In short
Motley Fool Money episode covering (1) inflation data and what it implies for Fed rate cuts and markets, (2) media/content deal news (UFC with Paramount, ESPN/Disney streaming), (3) “big buys” from Warren Buffett/Berkshire Hathaway revealed via 13F (notably UnitedHealth), (4) post-earnings stock calls using “Oh No / Let’s Go” (Lululemon, TKO, Rigetti, Eli Lilly, Reddit, Celsius, Crocs), and (5) ChatGPT’s GPT-5 upgrade plus AI/tech investing angles, ending with two “stocks on radar” (QXO, TBBB).
Guests
Travis Hoyam (host), Lou Whiteman (co-host), Rick Muñares (Disney/media expert; also comments on stocks and AI). Producer: Dan Boyd (asks questions; “behind the glass”).
Key claims
PPI rose 3.3% YoY while CPI stayed fine, suggesting “slow creep” inflation that consumers may feel later; rate cuts are debated given inflation vs jobs. Buffett is buying UNH (~$1.6B) and housing stocks while selling Apple and T-Mobile; they’re cautious with large cash. UFC’s $1.1B/year deal with Paramount is a “jackpot” but may fragment content and not help consumers. “Oh No/Let’s Go” stances: Lululemon “Let’s Go” (value/valuation), TKO “Let’s Go” near-term but “Oh No” long-term (sports-fee gold rush), Rigetti “Oh No,” Eli Lilly “Let’s Go” (pipeline beyond Zepbound), Reddit “Oh No” (valuation/monetization risk), Celsius “Let’s Go,” Crocs “Let’s Go.” GPT-5 is incremental; prefer “picks-and-shovels” (Nvidia/AMD, etc.) over platform bets.
Notable examples
UNH stock up ~10% on Buffett buying; UFC/Paramount seven-year $7.7B deal; ESPN follower reach cited (300.8M vs Paramount/CBS 32M); homebuilders/tariffs timing for holiday inflation; QXO roll-up plan to double EBITDA and grow via M&A; TBBB Mexico discount grocer expansion (3,000+ stores, revenue +38%, comps +18%).
Written by AI. May contain mistakes. Listen to the episode to check what was said.
Chapters
Tap a time to open that second in VODiscussing Inflation Pressures
0:45 to 3:06
A detailed discussion on inflation indicators and their implications.
“UnitedHealth stock is up 10 % this morning after Warren Buffett and some notable hedge fund managers disclosed positions.”
The Fed and Interest Rates
3:06 to 6:10
Exploring the potential impact of rate cuts on the market and economy.
“in September as we work out this inflation news.”
Sports Content Pricing and UFC Deals
6:10 to 14:39
Analysis of rising sports content prices and UFC's new deal with Paramount.
“Yeah, and let's keep in mind that the tariffs were announced a little over four months ago.”
Sports Content Pricing and UFC Deals
14:41 to 14:54
Analysis of rising sports content prices and UFC's new deal with Paramount.
“Vanguard investors own shares of Vanguard index funds and those funds own shares of the companies they invest in.”
Buffett's Recent Moves and Market Reactions
15:02 to 19:49
An analysis of Warren Buffett's latest investments, their implications, and investors' reactions.
“The interesting one that came out last night was Warren Buffett and Berkshire Hathaway disclosed what they own for the quarter, continued selling shares of Apple.”
Evaluating Stock Moves: Oh No or Let's Go
21:18 to 28:01
Discussion on various stocks' performance and whether to invest or avoid them.
“After earnings season, we have some big stock moves to talk about.”
Stock Discussions: Reddit and Celsius
28:01 to 30:27
The hosts analyze the performance and valuation of Reddit and Celsius stocks.
“You can actually get better dividends out of some of these that are maybe more attractive to me.”
Crocs: Analyzing Market Performance
30:28 to 33:08
Discussion on Crocs' stock performance, recent challenges, and future potential.
“That does include the Aligny new acquisition.”
Crocs: Analyzing Market Performance
33:30 to 34:41
Discussion on Crocs' stock performance, recent challenges, and future potential.
“You just found out that your sales team is at risk of missing quota.”
Crocs: Analyzing Market Performance
34:44 to 35:07
Discussion on Crocs' stock performance, recent challenges, and future potential.
“and take complex actions across your entire organization.”
