Mark Zuckerberg’s Second Act?

17:56Lou Whiteman:So here is I'm trying to be a pragmatist here. And here's why I think all this could be a good thing or matter. It's because there's people like us, lawyers, pundits, everybody has been arguing forever. Like, all right, well, is Blue Owl exposed here? No, Oracle isn't exposed here. Why don't we just go like hash it out? I don't know. You know, like if they actually follow through here, at least instead of just debating legal ramifications and who's on the hook for where, what, maybe we'll get a little clarity on like a non-hypothetical. Maybe. I don't know. Like, I don't wish Oracle harm, but maybe if this plays out, we can actually answer some of these questions instead of just speculate about them.

18:32Travis Hoium:Yeah, it's so interesting. We talked earlier in the show about the AI products that are coming out. those are incredible. I don't think any of us are debating that there's a ton of important technology being built, but then underneath it is what's the business model? Who's going to pay for all this debt? And even a company like Meta, we don't have a great answer. So lots of that to come over the course of the rest of the year in 2027. We'll be back in a moment.

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21:00Travis Hoium:Welcome back to Motley Fool Hidden Gems Investing. In this segment, we like to have a little fun with investing. So I wanted to rank the top tech products of 2026. We got the new charm and some new glasses from Meta this week. So where does that rank with Apple Duo, Waymo's OG? Is that their new vehicle? I don't know exactly. Ojai? Is that how you say that? That's probably right. It sounds better than what I said. Fitbit Air or the Garmin Circa. So these new smartwatches that don't actually have a watch on them. They're just kind of connecting your data. The Aura Ring. Aura, by the way, going to be going public here maybe in the next week or so.

21:35Travis Hoium:And the Figure Helix 3. Can't quite buy this humanoid robot yet. But if it can fold my laundry, it may actually be worth something. So, Emily, those are the products that I want you to rank today. Which one is going to have the most lifetime profit? At the end of the day, we're investors. We want products that make money. Which one's actually going to make money for these companies? Yeah, when he first asked this question, I was thinking to myself, sales, that's an easy one. No, but profits really does add an extra dimension here. And I think, in my opinion, I think I'll fight anybody who disagrees with me on the first one.

22:07It has to be the Apple duo, right? The flip phone from Apple, they're selling it for nearly$2 ,000. They have by far the biggest scale, incredibly profitable company. I mean, Apple does not miss. Yeah.

22:20Lou Whiteman:To that point, you're really, really insulting the people at Apple if you think that they are going to do this if they can't make a profit on it. They're not.

22:28Travis Hoium:But they introduced the Air, the iPhone Air a year ago. We're already talking about that essentially coming to its end of life because it hasn't sold very well. You don't think that's possible for the duo? It's certainly possible, but I will say, Travis, with this list you gave us, he set the bar pretty low. Yeah.

22:46Lou Whiteman:And also it's profit on a unit basis. And again, I don't think I want a tablet as a phone personally, but I don't do a lot of like I'm old. I have TV. So, I mean, I'm not the target audience. I live in fear of, you know, teenagers that instead of they're distracted by their phone, that their entire face is covered as they're walking down the street because of these huge things. So I don't know. But look, I do think that there's a market for this. And I do think that Apple priced it to be profitable. So I think, again, as Emily said, I don't see a lot of profits on this list. So I lean in there.

23:22Lou Whiteman:If I could offer another one, though, I'm going to go to the other extreme, kind of the most boring thing on here. whether it's the Fitbit Air, the Garmin product. And again, I'm going to lean on Apple here. If Apple is suddenly, according to reports, scrambling to come out with their own version of this, I, again, I, this is, I'm boring and consistent on this. I don't think we need new smart screens. I think that my, I have a smartwatch and I hardly ever use it, to be honest. I think just something that collects whatever health data because I do see value there, but doesn't have a screen and is lower cost.

23:57Lou Whiteman:I think that's a hit. And again, if you're talking profits, it's also without that screen, not that expensive. I think the world is moving not towards more screens, sorry, Zuck, but fewer screens and just the kind of my phone works pretty well and little kind of add on things like a Fitbit air where it's just collecting kind of your health data you want without the added bells and whistles that they might be on to something there. What do you think?

24:22Travis Hoium:Is that a compelling product, Emily? Well, I'm balancing those. You know, I don't disagree. We're talking about a high volume product and something like the Fitbit Air Garmin Circa. I'm trying to balance it against another one on your list, Travis, which was the Oura Ring 5, which is effectively, in my opinion, the same thing, but it does sell at a higher price point. Now, I hate to give a nod to Oura Ring here because I actually really hate the rings. I think they're ugly. I think they're for people who just won't, you know, sacrifice and go get yourself a nice big Garmin smartwatch like I have.

