A (3:15)

Jason, how are you thinking about the year? Because there is some worry that didn't really seem to impact the markets in 2025. But could that be peeking its head out in 2026?

B (3:25)

It could be. And I mean, if you look back at 2025, and if you remember, we got off to a little bit of a rough start in March. Going into April, we were all having the conversation of like, oh, man, this year could shape up to be a tough one, all of the tariff talk. And we were trying to make sense of exactly how that was going to flow through the economy. And then, lo and behold, the rest of the year turned out quite nicely and the markets had a great 2025, tariffs notwithstanding. Now, I think we have a couple of things coming in the pipe here in the front half of the year that I think will probably dictate to some degree sort of how things play out in the back half of the year. Now, we heard today that the Supreme Court is not yet going to rule on the way that, you know, the legality regarding how the tariffs are being implemented, that probably comes out by June. So that'll be an interesting decision there. I think the going money right now is based on some of the opinions that we've heard, is that they likely will rule against the way the tariffs are being implemented. So that can have an interesting impact. And then obviously we have a new Fed chief coming in May, I believe it is, and that Fed chief is coming in on a more or less a mandate to try to figure out how to bring rates down now, right? Fed, she can't just do that on his or her own. Right. There is a democratic process in play there within the Fed, but they can carry a lot of sway in how those votes ultimately go. So if we start to see rates come back down in the back half of the year, maybe that loosens up the housing market a little bit, maybe that gets consumers feeling a little bit better about things, and maybe the good times continue.

A (4:55)

Well, we also heard that President Trump has I think instructed, is it Fannie and Freddie to buy $200 billion worth of mortgage backed securities with the idea that that should bring rates down. But Jason, is that the kind of, this is always seems like a hard question is like we all want more affordable housing, we all want lower rates, but markets work the way that markets work for a reason. And you know, these long mortgage rates in particular, and those are driven largely by the 10 year, are not necessarily responding to, you know, what politicians want. They're responding to what are the risks in the market, what's going on with currencies, what's going on with the economy. And those rates have, the ten year in particular has not come down at the rate that I think that a lot of people anticipated late in 2025. I mean you could even make a scenario where they would go up even if short term rates come go down. So how do you, how do you think about this mixed bag of rhetoric and then markets that ultimately are going to drive what's going to go on with our investments?

B (5:57)

Well, I think that's a very good observation and you're right. I mean just because the Fed brings interest rates down doesn't mean that mortgage rates will follow. Mortgage rates are going to respond more to market forces than anything else we've saw. We saw that play out a little bit toward the end of the year where, you know, rates started to come down and mortgage rates didn't really budge and kind of went up in some cases. And so, I mean that is sort of an interesting dynamic to it. That kind of remains to be seen how ultimately, number one, how quickly the Fed tries to move and then number two, how that shapes all of the other market forces at play here. And that's why, I mean like you could figure the market is probably baking in a little bit of that at some point right now, but probably not a lot because there's just still so much hanging out there right now.

C (6:39)

Yeah, the idea of buying mortgage bonds bring down rates sounds good. And Even in the 200, 400 billion number they're talking about, that's back of the envelope, that's maybe good for a quarter percentage point, I don't think. I mean that's great if it comes down, but I don't think that would be how homebuyers are holding out for a 25 basis point drop in mortgage.

B (6:58)

So. No, not at all.

C (6:59)

You know, you know, there's only so much you can do. Like you said, Travis, I think short term rates Especially a topic we'll get to later about, you know, maybe increasing government spending and what it means to the budget that's going to impact long term rates a lot more than anything the Fed tries to do. All of this, it's great in theory, it's hard to pull off in practice. And the good news is that inertia sometimes works your favor. Again, as long as we can just have enough people feeling good enough to carry on that will drive the economy. It's just making sure whatever that enough people number is that we keep it over that critical mass or, or else we've seen what happened. It's called a recession.

