Dylan Lewis (3:33)

Phonepe might be a future radar stock. You might have just teased something there. Jason.

Jason Moser (3:37)

It absolutely could be.

Dylan Lewis (3:39)

One of the things that we look to with Walmart is signs of what is going on with retail. And as we have looked out at reports and commentary from management this quarter in particular, tariffs have popped up and we've seen every management company approach this a little bit differently. CFO Walmart John Rainey said we don't have any explicit assumptions in our guidance around tariffs. Their stance was kind of we don't know what we don't know. Jason.

Jason Moser (4:06)

Yeah, well, and that's a great lesson for investors too, right? Just be, be a whale and get up there and just say, listen, I don't know, it's okay, go out there and learn. But I did, I noticed that in the call. I thought it was really interesting in regard to tariffs. They're not terribly concerned. Now maybe this plays a little bit into their conservative guidance. But they did talk about it in the call. They just said, listen, we've been dealing with tariffs for many, many years. This isn't something that's just come up and they're going to continue to keep on doing what they've always been doing while that prospect exists. And it's something that can absolutely play out on the financials here in the near term. It does sound like a management team that's very confident in how they will deal with whatever they're ultimately given.

Dylan Lewis (4:54)

When it comes to the interest rate environment, we hang on every word from the Fed. When it comes to the consumer asset, Walmart is the Fed. A ton of attention being paid to management's commentary. What's the read for you?

David Gardner (5:06)

I think the consumer, based on management's commentary, is keeping their money close to their pockets. Walmart is looking at 3% to 4% of revenue growth rate in the near term future. We expect retailers in the consumer goods industry and the retail side to keep up with inflation. Inflation started out pretty hot in January. If you annualize those little numbers, that works out to about 5% this year. We see that inflation is still very much on consumers minds and I think Walmart's outlook just reinforces both the uncertainty from the macro level but the uncertainty from the individual level. It's not that people don't have money, it's that they don't want to spend. And when it hits Walmart you get something you can extrapolate to the rest of the economy as you go up the scale of consumer spend. I just wanted to say though, Walmart still is so interesting from its global reach that Jason just talked about. I've been in Mumbai recently where people are using phonepe on the street. So you'll have a physical vendor who has a wooden cart full of bananas but you can pay him from your phone to his with phonepe which is actually an ingenious pun in the Hindi because it actually means on the phone and it rhymes with pay like paying someone. Phone pay a really cool technology but shows you their reach and long term they reach more global consumers. The inflation doesn't matter as much when.

Dylan Lewis (6:32)

We look at the Walmart results. They've been able to continually put up relatively strong results even given the headwinds because people have continued to come to them for things like groceries. We've seen the discretionary spend for them come down but that's been something that's been going on across retail. Jason, certainly something we saw in results from Etsy this week. Shares down around 10%. It seems like it's a lot of that. Do I need this type purchase being delayed for a lot of people?

Jason Moser (6:59)

Yes, that old lesson we teach our kids between needs and wants. I certainly understand why the market was less than enthused. It wasn't a bad quarter by any means, but it was one I think that demonstrated some of the challenges that Etsy is facing in the greater retail environment. This is a business in a bit of a state of transition. They're making some moves to focus on the longer term sustainability of the business as opposed to driving near term results. That's what we saw this quarter. The numbers bear that out too. The consolidated gross merchandise sales of $3.7 billion that was actually down almost 7%. Although I will say revenue grew 1.2%. Net income grew 56%. That's something. The take rate came in at 22.8% versus 21% from a year ago. Something just to take away from the actual company's press release, these numbers stood out to me. Active sellers and buyers were both down 10% and 1.1% respectively. Now, the buyer number isn't as concerning. That seems in line with a lot of what we're seeing in the general retail environment now. But the seller's number did stand out. That's a big deal. But they noted in the call this was intentional. They expected this. They are going through and revamping the seller process. They've set up this new seller onboarding process where there is a seller onboarding fee that comes into play. Now that is something that has obviously played out on that metric. It rhymes to me with PayPal we saw with PayPal not all that long ago saying, hey, listen, we're going to cut a lot of these users that we have that aren't really using our service. We want to focus on creating an engaged base with the users that are going to return the most value and continue using our service on a frequent basis. I understand the challenges that the market sees with Etsy today, but it does sound at least like these are intentional decisions by management in order to ensure more long term success for the business.