Show all 12 chapters
ChatGPT Upgrade and AI Market Insights
35:11 to 38:16
The hosts discuss the implications of ChatGPT's upgrade and the competitive landscape in AI.
“and The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear.”
Stocks on the Radar: QXO and TBBB
38:17 to 41:55
Hosts share stocks on their radar, including QXO and TBBB, and discuss their growth potential.
“And yeah, Dan, I know, sponsored by Sesame Street, right?”
Transcript
Automatic transcript. May contain errors.0:04Travis Hoium:Warren Buffett is making big buys again. Motley Fool Money starts now.
0:25Everybody needs money. That's why they call it money. The best things in life are free, but you can give them to the birds and bees.
0:36Travis Hoium:From Fool Global Headquarters, this is Motley Fool Money. I'm Travis Hoyam, joined by Lou Whiteman and our Disney expert for today, Rick Munares. UnitedHealth 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 for 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.
1:21Travis Hoium: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?
1:29Lou Whiteman:So, 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.
2:08Travis Hoium: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 think about maybe a little bit differently as investors, where 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 CPI came in fine.
2:47PPI came in hot two days later. To me, that's problematic. I think it's going to be very tricky. Everyone was assuming that the Fed was going to cut rates next month. I don't know if it's too soon to have a soundtrack for the month ahead, but I think Green Day's 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.
3:09Travis Hoium: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 hat 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 a very small downtick in the Fed with their interest rates. But I don't think it'll be - Is that just because everybody's calling for it? Is there an economic rationale behind it?
3:49Travis Hoium:I guess that's what I 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, And 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.
4:16Lou Whiteman:It is, I think, important, Travis, to your point that this whole dual mandate we talk about with both 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.
5:00Travis Hoium: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 were 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.
5:38Travis Hoium:But is there a difference between the inflation that we saw a few years ago and the potential for maybe 3%, 4 % inflation being sort of the norm, Lou?
5:48Lou Whiteman:Yeah, it's going to be interesting. I think that is the potential. And 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 bull case, 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 of this year and into 2026.
6:41Travis Hoium: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.
7:20Yeah, some layaway shopping, layaway 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 when the pandemic happened, that we had this. I remember when 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 into 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.
7:52So I don't think it's necessarily, the market may not have a negative reaction to this, but as consumers, we will probably feel a pinch.
7:58Travis Hoium: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 cozying 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.
8:40Once 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, And that's why 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 helps Paramount, I don't think it helps consumers necessarily when they have to keep this movable feast to find content. But I do think it's interesting. But I don't know if it's in the best interest for UFC. I mean, I saw what Joe Rogan had to say.
9:13I 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.
9:24Travis Hoium:Yeah, I want to put some numbers to this. And this is from Ariel Hawani, who reported that the social exposure for ESPN, 300.8 million followers across Twitter, Instagram, and I believe it 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
10:06Lou Whiteman:trying to play two games at once here yeah yeah absolutely first of all I got to give some credit to Paramount+. 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 Earth's face of the Earth.
10:40Lou Whiteman: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.
11:26Lou Whiteman:So I don't think it's hard to just say, well, what we had five years ago was better. to lose point uh travis i think that the whole uh the cbs angle is interesting because yeah it won't all be on paramount plus and 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 it's billy joel giving his giving up his residency at the mattis square garden for an exclusive engagement and 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.
12:05This 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 payday of the$1.1 billion a year that they'll be getting in the whole process.
12:18Travis Hoium:Well, 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, you know, CSI and content that, you know, kind of young males who are typically going to be the UFC watchers are not going to gravitate towards the same things on CBS. So does, you know, 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.
12:50Travis Hoium: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, 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 Maybe.
13:14Lou Whiteman:The truth is, we don't know how it's going to end up. My pushback on Rick's analogy and 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.
13:43Travis Hoium: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.
14:05Lou Whiteman:As a podcaster, my voice is heard by thousands of people, and now with Vanguard Investor Choice, I can be heard by the companies I invest in too. Vanguard Investor Choice makes it easy for eligible Vanguard fund investors to have a say in how their funds vote at company shareholder meetings. With just a few clicks, you can set your proxy voting preference and make your voice heard on topics like executive pay, board director elections, and more. Investor participation is the heartbeat of a healthy corporate governance ecosystem. You have a voice. Let it be heard. Visit vanguard.com slash investor choice to learn more.
