Management Weighs in on the Macro

Summary

Motley Fool Money: Episode Summary – "Management Weighs in on the Macro" Release Date: April 18, 2025

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Hosts:

• Dylan Lewis
• Jason Moser (Senior Analyst)
• Matt Argersinger (Senior Analyst)

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1. Introduction to Earnings Season

The episode kicks off with hosts Dylan Lewis, Jason Moser, and Matt Argersinger diving into the start of the earnings season. Dylan mentions his recent personal hiatus, returning refreshed from his honeymoon, and sets the stage for discussing key financial results and macroeconomic factors affecting the market.

2. Market Overview: Tariffs and Economic Uncertainty

Jason Moser elaborates on the pervasive uncertainty in the market driven by expanding tariff discussions affecting over 180 countries. He highlights the ripple effects on trade deficits, domestic production, job losses, and interest rates.

• Notable Quote:
  “Everything could change tomorrow. We just don't know because one, one headline, one tweet could change the whole course of things.”
  (Jason Moser, [03:30])

3. Performance of the Magnificent Seven

The analysts discuss the underperformance of the "Magnificent Seven" stocks, including Tesla (down ~40%) and Nvidia (down ~23%), contrasting their previous enthusiasm in 2024.

• Insight:
  The decline signifies that even leading companies are not immune to macroeconomic shifts, emphasizing the importance of diversification and cautious investment strategies.

4. Safe Haven Assets and Treasury Yields

Matt Argersinger examines the rising Treasury yields, noting that contrary to expectations, yields have increased from 4% to 4.3% since early April. This rise undermines the administration's hopes of lowering interest rates to mitigate tariff impacts.

• Notable Quote:
  “There’s a real danger to that. If rates stay high and countries like China, Japan, the UK, various countries in the EU aren’t exporting as much to the US and not buying as many Treasuries or worse, they actively decide to stop buying U.S. Treasuries, I think we’re kind of in trouble.”
  (Matt Argersinger, [05:00])

5. Gold vs. S&P 500 Performance

Matt Argersinger highlights that over the past 20 years, the GLD (SPDR Gold Shares ETF) has outperformed the S&P 500 Total Return by surpassing it with a 571% increase compared to 565% by the S&P 500.

• Notable Quote:
  “Gold over the last 20 years. I’m just using the GLD by the way, the Spider Gold Shares ETF. That ETF is up 571% over the last 20 years.”
  (Matt Argersinger, [06:09])

6. Automotive Sector Insights

Jason Moser discusses recent auto supply data indicating a decline in both new and used vehicle supplies, drawing parallels to the constrained supply chains experienced during the COVID-19 pandemic. He suggests this may present short-term investment opportunities despite potential long-term challenges.

• Notable Quote:
  “This falls more into the short term catalyst value style of investment here. But I think it's absolutely something to keep an eye on.”
  (Jason Moser, [08:30])

7. United Airlines’ Earnings and Guidance

Matt Argersinger reviews United Airlines' earnings, noting record revenue and earnings per share that surpassed expectations. United provided scenario-based guidance for 2025, projecting earnings per share between $11.50-$13.50 under stable conditions and $7-$9 in a recession scenario.

• Notable Quote:
  “I give management credit for providing that because I think coming into earnings season, all of us are wondering which companies would be brave enough to even provide guidance and would they do something like this.”
  (Matt Argersinger, [09:44])

8. Big Banks' Earnings Analysis

Jason Moser analyzes the earnings reports from major banks like JP Morgan, Bank of America, and Goldman Sachs. He notes significant growth in trading revenues, especially in equity markets, and highlights their robust dividend payouts and stock repurchase programs.

• Notable Quote:
  “The markets revenue for the business was up 21% year over year. Fixed income was up 8%, but equity markets were up 48%, which I just found incredible.”
  (Jason Moser, [12:09])

9. Industrial REIT Spotlight: Prologis

Matt Argersinger discusses Prologis, an industrial real estate investment trust (REIT), emphasizing its resilience amidst tariff uncertainties. Prologis maintained its guidance for 2025 despite economic headwinds, supported by strong leasing activity and high occupancy rates.

• Notable Quote:
  “The stock trades for less than 17 times its earnings expectations for this year. It currently yields 4.1% for the dividend.”
  (Matt Argersinger, [17:13])

10. Future of Robotics: Interview with Daniela Rus

The episode features an insightful interview with Daniela Rus, MIT Professor and head of the Computer Science and Artificial Intelligence Laboratory (CSAIL). Daniela explores the evolution of robotics, emphasizing the shift towards softer, more adaptable materials to create collaborative robots (cobots) that work alongside humans safely.