A (7:43)

Yeah, Lou, you mentioned it. The spending is apparently going to go up and defense was really the topic this week. President Trump said that he wants to increase defense spending from about a trillion dollars to a trillion and a half dollars. That seems phenomenal for defense stocks. The challenge is on the flip side, he also said that he was going to be restricting buybacks and paying dividends and also even how much executives could be paid for quote until such a time problems are rectified and gave some examples of what those problems are. But Lou, what in the world is going on? What is heads, what's tails in this in the defense space? Because this seems like it's incredibly complicated to follow right now.

C (8:25)

Yeah, yeah. What's going on? If only anyone knew. I mean I think it's important to the focus on what we do know. It's a big difference between making declaration and setting policy. I am skeptical of both that 1.5 trillion dollar number and some of the things we're talking about like holding back the restrictions in terms of just as blanket statements. I do think if you filter it all up out, what I hear is defense spending is going to increase and that should be long term bullish for the sector. I'll note that a couple things that, that 1.5 trillion number. So much of the Pentagon budget is soldiers salaries, healthcare, support services don't just do a like for like also on big programs. It could take five for it to hit the coffer. So I'm always nervous when these stocks go to the moon on numbers like this.

A (9:17)

But yeah there's and this follows increased spending in some countries in Europe as well. This is not just a US story.

C (9:23)

Yeah, yeah. And that's kind of the funny thing about the restrictions, you know, like how you would do that. And also the biggest problem the Pentagon faces right now is having we let the industry consolidate after the Cold War ended. And right now The Pentagon is struggling to get enough qualified bidders for their big programs to make sure they have innovation, competition, all those things we love. If you ratchet up the risk, especially in speculative forward looking programs where cost overruns seem to happen, I don't know if you're going to increase the number of bidders that are going in for this. So it's kind of be careful what you wish for. My bet, as someone who has a lot of defense stocks, is that the bark will be a lot worse than the bite on that. And that 1.5 trillion number won't really translate the way we hoped it did. But directionally we are moving in a, moving in a way that should be bullish for the whole sector.

A (10:19)

Jason, what do you think?

B (10:20)

Yeah, well, I feel like we could amend that old saying, right? Death and taxes. It could be death, taxes and defense spending, because defense spending is as sure as the sun's coming up. And I certainly understand that in, I, I wonder in regard to like limiting buybacks and dividends. I mean, I'm no lawyer, but I'm not even sure to what extent he can actually go through with that. Now if he's talking about doing it by saying, well, if you don't do this, then we'll take away your business. I don't know. Good luck with that. Those contracts are set, you know, pretty, pretty solidly and there's not like this huge pool of providers that, that can just go in there and take that place. But it's also, it's not like these companies are spending absurd amounts on, on buybacks, for example. I mean, I'm looking at just the last, right. Since 2020, Raytheon repurchased maybe $20 billion in shares. Share counts down 11%. Lockheed is repurchased more than that. Share Counts down about 17%. We saw General Dynamics, they've repurchased around seven and a half billion dollars. Counts down five and a half percent. Northrop a bit over 10 billion. Their count is down just over 14%. So that's good stuff, right? We like to see when companies are repurchasing shares that the share count is actually coming down. These are massive businesses that make a lot of money. So if he's just trying to stoke them a little bit to say, like, hey, we, we want you to do more and do it faster. I mean, listen, you know, I'm sure that there could be probably some efficiency squeezed out of that process, but I would imagine like, like Lou said, probably the bark is a bit more worse than the bite in this case.

C (11:52)

You know, it's funny, you can write this as narrow as you want, so maybe they can do it. But you know, who is it? Huge Pentagon contractor, Alphabet, Amazon.

B (12:00)

Yeah.

C (12:01)

UnitedHealthcare gets about 40% of their revenue from the government. Now, a lot of that, a big part of that is Medicare. But Tricare, which is what our military uses for healthcare, runs through private providers. There's just a quagmire here. If you really tried to go here. And again, just to say I'm watching it, I do think it'll it, it's definitely gotten the attention, I think, of defense contractors and they're watching closely. But if it happens, I think it's a short term thing. And I do worry about the ramifications for just kind of, you know, bidding on future projects, innovations, all those things they're trying to solve for. My hunch is you figure out pretty quickly that the unintended consequences might be worse than whatever you, you solve by, I don't know, lighting a fire under them to work harder.

