Chit Chat Stocks - Episode Summary

Episode: Michael Burry’s AI Short Bet; Q3 Fallen Angels; Earnings Round-Up ($RELY, $CPNG, $SFM, $MNDY + More)
Date: November 14, 2025
Hosts: Ryan Henderson & Brett Schafer

Episode Overview

In this action-packed "Power Hour" episode, Ryan and Brett catch up on market developments after a brief hiatus. The discussion spans Q3 earnings reviews for key stocks ($RELY/Remitly, $CPNG/Coupang, $SFM/Sprouts Farmers Market, $MNDY/Monday.com), the shifting narratives around “fallen angels,” Macro news (50-year mortgages, the Apple "Satchel"), and the impacts of AI on established software. The episode concludes with a bubble watch segment focused on recent AI developments, OpenAI’s controversy, and Michael Burry’s AI-related shorts.

Key Discussion Points & Insights

1. Remitly ($RELY) Earnings Deep Dive

Main Points:

• Stock is down 55% YTD, a tough ride for investors in high-growth, unprofitable tech.
• Underlying business remains strong: Q3 revenue up 25% YoY, send volume up 35% YoY to $19.5B.
• Take rates declining over time (as expected at scale), but targeting higher-value users and small businesses may compensate.
• Operating margins growing YoY, but lack of sequential growth last two quarters (operating margin at 3% this quarter).
• Conservative guidance for 2026 (~17-18% revenue growth); $1.62B revenue expected for 2025.

Valuation & Capital Allocation:

• Stock trades at ~5x look-through earnings if margin goals met (20% margin on $1.9B revenue).
• Large cash position, possibility of stock buybacks ("I wouldn't even mind them taking out debt to buy back stock..." - Brett, [05:46]).

Narrative vs. Reality:

• Bearish sentiment dominates, but fundamentals are sufficient for patient investors.
• Parallels drawn with Western Union's margin trajectory and investor impatience:

  "Investors don’t want to wait around till they get to 20% operating margins. They want to see the cash flow now." – Ryan [10:14]

Notable Quote:

• “Price can drive narrative.” – Brett [10:12]

2. Q3 'Fallen Angels' and Sentiment Shifts

Fallen Angels Cited:

• Remitly ($RELY)
• Monday.com ($MNDY) – down 31% YTD, in a 62% drawdown
• The Trade Desk ($TTD) – worst S&P 500 stock, -63% YTD
• Constellation Software ($CSU) – first major drawdown ever, -35%
• Duolingo ($DUOL) – narrative shift despite decent results

Core Insight:

• Recent drawdowns often driven by narrative, not business deterioration. Many cited are experiencing transitionary setbacks or investor fatigue as market sentiment shifts, often triggered by perceived “AI disruption.”

Notable Quote:

• “Do any of those interest you other than Remitly?” – Ryan [15:21]

3. Monday.com ($MNDY) Earnings & AI Disruption Themes

Highlights:

• Stock at its lowest FCF multiple (< 20x), just at GAAP profitability.
• Beat on Q3 revenue and EPS, but guidance for the next quarter (22-23% growth) disappointed, causing selloff.
• 117% net retention in >$50k ARR customers; expansion into large enterprises.
• Concerns about AI disruption cited but dismissed as overblown for established workflow SaaS.
• Strong operating leverage potential as gross margins are high (~80%), and spending below gross profit line controllable.

Perspective:

“Every single line item below the gross profit is manageable... Software companies tend to get aggressive with marketing spend... But when push comes to shove, they can manage that really easily.” – Ryan [22:52]

4. Apple: “Satchel” Product, AI, and Growth Outlook

Product Launch:

• Apple announces the “iPhone Pocket”—a $230 mini-purse for iPhones.
• Both hosts dismiss it as uninspired and symptomatic of Apple's innovation stagnation.

AI Moves:

• Apple to use Google’s Gemini for Siri—a reversal of the prior financial relationship between Apple and Google.

Growth Prospects:

• Hosts skeptical that Apple can deliver > 6% annualized revenue growth; cite lack of new products and declining iPhone upgrade rates.

• “If this doesn’t sound like innovation, I don’t know what does. You can get this sock... for $230...” – Ryan [25:15]
  “Easy under. Where’s it coming from?” — Brett on 6% revenue growth [29:03]

5. Sprouts Farmers Market ($SFM): Return of an ‘Old Flame’

Recap:

• Brett re-initiated position after a 55% drawdown from highs due to weak guidance (Q4 comps 0–2%).
• Underlying business strong: 13% revenue growth, 5.9% comp growth.
• $1B buyback authorized, $8B market cap; scope to double store count long-term.
• Margin compression risk acknowledged, but Brett sees “a good risk/reward at these levels.” Ryan echoes conviction that Sprouts can hit 10% revenue growth via store and comp growth.