• Key Topics:

  • Soft Robotics: Utilizing materials like silicone and even food to develop gentler robots.
  • Cobots: Robots that assist and augment human capabilities in various settings, including warehouses and restaurants.
  • Autonomy Levels: Discussing the challenges of achieving full (Level 5) autonomy and the incremental steps towards more intelligent, shared autonomy systems.
  • Future Consumer Robotics: Envisioning household robots for tasks like laundry folding, dishwashing, and kitchen assistance within the next 10-20 years.

• Notable Quote:
  “I want the machines to adapt to people rather than the other way around, which is the state of the arts today.”
  (Daniela Rus, [22:00])

11. Starbucks’ Dress Code Update

Jason Moser comments on Starbucks CEO Brian Niccol’s recent update to the company's dress code, introducing the "Green Apron" uniform to standardize employee attire across company-owned and licensed stores, aiming for operational consistency.

• Notable Quote:
  “I mean, one of the things that comes to mind is that green apron. So I absolutely appreciate wanting some consistency there in the operation.”
  (Jason Moser, [34:55])

12. Radar Stocks

The analysts present their stock picks for the week:

• Matt Argersinger:
  Ryman Hospitality Properties (RHP)

  • Overview: A REIT owning large-scale resorts and convention centers, primarily under the Gaylord brand.
  • Investment Thesis: Despite economic downturn risks, RHP's long-term bookings and high occupancy rates offer stability. The stock trades at a reasonable valuation of less than 11x earnings with a 5.5% dividend yield.

• Jason Moser:
  Alphabet Inc. (GOOGL)

  • Overview: Dominant in global search but facing increased competition in AI and ongoing antitrust litigation.
  • Investment Thesis: While Alphabet remains a powerhouse, challenges such as reduced market share in search and expensive acquisitions like cybersecurity firm Wiz introduce uncertainty. Upcoming earnings report on April 24 will be pivotal.

• Notable Interactions:
  Daniela Rus shares a light-hearted comment regarding RHP, emphasizing her personal experiences and opinions on the stock.

13. Conclusion and Upcoming Topics

The episode wraps up with a teaser for upcoming discussions, including further analysis of big banks, industrial REITs, and a continued exploration of Radar stocks. Hosts remind listeners of the importance of conducting personal research before making investment decisions.

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Final Thoughts: This episode of Motley Fool Money provides a comprehensive analysis of the current macroeconomic landscape, the performance of major financial institutions, and insights into emerging technologies in robotics. The discussion underscores the importance of adaptability and strategic investment in volatile times.

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All opinions expressed are those of the hosts and do not constitute financial advice. Listeners are encouraged to perform their own due diligence before making investment decisions.

Transcript

[Dylan Lewis]

Ding, ding, ding. It's earning season. This week's multifamilyful money radio show starts now.

[Jason Moser]

Everybody needs money. That's why they call it money.

[Dylan Lewis]

But you can give them to the buzz and be. From Fool Global headquarters. This is Motley Fool Money. It's the Motley Fool Money radio show. I'm Dylan Lewis. Joining me over the airwaves, Motley fool senior analysts Jason Moser and Matt Argersinger.

[Jason Moser]

Fools.

[Dylan Lewis]

Wonderful to have you both here.

[Matt Argersinger]

Dylan.

[Jason Moser]

Hey.

[Dylan Lewis]

We are kicking off earning season with a look at results from the big banks. We've also got a glimpse at our robotics future with one of MIT's leading experts.

[Daniela Rus]

And of course, you guys have brought.

[Dylan Lewis]

Your stocks on your radar this week. Matt. Jason, I have been away since late March getting married, gallivanting around Europe on my honeymoon. I return a little tanner, a belly full of oysters and Portuguese wine. My first show. Back in the host seat in a little while.

[Unknown]

Jason.

[Dylan Lewis]

Jason, what have I missed?

[Jason Moser]

Belly full of oysters. I mean, are you rubbing it in, Dylan? I mean, I love oysters. Golly. Hey, listen, congratulations, by the way. That's. We've been talking about this a lot. It's a lot of work leading up to that event. So congratulations to you and your. And your wife for a successful wedding and hopefully what was a very enjoyable honeymoon. It's a great stage of life.

[Matt Argersinger]

Can I just add, congrats on being away for the last few weeks. That's been the right place to be.

[Dylan Lewis]

I think it's been the right thing for my portfolio, you know.