14:43Lou Whiteman:Vanguard investors own shares of Vanguard index funds and those funds own shares of the companies they invest in. Available for Vanguard index funds that participate in investor choice. Vanguard Marketing Corporation Distributor.
15:02Travis Hoium:the day every investor waits for 13f filing day is today uh that's when big hedge funds big public investors like warren buffett have to file what's called a 13f tells us the stocks that they actually own in the quarterly filings we get kind of what those values are but we don't necessarily get these specific stocks. The interesting one that came out last night was Warren Buffett and Berkshire Hathaway disclosed what they own for the quarter, continued selling shares of Apple. But the one that's getting a lot of news today, Rick, is buying$1.6 billion worth of United Health. Shares of United Health are up 10 % on that news.
15:40Travis Hoium:What do you take of it? Yeah, I think especially with United Health, a lot of people, even in the weeks leading up to My whole social view was interrupted 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, 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 UnitedHealthcare investor. But to me, it's not one of my favorite picks that Warren made this past quarter. So, Lou, the other thing, Buffett, and we should mention Greg Abel.
16:19Travis Hoium: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, a play on interest rates? Is this a recovery of the economy play? What could be going on here?
16:43Lou Whiteman:So, Travis, full disclosure, I'm not Warren Buffett. And 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, UnitedHealthcare, that scares me, because healthcare 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 homebuilders. I think this is a logical play on big macro.
17:18Lou Whiteman: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 homebuilders look attractive today, why not just get back into repurchasing? Why not initiate a dividend? As a shareholder, I'm not going to question Warren Buffett. I'm not going to just go run away and have a temper tantrum. But this is very underwhelming, the moves they're making, both buying and selling.
17:48Travis Hoium:Rick, the other one that they did sell is T-Mobile. 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, Nucor, just some interesting... 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.
18:27They 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. 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. And yeah, so but again, not a full commitment. It wasn't necessarily a very bullish move by still keeping the cash hoard so large.
18:48Travis Hoium:Lou, what are your final thoughts here?
18:50Lou Whiteman: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 doesn't move the needle.
19:01Travis Hoium:I could go out and buy one of the big tech companies like Alphabet. It seems to fit a lot of the things that Buffett likes.
Read the full transcript
19:07Lou Whiteman:But they're not. And that's kind of my point. Increasingly, like I say, 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 Berkshire. But it feels like that just the status quo quarter after quarter of just nibbling at the edges, I don't know how long that's going to go on.
19:39Travis Hoium: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 Fool Money.
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21:10Lou Whiteman:Claude.ai slash fool.
21:18Travis Hoium:After earnings 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 a Lululemon. 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 Lululemon stock right now?
21:58I'm a let's go, but not with an exclamation point at the end. To me, Lululemon is, it's not the same growth stock it was 5, 10, 15 years ago. That is not the Lululemon 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 Lululemon will appreciate from here, and it's a good buying spot here.
22:28Lou Whiteman:I'm, oh, no. And I hate to be because it's quality stuff, and I really do believe in the stuff. It's another 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.
22:51Travis Hoium: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. I'm not the target market there. But that just sort of shows that they are not necessarily the brand that they once were. So 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.
23:27Travis Hoium:Shares are up 13 % over the past month. Revenue was up 10 % last quarter. Net income nearly doubled. That's before really any of these new deals kicked in. So Rick, is TKO Group a little bit too rich in 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 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.
24:13So I think the company is doing fine. And I think, yeah, it's a let's go.
24:18Lou Whiteman: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 in a 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.
24:52Travis Hoium: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, TKO 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 get, you know, they double their fee from moving from ESPN to Paramount? do they get to keep that extra five,$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.
25:32Yes. 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 know, 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.
25:55Travis Hoium: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 this is 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?
26:18Lou Whiteman: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. Then maybe let's talk. But for now, my brain's not big enough for this. Yeah, I'm going to go with, oh, no. And to me, it's not the numbers. So, Travis, the stock up 31%, you see revenue down 42%, income growth negative.
26:55Those are scary things, but you're not buying into Rigetti 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 of a reality, I'm not convinced. So I'm going to go, oh, no.
27:17Travis Hoium:5.8 billion dollar 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. And income almost doubled. Lou, oh, no? Or let's go.
27:41Lou Whiteman:I'm going to caution us let's go here. This probably wouldn't be my first choice here, but I'm too old to believe that this is a one-hit wonder, that it's just Zep bound or nothing. This is a really, really good company. Opportunities and risks involve with JLP1s, but I wish they had a better dividend. You can actually get better dividends out of some of these that are maybe more attractive to me.
