Zuckerberg's Superintelligence Team; 3 Stocks We Just Bought For Our Portfolios; What Will Be The Largest Company In The World By 2030?

Summary

Chit Chat Stocks Episode Summary Release Date: July 11, 2025

Hosts: Ryan Henderson & Brett Schaefer
Podcast: Chit Chat Stocks
Episode Title: Zuckerberg's Superintelligence Team; 3 Stocks We Just Bought For Our Portfolios; What Will Be The Largest Company In The World By 2030?

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1. Introduction

In this episode of Chit Chat Stocks, hosts Ryan Henderson and Brett Schaefer dive into several engaging topics, including potential market leaders by 2030, recent portfolio additions, and significant industry developments. They also touch upon recent news such as Autodesk's rumored acquisition activities and Meta's aggressive recruitment of AI talent.

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2. Delta Air Lines Earnings Analysis

Timestamp: [02:06]

Brett begins the discussion with an analysis of Delta Air Lines' latest earnings report. He highlights that despite a 10% increase in stock price, Delta’s revenue only saw a modest 1% year-over-year growth, while capacity increased by 4%. Brett remarks:

“The business overall is much better than I think what people feared a couple of months ago. Consumer's not dead yet, Ryan.”
– Brett Schaefer [05:17]

He emphasizes Delta's strong credit card partnership with American Express, contributing $2 billion in revenue, reflecting a 10% growth year-over-year. Brett views Delta as a strong indicator of consumer health, particularly in the premium segment.

Ryan concurs, mentioning his increased personal use of Delta flights, which ties into their discussion on whether airlines remain investable. Brett remains cautious, viewing Delta as a tracker for broader economic indicators rather than a primary investment due to the challenging airline industry dynamics.

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3. Recent Portfolio Additions

Timestamp: [08:35]

The hosts transition to discussing three stocks they've recently purchased, providing transparency into their investment strategies:

a. Remitly (Brett Schaefer)

Brett explains his investment in Remitly, attracted by its current undervaluation and strong revenue growth potential. Despite a market cap of approximately $3.8 billion and trailing twelve-month revenue of $1.35 billion, Remitly is growing revenue at over 30% year-over-year. Brett believes that by optimizing unit economics and reducing reinvestment in customer acquisition, Remitly could achieve significant profitability and valuation growth.

b. Wise (Ryan Henderson)

Ryan shares his investment in Wise (formerly TransferWise), appreciating its robust digital remittance solutions. Unlike Remitly, Wise is building its own infrastructure, aiming to become a low-cost provider in digital money transfers. Ryan highlights Wise’s ability to offer cost-effective cross-border transactions, which he believes positions the company well against competitors like Remitly and legacy services such as Western Union.

c. Nintendo (Brett Schaefer)

Choosing a less typical pick, Brett invested in Nintendo, buoyed by the successful launch of the Switch 2 and strong sales in new gaming titles like Mario Kart. Despite a 50% increase over the past year, Brett finds Nintendo's high-quality offerings and consistent market presence appealing, predicting continued growth and potential to reach a $30 share price by the year’s end.

d. Adobe (Ryan Henderson)

Ryan discusses his position in Adobe, particularly after analyzing the competitive landscape post-Figma’s S1 filing. He argues that Adobe’s extensive suite of products ensures customer stickiness, mitigating churn even with new entrants like Figma. Adobe’s ongoing stock buybacks, amounting to roughly 8% of its market cap over the last 12 months, further bolster his confidence in the company’s long-term prospects.

e. Taiwan Semiconductor Manufacturing Company (TSMC) (Ryan Henderson)

Ryan recently acquired a starter position in Taiwan Semiconductor Manufacturing Company (TSMC), recognizing its pivotal role in the semiconductor industry. With June’s revenue up 27% year-over-year and robust demand driven by global tech companies like Nvidia, Ryan sees TSMC as a cornerstone for future growth in the semiconductor sector.

Brett adds a high-risk, high-reward position in Real Brokerage, a micro-cap stock, recommending listeners to explore a comprehensive research report he produced in a previous episode.

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4. Autodesk's Rumored Acquisition of PTC

Timestamp: [44:54]

The conversation shifts to rumors surrounding Autodesk potentially acquiring PTC, valued at around $20 billion. Both hosts express skepticism about the acquisition:

• Brett: Points out the similarity in business models and concerns about overpaying for a comparable revenue-based company.

• Ryan: Highlights that both companies have experienced slower-than-expected revenue growth and questions whether Autodesk can successfully integrate PTC without diluting shareholder value.

They conclude that while the CAD and product lifecycle management sectors are robust, the acquisition may not yield the desired growth or shareholder benefits.

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5. Meta’s Superintelligence Team and AI Talent Wars

Timestamp: [47:36]

A significant portion of the episode is dedicated to Meta's (formerly Facebook) strategic move to build a Superintelligence Lab by aggressively recruiting top AI talent from competitors like OpenAI, Google, and Apple. Meta is reportedly offering exorbitant compensation packages, with some AI leaders receiving tens of millions annually.

Key Points:

• Talent Poaching: Meta has successfully hired eight core researchers from OpenAI and attempted to acquire teams from other leading AI firms.

• Leadership Aspirations: Alexander Wang (formerly of Scale AI) and Nat Freeman (founder of GitHub) are among the high-profile hires leading the new lab.

• Competitive Landscape: The hosts debate whether Meta’s aggressive recruitment signifies desperation or a strategic push to compete with industry leaders like OpenAI and Alphabet (Google). They express concerns about potential internal power struggles and whether new talent can effectively collaborate within Meta’s existing structure.

Brett's Observation:

“It makes me more bullish on OpenAI and Alphabet. Seems like they have the two leaders along with Anthropic in the space.”
– Brett Schaefer [52:58]

Ryan’s Insight: Ryan praises Google's Gemini AI initiative, noting user-friendly integrations and superior AI responses compared to traditional search functionalities, enhancing his investment confidence in Alphabet.

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6. Predictions for the Largest Company by 2030

Timestamp: [28:35]

When asked about the potential largest company by market cap in 2030, Brett and Ryan present their views:

Brett’s Rank:

1. Amazon
2. Alphabet (Google)
3. Taiwan Semiconductor Manufacturing Company (TSMC)

He bases his predictions on Amazon’s extensive revenue base, continuous growth in e-commerce market share, and innovative logistics network, positioning it as a formidable contender.

Ryan’s Dark Horse: TSMC

While agreeing with the top candidates, Ryan introduces TSMC as his dark horse, emphasizing its crucial role in the semiconductor supply chain and sustained demand from tech giants like Nvidia.

Brett adds:

• Amazon’s Subscription Dominance: Amazon Prime leads global consumer subscriptions with $44 billion in revenue for 2024, surpassing rivals like Spotify and Netflix.

• Alphabet’s AI Leadership: With substantial investments in AI and the Gemini platform, Alphabet remains a strong candidate for market leadership.

Challenges Addressed:

• Apple and Microsoft: Both are deemed less likely to surpass the top contenders unless Apple introduces groundbreaking hardware innovations.