A (12:53)

Yeah, sometimes these short term discounts based on posts online are ultimately buying opportunities for investors. So we'll see how this one plays out. When we come back, we're going to talk about Alphabet becoming the second most valuable company in the world. You're listening to Motley Fulman.

D (13:10)

Support for the show comes from Fundrise. For the past 70 years, there's been a room in finance most people couldn't enter. A room where you could have invested in some of the biggest names in tech companies like Airbnb and Uber before their multi billion dollar IPOs. I'm talking about venture capital, but unless you had millions of dollars and the right connections, the door to the venture capital room was closed. You were stuck waiting in line with everyone else. But recently fundrise took a sledgehammer to that door when they launched their venture capital product and made it available to anyone with a minimum investment of just $10. Fundrise says their mission is to give everyone the chance to invest in the best tech and AI companies before they go public. Visit fundrise.com fool to check out Fundrise's venture portfolio and start investing in minutes. All investments involve risk, including the potential loss of principal. Past performance is not indicative of future results. This is a paid advertisement.

A (14:12)

Welcome back to Motley Fool. Money Alpha. Alphabet passed Apple this week to become the second most valuable company in the world behind Nvidia. Jason, is this something? Is this nothing? Is this going to be the next or the first $10 trillion company?

B (14:26)

What are you Thinking I think it's something in the sense that for a few years now, Alphabet was kind of taking it on the chin in regard to what they were doing in AI and ChatGPT and OpenAI basically taking over the market there. And lo and behold, it turns out that Alphabet was investing all along and, and is actually utilizing AI to make their business better. And if you look at the performance of Alphabet versus Apple, for example, just over the last one, three and five years, Alphabet's outperformance is just kind of breathtaking, honestly. But why is that? Right? I think it's for a number of reasons. I mean, it's the global mobile operating system of choice, right? The dominance on a global scale. Cloud hit the inflection point. They've got clear leadership in the AI opportunities to date. Remember, Apple is going to be leaning on Alphabet's AI technology, right? We haven't heard really anything from Apple other than Apple AI. And I have an iPhone, Travis. I don't even know what that means, man. But I think it is. You know, one thing that really stands out to me also is you look at the leadership part of the equation here. Sergey coming back to play a big role within the company at Alphabet. And you've got the interviews about that.

A (15:37)

By the way, were fascinating, that he was just kind of bored and then also found it just found this so fascinating from an intellectual perspective that may have been a trillion dollar boredom in a coffee shop.

B (15:52)

Very well could have been. And I mean, I think getting him back and active is encouraging. And by the same token, we're hearing more and more talk about Tim Cook and how much longer he's going to be serving his role at Apple. And then of course, if he steps aside and he's done a tremendous job, make no mistake, I have all the respect in the world for him. But that is a big leadership void that they're going to need to fill. Whereas there's just a lot more certainty in regard to Alphabet today.

A (16:17)

The other thing to just bring into this, because I always find Apple's numbers fascinating to look at. Over the past year they have, they have $109 billion in services revenue, $112 billion in net income. So that services revenue, very, very high margin. A lot of that services revenue, somewhere between 20 and $30 billion of basically pure profit comes from Alphabet. So Alphabet is also feeding the company that it just passed. But Lou, what do you think is Nvidia next? Is this going to be a run that continues for Alphabet? Because like Jason said, they do seem to Have a lot of momentum right now. Gosh.

C (16:55)

Is Nvidia next? Who knows? I mean, we were talking about this with Emily the other day. Just that, you know, that which it doesn't tend to. We don't tend to have too long where one company's on top. So maybe. But, you know, like looking at Apple and Alphabet, the comparison as investors, obviously what we care about most is, you know, what from here. And, you know, like, as Jason said, the leadership is more stable at Alphabet. Just kind of with rumors. I feel like if we were doing strengths and weaknesses on the two companies, it would almost be mirror images of each other. At Apple, you know, they have this solid core, pardon the pun, they have that installed base that's going to do that, is going to buy from them and is going to refresh over time. Time. But the question over and over again, whether it's the car, the TV or whatever else, is what from here, what should we be excited about? That's forward and wow. On Alphabet, the question is about the core. It's still about, you know, what AI will do to search and how they adjust to that. But there is just so much potential from Waymo to AI to so many other things of just what the future could be. It almost feels like a value stock and a growth stock maybe. I mean, I hate to do that to Apple, but it does feel like that these are just two companies that are almost mirror opposites of each other in terms of where from here, based on what we know.