• “Seems like a layup to me. The risk is margin compression, which will happen if comp store sales growth is lower than their inflationary inputs. That’s a risk I’m willing to take.” – Brett [33:42]

6. Coupang ($CPNG) Q3 Review

Performance:

• 22% constant currency gross profit growth; product commerce EBITDA margin of 8.8%.
• Significant reinvestment in the Taiwan operation, which drags on GAAP profits.

Management Approach:

• Management unafraid to close underperforming initiatives and appears bullish on Taiwan opportunity due to early success indicators.
• Valuation attractive: potential for ~10x future earnings if margin expansion continues.

Notable Insight:

"Owning Coupang today makes me realize how difficult it might have been to own Amazon early on where they were consistently reinvesting and never really showed you the margin inflection for, for pretty much up until... when you saw them go from 0% margins to 9%." – Ryan [51:12]

7. Macro: 50-Year Mortgage Proposal

Hosts’ Takes:

• Skepticism over whether it addresses the core issue (housing supply constraint).
• Limited savings for consumers ($128/month on a standard mortgage).
• Concerns over which banks would take that duration risk and if government will backstop them.

• “I don't see any issue with the 50-year mortgage being an option.” – Ryan [42:22]
  “Sure. Just don't have the government bailing out idiots... on my behalf.” — Brett [44:39]

8. Bubble Watch: AI Funding & Michael Burry’s Short

OpenAI & Anthropic Developments:

• OpenAI projects huge losses ($74B in 2028), hoping to break even only in 2030 (“Don’t worry. It’s just going to be a quick $74 billion loss and then two years later we’re going to turn a profit. Don’t. It’ll all be fine.” – Brett [58:50]).
• Anthropic expects to break even in 2028 and is gaining traction among developers.

Sam Altman Controversy:

• Altman’s defensive attitude about OpenAI’s spending commitments and sustainability alarmed the hosts.

Michael Burry's NVIDIA/Palantir Shorts:

• Cited as notable, but hosts question how literal/fixed Burry’s bearish positions are given his history of quickly moving in and out.

AI Hardware Depreciation Schedules:

• Discussion on whether the big cloud players are underestimating GPU/TPU depreciation to flatter current earnings.

• “They’re the only ones that know... Whether GPUs from five years ago are still being used or are sitting in the trash.” – Brett [64:32]

Notable Quotes & Memorable Moments

• “Price can drive narrative.” — Brett [10:12]
• “The narrative has definitely flipped and the price just reinforces that where the stock keeps going down... you have to just take back seat. Don’t look at your portfolio every 30 minutes.” — Brett [13:56]
• “Every single line item below the gross profit is manageable...” — Ryan [22:52]
• “If this doesn’t sound like innovation, I don’t know what does. You can get this sock... for $230...” — Ryan [25:15]
• “It's not what they are earning but it's kind of what you could project at scale...” — Brett on Coupang [50:07]
• “Owning Coupang today makes me realize how difficult it might have been to own Amazon early...” — Ryan [51:12]
• “Don’t worry. It’s just going to be a quick $74 billion loss and then two years later we’re going to turn a profit. Don’t. It’ll all be fine.” – Brett on OpenAI [58:50]

Important Segment Timestamps

• Remitly (RELY) Earnings Deep Dive: [02:09] - [12:32]
• Q3 Fallen Angels/Narrative Shifts: [12:33] - [15:21]
• Monday.com (MNDY) Earnings & AI Disruption: [18:42] - [24:52]
• Apple “Satchel” & AI, Growth: [24:52] - [31:11]
• Sprouts Farmers Market (SFM): [31:11] - [38:46]
• 50-Year Mortgage: [38:46] - [44:47]
• Coupang (CPNG) Earnings: [44:51] - [52:39]
• Bubble Watch: AI Spending, OpenAI/Anthropic, Michael Burry Shorts: [52:39] - [65:15]

Final Notes

• The episode provides thoughtful, real-world investing commentary and a healthy dose of skepticism over market narrative swings.
• Both hosts stress the importance of understanding fundamentals instead of blindly following market narratives, especially amid volatility and disruptive noise (notably around AI and macro policy).
• Listener questions on fallen angels, AI, and management incentives are addressed with candor and a hint of humor.

For full value, consult the specific segment timestamps for companies or topics most relevant to your investing interests.