Final Consensus: Brett and Ryan conclude with Amazon and Alphabet at the forefront, supported by TSMC's strategic importance in the tech ecosystem.

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7. Additional Discussions

Timestamp: [55:00]

• Autonomous Driving Impact on Stocks: The hosts briefly explore how the rise of autonomous vehicles could impact industries like auto insurance, repair shops, and OEM sales. They speculate that companies like Copart (a large salvage yard operator) might face challenges as self-driving technology reduces accidents and, consequently, the need for traditional auto services.

• Core Weave’s Aggressive Expansion: Brett and Ryan critique Core Weave’s recent $9 billion all-stock acquisition of Core Scientific, perceiving it as a high-risk strategy focused on scaling data center capacity without clear ROI, potentially leading to an oversupply in the AI infrastructure market.

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8. Community and Resources

Timestamp: [26:54] & [34:10]

• Interactive Brokers (IBKR) Advertisement: The hosts promote IBKR for international investing, emphasizing its low fees, broad market access, and multi-currency capabilities.

• Blue Chippers Club: Both hosts endorse Blue Chippers Club, highlighting its value as a community for stock-focused investors to share insights, break down portfolios, and participate in weekly calls.

• TSOH Investment Research Service: Ryan introduces TSOH, praising its high-quality stock research reports and transparency, recommending listeners to subscribe for in-depth analysis on companies like Airbnb, Celsius, and Roblox.

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9. Conclusion

The episode wraps up with a reminder that Ryan and Brett are not financial advisors and that their discussions should not be taken as formal investment advice. They encourage listeners to conduct their own research and consider the insights shared as part of their broader investment strategies.

Notable Quote:

“We're not trying to build the largest company next year, but we are discussing the potential long-term leaders based on current trajectories and strategic positioning.”
– Ryan Henderson [30:57]

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Key Takeaways:

• Delta Air Lines shows resilience in premium segments and serves as an economic indicator.
• Remitly, Wise, Nintendo, Adobe, and TSMC are promising investments with unique growth propositions.
• Meta’s aggressive AI talent acquisition signals heightened competition in the AI space, potentially benefitting leaders like OpenAI and Alphabet.
• Amazon and Alphabet are strong contenders for the largest market cap by 2030, supported by TSMC’s strategic importance.
• Industry shifts such as autonomous driving and AI infrastructure expansion present both opportunities and risks for various sectors.

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Stay Tuned: For more insightful discussions and up-to-date stock analysis, subscribe to Chit Chat Stocks and join their investment community through the promoted services.

Transcript

[Ryan Henderson]

Welcome to Chitchat Stocks. Today we have another episode of our Power Hour. I am one of your hosts, Ryan Henderson, joined as always by the one and only Brett Schaefer. We are talking, we got some fun topics today. Which company will be the largest company by market cap in 2030? Brett's got what I'd argue is some hot takes and I've got I think maybe a dark horse for for that list as well. And then we're talking about recent buys. There's been I think at least a few stocks on my watch list slash portfolio that have been what I would call a discount. So I have been buying. So we're going to give a little transparency into some recent purchases that Brett and I have both made. And then we've got a whole other host of topics as well. Autodesk reportedly dipping its toe back into the acquisition funnel, going for I believe more than a $20 billion acquisition rumored. And then we've got Delta earnings meta poaching, AI talent building. Zuckerberg is building his super intelligence team. But before we get to all that, we want to talk about our friends at Interactive Brokers. If you are a regular listener to this show, then you know that we love international investing and I'm guessing you do too. When it comes to international investing, no brokerage compares to Interactive Brokers, otherwise known as ibkr. You can easily trade assets worldw wide using a multi currency IBKR account in 160 markets, 36 countries and 28 currencies with low fees. Compare that to your existing brokerage and its limited trading ability and high fees on foreign exchange. There truly is no comparison. Trade stocks, options, futures, currencies and bonds globally with IBKR's unified brokerage platform. I wouldn't use any other brokerage for my investing needs. If you're interested in checking them out for yourself, head on over to ibkr.com restrictions apply. Interactive Brokers is a member of SIPC. Brett, where do you want to start? We've got some. Do you want to save the fun topics for later into the episode or you want to get right into it?

[Brett Schaefer]

Well, what are the fun topics? I would say earnings are a fun topic, but I don't think the listeners do.

[Ryan Henderson]

Yeah, I don't know if listeners are as excited for our take on Delta's earnings as there might be for which company we think will be the largest in five years. But why don't we eat our veggies first? Maybe Delta earnings. We could also talk the Autodesk rumored acquisition in there as well.

[Brett Schaefer]

Yeah, let's do it. Delta earnings, pretty simple. It's always one of the first ones to report. So it can be a good indicator of what consumer spending is like. And they're such a large airline and they also have such a large credit card business that you can see the health of the consumer in some way, at least maybe the premium segment. So stock was up over 10% today. Revenue was only up 1% in the quarter year over year on capacity, up 4%. So tickets were down a little bit. It looks like from my reading that expectations were quite low in the quarter. Here's a quote from them on the American Express remuneration. I can never say that they get $2 billion in revenue from their American Express partnership for credit cards that is up 10% year over year. So we're seeing the credit card business for them. The travel credit cards continue to take market share of their existing payments. You know, it's growing faster than overall revenue. They delevered their balance sheet, took down $2.9 billion in debt and finance leases. So they're coming out of the pandemic panic ever so slowly as they generate more cash flow. And they're still guiding and reaffirm their guidance of 3 to 4 billion in free cash flow this year. Market cap $37 billion. So expectations I thought were low going to the period. They seem a little bit higher now that 50 feels like a reasonable valuation for a leading airline. You know, 10, 10 times cash flow, something like that. My general takeaway from reading it was that premium tickets are doing well. The business overall is much better than I think what people feared a couple of months ago. Consumer's not dead yet, Ryan.

[Ryan Henderson]

Well, take this into account. I have been flying Delta a little more lately, so. So maybe are they in Austin?

[Brett Schaefer]

Are they an Austin Flyer?

[Ryan Henderson]

They are. My resident west coast airline of Alaska Airlines has limited routes down here, so Delta is kind of the one I've gone with. But yeah, the numbers, it sounds like they're all right. I. I want to get your take on the airlines overall because the business model has changed. We've talked about mileage programs on this show before, but they are probably the most pivotal moment or adaptation of the airline industry maybe ever in terms of like changing the recurring customer nature of the business. Do you think these are investable businesses? Do you see yourself ever owning one of these airlines? Not, not if it gets like cigar butt, deep value type thing, but owning one because you believe that it can grow at a solid rate for a long time?