A (18:21)

Yeah. The other thing that's interesting with Alphabet is they have such a big investment arm that when you look at some of these hot companies, not OpenAI, but anthropic SpaceX, who's the biggest shareholder or one of the biggest shareholders, it always, almost always ends up being Alphabet.

B (18:38)

Yeah. Yeah. I mean, I think that's a great point. And you know, the luxury that Alphabet has over something like an OpenAI, let's not forget, just massive profitability. Massive profitability. I mean, OpenAI. It's just not clear right. Exactly how well they're going to be able to monetize that business in the coming years.

D (18:56)

Well, there you get to it.

A (18:57)

The business model too seems much clearer as we look at everything that's going on in artificial intelligence. If you have to start to ask yourself, how much are we going to charge for this?

B (19:06)

Right.

A (19:07)

There's a. I mean, maybe somebody values it at 500amonth, but the next person values it at 0. Because I'm just playing around and doing things with my kids. Whereas, you know, Alphabet can build this ad model around this.

B (19:20)

Yeah, I think the, I think the prices that these companies are going to be able to charge for their AI offerings for consumers is race. It's a race not to the bottom, but it's a race going lower. Right. I mean, Alphabet right now like Gemini is terrific. I don't pay for Gemini, but I use it frequently and I mean, I don't pay a penny for it.

C (19:39)

Apple over the years has gotten so much credit for their ability to build based on the closed garden and it's almost like a mindset of the company. But Travis, as you talk about Google spreading its wings and everything they do, wouldn't it be weird if in the long run what really mattered was spreading out actually for the win?

A (19:56)

We'll be back in a moment. You're listening to Motley Fool Money.

D (20:06)

There is no perfect time for better health. There's just now. AG1 is the easiest and most impactful habit you can implement this year. Sustainable health, that's about consistency, not perfection. Simplify your nutrition with AG1 multivitamin, pre and probiotics, superfoods and antioxidants in one scoop. This is the opposite of complexity. 30 seconds. One scoop done. And with the new next gen formula, they've added more vitamins and minerals than ever. Clinically proven to fill common nutrient gaps. I use this every day. You should too. By the way, AG1 now comes in original citrus berry and tropical. I'm old school. My favorite is original. But find the flavor you like the most. They're all great. AG1 has over 50,000 verified 5 star reviews and comes with a 90 day money back guarantee. Go to ag1.com fool to get their best offer. For a limited time only, get a free AG1 duffel bag and free AG1 welcome kit with your first subscription order. Now it's only while supplies last. That's drinkag1.com fool. Drinkag1.com fool fly me to the moon.

C (21:20)

Let me play among the stars.

A (21:24)

Welcome back to Motley fool money. In this segment, we usually like to have a little bit of fun and I want to talk about some of the hot topics and big opportunities that we have to Maybe these are 100x at least 10x opportunities for investors over the next 10, 20, 30 years. These are hopefully the things that we're going to be talking about. You know, as my kids get a little bit older, that's moonshots and moon flops. I want to know what Jason and Lou think about some of these new industries and companies And Lou, let's start with EV tolls. First of all, for people who are not familiar, can you just give us a elevator pitch on what these companies are and who the leaders are, what we should look for in 2026.

C (22:02)

So they want to call them flying cars, but if you watch the Jetsons, you're going to be really disappointed. These are basically sort of airplane helicopter hybrids. They can take vertical takeoff landing like helicopters, but they have the stability of airplanes. So it's kind of the total addressable market, at least for now, is everything a helicopter would do if helicopters were safer. Joby and Archer Aviation are both going to win certification this year. So those, these are the big names to watch.

A (22:29)

Do we have a timeline on that, by the way?