[Jason Moser]

Yes, I think that's exactly right. I mean, oftentimes we talk about the best thing to do is usually nothing. And it feels like these last few weeks have really have really put. Put that. Put that to the task. But I mean, there. There obviously has been a lot going on. I mean, we've talked a lot over the last couple of. Of years here in regard to the Magnificent Seven. Right? How about those Magnificent Seven this year? Right? All of them down, all of them underperforming the market year to date. Tesla down close to 40%. Nvidia down close to 23% now. So that's been an amazing turnaround. Now, granted, I think there was a lot of enthusiasm that was brought forward into those stocks through 2024, and to be sure, they're wonderful companies, but it just goes to show that it's not always a straight lineup. And I think those Magnificent Seven serve as an example of that. And then I think, really? Wow, what did you miss? I Can't believe you missed it. I have to believe you at least saw a headline or two in regard to tariffs, right? I mean, that's been the point of discussion for so many, for of the last few weeks. And it's created to a ton of market volatility. And you know, you start to wonder like, remember how this all started? I mean, this was a couple of months ago when we were talking about Canada, Mexico, China. There were border issues and it was fentanyl. And I mean now this has gone global with like 180 countries in play and just deals out the yin yang and nobody really knows ultimately what is going to happen here. So you ask yourself the question of why this is happening. And I mean there's the trade deficit conversation and I get that. I mean we certainly do import more than we export and there are risks that come with that. I mean, you can see shrinking production domestically, job losses, higher deficit spending, things like that. But then all of a sudden, you know, you also hear at least this conversation out there in regard to maybe the administration is really doing this to try to get interest rates pulled back down. I'm not saying that's why they're doing it, but the conversation is certainly out there. So it just leads to a ton of uncertainty and headline risk. I mean everything, everything could change tomorrow. We just don't know because one, one headline, one tweet could, could, could change the whole, whole course of things. So it's been a, a fascinating time to be an investor for sure.

[Dylan Lewis]

Other than that, how was the play? Mrs. Lincoln over to, over to Matt.

[Matt Argersinger]

Hey Dylan. Well, congrats as well on the wedding. Jason kind of hinted at this, but you know, the MAG7's down, the market's down, and here the S&P 500 as we tape this is still down roughly 15% year to date. Really rough. But what investors haven't been doing, which is unusual, is they haven't really been buying the safe haven assets like Treasuries. If you look at treasury yields, for example, they're actually up since April 2nd. If you go back to April 2nd, before the tariff announcement, the yield on the 10 year treasury was just below 4%. As we tape, it's 4.3%. And I think that is not going as planned or at least as the administration planned it, which is they expected maybe that interest rates would fall, that would maybe be a boost and help kind of alleviate the pressure, so to speak, from these tariffs and the implications for the economy. But that's not what's happening. And I think there's a real danger to that. I mentioned this last week. But if rates stay high and if countries like China, Japan, the uk, various countries in the EU aren't exporting as much to the US and not buying as many Treasuries or worse, they actively decide to stop buying U.S. treasuries, I think we're kind of in trouble. I mean the housing market is already slow. That would certainly get worse. Small to mid sized businesses that rely on credit and bank financing, their costs would go up, their access to credit would go down. You have consumers with very high auto and credit card debt that could become a problem. So I understand why the administration kind of pivoted about a week ago when the 10 year yield popped over 4.5%. So I think interest rates is what you got to pay attention to. And I think to me that's kind of the bigger story over the last three weeks, Dylan. But then there's this, guys, have you looked at the price of gold lately? Because I couldn't believe this. But I looked, this is Wednesday and I looked as we tape and I looked at a 20 year chart of the S&P 500 versus gold. And guess what's winning?

[Daniela Rus]

Is it gold?

[Matt Argersinger]

It is gold. So gold over the last 20 years. I'm just using the GLD by the way, the Spider Gold Shares ETF. That ETF is up 571% over the last 20 years. The S&P of 500 total return is 565% gold. And 20 years has tipped over the market.

[Daniela Rus]

Wow.

[Dylan Lewis]

So you know, what are we doing here looking at it?

[Matt Argersinger]

What are we doing talking about stocks?

[Dylan Lewis]

We could just be buying rocks.

[Matt Argersinger]

Go to Costco and buy gold bars.

[Dylan Lewis]

Well, I think with that backdrop, plenty of things in the macro picture for us to zoom in on. And we now have the benefit of a lot of companies giving some commentary alongside their earnings touching on topics like tariffs and rates. We also have some updates on consumer behavior and how folks are processing tariffs with their dollars. And it seems like we are seeing some consumers out there, Jason, trying to get ahead of the expected tariff impact and expected price increases that might come with tariffs.

[Jason Moser]

Yeah, absolutely. Consumers and providers. I mean we saw some auto data out here today based on data from Cox Automotive. They said the day supply of new vehicles has fallen from 91 days at the beginning of March to just 70 days this month. And the supply of used vehicles actually has declined by four days to just 39 days now. And so to me, the first thing that came to Mind, when I read this data, you know, I thought about anecdotally, my wife and I went through 2021, I think it was we were buying a new car for the family. And it was not the easiest process. Supply was very limited, prices were high. Unless you could actually work out a pretty good financing deal, which thankfully we were able to do. Not a lot of people are able to. Right. I mean, kind of sometimes you got to take what, what they're going to give you. But it just reminds me a lot of these Covid years. And if you look at from mid-2020 until the beginning of 2022, right. Where we saw the supply chains really constrained for, for an obvious reason. You look at Ford and GM, both companies, their shares hit five year highs at that point. CarMax, same thing. Right. And CarMax is I think exclusively used vehicles. You look at all three stocks today, I think GM a little bit less so. But all three relatively depressed levels today. Even Tesla. And so supply chains are in flux obviously for different reasons. And I think there could be a headline or two tomorrow or next week that changes everything. But you have to wonder if there's not an opportunity developing here in the near term at least because it does feel there's a lot of demand being pulled forward, sort of predicting the challenges that are going to be in maybe Q3 and Q4. As an investor, you know, I like to find a short term catalyst or a long term trend. I think this falls more into the, the short term catalyst value style of investment here. But I think it's absolutely something to keep an eye on in regard to.