24:50But I don't love what I've seen in the documents here for Aura ahead of going public. But they do have incredible gross margins on their product. I think there's a lot of power users who are probably willing to pay up for it. So I think I actually rank the Aura Ring higher than the Fitbit Air or Garmin Circa in terms of total profits that they can generate. Now, do I like Aura as a company? Is this me telling investors to go out and buy this IPO? No, no. And there's so many reasons for that. But another one being or ring is kind of like, in my opinion, Fitbit back in was it 2016, 2017? I have some flashbacks to what it was like to to be a Fitbit bull of which, of course, I was back then.

25:31And I think or in my opinion, it's probably headed in the same direction.

25:35Travis Hoium:So is the basic idea here from both of you that the the band that's connect collecting information from your wrist, that's kind of, you know, socially acceptable. It has a little bit of staying power, but the ring that is collecting information has a little less staying power as a device we're going to be wearing a decade from now. I think it has less power users in terms of the data that it's able to collect. And I think that's if you look at the performance of Garmin recently, I think that's a great example of it because these Garmin devices that they've launched, their fitness segment has been an incredibly strong performer for them because they're niche.

26:10They find the person who swims every day, the person who golfs, the person who runs, and they find, okay, what's the best, most valuable data that we could provide to that niche? And how do we get them to pay$2 ,000 for this watch? And in my opinion, that's the only reason Garmin has been able to sustain itself in the world of Apple watches, which is for the more everyday consumer. Or Ring, in my opinion, is trying to be the Apple watch without actually being a watch. It collects minimal amount of data. The data, in my opinion, is not particularly useful that it does connect or particularly reliable, but it's a fashion statement.

26:44It's cheaper. It's easily accessible. But ultimately, is it the sort of thing that people really devote themselves to and wear every single day? In the case of the Apple Watch, you had your iPhone attached, all your data there for Apple. So it makes a lot of sense for why that had staying power. In the case of Garment, it was more niche. That has staying power. I don't see the staying power with Aura unless somebody comes around and acquires them and gives us a reason to put it on every day.

27:07Lou Whiteman:And it feels like a small sample size, but everyone I know who has an Aura also has a Garmin or an Apple Watch. So I think Emily's right that it is sort of a status thing. I mean, look, I played a lot of basketball growing up. I almost had to wear a wedding watch. So I don't think I am the target because I can't get rings on my hand. So maybe I'm just missing out on the fun. But it feels more fad than some of these other things. We'll see. I think it is maybe higher margin than some of the other products, but also maybe less total addressable market or less staying power. One more, though, if you want profitability, whatever you want to pronounce the Waymo vehicle.

27:48Lou Whiteman:Yeah. Look, they are this is their core business. So they have to be, you know, to make it profitable. Their cost right now is pretty high. So if they can self-develop and actually have a form that optimizes what they do, I would think that lifetime profitability, this could be a dark horse, assuming Waymo's tech continues to work as we want, because it seems like that this is maybe second only to Aura, because the ring is their only business. But this is the one that is most core to the business in terms of if Waymo is going to work, they need to design a purpose fit vehicle that works. So this may be the Dark Horse winner on profits.

28:33Travis Hoium:Yeah. And if you're not familiar with the Ojai, this is a purpose built vehicle like like Lou said. So it's actually made by Zeker. It's made in China coming over to the U.S. It's essentially just a small van, but there's no driver in it. It's built to be fully autonomous with all the hardware built in. So instead of having this stuff that's added on afterwards, like we have with traditional Waymo vehicles or even with like the new Lucid vehicles, it's all integrated. So it's kind of like where we seem to be going in the future. But Emily, that seems to be a pretty compelling thing for them because they've proven the tech.

29:08Travis Hoium:Now it's a matter of how do you bring down the cost and actually make this into a real business? Yeah. And let me let me just pose that one step further. Okay, let's say you do bring down the costs. Where's your revenue coming from? It's rideshare. So you're thinking to yourself, what I'm basically doing is, in the case of the Ojai, I am basically just replacing the Ubers of the world with these robotic vehicles. And that's your addressable markets. And we know how challenging it has been for Uber and how many years it took to generate sustainable profits on their platform. Now, in the case of Waymo, they would not necessarily be sharing those with the drivers.

29:42And that was obviously and continues to be a big headwind for the Ubers of the world. But I will say, I actually kind of disagree with Lou here because I don't see the same opportunity for profits just based off of how Waymo is planning on finding value, finding revenue from the OI itself, which is to your point, a purpose-built taxi vehicle. Now, I think Waymo can get there eventually. And I think eventually they will be selling a lot of these products to the general populace. And in that case, I think that's where a lot of their margin will come from. But when I'm looking out over the next, like, you know, we didn't determine a timeframe, but let's say five years, five to 10 years.