C (22:31)

I'm going to say maybe we'll hear something first quarter, if not first half from one of them. Probably Joby first. In terms of moonshots or moon flops, I do think that as a, as a design, this is going to revolutionize what we use helicopters for. But Travis, helicopters are a pretty small industry and the stocks are very excited. I fear we're going to have a hard lesson on when you're going to kind of when there's actually revenues, expenses, manufacturing, you find out that it actually costs money to build aircraft too. I am more excited.

A (23:07)

Small details.

C (23:08)

Yeah, yeah. I'm more excited about, I think, the technology and the use cases than I am the stocks going to the moon from here.

A (23:17)

What do you think the right business model is going to be for these companies? We talked a lot about air taxis plugging into networks like Uber. Is that going to be. Ultimately what they do is they own these aircraft and then fly them around and, you know, make 20, 50, $100 per person per flight. Or are they just going to end up selling these to a bunch of other companies who end up operating them?

C (23:37)

Well, the answer is both, and it kind of depending on the company, what they're planning on doing. Look, you know, traditionally Boeing doesn't, in fact, by law, Boeing can't run an aircraft, airplane, airline, very long story. But Boeing started United Airlines and then had to break it up. So this is, I mean, we don't normally have that model. This is somewhere in the middle. I think most of the market is going to be third party operators over time, but there is at least some of them are attempting to run their own services.

A (24:09)

Jason, are you excited to potentially fly in an EV toll, let's say, later this decade?

B (24:15)

Not particularly, but, you know, maybe not an early adopter. Well, I'm an adopter when it comes to things that aren't really putting my life at risk. And, you know, this technology certainly exists. I think it's really cool. I think it's hard to see it probably gaining widespread adoption in the near term. But, you know, like you said, we watch as our kids grow up all of the things that change as they get older. And I could see this becoming a market, and I think more of an uber style market would make sense to me in that regard. I think it was just interesting to note Archer played its hand very well at CES this year, announcing a new partnership with Nvidia to integrate the IGX Thor platform into its aircraft. So anytime, you know, the companies are just champing at the bit to announce a partnership with Nvidia. And so Archer got that done this year. That's. That's encouraging news for sure.

A (25:07)

If any of these companies want us to do a live show and do some demos, I don't know, maybe I could get Luda Lou to go to that one. I don't know if. Jason, Jason.

C (25:15)

It's right around. It's right around the corner from me. Archer's building.

B (25:18)

I'll just watch and smile politely.

A (25:20)

Let's talk a little bit about space because this has gotten a lot of attention over the past year. You have Rocket lab, you have AST, Space Mobile. You potentially have the IPO of SpaceX. Lou, what's, what's a moonshot worth paying attention to? What is potentially a moon flop?

C (25:38)

I'm grumpy. I'm a grumpy old man about all of this. And because of one thing, it's a concept called latency. And latency is basically the idea that if you're sending a signal from space versus sending it from a tower around the corner, you are never going to win in space. But Lou, there's a huge market, cruise ships, places where they don't have towers, all of that. Yeah. But there also aren't a lot of humans in those areas. That's why there's not towers. I believe in the technology. I think some of it asts to me. I think we're way ahead of ourselves in terms of just kind of improving it out. But the valuations we've assigned to this and some of the assumptions we're making on this, I think bread and butter. Space just kind of the companies that are building stuff that can be used by corporate users and governments in space. That is where I'm excited about space. These communication things to some extent look like a solution Chasing a problem, or at least to the extent that the money's been flown into them, chasing a smaller pot at the end of the rainbow, I fear.

A (26:45)

Jason, is space an area that you're excited?

B (26:48)

Yeah, I love space. I mean, just from a personal perspective, I'm just fascinated by it. So I think Lou's right on the latency side of things and I think that that probably improves as these networks continue to grow. Now you look at space comms, it's pretty well established already, right. You get Starlink in there with a pretty good lead. I think over 7,000 satellites in orbit today. They're aiming for over 12,000. Don't forget about Amazon. Right. They have Amazon Leo, which was formerly Project Kuiper and that's aiming for a constellation of around 3200 satellites. It has FCC approval and I believe they need to launch at least half of those satel by the middle of this year, with the remaining by 2029. So I think those are. They are one piece of the overall solution. Right. I think it's kind of like energy policy. We need to use it all. And I think in regard to space comms, I keep it simple. You can get exposure to these companies by owning companies like Amazon, for example. SpaceX goes public. Yeah, I'm going to be fascinated to follow it because I find all of that stuff to be really neat. When you hear people like Jeff Bezos and Elon Musk talking about the industrialization of space, I mean, you can't poo poo that idea. These guys have built empire businesses. I kind of feel like they know what they're talking about.