[Brett Schaefer]

I think probably not the industry is just so tough, but Delta would be the one I'd want to buy one because they have that American Express partnership, which I think is quite profitable for them. And the spending on those cards, the relationship they have there, it seems like it's an exclusive relationship. They're the only airline that partners with American Express and you have that combination with all the travel rewards, airport lounges, stuff like that that people really enjoy. Besides that, I think there's better stocks out there. There's better companies I can own in my portfolio. I really like following the industry because it can be a good harbinger on labor stuff with all the people that work for these companies, travel as a whole, consumer spending, credit card spending. So I think it's fascinating to look at, but I honestly look at Delta to track as my leading indicator for how American Express this quarter was. And that's why that's the one thing I look at first when opening up their results.

[Ryan Henderson]

It's.

[Brett Schaefer]

Oh, someone, we have a comment here. Have you looked into Ryanair? That is maybe number one. But I remember looking at that business and thinking, well, where's all the cash flow?

[Ryan Henderson]

Yeah, no, it's a fair concern.

[Brett Schaefer]

Yeah.

[Ryan Henderson]

And it's always, I think the CEO of Ryanair. I'm blanking on his name.

[Brett Schaefer]

O'. Leary.

[Ryan Henderson]

Yeah, yeah, Michael o'. Leary. Anyway, he, he basically says, like, the airline industry is always two to three years away from its next, like, catastrophe. Like, I don't think, I don't think he used that specific word, but like downturn. And it's, it's so true, it's so unpredictable. The. You never know what's going to cause some sort of a slowdown. It could be a supplier issue. It can be Covid, it can be, I don't know, you name it, there's always going to be some problem. And the economics are just so tight. It's so hard to squeak out a margin. I will say maybe they, at least in America, there's, there's not a lot of incentive to build a new airline, like from a private, like if you're a startup. I don't think we're seeing a whole lot of airline startups these days because it's such a tough business to be in. Logistically, it's a nightmare. And there are some, at this point, there are some, like, advantages to being the incumbent because you've got the massive card holder base and people don't want to switch. But I did see some comments in the chat. We can maybe touch on some of Those before I get to the Autodesk acquisition. Someone's talking about remitly here. I actually saw Brett, you talking about this yesterday as well. Maybe this is a good time to revisit. Actually, I have a look at our notes here. So why don't we move into three stocks that we're buying this week? Because maybe that was a little tease there. Do you want to alternate here? Give a little pitch for. We both have three stocks that we've bought recently. Give a little background on what you bought, why you bought it.

[Brett Schaefer]

Okay. Yeah. We can start with remitly. I added to it when it fell close to about 18 a share. I think it was cheap. I think there's a stablecoin narrative out there perhaps. I think there's a immigration crackdown in the United States narrative that could be impacting them. I'm not exactly sure why the stock has fallen so much. I like the business. I don't have the exact numbers in front of me, but they, their exact PE right now doesn't look too attractive. But if you look at where they're trading on and I'll try to pull up their market cap right now in fiscal AI, I think the market cap's about just a tad under $4 billion. They're doing. And I'll get, make sure to get the exact revenue number here so we can kind of go through the, the basic Math. Okay, yeah. $3.8 billion in market cap, 1.35, 1.36 billion in trailing twelve month revenue. Let's say they can get to 1.5 billion fairly soon. Given that they're growing revenue at over 30% year over year, I think they can get to 2, $3 billion within the next few years fairly easily. Probably $3 billion within a couple of years is no big deal given the market share gains they're going to take. If we look at their unit economics, I think if they stop reinvesting so much in customer acquisition, stop reinvesting in product development, which they're building a lot of new financial services, including this small business, one that they just launched. And if they, yeah, essentially if they tamp down on their spending in general, which has trended downward, it's going to be a slow churn. But they can get, I think fairly easily given the unit economics, 20% profit margins. $3 billion with 20% profit margins I think is $600 million in annual earnings. So compare that to market cap of $3.8 billion. We can get well below 10, $10 times earnings fairly soon. And There's a huge Runway left to grow. So I like it. I'm not making it my entire portfolio. I would never do that. That's not the type of investor I am. I think that's just highly stressful and things can go wrong. It's not a risk free investment. But I like it here. It's one of my largest positions and I'm very, very bullish on their long term prospects. What you had a chart here, Ryan. I can't really see what it is, but what do you got?

[Ryan Henderson]

Yeah, so there have been some concerns over stock based compensation at the company. So this is stock based compensation versus compared to free cash flow over the last 12 months. And a lot of people say like you can't value it on cash flow. There's so much of that going to stock based comp. Any company for the most part that's at sort of this age, which I think remitly is probably 10 to 15 years old and they were VC backed private for a long time, came public I believe three or four years ago. You're going to have a spike in, in stock based compensation. Your, your equity has become currency and you can use it at the company and it's going to happen. But as long as you can be confident that a. They're not being so they're not totally oblivious to it, that they are managing it and they're using it as a tool for compensation, it's not an issue. If they can get to being a really profitable company. And in this case they're doing $365 million in free cash flow. We're seeing that, that basically turn now because a year ago, year and a half ago, they were not profitable. They invested heavily following their IPO or SPAC or whatever it was and they had raised a bunch of cash from it. They were willing to be unprofitable during that period. They leaned up. We're seeing the operating leverage now, stock based compensation. I think a lot of people, especially new investors kind of look at it as like the boogeyman. Like oh, they're trying to hide expenses in sbc. That's not the case for good management teams. They're just using it as a tool to make sure that their employees are well incentivized and they're using it as a part of the compensation program and companies can manage that. Well, I think Remit Lee's done that so far, at least over the last year. So I wouldn't worry too much about it.

[Brett Schaefer]

For the, for some industries, for some company cultures and for some employee bases, which for them is software engineers. They are in a the city I live in. Their headquarters is in Seattle. You're competing with Amazon, Microsoft and a few other the larger companies that can offer you very attractive and stable stock based compensation packages. If you want the good talent, you're going to have to pay up with stock. And that's just part of the equation. It doesn't mean that the business is bad, you just have to factor that into the equation. Like okay, I look at the valuation. If I'm going to do true valuation work, not back in the napkin math on a podcast, I'll probably factor in a little bit of dilution going forward. But given that they're now cash flow positive, we can also offset that. In your model they're going to have the cash to either buy back or return in dividends. And as you saw on that chart, it's stabilizing. Not too big of a concern, but that maybe have been a bit too long. We got five other to get to. So Ryan, what's your first one? I think someone actually called it out in the chat. So what, what's that? Know you too well. What are they calling the first one on your list?

[Ryan Henderson]

Ah, yeah, they, it looks like they did call it out. Yeah. So for me, I mean this is kind of up the same alley as Remitly. I've been buying shares of Wise. They're still listed on the London Stock Exchange. I'm actually buying the OTC version which is kind of annoying because I'm.

[Brett Schaefer]

Are they on the iam Aim on London.

[Ryan Henderson]

Honestly can't remember but I paid like a. It doesn't matter. The.

[Brett Schaefer]

The.