Dylan Lewis (9:00)

One company in retail that is having a great week, South American e commerce giant Mercado Libre. They reported earlier and the street was all about it. Shares up 10% assit. I personally love to see it. It's one of my biggest holdings. What is the Amazon of Latin America doing right here?

David Gardner (9:16)

They're executing on a lot of fronts. This is a company, Dylan, that specializes in e commerce, in fintech and logistics. Revenues were up 37% this quarter to $6.1 billion. And what I saw is they controlled the research and development costs this quarter and also their sales and marketing spend. So that helped operating income grow like two and a half times to about 820 million bucks. What is going on here? Lots of network effects. When you put the parts and pieces of this business together, you see sort of a really nice hole where everything is contributing to both the top and bottom lines. And they're target more credit card users and that's leading to more spend across fintech and the commerce ecosystem. They're making investments in logistics, so that's broadening out their physical reach. And they're also doing very interesting things with their digital banking. They keep offering higher deposit yields to folks, but that brings more people into that digital banking fintech realm where they can then upsell other services. So all in all, when you put this together, they really have just an integrated system that keeps getting bigger as a platform. A great example of a platform business scaling.

Dylan Lewis (10:32)

All right, coming up after the break, we'll Keep the earnings rundown going and also look at whether the market is giving investors a nice entry point to the leader in wings. Stay right here. This is Motley Fool Money.

Jason Moser (10:43)

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Dylan Lewis (11:19)

Welcome back to Motley Fool Money. I'm Dylan Lewis here on air with Jason Moser and Asit Sharma. Football season's over and we've got a look at the business of wings. A rough week at Wingstop. Asset shares of the Buffalo Wing focused restaurant down about 20% this week. I know that this is one in your portfolio. I'm guessing it hurts a little bit for you.

David Gardner (11:39)

It does, Dylan, but it also makes me more attuned to the opportunity for the long term here. And Wingstop definitely has a long term story going forward. So it happened this week. Reported a great quarter system wide sales increased almost 20% to 1.2 billion bucks. They had a great number of net new openings of stores. But looking ahead, comparable store sales are going to be this year in the low to mid single digits. So not a lot of growth there. What's underneath that is at least two years of very strong growth in comparable sales. So you have what we call a two year stack that makes comparative growth to that really hard in the third year. And that's what Wingstop is up against now. But I expected those projections to be a little bit higher than they were. I would have thought maybe somewhere mid to high single digits would have been more appropriate. I think the market sensed that maybe those same store sales are soft now. On the other hand, if you're a shareholder, this is a company that keeps outpacing its store growth projections long term. They want to grow their global store count by about 10% every year. They have been increasing and increasing their compounded annual growth rate on that front till almost 15% this quarter. There is a tremendous demand in the pipeline for franchisees who realize amazing returns on cash of 50% after just a couple of years. So I think the expansion story for this or I think the expansion story for this company is still very bright. Maybe a buying opportunity for those who want to nibble a bit.

Dylan Lewis (13:08)

Yeah. Shares are down about 40% from recent highs, basically back where they were at the beginning of 2024. And the market does not give you a reset all that often. Asit or a time machine type moment where you can go back and get the same opportunity you had before. You feel like this is maybe a good time for people to put this one on their radar.

David Gardner (13:26)

I think it's a good time. The hard thing about small companies which are growth stories is that they're not linear. They will have periods where they really disappoint investors and take a tumble. But commensurately they have times where they take off and then it feels very hard in retrospect to get back in. I tend to try to take these opportunities as they come with high quality companies and just add a bit to what I already have in my portfolio.

Dylan Lewis (13:49)

All right. Also down this week, Block, AKA Square, AKA your way of paying at the farmer's market. And also the owner of Cash App, Jason, this is one you have followed for a very long time through various evolutions. What is the company now and what are they trying to pitch themselves as?

Jason Moser (14:06)