A (28:07)

One of the fascinating stories that I remember from business school about satellites being a huge impact on a business was Walmart. I don't know if you guys knew that Walmart has its own private satellite network. Do you either of you know when Walmart's first satellite was launched?

C (28:24)

I've heard this like the 80s to track parking lots or something like that.

A (28:28)

It was 1987, enabling instant voice data and video communications. I always remember it being. So this is how they got their inventory so much more efficient than everybody else was. They could feed that information almost instantly from the store back to headquarters. So. And that application, you talked about this a little bit, Lou, but that application layer, you know, maybe not owning the satell, but what are you doing with them? That's going to be really interesting to watch.

B (28:52)

I'm sure there's a lot of companies that are. I think you also need to look beyond this and maybe the Greatest opportunity. And this is not tongue in cheek, but the space junk companies, right? I mean, there, there is a lot of space junk building up out there, and the companies that are able to solve that, I think stand to benefit greatly because that, you know, that is just a hard job. And so I think the kind of, the companies who, who figure out how to solve that problem stand to do well also.

A (29:20)

All right, I need to do some research. Maybe we should do a future show on space junk. Let's talk a little bit about autonomy and robots. And I wanted to put this in the humanoid robot. We had CES this week. Humanoid robots are once again a hot topic. Jason, is this an area where there are opportunities? Is this an area where you're waiting? Is there going to be a bunch of flops? I just, I'm of so many minds about this, and I, and I can't figure it out as an investor, but where are you at?

B (29:49)

I, well, I've said it before, like, you, you just. If you gave me one of those humanoid robots to keep in my house, I would just sell it. Like, I have just zero interest in. So, like, for me, I see the industrial applications so clearly because they already exist. I mean, modern warehouse technology, Amazon, obviously, by the KIVA acquisition a long time ago, it just, it continues to play out on the industrialized side. And I think other.

A (30:14)

How do you think about humanoid robots, though? Because this is what I really struggle with. I used to work in manufacturing, and this was 20 years ago, and there was robots driving around everywhere. There was robot arms all over the place. They did the same tasks over and over and over again. And the efficiency of manufacturing is not making things something once, it's making something a million times. I just don't, I have a hard time getting to humanoids are going to replace these people because most of the humans that are there are troubleshooting the robots, right?

B (30:43)

And, yeah, I don't know that humanoid robots. It feels like that's not necessarily a solution, right? I mean, robot technology does not have to take humanoid form. And I think in most cases it's probably more optimal that it doesn't in order to solve the problems that it's trying to solve in the industrial side. So, you know, I think that's where humanoid robots run into a little bit of a buzzsaw. You know, it was funny, I was reading this, this piece from CES recently and Jeff Bernstein, president of the association for Advancing Automation, you know, in that, in sort of that difference between the industrialized side and like, the consumer Home side, you know, he made the point. He said home is very unstructured. You can't plan for a child running into the robot or the, the robot running over a pet. And so interesting to, to note those, those are just simple but very obvious challenges as to where I, I just don't know about the widespread adoption of these things in the home and I don't know that they necessarily are the optimal solution in, in the industrial sector either. But it's amazing technology just.

C (31:50)

Yeah, I feel like, I feel like it's an old Star Trek the Next Generation episode. Like, you know, just. We're marveling at the arrogance of thinking the human form is the best tool for most jobs. I am so bullish on robotics and the humanoid robotics, to me is the least. It's the funnest to see videos on, but it's the least interesting part of this.

B (32:12)

Yeah, think about intuitive surgical and all of the, all of the stuff that they're doing with their technology in robotics, surgery. But I mean, we're not talking humanoids because.