[Ryan Henderson]

A lot of the thesis is similar in that just digital remittances overall are growing and people are looking for digital solutions to transfer cash across borders. Remitly is basically a really great software layer on top of the existing correspondent banking system, whereas Wise is actually going and building out its own infrastructure. And that's not like I own Remitly and Wise and they're basically the same size in my portfolio and I think both can do well. I think if you build out really slick user interface user experience that's lower cost than the alternative solutions in this case Western Union, which is that I'm talking about Remitly here. You can attract a lot of customers and they've done a really good job of that on Wise's side. They're, they're playing a different game. They want to be the low cost provider and they want to keep the Cash as much as they can in their account. And, and here's the part where the stable coin argument doesn't make sense to me. If I send money across borders using Wise there is no cost if it's going Wise account to Wise account. So let's say I get paid on Wise. I've got the money in there. I can earn high yield cash in that if I'd like and I can spend with it. I'm paying 00 money. There's no off ramp in that case so I'm not paying any commissions.

[Brett Schaefer]

Right. I can so much stablecoin pitch Right. Where if it's stablecoin a stablecoin it's free but you have to off ramp.

[Ryan Henderson]

Yeah. And it's instantaneous. So to me I, I really don't see why And Crystal Carmen, the CEO of Wise has said basically like until I see proof that stablecoins can be more effective than what we're doing we're not gonna like really work.

[Brett Schaefer]

Yeah.

[Ryan Henderson]

Or invest in it. And I, I honestly think they're right. They, they can replicate a lot of the same stablecoin functionality by send spend all on the platform earn interest you I really think you can replace kind of a lot of the, the legacy bank accounts and attract a lot of customers doing that. I think that I have some problems with their user experience a couple times but maybe it's not as slick as remitly in some cases but overall they are the low cost provider for most, most corridors. So yeah I've been buying them. That would be my, my first one.

[Brett Schaefer]

We have a comment here that says Wise ADR is highly traded at least like Aden they kind of remind me of each other in terms of strategy and culture. Yeah. If you like Aden the culture at Wise is similar. Okay. Number two for me because we had other topics we want to get to added a little bit to Nintendo at $20 a share not very much remitly was larger you know percentage wise. But why what I saw with Nintendo and it's honestly I've traded around them a little bit. It's not what I typically like to do but earlier this year I trimmed my position but when we got back or after the Switch 2 launched and we saw the huge amount of demand and the huge amount of sales on the hardware, the record unit sales and like a four day span along with the launch of the new Mario Kart game I think the thesis is getting each quarter continually de risked and I think it's even at a higher price than it was. I think it's up 50% over the last year. It's less risky to buy today than previously. I still think it's cheap and when it kind of dipped, at least the ADR dipped. Sometimes it trades wildly because of some foreign currency stuff. Seemed cheap. Yeah, that's it. Nothing. Nothing to add. Pretty simple. Just wanted to buy another high quality company.

[Ryan Henderson]

Yeah. How long would you say you've been buying Nintendo now?

[Brett Schaefer]

Oh, when did we first get into it? 2020.

[Ryan Henderson]

2020 2021. Yeah.

[Brett Schaefer]

Yeah. Well late. 2020, 2020. Early 2021. Yep.

[Ryan Henderson]

Yeah.

[Brett Schaefer]

Now 2021 didn't end up being good returns after that, but keep doubling down on a good business and had to be patient. But it's worked out well so far and I think I'm still confident in our bet. Ryan, we're felt I was ahead on like the timeline for the full year of going from 15 to 30 by the end of the year. We're a little behind now, but I still am confident that $30 is in reach by the end of this year.

[Ryan Henderson]

Hey, I'm rooting for it. All right. My second company is Adobe. After reading the Figma S1, I bought like a tracker position of Adobe I think three months ago at the same price I bought it at two days ago, maybe a little longer. The. After reading the figma S1, I, I don't. I really think people are overrating the competitive landscape. There are like, okay, let's say you are an enterprise and for a long time, long time you've been using Adobe XD, I think it is, and InDesign. Those are the two. Like when you think of Adobe's overall product portfolio, I think there's like 30, 40 apps that people all across the enterprise are using. Let's say you're using XD or InDesign and someone else in the company's using Audible. I think that's what it's called, Adobe Audible.

[Brett Schaefer]

Uh, oh God, so many, so many.

[Ryan Henderson]

Adobe Premier confused, Adobe Photoshop, you name it. And then there's probably the other aspects. Maybe you're using the sort of their DocuSign competitor, maybe you're using some of the experience products as well. Just because you start using Figma and that the design department starts using figma, that doesn't mean you cancel your bundle. Typically you're paying for the entire Adobe Creative Suite. And if you still have people that depend on Photoshop, Premiere, Audible, whatever it is, it doesn't make sense to downsize or maybe like all I'm saying is basically new seats for Figma or even market share gains for Figma does not directly equate to to churn for Adobe. And I think a lot of people just automatically assume oh there's a lot of competitors popping up, that means churn for Adobe. I don't think that's the case. Maybe it puts a little bit of a limit on some pricing power for the bundle, but in general enterprises are sticky. I think they continue to have best in class products across a lot of features. Not everyone like Figma. I think is is probably better than Adobe XD and InDesign and Canva has won across solopreneurs and small and medium sized business. But I think they're going to continue to grow seeds. They are. Every time I've seen a setup like this where there's a company that's been considered high quality for 30 years and all of a sudden the narrative changes on them and they start buying back a ton of stock, which is what Adobe is doing. I think they're buying back roughly 8% of their market cap right now over the last 12 months. That that to me is, has always resulted in it in positive returns and so I like it here. It's not a huge position but I've added to it.

[Brett Schaefer]

And for Anyone that's wondering, EV to EBIT down to 19, EV to free cash flow down to 18. All right, my last one and I don't think there's much explaining I need to do. Maybe I'll just use it as a tease to go listen to one of our other episodes. It is an initial position in the real brokerage. This is a small and micro cap. That was my latest research report and I liked it a lot. It's not a huge position, but I think it's one that's high risk, high reward, disruptive company. I did a full hour research podcast on them a couple of weeks ago I think at this point and I'd recommend people go listen to it. If they keep growing as they have and they keep taking market share within the brokerage platform space, the stock will do quite well. All right Ryan, what's your last one? And maybe it actually is going to lead into another one of our topics here because I think a press release that came out today will make you quite happy as a shareholder.

[Ryan Henderson]

Yeah, I bought a starter position in little known company Taiwan Semiconductor. I think they're actually the might be the seventh largest company in the world right now. Seventh or eighth?

[Brett Schaefer]

Seventh. Seventh or eighth I think. Yeah, something like that. Top ten.

[Ryan Henderson]

It's just they seem to have such an advantage in manufacturing. And I will say new to the. Generally new to the semiconductor industry. I actually read a really good primer from Oppenheimer from 2008, but it's still very relevant today. And they actually talked about sort of the whole industry, the different elements of the supply chain and they talked about Taiwan Semiconductor and kind of how they differentiate themselves from. From a lot of the other pure foundries. And they're just way ahead of the game. I think that continues to be sort of a positive feedback loop from them or for them.

[Brett Schaefer]

Positive feedback loop for United States investments too. Yeah, I like this company a lot. I wish, yeah, I wish I own this one. Revenue, if you want to know, they do monthly revenue. Monthly revenue for June was up 27% year over year. I think that just came out today. And that is on top of 33% growth a year ago. And reminder, this is a company that does $100 billion in annual sales.

