because my fantasy as a little kid was to pitch the Orioles to back-to-back World Series. That's not happening. So maybe I could buy and manage them to back-to-back-to-back World Series. Appointing himself as CEO. Maybe. Although, no. Can I just because it's such a complicated game with all the contracts and stuff and you have to do so many spinning wheels and you got to be good with money.
32:45Lou Whiteman:I'm just really going into the um archive here michael dunlop the guy who built melnet he's like one of my heroes as a ceo i want michael dunlop to manage all of these things so there you go this is going to be the future billy bean yeah i can't believe you didn't go with cal well no no honestly i don't think i want cal running things but cal no or actually cal write me a letter that's fine all right jason who are you buying yeah man i tell you camden yards that's just a wonderful baseball experience i to go see a game there. Bullock's Barbecue, by the way. Oh, yeah. Luke, that's it. Bullock's Barbecue.
33:20I got to, many years back, got to go to Camden Yards to watch the Orioles play the Red Sox. Pedro Martinez was pitching for the Sox. We had the seats right behind home plate. It was really cool to see. And that leads me to my point, much like with the Celtics. Grew up with my buddy watching the Celtics. Grew up watching a lot of Red Sox baseball. I'm a Red Sox fan. I love, again, just the history, the tradition, the ratted fan base. And so what I think is interesting, when you look at the Red Sox versus the Yankees, the disparity in the valuation there is pretty considerable. I mean, you get the Red Sox today valued at something like$5 billion.
34:06Yankees, understandably, valued at something like$9 billion. dollars um now i do think it would be interesting to see if we hit in baseball uh some sort of salary cap right now it's kind of the wild west and the teams that make the most money you're able to spend the most money and get the most talent and they tend to do you know obviously the best um i i think those days are numbered but i think that actually is something that would play out in in the favor of your teams like the red socks and even the yankees because of the lore the history, the tradition. People want to wear those logos, right?
34:42And they just have so much opportunity. So I'm going with my Red Sox and leading the way. You know, I thought about this. If you go with something easy like a Tom Brady, just because people love him up there. You know what, man? I'm going Brian Nickel because it seems like everything that guy touches turns to cold. And so maybe he could bring another championship there to Boston here in the next few years. And imagine what would happen to the restaurants in Fenway. Oh, my word. Double dip in there. You're getting the best of both worlds.
35:15Travis Hoium:All right, we got about two minutes left. Lou, quickly, if you're buying an MLS franchise, by the way, these have gotten incredibly expensive for the actual popularity of the league. But if you're trying to get in early, what are you looking at?
35:30Lou Whiteman:I'm going to go to Jamo's backyard. The Charlotte area for soccer, just the Carolinas is so good. And I like the fact you're sort of getting in earlier, not getting, you're not going to pay the top dollar for MLS, but you are getting a great fan base and a great grassroots soccer. I'm going to go there. I don't know who I'm going to pick as CEO, though. Maybe, can I say Clint Dempsey, just because he was my favorite U.S. men's player growing up. Just a fantastic guy. I don't know if he'd do a good job or not, but I do respect the guy. So, Clint went to school in South Carolina. to let's just put him in charge and see what happens jason i well i admittedly this is the area i have just the least file on um but doing a little bit of quick research i think you got to go uh los angeles football club lafc i think when you look at the two clubs that are really the the highest value today it's you got miami and you got la thing about miami is i think that all really hinges on messy and he's not going to be around forever i mean i think you know the question as to whether he's going to be in the next World Cup.
36:36Understandable. He's just, time waits for no one. So I think LA Football Club is probably more durable of the two. And, you know, as far as CEO, I just, I don't have really a strong feeling there. Again, it's not a sport I really follow. So I don't know who would necessarily be most suitable.
37:01Travis Hoium:but bring Jim McNerney in out of retirement. Yeah. or how about this?
37:07Lou Whiteman:Jason, your CEO is already there. David Beckham. There we go. I mean, there you go. He's in Miami, but yeah, I think Beckham, obviously. Yeah. You want to go, you want to go with someone who has inside knowledge. And so yeah, Beckham could make sense or, Hey, I mean, you know, when Messi retires, maybe he's got another gig weight form there.
37:27Travis Hoium:Yeah, that will be an interesting one to watch the valuations of some of these soccer leagues because the other ones are going crazy. So I'm sure the rich guy club is coming after soccer next as well. When we come back, we're going to get to the stocks on our radar. You're listening to Motley Fool Hidden Gems Investing.
