Tesla’s Robotaxi Non-Event & GPT-6 Is Here!

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20:08Travis Hoium:Welcome back to Motley Fool Hidden Gems Investing. In this segment, we like to have a little bit of fun, and I wanted to look in our crystal ball. We've talked about a couple of big things that are happening in artificial intelligence, in autonomous vehicles. So I want some 10-year predictions from Lou and John, and we can kind of go through how we're thinking about these things when we're looking for investment opportunities, because this is the kind of time horizon that we like to look at as foolish investors. So Lou, which company is going to have the most autonomous miles driven per year 10 years from now, 2036, Tesla, Waymo, or you can take the field.

20:44Travis Hoium:but you have to pick someone else if you're going to take the field.

20:47Lou Whiteman:All right. So I'm going to push back on something John said earlier, right? He was saying that he thinks that it's going, like individual automakers are all going to have their own technology. I think that the long history, whether it's technology or parts in the automotive industry, is that just, you know, normalize, commoditize and move on.

21:07Travis Hoium:So that would be like the modular business model. For example, the level one solutions today, Most of those come from Mobileye.

21:15Lou Whiteman:Something like that. Yeah, I mean, look, and I know this isn't the same as wiper blades, but I think there's just a long history of commoditization, innovation turning into commoditization in this business. And I am not going to assume otherwise. I didn't know I had to pick someone in the field. I was going to say the field for that way, but I don't think it's going to be Tesla. I think I would take Waymo over Tesla here. I think I'll take the field. if you make me say GM, I'll cringe, but just because they're bigger and I think they'll stay bigger. But yes, something like whether it's Mobileye or NVIDIA or someone, I think that this is going to just be like right now, everybody buys their turbochargers from the same place.

21:57Lou Whiteman:Basically, you know, one company. I think that 10 years from now, we're going to have a similar situation with the technology inside the cars too.

22:05Travis Hoium:Yeah. So the idea here is that instead of each individual automaker developing autonomous driving technology. You have one company develop it and then sell it to everyone else. That's the modular business model. A couple of names there would be AVRide, WeRide. One of those is owned by Nebius and one of them is publicly traded. I always get them mixed up, but there's like Pony AI. There's a dozen or more companies that kind of fall in that category. John, what do you think is going to be happening with autonomous vehicles 10 years from now. Assuming no regulatory burdens or barriers, I would say Tesla.

22:39And I think that everyone listening is going to be like, this guy just loves Tesla. Okay, I don't own Tesla stock, I don't plan to buy any right now. But I do see the case here that they're going to have the most autonomous miles because they're the ones that can scale manufacturing to the cyber cab faster than competitors, in my view. So I would say that 10 years hence, if there is regulatory green light, then they're the ones that are able to get it out there. Plus, they have the resources to potentially subsidize those vehicles, whereas maybe competitors don't. We see that right now with AI companies, right?

23:12You're not paying the token costs, the true token costs. AI companies are subsidizing those to a degree to get you to adopt. I could see the same thing happening with Tesla, and I would see the incentive to do so.

23:22Lou Whiteman:Can I break in? I'm honestly curious what you guys think, like a related question. And those miles, do we think that the cyber cabs or the autonomous vehicles are going to drive the most miles? Or do we think it's going to be individually owned vehicles in 10 years?

23:39Travis Hoium:So just to that point, they basically had an inquiry yesterday. I think a form that you could fill out saying, hey, I would like to be a fleet owner of cyber cab vehicles. Or something like that.

23:51Lou Whiteman:In 10 years, do you think most people don't have a car in the garage? I'll say no on that in 10 years. That's why I'm curious. Yeah, I mean, I don't want to give up my manual transmission, so I'm definitely going to keep the car in the garage. But it's a great question, Lou. It's a great framing. I don't know what the majority of people are going to feel about that. Yeah, I don't either. I mean, maybe eventually, but 10 years seems really, really short for me to, like, think of the world changing that dramatically.