[Ryan Henderson]

That's the demand right now is unbelievable for the end, demand is unbelievable. And every time I think about the semiconductor industry, Taiwan Semiconductor is a choke point. They end up being like, it feels like all roads back, all roads lead back to Taiwan Semiconductor. So yeah, I finally just bought a starter position. I'll continue to read up on them, hopefully get a little better understanding of the advantages and more of the competitive landscape. But.

[Brett Schaefer]

If you like Nvidia, you gotta like Taiwan Semiconductor. They're basically their only supplier.

[Ryan Henderson]

Now.

[Brett Schaefer]

My takeaway from the TSMC and the Delta report and some of the other consumer trends out there. I know there's some macro stuff that came out today. I always forget the exact terminology, but in general it kind of fits under. This is the current economic trends of the last call it six to eight quarters ever since the 2023 turnaround and the interest rate and when inflation peaked and when interest rates were, you know, to stop the hiking cycle. And we've kind of done this pause and slight drop. You see these trends persisting with AI spending. Consumer spending is fine, people are traveling a lot and we keep getting all these reports, you know, macro bears saying the next shoe is going to drop and hasn't happened yet. It may happen in 2025, but it just shows that timing a recession call like this, even if you felt like it in April, that it was almost inevitable, something like myself, you really should just still stick with buying high quality companies, reasonable price, having a two to three year time horizon. And don't try to make any macro forecasters even one of the best venture Capital investors of all time. Peter Thiel had a terrible track record trying to be a macro hedge fund manager. And I think they probably had people much smarter than us working in there on their team.

[Ryan Henderson]

Okay, which company will be the largest in 2030 by market cap? Before we get to that, I want to talk about the TSOH investment research service. TSOH is run by recurring guest and friend of ours and actually a listener favorite as well, Alex Morris. He inside his research service, subscribers get access to 6 high quality stock research reports per month, including initiation reports, as well as regular updates on current TSOH holdings and watch list stocks. Plus, there's 100% transparency of the TSOH stock portfolio. Coverage includes companies like Airbnb, Celsius, which had some interesting industry data come out this week as well Roblox, Netflix and many others. Tsoh is a premium research service. If you're serious about investing, this is like outsourcing. A professional analyst, we read his write ups every week and to be totally honest, I lean on him for quarterly coverage of a lot of the stocks I own. And I will also say this, I read a lot of substacks, blogs, investing newsletters. Alex has a unique ability to simplify things, to simplify complex theses into getting to basically like what are the most important questions to ask for this company.

[Brett Schaefer]

And not wasting our time.

[Ryan Henderson]

Exactly.

[Brett Schaefer]

That's what I find when reading.

[Ryan Henderson]

Yeah, his write ups are phenomenal, honestly. So if you're interested, head on over to the scienceofhitting.com the link is in the description again. That is the scienceofhitting.com Brett, which company will be the largest in the world by market cap in 2030?

[Brett Schaefer]

Okay, I did basically a gut check one through three. No, Palantir is not on there. Sorry, Palantir crazies. It's not going to happen. Here's what I want. 1, 2, 3. This is just what I think most likely to third. Most likely 1. Amazon 2 Alphabet 3 company. We just talked about Taiwan Semiconductor manufacturing. What are your thoughts?

[Ryan Henderson]

So my dark horse for the largest company in the world in 2030 is Taiwan Semiconductor. But as I was thinking about that, if they're gonna get there, it's gonna require continued demand for Nvidia's GPUs. Which likely means. Which likely means Nvidia is going to remain above them.

[Brett Schaefer]

What about Amazon and Alphabets in house chips?

[Ryan Henderson]

Right? Like if those take off, that can, that can probably help too. So that's the only world.

[Brett Schaefer]

Here's another. Here's another pushback on Nvidia. Taiwan Semiconductor I think will maintain pricing power to Nvidia. But I don't know if Nvidia will be able to maintain this extreme pricing power to end customers if supply keeps normalizing. Does that make sense or am I.

[Ryan Henderson]

Yeah, but if supply doesn't like if they're. It's so circular. So if they are the ones that are able to increase their own supply, like if I really think in 2030 Nvidia GPUs the leading edge will still be really sought after. If they can increase supply, that's that means it's Taiwan Semiconductors new fabrication facilities in the US and Japan are probably running at full steam and producing that much more chips. That's probably still pretty good for Nvidia. It's not maybe that maybe they don't maintain the same amount of price, but they could make it up potentially in volume. I don't really know the price versus price versus supply issue that well on the GPU side because everything they always say we're supply constrained.

[Brett Schaefer]

Yeah, they like saying that. The I think the thing that holds back TSMC and where I think Amazon and Alphabet have a much higher chance is they're just not that from a revenue standpoint they're just not nearly as big as these companies today. And the reason I like Amazon, this might sound simple but their revenue base is so high and they have two huge runways still left to grow. You have continued market share taking of E Commerce. Overall, the retail in the United States it's still under 20%. They keep maintaining their market share and the fact that they have finally made this almost holy grail delivery network. Tons of automation in the warehouses. Times are really fast. You get your basic goods same day or next day across the whole country. Now they're finally, they're expanding to rural areas as well. You have a huge amount of operating leverage that'll come into that over the next five years. And I think the way, the way I thought about it is what companies do I think will have the highest operating income in 2030. I think one will be Amazon, two will be Alphabet.

[Ryan Henderson]

I think you're probably right with Amazon. The other thing with TSMC is the new fabs aren't going to be as profitable as, as their ones in Taiwan. The with Amazon. Yeah, I think they will continue to surprise investors with how profitable they can be. People continuously think of them as okay, it's retail that you know there's a captive margins here. But with all the automation and the fulfillment and the really high margin businesses that they've Built on top of it. Unless they choose to continuously lower costs. I think they're really like their underlying profitability is probably a lot higher than people realize with Amazon too. Did you know Amazon prime or Amazon Subscription Services revenue is the single largest consumer subscription business in the world?

[Brett Schaefer]

I did not. I did not. What about YouTube? Do they not break that out?

[Ryan Henderson]

YouTube ads would be lower. YouTube ad revenue would be lower. Now if you lump in premium, maybe it's higher, but it's hard.

[Brett Schaefer]

Probably not because YouTube, they say what is $50 billion in total? And that's including ads. So you're. So what is the number for Amazon subscriptions?

[Ryan Henderson]

Let me double check it right now.

[Brett Schaefer]

And I, I think the. That segment has still a lot of pricing power. Not an infinite amount because they've taken a little bit. But if they raise it to from now until 2035 to 200 a year to keep up with inflation and as they've added all this, you know, same day, next day delivery, that's much better than know second or deliveries in two days, you could easily go to 200. What does that say on your tweet here?

[Ryan Henderson]

Yeah.

[Brett Schaefer]

For anyone that doesn't know Ryan runs the Fiscal AI Twitter account.