C (32:23)

Right, Jesse, would that be any better if they.

B (32:26)

I don't think so. It's a matter of fact. They rot in the doctor's robe, to me, would be scarier. I think it's not. So it would be better.

C (32:32)

It would be a fun marketing trick, though. Yeah, that to me is.

A (32:35)

Yeah, we, we'll see how this plays out. I, I think, I agree that this is potentially a lot of flops waiting to happen, but I, I've been proven wrong on some of these in the past. When we come back, we're going to get to stocks on our radar. You are listening to mly fool money. Blue moon.

C (32:54)

You saw me standing alone.

A (33:01)

Without a dream.

D (33:03)

The old adage goes, it isn't what you say, it's how you say it. Because to truly make an impact, you need to set an example. You need to take the lead and adapt to whatever comes your way. And when you're that driven, you drive an equally determined vehicle, the Range Rover Sport. The Range Rover Sport delivers power, poise and performance to deliver a truly instinctive drive. Its design is distinctly British, free from unnecessary details, so that its raw power and agility can really shine. Inside, you'll find true modern luxury with the latest innovations in comfort. You can use the cabin air purification system alongside active noise cancellation for a whole new level of comfort and quiet. Whether you're looking for the assertive stance of its refined exterior or the capability of its powerful engines, there is an option for you including a plug in hybrid with an estimated range of of 53 miles plus with seven terrain modes to choose from. The Terrain Response 2 System Fine Tunes your vehicle for the roads ahead. Design yours today. Explore the Range Rover Sport@range Rover.com US Sport.

A (34:11)

As always, people on the program may have interest in the stocks they talk about, and the Motley fool may have formal recommendations for or against. So don't buy or sell stocks based solely on what you hear. All personal finance content follows the Motley Fool's editorial standard and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show Notes Jason this week we learned that CrowdStrike is going to buy SGNL for $740 million. What do we need to know?

B (34:42)

Yes, this is a not a small deal by any means. Obviously they're going to, they're going to be able to use the cash on the balance sheet to fund it. I think there was a little equity component to it, but mostly a cash deal. And I think that this is really a shot across the bow for companies like Okta that focus primarily on identity security because that's what this acquisition is all about. CrowdStrike really wanting to pursue that identity security option, that market. Now don't get me wrong, I'm not saying OCTA's cooked here, but the agentic AI threat, you know, things like AI agents, non human identities or NHIS, I mean that's a real concern and it's something that's only going to grow in the coming years. So you look at CrowdStrike, their falcon platform has proven to be a dominant force in the cybersecurity space. And there's a reason, a reason why revenue's grown 43% annually over the last five years. And I think this just gives them another attractive market opportunity to pursue.

A (35:41)

The other interesting announcement this week, Lou, came from General Motors. They said that they're going to write off another $6 billion, bringing total EV related write offs to about $7.6 billion. A few years ago GM was really going all in on EVs. I think they were going to be a fully electric by 2030. Now things look very different. So what should we take from this announcement for not only GE but also the rest of the industry?

C (36:05)

Yeah, I mean, I don't think it surprised anyone.

B (36:07)

Right.

C (36:07)

We know everything going on with EVs and I don't think the revolution is over. It's just going to take a lot longer than initially hoped to get there A lot of people comparing this, and rightly so, to Ford, where Ford took I think a $19.5 billion charge, kind of a similar late in the year. Yes, similar. But to me the interesting thing is where it's different, Ford took a bigger charge, basically saying, we are going all in on hybrids. We think that this transition is going to take a ton of time. And in the meantime, hybrids is the way to go. GM largely keeping the EV lineup in place with some quote unquote structural adjustments. You know, I think in reality what they'll actually do is probably closer than that contrast I did. And I think it's the value of these companies is they can continue to make ICE cars, hybrid cars, EVs.

A (36:58)

Wasn't that the thing that GM was really investing in was these platforms where they could build, you know, a nice vehicle with a EV right behind it and a hybrid right after that. So it seemed like that was sort of built into their manufacturing was the flexibility sort of.