24:19Travis Hoium:We'll see. Here would be my prediction is I think so we have, you know, me, my wife and three kids and a dog. There's it's probably unlikely that we give up all vehicles, but I would love to live in a world where we have one large vehicle, a large SUV or a van, whatever it is for driving the family around. And then that's it. And if I need to get somewhere or my kids need to get somewhere, there's an autonomous vehicle that can just pick us up, you know, within a minute or two. That might mean that people still have vehicles in their garages, but there's fewer of them. So we'll see. It'll be interesting to see how this plays out.

24:59Travis Hoium:And there's a lot of bets to be made, whether you're looking at Tesla or a lot of other opportunities in the industry. Okay, who is going to be building the best AI model? And I'm talking about the frontier side of things. Is that going to be Google, Anthropic, OpenAI, Meta, or the field? Again, I'd like you to take somebody, but I don't necessarily know who would be that player. And NVIDIA, maybe, something like that in the field. But the idea here would be not everyone is going to be on that bleeding edge 10 years from now. Companies are going to eventually capitulate and kind of tap out. Lou, who do you have winning this race?

25:39Lou Whiteman:I have no clue, but I'm going to take you through my logic here and explain why I come to where I do. I don't think most of the revenue is coming from the bleeding edge, as I said before. So that makes me think that the best AI model, I don't know who's going to be around to fund it if that's what you're focused on. I think the AI model providers in the future are going to be the Googles and the Metas and the ones that have other businesses to support it. I don't think both Anthropic and OpenAI are around as independent companies in 10 years. Maybe one of them, and it's hard to say.

26:16Travis Hoium:Do you think they go public in the next year or so and then they eventually get bought out either under distress or for some other reason?

26:24Lou Whiteman:Or strategically, yeah. I just don't think that there is going to be enough revenue for the bleeding edge models for this to work as a standalone business. So I'm guessing the dominant AI vendors are going to be, if not the established companies we know now, but other companies as part of a more diversified business model instead of just a standalone science lab. Travis I'm going to answer this is going to sound like a cop-out it is not intended to be but who's building the best AI model 10 years from now irrelevant because honestly I mean as soon as you build the best AI model someone's coming along beside you with something just as good for these companies that are focused on this really your lead well that's where we are today

27:09Travis Hoium:but you've got to think that in in the future like these none of these companies are making a profit on building that leading edge model. So eventually some of them are going to tap out, but who's going to, who's going to be left like trying to push that bleeding. Sure. I mean, yeah, I would say that, you know, Alphabet is definitely still in the mix. Um, I would be not surprised if meta was still in the mix. Right. But which one of those two, if it's a two horse race, I mean, how much of a lead is either of them going to have not for very long? I would say now that said, I do want to circle back to something that I didn't mention here with the update of open ai's gpt6 there is something interesting about this new model so you've heard about deep seek and how it was able to basically make allegedly right reportedly like this incredible model on only a fraction of the compute power what it allegedly did was distill from the frontier models to create what it had and basically it's not training it's just looking at the reasoning that the AI is going through and then taking that and putting it into its own models.

28:18Apparently with GPT-6, what I'm seeing is that the chain of thought is not as easy to follow. So it may not be easy to distill that for these cheap models that are coming in and trying to take the share. So that is something interesting to watch. It'll probably be somebody building the best AI model who also is investing in the best compute.

28:39Travis Hoium:That would be a logic for some of these current leaders to widen that lead by making it more difficult to distill things like that. Okay. How are we shopping in the future? And the reason that I wanted to bring this up is I spend a lot of time thinking about where is Shopify going from here? Where's Walmart going? Amazon, you know, OpenAI is building these products. Some of the things that came out yesterday with the GPT-6 launch was just talking to the AI and going, make a reservation for me, buy this product for me. I'm not ready to do that yet. But John, when you look out 10 years, how are we shopping in the future?

29:20Travis Hoium:Is it similar to today? So we have Walmart, Target, those companies still doing fine. Is it an incremental change from today? So Amazon is doing fine. Or is it, we are using AI, maybe OpenAI is a winner. Shopify, I think would be a winner in that world. How do you think about the future of shopping? You know, that example from the launch video for OpenAI just shows me like how different those people live compared to most people. Right. I mean, to need a reservation for dinner. I mean, it's just not something that hardly ever comes up in my life. But, you know, agentic commerce definitely is the future.