[Dylan Lewis]

Automakers switching over to earnings season. Matt, we saw some results out from United this week helping us usher in the formal beginning of earnings season. They're one of the early reporters. They had good results, but also some warnings about the state of domestic travel. Are the skies looking friendly right now.

[Daniela Rus]

For the airline companies?

[Matt Argersinger]

Not really, Dylan. But you know, in United's case, and we saw, we heard from Delta a week ago, it's not as dire or cloudy as we might expect it to be so far. And in fact, I like that United's management team was willing to do something that Delta was not willing to do, which is actually provide guidance for the year, if that's what you want to call this.

[Daniela Rus]

So it was like two stage guidance, right?

[Matt Argersinger]

Yeah. United provide two scenarios for its 2025 earnings. In a stable scenario, I guess that's economic stability. They see earnings per share between $11.50 and $13.50. In the recession scenario, full year earnings will be 7 to $9 a share. That is quite a range. But you know what, I give management credit for providing that because I think coming into earnings season, all of us are wondering which companies would be brave enough to even provide guidance and would they do something like this, provide scenario based guidance. And United did. And going back to United's results really quick, they were pretty decent. Record revenue in the quarter. Earnings per share were ahead of expectations. They also talked about the last two weeks, the last two weeks when all this tariff tantrum was happening. Both premium cabin bookings and international bookings were higher and better than expected, which was those are the areas you'd expect to be most impacted by what's going on with the uncertainty. And those are holding up. So looks like it's going to be a pretty resilient year for United and maybe for the airline industry as well. And it'd be interesting to see what earnings they actually hit this year.

[Dylan Lewis]

Matt, I am with you on this one. I think the options for management teams at this point are no guidance, a single range that, let's be honest, very unlikely to hit or scenario analysis. I will take scenario analysis over no guidance or a single range any day.

[Matt Argersinger]

I agree. I love that. I love it. Let's, let's, let's, let's see more of those.

[Dylan Lewis]

All right, maybe we'll later this earnings season. More earnings results. Coming up after the break, we've got looks at big banks and everyone's favorite industrial reit. Stay right here. This is mouthful money.

[Unknown]

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[Dylan Lewis]

Welcome back to Motleyful Money. I'm Dylan Lewis here on air with Jason Moser and Matt Argersinger. The big banks are out with fresh earnings numbers this week. We've got quarterly updates from JP Morgan, bank of America and Goldman Sachs. Jmo, where do you want to start? With this one?

[Jason Moser]

Yeah, I think the common theme we've seen with the big banks. Listen, volatility isn't bad for everyone, Dylan. I mean investors might have a hard time making sense of things, but hey, these big banks are raking in some fees as investors continue to reposition their portfolios given the levels of uncertainty in the economy today. And of course, I mean a lot of that, most of it's all tied to tariff talk and trade relationships and how this is ultimately going to, to shake out. But Goldman Sachs, Morgan Stanley, JP Morgan, bank of America, all recognized record equities trading revenue in the first quarter here of this year. And I think that is poised to continue given the fact that it feels like we're probably going to hang around these uncertain times for a little while, right? Maybe there is a headline that comes out tomorrow that changes things, but I'm not betting on that. But I think when you look at the banks in particular, we'll look at JP Morgan and Bank of America, for example. JP Morgan strong quarter revenue was up 8% from a year ago. Earnings per share grew 14%. They repurchased $7 billion of common stock, which I thought was really interesting. I mean, the stock has been at some elevated levels here recently. And Jamie Dimon wasn't exactly the biggest fan of repurchases at those levels, but I guess he sees the return there. And they announced a 12% increase in the dividend. So you now, you now have a yield there at about 2.4%. The group book value was up 12% from a year ago. But getting back to the trading revenue, right, the markets revenue for the business was up 21% year over year. Fixed income was up 8%, but equity markets were up 48%, which I just found incredible. Now, there was some recession talk in the call, not a lot, though. It wasn't like a word that was just bandied about 50 times. But right now, based on their research, they're pegging a recession in 2025 at basically 50, 50. So a coin flip, you look at bank of America, very similar in a lot of regards. Revenue grew a little bit better than 6%. Earnings per share, up about 18.5% from a year ago. Brian Moynihan, CEO of the company, noted in the call that based on their research, they actually don't believe we'll see a recession in 2025. But going back to the trading revenue there, their global market segment, that revenue was up 12%, driven primarily by higher sales and trading revenue. And they grew book value 8% from a year ago, which, which is really encouraging, I think with these companies. You know what they continue to do very well. I mean, they're obviously strong dividend payers, but they're doing a good job of Returning value to shareholders with with share repurchases. You look at bank of America, that share count is down 12 and a half percent since 2020. And JPM, more JPM's down 9% now. Both stocks have underperformed here year to date. Both are valued in tandem with less than 12 times earnings though, which that's historically not crazy one way or the other. But I think there's a lot to be said for stability and these could be a couple of nice ways to get that.