Sheesh, man. I'm still trying to get over this football season is over thing you just said. I mean, God, thanks for reminding me. No, I, I think it was an okay quarter. Obviously a very tough day for the stock after the report. It was nothing to write home about. It was okay. The business continues to execute. For the most part they hit their internal targets, which I think is the most important part. But clearly the market wanted more. They grew gross profit 14% year over year. That was broke down with 16% growth in the cash app business and 12% growth in the square business. They saw a total gross payment volume of just under $59 billion. That was up 10% which was encouraging. They did not the call that they are looking to accelerate this number. They want to get that growth going again. They are rapidly scaling as they said their US account executives and field sales teams, expanding their international sales presence and making more partnerships across the payment spectrum. I think that will be an interesting part of the story to follow. Cash App itself, they reached 2.5 million paycheck deposit actives in December. That was up 25% from a year ago. Cash App Card now 25 million monthly active users at the end of the year. Then Cash App gross profit, as I noted, increased 16% from a year ago. That was really driven by strength across the entire spectrum there. Cash App Card buy now, pay later and even Cash App borrows. I Think that really plays into this thesis of cash app becoming that service for the underbanked. For those looking for an easy way to follow this company in the coming year, something to keep an eye on. They've talked a lot about this rule of 40. Ultimately this is just taking gross profit growth along with the adjusted operating income margin. You combine those two, they expect them to total 40 or better. They hit around 36, I think this most recent quarter. But going forward, they really do subscribe to this rule of 40. They believe it's achievable. They see exiting this year at or above the rule of 40 and executing on a quarterly basis going forward. If that's the case, that's impressive growth and profitability. I think the market starts to look at the stock a little bit differently. But again, that's no guarantee, right? They're not really there yet. So if you're looking for a metric to pay attention to this coming year, that could be one to follow.

Dylan Lewis (16:32)

Bringing us home on the earnings beat. Don't look now, but one of China's biggest tech names might be making a comeback. Shares of Alibaba up over 10% after earnings this week, pushing the stock up 70% since the beginning of the year. Asit this is not some fly by night microcap company. This is one of the largest tech companies in China, adding $100 billion in market cap in just a few weeks time. What's going on here?

David Gardner (16:56)

Alibaba had been out of favor, Dylan, with investors and with the Chinese government which changed its policy directives a few years ago and de emphasized all of these consumer tech facing companies with swaggering chairmen like Jack Ma in favor of industrial policy to try to compete in what we've seen as an evolution into electric vehicles, other kinds of industrial technology. But lo and behold, the government is looking at the success of deep Seek and suddenly they're inviting some of these entrepreneurs back. Jack Ma being seen at a recent meeting with the Chinese leadership after being Persona non gratis for so many years. That's part of the excitement, but also Alibaba is capitalizing on some trend. Their cloud business is growing with a brisk pace, not quite at the rate that cloud platforms like Amazon Web Services or Microsoft Azure grow here in the United States, but certainly an uptick from former expectations. Their cloud intelligence group grew by about 13% year over year. Now I have to point out that even though this business is growing fast and it is a big business, the cloud group for Alibaba is only about $16 billion of revenue run rate each year. It's maybe one fifth or less the size of the commensurate U.S. heavyweights. But that could be a growth opportunity for investors who are okay with some geopolitical risk that comes as part and parcel with these companies. But Alibaba is certainly showing that it's one of the premier Chinese big tech companies, and investors shouldn't forget altogether about it.

Dylan Lewis (18:28)

You hit on some of the government elements of investing in China. A lot of people have put it in the too hard bucket. Does it continue to stay in that bucket for you right now?

David Gardner (18:36)

You know, it's like on the edge of the Venn diagram. It's too big to ignore and maybe it's not too hard. If you have to follow one company, this one might not be a bad choice in terms of being able to understand the business model and deal with the geopolitics.

Dylan Lewis (18:51)

All right, asa, Jason, we'll see you guys a little bit later in the show. Up next, Motley fool co founder David Gardner celebrates a milestone with some foolish friends. Stay right here. You're listening to Motley Fool Money, where.

Asit Sharma (19:01)

You'Ve heard about love and giving sight to the blind. My baby Loving calls the so she my sweet little thing she my pride and joy she my sweet little baby I my little lover boy.

Jason Moser (19:23)

Yeah I.

Asit Sharma (19:24)

Love my baby my heart and soul Love like a house I won't never grow she my sweet little thing she my pride and joy she my sweet.

Morgan Housel (19:44)

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Dylan Lewis (20:57)

Welcome back to Motley Fool Money. I'm Dylan Lewis. If you're a longtime listener, you know we've been doing this for a while, but we're not the only ones. Motley fool co founder David Gardner just celebrated his 500th episode of his weekly Rule Breaker investing podcast. And to celebrate, he brought two friends for a conversation aimed at sharing three stories. One to educate, one to amuse, one to enrich. So best selling author Morgan Housel and Randy Zuckerberg, former Facebook exec, author of several books and Tony award winning producer, joined him for his first ever Three Fools Story show. They talked about some of the enduring lessons from their time in college where they look for true insight in the world and a fun way to use AI to get some.