29:56I think that if you look at these Walmarts, these Amazons, Shopify even, you know, kind of like the the website is not anything of a competitive distinctive anymore. All retail companies need a website. I think that all retail companies are going to integrate with agentic commerce systems. so then it becomes the other side of that your your your payment your fin your financial technology companies the ones who are sending the agents to your platform i think those are the ones to watch honestly i would say that coinbase is a dark horse here the way that it is investing in agentic commerce that's a really interesting one to watch yeah it's just funny and again not to

30:38Lou Whiteman:sidetrack but the whole make a reservation for you the computer will do that i just looked it up Apple has been promising that since June of 2012 was the first time they did a demo on that, which again, yeah. So great. Wow. Innovation. That's great. You know, we're a decade into this innovation. How's shopping going to work? I am going. So I will say, and maybe I'm just being an old and maybe I'll change up in time. But the idea of a bot helping me with search is very, very intriguing. The idea of a bot making the purchase and things just showing up and I get to find out what it got is dystopian to me.

31:14Lou Whiteman:And that is the difference. So my guess is, is that all of these demos, just like the Apple demo back in 2012. Spoiler alert, guys, the demos always overstated. It's going to be some 10 years from now is going to be some version of today with different tech tools to guide us versus. I mean, look, the idea, if you would have told me 20 years ago that I could get on a computer and seamlessly search through thousands of products instead of having to just go see what they have at the local target, that would sound like innovation to me. But it's still all the same players plus a few more. I'm guessing it's going to look the same thing.

31:52Lou Whiteman:I think Shopify will have a huge part. I think Walmart will. I think Amazon will. OpenAI of the ones you said, I mean, maybe, but it's just a different version of the same. It's not going to be as dramatically different as the futurists and the demos might say.

32:07Travis Hoium:I think what you're hearing here from a theme from a lot of these things with artificial intelligence is it's looking a lot more like a sustaining innovation than a disruptive innovation, which tells you that a lot of the existing players are going to be the winners in the future.

32:21Lou Whiteman:So, well, I do think it's just kind of a closing point. I think as investors, this can be useful to go back and see what I mean, I don't mean to dunk on Apple here. Apple has done amazing things, but to go back a decade, look at what was promised and look at how it turned out in reality and then try to use that filter on what's being promised today. And so you don't get kind of too ahead of yourself as an investor. I think that there's logic.

32:46Travis Hoium:When we come back, we're going to get to the Stock Center radar. You're listening to Motley Fool, Hitch Gems Investor.

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33:59Travis Hoium: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. Before we get to Stock Center Radar, I did want to touch on some of the retail news that came out. John, Lululemon reported earnings yesterday. Not good. Sales were down. Same-store sales were down 5%. The stock is down almost 20 % in trading today. What did you see there? And is there a theme that we can see across retail and sporting goods right now?

34:36Well, Lululemon has a Lululemon problem, plain and simple. And the numbers back that up. So according to the Census Bureau, clothing sales in 2026 are up nearly 6 % compared to 2025. That's actually a pretty big number. Now, you look at Dick's Sporting Goods. It has a footlocker problem, not anything else. And again, the data backs this up. Sporting goods sales in the U.S. up 10 % so far this year compared to last year. The consumer is spending. And this isn't a case of consumers trading down from brand names to off brands necessarily. You look at American Eagle starting the year off with 10 % growth.

35:16Abercrombie's riding a 15 consecutive quarter streak of growth. You look at something like Yeti, and I know this is way out of this range here, but Yeti is expecting 7 % to 8 % growth this year. And that is definitely a high end of its market. So it's definitely a Lululemon problem. I think that if you look, it's struggling in the Americas, not the rest of the world. So to me, that says I have a brand that's recognizable enough to go global, but competition's coming in on my home turf and stealing share. Spot on.