28:05Travis Hoium:Just 0.9 % today.
28:06Lou Whiteman: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 in. 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 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 have sort of like 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.
28:49And again, when you are successful and you're making a lot of money, you will find ways to buy acquisition. You will acquire growth if you can't make it in-house.
28:58Travis Hoium: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 an 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 of years ago, this was a matter of, no, this is terrible. It's not going to be able to monetize.
29:34these communities of communities, they're going to basically have a revolution. And it happened early on with API and other stuff, just other issues that were happening. But I think Reddit, the stock itself, I think, has extended itself, overextended 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 or later. So I'm an oh no.
29:55Lou Whiteman:Yeah, I am too. I love the platform, but oh no. We've just seen it with so many of these, whether it's Twitter, Pinterest. The monetization is hard. They might have some levers to pull, but I want to see it to believe it.
30:07Travis Hoium:I didn't have you two 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. 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 Aligny new acquisition. Net income is up 28%. Rick, have things turned around and is this a let's go?
30:45Yeah. I'm going to go with let's go. The stock has more than doubled this year. It's one of the many surprising stocks that have more than doubled. Again, it's not organic growth, but But the Celsius brand, after three-quarters of negative growth, did grow 3%. Obviously, 84 % was all basically the Alani Lu 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 is a company that was able to integrate with Alani Lu in April. And just in three months, was able to make it very profitable and help on the bottom line.
31:18I think as far as the stock has gone, I do think that there's some potential upside, at least the next three quarters here.
31:24Lou Whiteman:Yeah, 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.
31:42Travis Hoium: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. And 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. This is not to say there are holes in the shoes. There's holes in the stocks. There's holes in the company. And the hey dude thing should have been a hey don't acquisition.
32:21but add it all up together. And Crocs 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 slide in some comfortable shoes. Yeah.
32:47Lou Whiteman: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.
33:12Travis Hoium:I was at Vikings training camp yesterday, and there was a bunch of kids running around with no shoes on. 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 ChatGPT's latest update and get to the stocks on our radar. You're listening to Motley Fool Money.
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35:07Travis Hoium: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 ChatGPT getting an upgrade to GPT-5. Rick, is this something or nothing for either ChatGPT or the rest of the tech space right now?
35:45Yeah, 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 with its 49 % stake in OpenAI. This is still a race with a very blurry finish line. To me, the safer catch-all plays continue to be NVIDIAs, AMDs, and even, oh no, even CoreWeave of the world than the actual companies behind the platforms.
36:15Travis Hoium:CoreWeave 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 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'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.
36:39Lou Whiteman:Yeah, CoolWeave scares me for just what you said. The one thing on ChatGPT 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 chatbot was as good. But we're talking about the consumer. It's the enterprise that 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.
37:05Travis Hoium: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 OpenAI's 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 open AI, 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, NVIDIA.
37:54Travis Hoium:What do you think, Lou?
37:54Lou Whiteman: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?
38:12Travis Hoium: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?
38:24Lou Whiteman: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 of 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 on track to double EBITDA, 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.
39:04Lou Whiteman:A lot of risk there, a lot of deal making, but an intriguing track record. I'm very, very interested in how this plays out.
39:11Travis Hoium: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, and 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?
39:31Lou Whiteman: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.
39:41Travis Hoium:Rick, what is on your radar? Yeah, so I'm going with BBB Foods, ticker symbol TBBB. It's a fast-growing, deep discount grocer in Mexico. And you're thinking zero stores 20 years ago to more than 3 ,000 right now. Posted great results this week. Revenue was up 38%, largely on expansion and added more than 500 stores, but comps were up nearly 18%. You don't see double-digit comps 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.
40:25Travis Hoium: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, el que no arriesca no gana. So Rick, my question to you is Mexican food. What's your go-to? I'm a good fan. I'm a 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 TBBB?
41:05Travis Hoium: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 go south of the border with Rick Monyarez today and put TBBB 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, but it's a deep discounter. I get it.
41:35Lou Whiteman: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.
41:45Travis Hoium:for Lou Whiteman, Rick Minyar is in our production magician behind the glass, Dan Boyd and the entire Motley Fool team. I'm Travis Hoyam. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.
From the publisher
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
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