[Dylan Lewis]

Jamo, you brought up the trading revenue there. Saw that with Goldman. We also saw that with Interactive Brokers this week. A very good week for them when they reported earnings. I'm guessing that as we see other brokerage businesses over the course of earnings season reporting likes of Robinhood, we're going to see a lot of trading activity pop up there. One thing I wanted to point out here as we're looking at bank results, net interest income, helping out a lot of these banks as well. That rate picture you mentioned there earlier, Matt, giving some nice spread for companies like bank of America.

[Matt Argersinger]

Right. Big banks are in a good position. I think it's funny how measured they are about the tariff situation as well. Wells Fargo CEO Charlie Scharf last week we support the administration's willingness to look at barriers to free trade. And then Goldman Sachs this week went out of their way not to use the word tariff in any of their disclosures to investors or on their conference call. In fact, I love the New York Times. They called it, quote, a defeat of linguistics, end quote, by David Solomon and other executives. Instead of tariffs, you had Solomon saying, this is all from New York Times as well. Quote, there are landscape changes, uncertainty about how certain things that are close will proceed forward and a change in constructs that impacted how international businesses interact to the US and global economic system. Sounds like Alan Greenspan giving a conference call at the Fed. I just think they know it's a good situation. They're trying to not bug the administration. But I guarantee you, even though they love the trading revenue, they love the interest income that you talked about behind the scenes, they don't like the whole tariff situation and the uncertainty it creates for a lot of customers they're lending to, for businesses that they're investing in. So I just want to see how measured they'll stay as long as this uncertainty continues.

[Dylan Lewis]

You know, Solomon gets a lot of, a lot of headlines for his beats. It's nice to know that he's also a lyricist. He's capable of putting pen to paper and writing pretty well as well.

[Matt Argersinger]

That's right.

[Dylan Lewis]

Bringing us home on our earnings rundown here, another early reporter, prologis. Matt, this is one of your favorites to follow and it is the industrial reit. Amid all the tariff uncertainty, they are standing firm on their guidance and outlook for the year.

[Matt Argersinger]

I was very surprised in a positive way about that, Dylan. So this is a bellwether for me. I mean, you think about prologis business serves so many markets. Amazon is one of their biggest tenants of their warehouses. And it was a solid quarter. I mean core ffo, that's kind of REIT speak for earnings. That was up 9%. They leased 58 million square feet during the quarter. That was close to another record average occupancy across the portfolio up to almost 95%. But you said it, Dylan, they didn't change their guidance at all for 2025. In fact, they said if it wasn't for the tariff uncertainty caused by April 2, the April 2 announcements, they would have actually raised their guidance. They saw improving fundamentals across the industrial real estate space. So that was pretty impressive to me. And look, stock's down a lot. It remains one of my top holdings. If you use the guidance, if you trust the guidance that the management's holding onto. The stock trades for less than 17 times its earnings expectations for this year. It currently yields 4.1% for the dividend. And here's a nice little tidbit from the conference call. There was an analyst who asked about Amazon and what they might be doing in the industrial marketplace right now. And the response from Pelagic's management was, quote, we have definitely seen Amazon in the market. As a matter of fact, we've signed some pretty good deals with them this year, end quote. So things are looking pretty good from Pelagis despite all the trade and tariff uncertainty. I hope that maintains. And so far management's not budging on guidance.

[Dylan Lewis]

Matt, you talked about them being a bellwether. This is obviously a business that has a little bit more of a build.

[Daniela Rus]

Out period to a lot of what they do.

[Dylan Lewis]

Do you expect that they may slow down some of their kind of growth and build out expectations to help moderate their risk a little bit as we look out to a cloudy world?

[Matt Argersinger]

Definitely, Dylan. In fact, they actually pulled down some of their guidance for development starts. Not their operating metrics, but just the amount of development construction that we're doing this year. They did pull that down a little bit.

[Dylan Lewis]

All right, Matt, Jason, fellas, we are going to see you guys a little bit later in the show. Up next, we've got a glimpse into the future of robotics with MIT professor Daniela Rus. Stay right here. You're listening to Motley Fool Money.