35:45Lou Whiteman:I mean, I think I'm not going to say that the consumer is healthy. I think there's better ways to look at the data on that. But there's a real danger in finding patterns in individual retailers. As John said, there's others. Lulu has a real Lulu Lemon problem. There's a common theme here with Lulu and on and some of these hot retail is dangerous. Hot retail is hot until it isn't. And you have to really call that right. You can make a lot more money on the trendy email. I'm sorry, trendy retail while it's going up. It is a better investment than slow and steady. But when the air comes out of that balloon, it's really hard to refill it.

36:25Travis Hoium:So is this something where the way to play it as investors is just to stay away, Lou? Or is there an opportunity here to buy some of these more value stocks? Because, you know, if consumers are spending, some of these companies are still growing. Not every company is dropping, you know, 5 % or losing customers the way that Nike is.

36:45Lou Whiteman:Expectations matter. I mean, I don't think Lulu is going away. It's trading at almost, it's down almost single digits to earnings. It might be a TJ Maxx from here. I don't think someone should buy in saying it's going to go back to where it was, but that doesn't mean it can't be a winning investment. My answer is to stay away, though, because retail fashion trends are really hard to get right. I will say if you were looking for a chance with on holdings, these this is still a really good growth stock, but the valuation is now down 70 percent. So if you were waiting for the air to come out of the balloon a little bit, I mean, this is a good business, still growing nicely.

37:17And now it's finally trading at a price that makes sense for a shoe stock.

37:21Travis Hoium:I also got to take a look at Yeti. So thanks for bringing that one up. All right, let's get to the stocks on our radar and bring in Dan Boyd for his thoughts behind the glass. John, you're up first. What do you got? Okay, I got Reddit and this ticker symbol RDDT. Listen, I'm not a huge fan of the social platform, but I do like the business. So this is a platform where people go and they share information. They start little communities. For two years now, it's maintained a growth rate over 60%. A couple of things are happening. There's more users and monetization is going up. So advertisers getting increasingly used to the platform.

37:55It's Reddit max product is automating ads. And this is causing, actually this product grew over 150 % recently. So that's a big deal. Higher revenue leading to higher profits, operating cashflow more than doubling. And so the net margin here at 30%, that's really good. No debt, great cash position, buying back shares and now trades for only 20 times forward earnings. this is starting to look attractive here.

38:22Travis Hoium:Dan, are you a Reddit user? No, I am not. And it's just ads, right? This is the money that Reddit makes? Well, they make money from like Google paying them to get their data into artificial intelligence. So if you do a Google search and you see those AI overviews, a lot of those are coming from Reddit. Yeah. Okay. Yeah. No, I don't care about this company one day. John's starting out behind the eight ball.

38:45Lou Whiteman:Lou, what do you got for us this week? And I'm still trying to lose, but I'm channeling old economy Ron here, Dan. So hopefully that works. Dan, I'm looking at CECO Environmental. C-E-C-O is the ticker. What do they do? They provide air quality, wastewater management, energy transition, all sorts of products to large corporate customers. These are big things. Think air scrubbers for power plants. Also, when we're making EV batteries, all of the toxic wastewater and things like that, kind of making sure it doesn't get into the environment. Stock's up 50 % over the last year, Dan. I think there's still room to run.

39:19Lou Whiteman:We know there's growing demand for power and energy thanks to data centers. I mentioned the battery production, semiconductor manufacturing. They're involved in a lot of red hot markets. It's not a value stock. They trade at almost 30 times earnings, but they have a$1.8 billion backlog, a clear path to$3 billion in annual orders compared to$2 billion now. And we're getting towards 20 % EBITDA margins manufacturing at scale. I think this is a winner from here.

39:47Travis Hoium:Dan I didn't have air scrubbers On my bingo card for the show Today but what do you think I feel like the regulatory Environment is probably not great For this company at the moment but That sort of thing tends to Be cyclical I also like that this Is a 60 year old company Who's been listed for 40 years Travis all right so make It official what's going on your watch list Oh we're not going red it let's go Seaco all right congratulations To Lou for For Lou Whiteman, John Quast, and Dan Boyd behind the glass, I'm Travis Hoyam. Thanks for listening. We'll see you here tomorrow.