[Ryan Henderson]

This is consumer subscription revenue of the biggest that I could find. So Costco membership fees do about $5 billion in revenue every year. Walmart membership fees actually does 6 billion. I don't think. I didn't realize that Walmart has more membership fee revenue than Costco. Spotify does about 14 billion. Netflix 39 billion. I could have added YouTube in here. That'd be I think just under Netflix in terms of ad revenue. And then Amazon subscription services revenue was at 44 billion for 2024. The largest.

[Brett Schaefer]

What of these, which one has the. I don't want to say fastest growth rate because you'll probably. Spotify is the easiest one to say fastest of Spotify, Netflix, Amazon, which one is larger? But Spotify is so low.

[Ryan Henderson]

Amazon has grown the quickest.

[Brett Schaefer]

Has it over the last decade.

[Ryan Henderson]

Yeah, look, we've got the. Okay, by the way, all this data, I'm sharing this for anyone that's listening. It's all available on Fiscal AI the use our link. Fiscal AI Fiscal AI chitchat. Amazon has grown its subscription services revenue, which is the biggest in the world, 29 a year since 2015. The second closest would be Spotify's premium revenue at 25% a year. It's that. Yeah, it's astounding. And to think that that division probably has a lot of pricing power. From here that just. Yeah, it goes to show the sheer size and impact of Amazon overall.

[Brett Schaefer]

Here's. Here's something Tyler brought up in the comments about what's going to be the largest market cap. He said, I'm not thinking enough about multiple expansion to take over for a five year period. You know, it's not that long to 2030 now Alphabet is the most capable of doubling their multiple while still growing earnings. I think that's a good point. And it brings up another question that people had. They asked Ryan, are you more or less comfortable today than when you bought Google or Alphabet? I think a couple months ago I'm more comfortable.

[Ryan Henderson]

That's probably another guess for me is that the multiple on Google slash Alphabet will change by 2030. My guess is it will. They will be seen as an AI winner by that time because Gemini rocks for developers. From everything I've heard from the team at Fiscal AI, it's powering so much on the development side. I think at their Google I O event they said they have 7 million developers building on Gemini 2.5.

[Brett Schaefer]

So you have cloud developers and consumer. I mean we've seen the MAUs on Gemini are growing quickly too. I like it. 401 subscription.

[Ryan Henderson]

400 million, I think.

[Brett Schaefer]

Yeah, it's. It's growing. Well, I, I like using the product. I use both Gemini and Google search depending on what I'm looking at. And it feels to me like I've only had it for a couple of months on that 20amonth subscription that also has some other things on top of it which is nice for the Google bundle. I think it's worth it if you're researching something. It can be, I think quite helpful for 20 bucks a month. It actually helped me. Let me. I know we talked about that coupon. As a little side note, that Coupang announcement of the intelligent cloud. I did some sort of queries into Gemini and I figured out with this Korean newspaper that I couldn't find over a Google search. There is a $1 billion incentive from the Korean government to build AI GPU clusters and they're looking for a Korean company to do that. So this is why Coupang is hyping up and starting their own AI intelligent cloud business. Because they could get what looks like a nice $1 billion customer commitment from the Korean government. So for anyone that follows that story.

[Ryan Henderson]

Go get that government revenue. Yeah, I would say I'm more confident now than when I initially bought Google. And the primary reason I think the price is up a little bit since I bought it but the primary reason is just that they have been pretty a, they have improved on the AI outputs from, from what I've seen, the, the actual AI responses are better, but they've actually been really thoughtful and pragmatic about the way they've rolled it out as well. I, I've gotten to the point now where I'm, I'm wishing that I got more Gemini responses as opposed to the Google search results. This is actually, it's been so eye opening how, how much better sometimes the LLM response is than a Google search. I really actually, I don't want to scour through a bunch of lists. I want you to do that for me. I don't want you to scour through a bunch of paywalls like go find that, go find that data.

[Brett Schaefer]

Yeah. Now is that legal? Is that going to be deemed illegal? We'll see. There's some legal stuff that is probably too boring to talk about on this show. What are your other picks? Are you going TSMC or do you have any other thoughts? Because from what we've Talked about, the three largest companies today that have, I think above 3 trillion maybe Apple's kind of been sliding, but essentially 3 trillion or above Apple, Microsoft, Nvidia, would they make your list or not?

[Ryan Henderson]

Apple would not. I'm pretty confident about that one. Unless somehow they, they come out with a new iPhone. And by new iPhone I mean a new product line that rivals the iPhone.

[Brett Schaefer]

Right. A true hardware innovation.

[Ryan Henderson]

Yeah, I don't think Microsoft will be up there. They. I, I think Google has probably some of the most. Google and Amazon probably have the most operating leverage from here in the next five years.

[Brett Schaefer]

And Microsoft high multiple too.

[Ryan Henderson]

Google is already the most profitable company in the world and they, and I'd argue they have operating leverage from here. So I'd say Google 1, Amazon 2, TSM, TSMC 3.

[Brett Schaefer]

Wow, similar list. And you know what? I don't own either of those companies, but I'm shying away from large companies. Let's see, we have a comment here that says, yeah, if they break up Google then it can't be the largest company, but maybe some of the parts could get there. Technically it wouldn't be anymore. And they said they made Tesla's full driving look like a sham with Waymo. Yeah, Waymo's looking good as well. But I saw projections that they're going to have $2 billion in annual revenue by 2030. So that's really still a decade long play that could turn into a good cash cow for them. But by 2030 it's not going to be material.

[Ryan Henderson]

Okay, question. Yeah, Alex says you already mentioned it but if they break up, break up into parts then can't be the most profitable. I think I've asked you this before but if that does happen, what segment, subsidiary division would you most want to own?

[Brett Schaefer]

Google Cloud? I think it's actually the one thing I'd worry about with Amazon is it seems like Google Cloud is from their capabilities they've built a better infrastructure for the AI world. I am nowhere near an expert but this is what I've read from experts talking about this and, and I'm just extremely optimistic. You mentioned the developer stuff. Google Cloud doing very well. If they got a cash infusion during a breakup and they can just reinvest in a ton of Data Centers, the TPUs, if you combine that in there, boom. It could be much, much larger in 10 years.

[Ryan Henderson]

I think I might own YouTube if, if, if I had my choice of all of them because you make a good case for Google Cloud and I think they are probably the most likely to grow the quickest. But among all of this AI discussion it's, it's in the last three to four years because everyone thought search had the biggest moat in the world and now it's been called totally into question. It's really going to gone to show how big of a moat YouTube has how collecting all the, that that video repository is. There's nothing like it.

[Brett Schaefer]

And you, you really, it's hard, it's impossible to match. Yeah, yeah. Even TikTok and Instagram have been insane balance sheets. They can't really match it. Those are still fine businesses. I think TikTok's got its own problems politically but yeah, I agree YouTube's a good business. I, I would just be curious to look at what their income statement actually looks like. I think it's more similar to a Spotify than anything else and the margins are going to be fairly low. But that doesn't you know on, on the price, whatever the price is. You just factor that in. Do we have. We're going to move to another topic. Do we have any other advertisements to get to? Before we talk Meta's super intelligence team.