[Unknown]

I don't care if Monday Blue Tuesday is gray and Wednesday too Thursday, I don't, I don't care about you It's Friday, I'm in love Monday you can fall apart Tuesday, Wednesday, break my heart on Thursday.

[Dylan Lewis]

Welcome back to Motley Fool Money. I'm Dylan Lewis.

[Jason Moser]

Fools.

[Dylan Lewis]

We are rapidly approaching the age of sophisticated, sophisticated robotics. Autonomous vehicles have been road testing for years, and companies are pursuing humanoid robots to take on rote work and manufacturing applications. To better understand all the work that's going on in this space, I caught up with Daniela rus. She oversees MIT's computer science and Artificial Intelligence Laboratory. Daniela talked me through how rethinking the materials that we use to make robots can open up more potential applications for them. The nature of developing truly autonomous robots, and how most cutting edge robotics work actually gets funded.

[Daniela Rus]

I've followed some of your work in soft robotics and some of the different materials that you're using to create robots, and I think kind of change the concept of what a robot maybe even is for a lot of people. Can you talk a little bit about that?

[G]

So look, the millions of robots that are deployed in factories today are masterpieces of engineering. And they can do so much more than humans can. But they remain isolated from people on the factory floor because they are heavy and dangerous to be around. And so the question is, can we make machines that are much gentler, that can operate side by side with people and that are safer to be around? Inspired by this idea, we have began to imagine robots made out of a wider range of materials. We began to imagine going beyond metals and hard plastics to think about silicone and paper and even food for making new classes of robots. The idea is to use the material that makes most sense. We have built soft robotic arms and robotic hands that are inspired both by the human hand, but also by things like the elephant trunk. With these notions, we can indeed imagine these new tools that can help people with physical work in a very safe way.

[Daniela Rus]

I feel like that's particularly important because there's a track of robotics work that is purely robotics work, but there's also a lot of work where humans and robots are working together, or a human is being assisted by a robot. We see that with things like surgical robots and the Da Vinci, where there's a mix of what the human is capable of doing and then being aided by machinery is the hope that you can kind of create more seamless interactions between who is using it and what's being used.

[G]

So in my mind, I want the machines to adapt to people rather than the other way around, which is the state of the arts today. But more broadly thinking robots. You can imagine robots as being employed in three different types of roles. We can have assisting robots. These are robots that follow people and help them do their tasks faster. We can have robots that augment the human capabilities. You can think about exoskeletons as falling in this category. Exoskeletons allow you to lift heavier things, allow you to move faster, and et cetera. And then we can also imagine robots that operate fully autonomously while full automation works in controlled environments. This notion of robots working side by side and these robots teaming with people, we call them cobots. This notion is especially powerful because it allows humans and robots to form tightly integrated teams, and it allows humans to do what they're best at while the robots do while they're best at. There are so many exciting ways in which this notion of cobot is emerging, even as products. There are companies that are building warehouse cobots, where you have a robot following the worker, and the worker picks up the objects and puts them in boxes carried by robots. And this is because robots can move very well, but they have a much harder time at grasping and manipulating objects. This notion has been deployed at Amazon, in Amazon fulfillment centers for a long time. And there are new emerging companies that are doing the same. I was in a lounge at an airport recently, and I saw a robot that followed the servers. And so the servers would pick up the dishes from the table and put them on the robot, and then the robot carried everything to the kitchen. And so this is an example of a symbiosis between what the machine is good at and what the person is good at.

[Daniela Rus]

The topic of full autonomy has come up a couple times, and artificial intelligence has come up a couple times. How does that technology play into true full autonomy for machines, and how we actually train those machines and have them start to do more and more for us?

[G]

Well, so autonomy means that the machine is doing a task fully by itself. And so, for instance, in warehousing, you can have these machines that can work side by side with people, but we also have robots that do things autonomously. And so, for instance, in the symbolic warehouse system, there are thousands of robots that are able to run around and pick up boxes and move them from one place to another. These robots are fully autonomous. They operate in this kind of enclosed environment. And they really operate really fast, but doing simple things. Now, if you think about autonomous driving, where we really aspire to have robot taxi, here the environment is much more complex. You have people who often do not follow the traffic rules. You have other cars, you have things that are moving around this notion of an autonomous car much faster. And in these kinds of circumstances, the robot is not so ready to reason about the surrounding world and act safely. Level 5 autonomy refers to this notion that you have a machine that can drive in any environment, anytime. This remains a challenge in our field, but level four autonomy, where the robot is deployed in a controlled and carefully mapped environment, such as maybe geofenced urban areas in parts of the country where it doesn't rain much, or industrial sites, or closed loop transit systems. In these cases, the vehicles can move at moderate speeds with minimum exposure to high speed interactions and complexity. So this part is kind of ready to go. So you see, when you think about autonomy, you have to think about where is the robot operating and what is the task of the robot. Even in a warehouse, when you just move from point A to point B and the environment is pretty static, autonomy is quite easy. But in your home or in Boston at rush time, the robot cars would have a much more difficult time. There are so many exciting ways in which we can think about tackling this Level 5 autonomy challenge. From my point of view, rather than wait for all the technologies that are needed to make this grand leap, we are working on embracing something we call a guardian or a shared autonomy approach, where we are gradually increasing the intelligent driver assist component of the robot. You can think about the parallel autonomy system. You're the driver, and then you have an AI system that drives in parallel with you and warrants you if you're about to drive into traffic because you have a vehicle in your blind spot that you cannot see, but the sensors surrounding the car can see. And so this notion that we can embrace a progressive path where every step we have gradually more and more capability, is what we are following with the hope that we will get to the promised land sometime.