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40:04Travis Hoium:As always, people on the program may have interest 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 The Motley 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. We'd like to end the show with the stocks on our radar. Jason, I'm going to have you go first. What are you looking at this week?
40:32So a company I was digging into this past week, had not really dug much into it before, but was looking at it for our Quantum Leap service. The company is called Quantum Computing, ticker is Q-U-B-T. And Quantum Computing works in the photonics space by providing quantum machines to commercial and government markets in the U.S. And, you know, photonics, right, that uses light instead of electricity, ultimately to generate transmit and process data. And so it just offers big benefits in speed, efficiency, higher bandwidth, yada, yada, yada, right? So, you know, this is a company to me, it's interesting in that it's pursuing this quantum opportunity, right?
41:17The quantum opportunities were still very early days. Now, it's worth saying, too, that Alphabet CEO Sundar Pichai just recently said that quantum today is where AI was five years ago. So, I mean, these are companies that really believe in what quantum computing is going to offer us in the future as far as the benefits to your traditional classical computing. But the company just reported results for the quarter. It really is important to note this is a company that is just starting to generate revenue traps. It's not some company that's just bringing the money in. I mean, they generated$5.6 million here in the second quarter, and that was a massive jump from just$61 ,000 the previous year.
42:01And this is a company that today is valued at around$2 billion. So the market is looking at a lot of these pure play quantum companies with a lot of optimism because of the language that we hear from a lot of these leaders. and just the idea that maybe quantum is sort of the next AI or the next leg of AI. That remains to be seen, but quantum computing is one that will continue to follow in the service and monitor its progress. All right, let's bring in Bart Shannon, who's filling in behind the glass.
42:29Travis Hoium:Bart, what do you think about quantum computing?
42:31Lou Whiteman:Well, first of all, Jason's explanation made my brain hurt because I need to understand what a company actually does before I can fully embrace it. But if they don't name their first product Ziggy, it's going to be a huge disappointment. But to quote Chevy Chase, I was told there would be no math. Bart, the best way to think about it is remember when you used to like hit up your neighbor across the street with a flashlight? Just imagine that at scale. Okay.
43:01Travis Hoium:Got it. There we go. That should be in the earnings presentation.
43:06Lou Whiteman:It should be their tagline. All right. Lou, what are you looking at this week? Bart, I'm taking a look at Firefly Aerospace, ticker FLY. So they build and launch small rockets, among other things. They have a nice satellite business too, which we'll get to. This week, the company reported better than expected earnings, which is good. But more importantly, because this is a very young company, they had a strong$225 million in future bookings in the quarter and a new launch agreement with Lockheed Martin that runs through 2031. There's a lot of risk here. It is literally rocket science here. Breakeven is years away.
43:41Lou Whiteman:But one constant investable theme is if you can get things into space, there is a market here, especially when SpaceX and Blue Origin are devoting so much of their launch capacity in-house. Firefly can get things into space. They're using the revenue from their satellite business to build out launch. I really find this one intriguing.
44:00Travis Hoium:And we got a great ticker, Bart, fly.
44:03Lou Whiteman:can't be beat and you can't go wrong with any company that names their company after a joss
44:08Travis Hoium:whedon television show there you go which one's going on your watch list part uh i'm gonna go
44:14Lou Whiteman:with firefly uh quantum i'm still wrapping my brain around congratulations to do to lu that's
44:19Travis Hoium:all the time we have today i'm travis for bart shannon lou whitman and jason moser we'll see you next time
44:33Thank you.
From the publisher
Demand for AI is exploding and two companies – OpenAI and Anthropic – are driving the industry forward. Everything from hyperscalers to neoclouds to memory stocks are hanging on the demand for tokens they need. We discuss that demand, how debt got involved, and what could go wrong. Plus, what sports franchise would you buy?Travis Hoium, Lou Whiteman, and Jason Moser discuss:- AI IPO Setup- Insatiable Demand- Debt Gets Involved- Restaurant Recovery?- Buying a Franchise- Radar StocksCompanies discussed: Quantum Computing (QUBT), Firefly (FLY), Alphabet (GOOG), Amazon (AMZN), SpaceX (SPCX).Host: Travis HoiumGuests: Lou Whiteman, Jason MoserEngineer: Bart ShannonAdvertisements 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.
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