30:15I just don't think, I think that Ojai is an example of what Memo can do with an attempt to spread awareness, to spread adoption of self-driving vehicles. I don't think it is going to be a big profit generator for them. All right.

30:30Travis Hoium:We kind of have two product categories left, Meta's products and the humanoid robot from Figure. Emily, where do you stack those up? Oh, my gosh. Well, I never thought I'd be putting something behind meta here, but here I am. I think in the case of meta, I actually mentioned at the top of the show, but I'm pretty bullish, I think, if they're able to get people onto the AI assistant about how many people may adopt their new glasses as a result. And even for people who aren't onto their AI assistants, the glasses in general, not having a camera, I actually think that with the press and the positive direction in that regard of product development, the new glasses at the price point, which I think they're, aren't they just right around?

31:09Someone help me out here.

31:10Travis Hoium:There's several different price points. And that's one of the things that's interesting because they do have a lot of partners, actually. So there's Oakley glasses, there's Ray-Ban glasses. There's becoming many more options for users. Yes. And in this case, I'm thinking of specifically at the Ray-Ban glasses. That's probably the next one I'd put up in terms of profits. And I even would put the Tamagotchi, I hate calling it a Tamagotchi, but the charm, the charm that they attach as part of this hardware initiative. I almost put that above the figure Helix 2, which is the humanoid robots, not just because there's obviously so much uncertainty about what humanoid robots look like, but I could see a world in which if hardware does take off for meta, these things become almost like collector's items for the power users.

31:48Maybe they don't sell a lot, but maybe they're able to demand a premium. Who knows?

31:52Lou Whiteman:Yeah, I think I'm pretty skeptical. And again, Emily did a good job bringing up a timeframe because that does matter with Waymo. I still, I even think glasses are going to end up being a fad. I don't think there's any permanence in any of these product categories. I think we're going to use them. We're going to get sick of them. I mean, at best, maybe the arc of a tablet, which has done pretty well. But again, tablets sort of feel like yesterday's news. I'd still put it over. I mean, Travis, you say you'd love to have a robot to do your laundry, but is laundry really so painful that you'd pay$20 ,000,$30 ,000 to have it do the laundry?

32:33Travis Hoium:Yes.

32:33Lou Whiteman:As the person who's not allowed to do laundry anymore in our house, yes, probably. I may be a long way off, but a I am still skeptical about, you know, how these things do fine, fine motor skill movement on a variety of things. Just I know the challenges that they're having in factories that if you want it to be fine motor skills, it has to be specialized. So this kind of humanoid replacement, like, you know, Rosie can go fold your laundry and then do your dishes and do all of these different like fine motor skills tasks. That feels like a long way off, very expensive and not a lot of profits.

33:13Travis Hoium:All right. Well, the vote is sounds like incremental products are going to be more successful than these revolutionary products. Interesting way to look at tech today. When we come back, we're going to talk about the stock center radar. You're listening to Motley Fool, Hidden Gems Investing.

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34:02Travis 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. All right, I wanted to get to one of the interesting news items that came out last night. that is TPUs in space, Lou. We've been talking about all the opportunities in space for months.

34:31Travis Hoium:We've been talking about data centers in space, which seemed like a pipe dream and a crazy idea. But this project may go into space next week. That seems like something pretty interesting.

34:43Lou Whiteman:It is, but data centers in space, let's do a big asterisk here. I saw, we're measuring this in kilowatts, not gigawatts, okay? And we're measuring it in -

34:53Travis Hoium:Several orders of magnitude difference between a kilowatt and a gigawatt.

34:57Lou Whiteman:And not even several kilowatts from what I saw. OK, so what we're talking, we're talking about a server in space and not really a data center. But look, this is good. Incremental progress. Tests are good. We have been talking about, will this work? Will this work at scale? All of that. We need to at least start doing this and find out if it works. I remain skeptical. Look, I mean, it's a different industry, but look at QuantumScape, which has been a favorite among investors because of the promise of solid state batteries. And sure enough, we've seen that solid state batteries, they work. We've known this now for decades in quantum skates chemistry.

35:34Lou Whiteman:They proved that out years ago. And yet we're still not driving them anywhere. You know, they can't be done at scale. They can't be done. I think that there's something similar here that, yes, let's get some TPUs up there, see how they behave, see how long they last, see if our radiation and our heat sucks work and all of that. Maybe this is the first step towards data centers in space, but this is not, oh, wait, it happened. You know, we're a long way from that.