[Daniela Rus]

So it sounds like you are a big time believer in level four autonomy and continuing to bring more and more functionality and help that way. But that level five is still quite a bit of a leap.

[G]

I certainly believe that there is a path to level five, but it's not now. So I think the road to level five is long. And our research really aims to bring us closer to a future where we may have level 5 autonomy and even more. Actually, my dream is to have A car that will be your friend and that will never be responsible for a collision. And so I want my vehicle to be more than a mechanism that drives me from point A to point B. I want my vehicle to do more for me. I want my vehicle to advise me. I want my vehicle to detect that. And my voice is a little bit sad. And maybe the vehicle could suggest. Hey, Daniela, you had a hard day. Should we stop for an ice cream or something like that?

[Daniela Rus]

Yeah, it wasn't my idea. It was the vehicle's idea to get the ice cream.

[Dylan Lewis]

Right. It's a perfect excuse.

[Daniela Rus]

You just reimagined a little bit there. What I think even most people would have in their heads for autonomy. I'm curious, being on the cutting edge of this, what type of robotic assistance do you see coming to people's lives maybe in the next 10 or 20 years that maybe is on our radar, or not on our radar, but something that you can imagine being in people's homes or assisting them in less of a clear manufacturing capacity or something like that, more of a consumer capacity?

[G]

Well, 10 to 20 years is a long way into the future, Dylan. If you give me a long time, then I will say that we are going to have our laundry folding robots. We are going to have robots that can help us with our dishes. We're going to have even robots that can help us in the kitchen with food prep. We can have robots that will help tidy up a space after your kids have scattered the toys everywhere. And so for many of these problems, we actually have prototype research grade solutions. The challenge is scaling them up and delivering them at the price point that is affordable.

[Daniela Rus]

One of the things I've heard you talk about is the funding nature of a lot of this work. I think you just kind of hit on it a little bit there. The challenge of doing a lot of upfront work so that some of these things can be available to the mass market and be available at an affordable level. What does the funding environment look like for a lot of this, for cutting edge work? Is it primarily a lot of research institutions and education institutions? Are you seeing a lot of private companies really lead the charge with this? Where are a lot of the dollars and efforts coming from?

[G]

Right now? Funding for robotics is coming from a mix of private industry, government research grants, and academic institutions. But this landscape is not really even. And that's because unlike pure software AI, which scales very quickly and attracts massive private investment, robotics faces very high upfront costs. Also, robotics has much longer development cycles and it has infrastructure challenges and so we see many robotic startups that secure funding from corporations. And these corporations often have clear commercial applications in mind and they invest because they see a direct benefit for their operations by investing in startups. We also see government investment from agencies like DARPA and the National Science foundation and the doe. These agencies are funding robotics research in academia and also in companies because this is a very critical step before we can have products. These agencies also have translation funds that help move the research grade prototype towards an mvp, a minimum viable product. But you see, I do want to emphasize that the advancement really comes from the deep thinking in research laboratories, whether they are in academic settings or industry settings. That is absolutely necessary in order for new ideas to emerge and new industries to be shaped up by these ideas. It's absolutely critical that this kind of funding continues.

[Dylan Lewis]

Listeners, if you want to hear more from Daniela, she's got two books out recently, Heart and the Chip, which looks at the intersection of AI and robotics, and the Mind's Mirror, which is a survey of AI development and our future in your future. You've got two Radar stocks coming up from Matt Argus, Singer and Jason Moser. They'll be back with me in just a minute after the break. Stay right here. You're listening to Molly. For as always, people in 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 sell anything. Based on what you hear, all personal finance content follows Motley fool editorial standards is not approved by advertisers. Motley fool only picks products it'd personally recommend a friend like you, Matt. Jason, appreciate you joining me for the back part of the show. We are going to head over to Radar stocks in just a minute. But first a quick update from new Starbucks CEO Brian Niccol and his plans to bring the chain back to Glory. Company out with a presser this week indicating they are updating their dress code to the company's Green Apron Partners. And they are saying we want to see a black shirt for everyone behind the coffee bar along with khaki, black or blue pants. Jason, does this update in uniform feel like a step on the way back to Starbucks?