[Ryan Henderson]

Let'S mention Blue Chippers Club. Blue Chippers Club is a tight knit community of stock focused investors. Inside this community everyone gets to share, break down their portfolios, pitch stocks, rece feedback and participate in weekly calls. This, I've said this before. Blue Chippers has been a longtime sponsor for this show and it really is, it's hard to describe how valuable it can be to have a true community that you bounce ideas off of. I'm not just talking about people that you tweet at once or twice, but to have actual calls to talk to people about ideas sort of face to face digitally. I think it just makes a huge difference. And Blue Chippers is trying to build that exact community. So if you're interested in joining, head on over to bluetrippers club.com and hit apply again. That is bluetrippers club.com the link will be in the description. Do we want to mention the Autodesk acquisition? You had a tweet yesterday that Autodesk loves to make bad acquisitions. Is this another one of those?

[Brett Schaefer]

I guess I don't remember PTC's business that much. But they. It's just a rumor right now. I think PTC was probably dropping the rumor just so they can get another bid potentially. What's the price gonna be? Do you. Did you see anything on that?

[Ryan Henderson]

No price. I actually went back through our show notes that we did on. We did an episode on PTC a while ago and actually we thought pretty highly of the business overall. They are primarily. They have like 10 different software products, but it's primarily CAD stuff. So computer aided design software and then product lifecycle management software. So a lot of. And typically those two go hand in hand. So a lot of the companies that use their product lifecycle management solutions also use their CAD solutions. So I don't really think there'd be that much like customer overlap necessarily with Autodesk. I could be wrong on that. But yeah, basically $21 billion market cap probably jumped now. PTC has a $21 billion market cap. Autodesk has a market cap of 67 billion. That's probably down since the market hates when Autodesk does this kind of stuff. It just, it's a third of the size on a market cap basis. And it's also a third of the size essentially on a revenue basis. My only concern here, I guess this kind of applies to both companies. But revenue growth has been a lot worse than I thought. Now it's higher margin revenue today than it was 20 years ago. But since 2005, Autodesk has grown revenue at 7.6% annually. PTC has grown at 6.4%. I just would have thought those figures would have been higher. But obviously high margin cloud based subscription revenue is going to be a lot, a lot more profitable than than selling sort of one time licenses. So I, I have no idea whether this will be a Good acquisition or not, my gut tells me paying a premium for a massive business that's very similar to yours. Grower probably not going to work out or you're going to pay too much, but we'll see.

[Brett Schaefer]

Yeah, about some of my thoughts too. These are great. It's a great industry from unit economics, moat perspective which is engineering, design, architecture, construction, software. But they don't seem to be the companies that are really run that well for shareholders. Yeah, no, that's about it.

[Ryan Henderson]

You're 100% right and it actually I maybe I'll share this chart but it makes me realize how much money, how, how difficult it might have been to buy some of the software companies that were going through the cloud transition. Because if you actually look closely from 2014 to 2017 both companies revenue was down like 30, 10, 20% for both those companies over that time frame. Cloud transition took a long time for both these businesses.

[Brett Schaefer]

That's why the buying opportunity showed up. You had to look deeper into what the subscriptions look like and just see that the accounting was masking that the business was doing just fine and was going to go on a nice growth run. But buying today, maybe not so much.

[Ryan Henderson]

Tyler in the comments brings up a good point unrelated this is about the Meta Super Intelligence team, but we talked about how Google's so promising from their AI perspective. But if Meta hires every every AI engineer, I'm not sure Google's going to be able to build anything. Same goes for every company.

[Brett Schaefer]

I don't think they have every engineer. But yeah, that that does seem to be their strategy. So Meta is poaching a lot of AI talent from other technology players for what it's calling their Meta Super Intelligence Lab. They are paying them major league sports salaries in the tens of millions annually from what is being reported. First thought is if there's like a thousand of these engineers and super genius scientists around the world that are going to drive advances in this industry and keep you in a lead or create the new products systems. I don't really know how to describe it. And this industry is going to be worth trillions of dollars. From what they all believe, I would think these people are still underpaid because of how valuable they can be at Meta. Alexander Wang, who they bought from Scale AI, who was the founder there, and then Nat Freeman who's the founder of GitHub. They will lead the Meta Superintelligence Lab. Apparently eight core researchers from OpenAI have joined Meta and they also tried to acquire the Safe Superintelligence team which is Led by a guy, his name is very hard to pronounce, who was the Chief Scientist at OpenAI and one of the legends in the industry. He's some of the inventors of the core technologies. A while ago this didn't work out. I guess they didn't, weren't able to get him. I think this guy probably doesn't need the money, so he just wants to build his own thing and see what he can do. They also just got the leader of Apple's AI division. Don't know if that's bullish or bearish, but. And then a few players from Google and DeepMind. I think if you're looking at Alphabet, you can see that they got a couple of people from there, but the, the leader of that division and maybe the number one AI talent in the whole world. I, I don't know if I'm saying his name right, but Demi Hasibis, he was the founder of DeepMind, he's still there. It seems like they have quite a strong team. Long story short, they have tried to poach everyone. I have a tweet here from past guest Reheard Jark, who follows the big tech companies, some of the best on the whole Internet and has some fantastic long form tweets around that. He said apparently Zuckerberg tried to poach Apple's AI chief with a $200 million comp package. For reference, Apple CEO Tim Cook makes $75 million a year. Might seem crazy, but given how valuable these people can be in this AI race. And one thing I thought about after reading or Ben Thompson at Stratatry had this idea is that unlike a lot of the other technology, you're not technology. Unlike 15 years ago, where Amazon was chasing one path. Microsoft had its own business, Google had its own business, Meta had its own business, Apple had its own business. And there was many. So some overlap on a Venn diagram, but you weren't chasing the exact same goal in this, in, in this race everyone is chasing the same thing, which is making it hyper competitive, especially when they have these rich balance sheets. So why is Zuck doing this? I, I think the logic is pretty simple for him as like a capital allocator or CEO. He goes, he looks at them and they, they have Instagram, WhatsApp and Facebook and they have the same wonderful proprietary data sets as Alphabet. Tons of stuff to train on, you know, similar to Google, Google search, Gmail, YouTube. He asks why are our A, my model AI models not good? Why are they behind? And then he just goes, it's probably our Workers. Therefore, I should spend as much money as possible to acquire the workers that can actually build and copy what Alphabet and OpenAI have. I'll let you go and talk, but the questions I have is, do you believe this is a smart move? How does it make you think about the other big technology players? My big takeaway is you should be more bullish on the growth of OpenAI and Alphabet after seeing this, because it seems like they're the two leaders along with Anthropic in the space.

[Ryan Henderson]

Yeah, I don't really know what to think of it. I have thought it was hilarious how, you know how, like, when an athlete gets traded from one team to the other, there's, like, trade announcements via tweets and they've been doing that for. For these.