36:02Travis Hoium:Emily, it also seems like this is something that would be welcome for a lot of people around the world who don't necessarily want data centers, not in their backyard, but just around them at all. Yeah, it's rare that you have an initiative in the AI space that, you know, the general populace and Elon Musk are both behind, which is, yeah, sure, send the data centers out of space. But I will say, you know, we're as investors when we think about these things. We're not scientists, obviously. We're not the people who are actually doing the really important work behind how to make that feasible. But we do have the option to listen to people and listen from experts.

36:32And when I hear Elon Musk come out and say, we're going to have, you know, it's going to be cheaper to build a data center in space in two to three years than it will be to build it on Earth. And then I also have a team of engineers coming out from Google saying, yeah, we're testing this out right now, but it's probably going to be 10 plus years before we're practically, which is, in my opinion, still a very short time frame. But before we're practically actually doing anything with data centers in space, I know who I personally lean towards believing, but I do think it's great that there is general social acceptance of the concept of data centers in space, which at the beginning of the year sounded crazy to me.

37:04Lou Whiteman:How terrible is it going to be when it turns out that AI does just wipe out the humanity, but it does so by giving Martians a cheat code and they can come in or something like that? I mean, have we thought

37:15Travis Hoium:this through people. I don't know. At least there's no force majeure in space. All right, let's get to the stocks on our radar. Emily, you're up first. We'll bring in Dan Boyd behind the glass for his thoughts. So this is a bit of a surprising one for me, but the stock on my radar this week is Stitch Fix, the ticker is STFX. And the reason Stitch Fix is on my radar is because they reported yet another what the market deemed to be dismal quarter. I mean, shares of this company are down 90 plus percent from where they were even just a few years ago. And that's because ultimately personal styling, especially in the advent of AI, has had a hard time keeping people engaged, keeping them buying stuff on their platform.

37:53But I made this mistake with Peloton in the past where I wrote off investments entirely because I perceived them as completely uninvestable and discounted how much a niche audience can really stick around. And one of the things that I saw Stitch Fix this quarter was that they have a niche supply of people who are very to engage high retaining, loyal users of their platform. I still think the company has a lot of existential threats, but I am wondering to myself, how cheap is too cheap for Stitch Fix when it comes to the fact that it seems like there's a group of users for this program, this app, that will not churn?

38:26Travis Hoium:Dan, what are your thoughts on Stitch Fix for your clothes? Well, you know, I actually used to be a Stitch Fix user. Really? And I enjoyed it. I thought it shopping whatsoever. But I stopped for two reasons. One, it's quite expensive. And two, the pandemic and the switch to working from home means I just don't need nice clothes very much. So the ones I have are fine. Right. So, yeah, it just was something that I didn't need anymore. Dan, you should take more pride in your clothing. Re-sign up for Stitch Fix. See what they send you. Yeah, I'm sure my two-year-old and four-year-old would appreciate that.

39:02Travis Hoium:Back to the office, maybe the most bullish case for Stitch Fix. Lou, what are you looking at this week?

39:08Lou Whiteman:All right, Dan, I want to look at Royal Caribbean Cruises, ticker RCL. And look, I am not looking at it because I want to take a cruise. God, no, that's the last thing I want to do. But rather, I'm looking at it because Royal Caribbean did something I thought was pretty interesting this week. They took a 50 percent stake in resort operator sandals, spending three billion dollars for it. Now, look, I mostly know Sandals from a subplot in the office, but they do have a portfolio of 18 all-inclusive resorts throughout the Caribbean that are very, very popular. I think this is interesting because RCL, look, they're trying to expand behind the boat.

39:44Lou Whiteman:Management sees a$35 billion market opportunity here. By comparison, Royal Caribbean did like$20 billion in revenue in the last 12 months. So even if, you know, I know total addressable market games, but if they can actually get past the boat and find something here, that's interesting. It's also interesting to me because cruise lines kind of left for dead after COVID. They have rebuilt themselves to the extent that now they can invest billions in a questionable consumer market where, you know, otherwise you'd think they'd be battening down to hatches. Pardon the pun. So I think, you know, this pivot is interesting.

40:17Lou Whiteman:It could be a differentiator. I'm watching closely. I'm curious how this works out.

40:21Travis Hoium:Dan cruises and sandals yeah so sorry Lou but there's I don't think any power on this earth that can make me be interested or invest in a cruise company I find the idea of cruising absolutely important I'm actually with you there make it official Dan which one's going on your watch list surprising everyone we're gonna go with stitch fix this time around oh congratulations Emily that's all the time we have for today thanks for listening everybody thanks for to to Dane Behind the Glass, Lou and Emily for joining me. We'll see you here tomorrow.