C (37:12)

But you still need to put the resources to developing good vehicles with the different powertrains. And clearly Ford is more interested right now in hybrids than gm, just based on their rhetoric. Look, we don't know how fast battery tech innovation will happen, so maybe GM is right and we're right around the corner. But I think, but for me, from my perspective, thinking that it's going to be a snail's pace, this revolution for now. I like the Ford's aggressiveness on hybrids. I think that for the foreseeable future, that is where the growth will come from.

A (37:46)

Jason, are you a believer in hybrids?

B (37:49)

Yeah, I am. I mean, I think just anecdotally we're out looking to buy my wife a new car here in the next few months and pure EV is just off the table. We're not going to do it. She wants a hybrid and we've been out already ready to test drive a number of different hybrids. And that's just, it's excellent technology. You've got both fuel sources and Yeah, I mean, Lou's right, the battery technology is going to advance and evolve quickly and then the market, I think adoption will continue, but it's just going to be a lot slower adoption than I think people thought initially. And we're seeing the numbers bear that out.

A (38:22)

Yeah, I think the cost curve maybe didn't come down the way that a lot of people thought. Still pretty expensive to get into an all electric vehicle, especially if you're looking at, I mean, we bought a three row vehicle a couple of years ago. I wasn't going to spend $90,000 on the only option that was available. We like to end the show with stocks on our radar and get some comments from Dan Boyd behind the glass. Lou, you were first up. What's on your radar this week?

C (38:47)

All right, Dan. For years I have held Kratos defense and security ticker KTOs, patiently waiting for the Pentagon to order the company's loyal wingman Valkyrie drones. These aren't those cute little backpack drones that we, you know, the model sets. Think of this as a miniaturized fighter jet that can react, act, and coordinate in real time with a piloted fighter on the battlefield to overwhelm enemy defenses. This is really cool stuff. But for years, no announcement. That all changed. This week. The marines issued an award for the first batch of Valkyries. Stock up 35% for the week, Dan? I think it could go higher because I suspect this is the first of many orders to come. A lot of risk here. High valuation based on the current business, but a ton of potential. I'm holding steady. I'm really excited to see what from here, here.

A (39:36)

Dan, what do you think about fighter drones? I think that they're terrifying, Travis. That's a great question. Yeah, I mean, this seems really interesting here, Lou. Looks like there's a lot to look forward to with this stock. What are some headwinds?

C (39:50)

So headwinds is. These are complicated. They have to work on the battlefield. But look, you say terrifying, but if we could put fewer humans at risk and still have the firepower we need to defend them themselves, ourselves, that's a great win. So I'm going to look, I'm going to take glass half full on fighter drones.

A (40:10)

Jason, what's on your radar this week?

B (40:12)

Well, Dan, this is a company that I actually called out, I think, back in 2024, July of 2024, companies named Rubrik Ticker is RBRK. Now, Rubrik is a cybersecurity company that's focused on making sure that customers can operate their businesses even when they have a successful cyber attack or cyber breach. So, for example, think about a hospital that is able to continue admitting patients even when they've had a cyber attack, or schools that can remain open when they've had a cyber attack. Or people when they swipe their credit card right, they can get their money out of their bank, even if the bank is impacted by a cyber attack. So it focuses on a specific sort of capability in the cyber security market, which I think is interesting. And since I first dug into it back In July of 2024, the stock has really had a good run. I think a lot of that is just, you know, we're looking at this AI trade and sort of all of this excitement around AI And Rubrik is a company that's certainly utilizing that to make their business better. It is a when I, you know, I call it a $5.5 billion market cap back then, it's about a $15 billion market cap today. And closing in on $1.2 billion in revenue. No profits, of course, but it is founder led with a bit over 15% inside ownership. So they do believe in the business. And I think cybersecurity is just going to be a massive market opportunity in the coming years. And it's one that I'm getting personally interested in here for 2026.

A (41:40)

Dan, what do you think about Rubrik? Yeah, so when Jason talked about it in July 2024, it was about half of what it is now as far as stock price goes. So that's a double since then. So, yeah, I like that. What's going on your watch list this week?

B (41:54)

Let's go, Rubrik.

A (41:55)

We're out of time. Thanks for listening.