[Brett Schaefer]

Who is the guy? Adam Schefter and. Whoa. Well, he retired. Oh, yeah. The guy now is Shams. I think it's his name. There needs to be that guy for. For business acquisitions. Yeah. Yeah.

[Ryan Henderson]

The one thing I would worry about is all of these people have been leaders at their own companies. Is it going to be, like, egocentric, like, people struggle with. Is there going to be sort of a power struggle?

[Brett Schaefer]

Yeah. Who. Let me give an example of a sports analogy. You understand who won the Champions League this year?

[Ryan Henderson]

Not Real Madrid. The.

[Brett Schaefer]

Yeah, it is the. It was. It was psg. Right. And they had the three, like, top players five years ago and they didn't win.

[Ryan Henderson]

It is a problem with super teams like. Yes, make a good point. The sports analogy for any of our listeners that aren't sports fanatics. When people build a super team, egos can start to get in the way. And I'm just thinking, like, if you were the chief AI scientist at Apple and you've got someone that had a similar role at Google and you've got competing ideas on the best way to do things, I just imagine that might be now. Maybe they're all getting so. I would imagine that that would be a difficult environment to work in, but maybe they're all getting paid so much money they just don't care and they'll just push their egos to the side.

[Brett Schaefer]

It makes me more bearish on Meta's AI prospects, for sure.

[Ryan Henderson]

It makes them look super desperate.

[Brett Schaefer]

Yeah, it makes me more bullish on OpenAI and Alphabet. Seems like they have. Yeah, that's exactly, exactly it. Tyler in the comments said, is Ryan a Cowboys fan now? I hope not, honestly. Ryan is more of a soccer fan in general, so that's the one sport he follows.

[Ryan Henderson]

So, yeah, yeah.

[Brett Schaefer]

It doesn't even matter to him. We have a question on Copart and autonomous driving. I don't, Sorry, no comments there.

[Ryan Henderson]

Interesting. It is. I vaguely know the business but they are one of the biggest in terms of like salvage yards if I'm not mistaken, and sort of a, sort of a big moat around there. And it's kind of a unique business. But if, who are some of the companies that get hurt by self driving?

[Brett Schaefer]

Insurance companies might be smaller. If the holy grail exists and accidents collapse. Yeah, the insurance companies would be smaller. Anything related to the insurance? Auto shops. Autozone O'Reilly maybe.

[Ryan Henderson]

Oh yeah, you might be right.

[Brett Schaefer]

But it's a long time, you know, it's gonna be a very long time until they fully replace everything. Think about Waymo is growing exponentially. But I think they have a thousand cars or something like that. I think anything related to repairs, insurance or that supply chain would be impacted and it's just going to be a much smaller business. Oh, and Tyler says auto OEMs sales could go down a ton.

[Ryan Henderson]

Yeah, yeah, that's true. If now, if it's just us, if they somehow find a way to just have licensable Software to the OEMs, maybe they're all right and they can continue to make their cars and people will continue to buy them.

[Brett Schaefer]

But yeah, and if it just taxes the existing taxi and ride sharing network, that's a small part of driving.

[Ryan Henderson]

Bubble Watch. We've got a little bit of time left. What did you find this week?

[Brett Schaefer]

Well, it's a Core Weave. Core Scientific merger or acquisition. So Core Weave, which is the high flying cloud computing AI startup buzzword happy company. You should have seen this press release. It was talking AI, hyperscaler, data centers, gigawatts, everything you wanted to see from any narrative based company. So they're acquiring a company called core scientific for $9 billion, approximately an all stock deal. This acquisition. Here's a quote. This acquisition will help Core Weave verticalize its data center footprint to future proof revenue growth and enhance profitability. Through this acquisition, Core Weave will own approximately 1.3 gigawatts of gross power across Core Scientific's national data center footprint with an incremental 1 GW plus of potential gross power expansion. They are using their stock as currency to increase their data center capacity. This is a smart way maybe to skip on capex plans and spending. You're using your inflated stock price to acquire this instead of spending money off of your balance sheet. Is it good for shareholders at that price? Maybe, maybe not. The stock quickly dropped and is down 25% from all time highs. All the jargon confuses me but it seems like a merger for more power, more computer chips, more data center capacity and no one is thinking about roi. That's what, that's all I take away. Not a one, not one ROI discussion. It's we are going to race and get as much supply of data centers, electricity, computer chips essentially until we match demand.

[Ryan Henderson]

I think you're probably right. They probably are not thinking about roi. My guess is that they're thinking whatever, we'll figure it out after. Or they think it's such a no brainer decision to increase capacity that the ROI has to be positive. This of all the AI beneficiaries, AI companies, I don't know if any company is as is taking as big of a risk or as big of a jump to try to benefit. Like yeah, I think they're planning what was it like 40 billion in capex.

[Brett Schaefer]

20 billion versus 5 billion in revenue this year. So investing, really investing ahead of planned growth.

[Ryan Henderson]

$20 billion in CapEx, $9 billion in stock fueled acquisition CapEx essentially. Yeah, you're right. This might be the smarter alternative relative to just building it out yourself. Especially if there's are already functioning. But yeah, it just feels so risky.

[Brett Schaefer]

Like it's aggressive.

[Ryan Henderson]

Yeah, aggressive.

[Brett Schaefer]

The, I mean I can sound like the boy who cried wolf but the way this is going, eventually there will be oversupply because no one is thinking. Everyone is thinking, look at even these rational big tech companies, they're just thinking supply, supply, supply just grow at all costs. Eventually that hurts you eventually. Like we're not going to cover the. Right, let's just take it too far. We're not going to cover the entire earth and data centers. Eventually there will be too much if we continue not thinking about what ROI is and matching demand. You're just going to build, build, build, build, build. And some people say there's unlimited demand. That to me sounds like a boom bust cycle getting ready to form. Now I'm going to benefit as a consumer because there's going to be a plethora of cheap AI tools for me. But these stocks such as Core Weave are highly dangerous to buy. It interests me not one bit. As do I know where it's going to be in three years. No, no idea. Could be zero. Could be a $300 billion company.

[Ryan Henderson]

Yeah, I'm fine missing this one. If it ends up. Well I think the answer here is by the commercial air conditioning businesses.

[Brett Schaefer]

True.

[Ryan Henderson]

Honestly if you believe that data centers are just going to like there are going to be so many data centers coming online over the next 10 years. Honestly, air conditioning might be might be one of the biggest beneficiaries. I think we're running up on time here. Brett, unless you have any other parting thoughts? Nope, Nothing else that is going to do it. Thank you to everyone for tuning in. Thank you to our sponsors, ibkr, the TSOH Investment Research Service, Blue Chippers Club and Fiscal AI for giving us all the data that we need for these shows, specifically Fiscal AI in that case. And thank you once again for tuning in. Want to remind everyone that Brett and I are not financial advisors. Anything we say or discuss on this podcast is not formal advice or recommendation. We may buy, sell or hold any of the securities discussed in this podcast. Thank you again for tuning in and we'll see you next time.