[Jason Moser]

I don't know that it recovers everything, but I definitely get it. I mean, it feels like it's in line with maybe what he did at Chipotle. It does seem like when you go into Chipotle, there's a consistency with with the way folks are dressed there behind the counter. And listen, I mean, you got a job, right? You work there. And you don't want, you don't have to work there if you don't want to abide by the dress code. But I think a lot of us recognize that Starbucks green 8th. And it's one of the few things like you think about it, think Starbucks. And honestly, I mean, one of the things that comes to mind is that green apron. So I absolutely appreciate wanting some consistency there in the operation. I think that's always been a little bit of a difficult challenge with Starbucks given the company owned stores versus the licensed stores. So I'm not exactly sure how that's going to work for them. But sure, I get it. I'm okay with it.

[Dylan Lewis]

All right. Your black shirt will be in the.

[Daniela Rus]

Mail after we wrap up today's episode.

[Matt Argersinger]

Jason and the green apron.

[Dylan Lewis]

And the green apron.

[Jason Moser]

I love it.

[Dylan Lewis]

All right, over to stocks on our radar for the week. As he does each week, our man behind the glass is going to hit you with a question. Matt, you're up first. What are you looking at this week, Dylan?

[Matt Argersinger]

I'm looking at Ryman Hospitality Properties Ticker rhp. So this is a bit of a risky one right now, but I think there's enough margin of safety built into the stock. So if you don't know Ryman, this is a REIT that owns large scale resorts, very large scale resorts, mostly under the Gaylord brand name. So you've got, for example, Gaylord Opryland in Nashville. It's actually one of the biggest resorts in the world. It also owns the famous Ryman Auditorium in Nashville. There's the Gaylord National Resort and Convention center in national harbor just outside Washington, D.C. so these properties are built with large scale conventions and events in mind. And you say to yourself, well, Matt, isn't this a business that's going to suffer in an economic downturn? Well, yes, of course it will. But I think the advantage Ryman has is that corporations, large groups, they book these rooms out for many months in advance, often years in advance. And it's one thing for you and I to cancel vacation that we plan know next month, but it's hard, much harder to cancel an event that you've got planned for 300 employees or hundreds of customers that you've planned out for many months. And when groups, when big groups cancel with Ryman, Ryman earns a big cancellation fee when they do. So there's a stickiness to the revenue. They've got, you know, kind of unique world class assets. And now you have a stock that trades for less than 11 times management's earnings estimate and a dividend yield of 5 and a half percent. Even if management has to reduce guidance a little bit because of the economy, I think that's a cheap enough valuation where you can get into the stock, start getting that dividend yield and wait for the environment to improve.

[Dylan Lewis]

Dan, if I'm not mistaken, you've been on site at a Ryman Hospitality property with some of our full events. A question about Ryman Hospitality Properties ticker rhp.

[H]

Not really a question, more of a comment, Dylan. But we just had our annual meeting just last week or the week before. That's right, the week before. And I got to tell you, Matty, I am done with Hospitality Properties for a while. So thank you very much, pal.

[Dylan Lewis]

All right, Jason, seems like you have an easy one to beat this week. What's on your radar?

[Jason Moser]

Well, I'm counting on a comment, not a question from Dan. Talking about Alphabet this week and Alphabet at the same time. It's the dominant force in global search, but it's also facing a lot of challenges on multiple fronts in regard to competition growing in the AI space as well as ongoing antitrust litigation that really does leave the company's future in a bit of an uncertain place. There's an interesting stat here. Stat counter data show that Google share, the global search market, fell below 90% during the final three months of 2024, marking the first time since 2015. Now, you add to that the fact that they are trying to go through this acquisition of cybersecurity firm Wiz again, paying through the nose for it. Is that going to be worth it? We don't know. Will regulators even allow it? We do not know. But right now we are waiting for Alphabet reports. They come out on April 24 after the market closes.

[Dylan Lewis]

Dan, a question about Alphabet ticker. G O, O G or G O O G L if you're into voting shares.

[H]

Classic fumble. Should have stuck with Google. Alphabet's a terrible name for this company. I don't care, Dan.

[Dylan Lewis]

I gotta be honest, usually I kind of know which way you're leaning with Radar stocks. This is a tough one. I don't know which way you're gonna go.

[H]

I mean, Alphabet isn't going anywhere. So they're gonna win, but I don't.

[Jason Moser]

Have to like it.

[Dylan Lewis]

Dylan, you just have to weigh in. And thank you for doing so. Matt and Jason, thanks for bringing your stocks. That's gonna do it. For this week's multifamily radio show. Show is mixed by Dan Boyd. I'm Dylan Lewis. Thanks for listening.

[Daniela Rus]

See you next time.