Randy Zuckerberg (21:34)

Morgan, you're up with your first story to educate.

Asit Sharma (21:37)

I'm calling this the Best Story Wins. And it's a story from back in college that I think a lot of people will probably relate to, which is now that I'm 15 years or so beyond college, I look back and I say, what were the concepts that I remember that I've learned the most from? And I'm probably not unique in saying, not that many, not that many. Every formula that I memorized the night before the final, I don't remember. Every long complicated theory that I was forced to learn, I don't remember them anymore. Except for one class. The class was environmental economics, which to be honest, I don't really have that much of an interest in. But the teacher did something very unique on the first day of class. He said, there is no textbook in this class. He pointed to the chalkboard and he said, I will never write anything on that chalkboard. I'm going to stand here every day for the next semester and just tell you stories about economics. He was a longtime economic consultant. I think he was an expert witness was his job. And he just sat there and told us war stories about how economics actually works in the real world. It was so useful. It was so entertaining. His name was Charles Cucchetti. And when I look back at my college years, I remember more from that class than every other course combined. I think the takeaway from that is people love a good story. They do not want to lecture. They're not good at memorizing formulas. Over the long term, they will always remember a good story. And you can apply that to almost any other field and even very technical fields. Stephen Hawking was a storyteller. Richard Feynman was a storyteller in physics, the most math based field that exists. They just told stories, and that's why they were so famous. My friend Nick Magiulli wrote a blog post this morning that said, attention is the new currency. And I think that's really true. If you can get people's attention with a story, they will remember it forever. And I think that applies to so many things outside of college, outside of economics.

Randy Zuckerberg (23:33)

Do you ever correspond with Charles Duchetti afterward? Is he listening right now?

Asit Sharma (23:37)

And here's. Here's the interesting thing. I disagreed with him on a lot of things. He was very political in the stories that he told in a way that I didn't agree with, particularly at the time, but it didn't matter. He told good stories that I remember. Even if I could poke holes in them, I remember them. And isn't there tremendous value in that? That versus all the other professors for whom I don't really remember much of anymore?

G (23:56)

I love that so much. And it reminds me of when I was in college. I was in a giant lecture hall, and the professor kept saying, you know, I'm going to be having lunch in this cafeteria today. Come spend time with me. And I was like, I'm one of 4,000 people in this lecture. I'm not going to go do that. And at the end of the semester, I showed up for the lunch, and he was like, you're the first person who's come to see me the entire semester. And like that, it just stuck with me so much. So I. So I agree with you. I think sometimes these, like, unconventional ways of connecting with information or with people are actually our strongest assets.

Randy Zuckerberg (24:39)

What a great story. And you did just remind me of a moment in my own freshman year, actually, sophomore year, Randy, where I met my wife in a creative writing class. Didn't know it at the time, but she just said, I invited her for breakfast, like, later that week, and she said, no, I can't. I'm going to breakfast with my professor. And I said, I'm sorry, you're what? She said, I go to breakfast with each of my professors each term. You don't.

Jason Moser (25:02)

Wow.

Randy Zuckerberg (25:04)

Totally, you know, same university, but totally different approach. So, yeah, you're right. Connecting in with people and Morgan, telling stories that you still remember and shaped you years and years later. Morgan Housel Are you ready to amuse us?

Asit Sharma (25:19)

I will try. And this is less of a story that's happened to me and more of an observation that I've had over the years. I call this True Geniuses. And I tweeted this many years ago, and I Tweeted it after thinking pretty hard about this, which is that I think the greatest psychologists of all time, which has been important to me because my field is behavioral finance, I think the most insightful psychologists to ever live are George Carlin, Jerry Seinfeld, and Chris Rock. I could put this broader and say comedians, I think, are the most talented psychologists exist, and I think they are the only thought leaders who are truly worth paying attention to. And I think there's two reasons for this. One is because what a good comedian does is take something that you already know, you intuitively know, but they put it into words that you have not or could not do yet. So when you're watching a good comedy, you don't need to think, is that true? You just sit back and you listen to it and you're like, of course that's true. What you just said is obviously true. And I've never heard anyone put it into words like you just, just did. It's just a very effective way to communicate. And they're doing it for things that are really, really fundamental and important in life. Jerry Seinfeld, he once gave this interview, and they asked him why he quit the show in 1998. Why did he stop? And he basically said, I'm going to paraphrase him, but he basically said that he and Larry David became so famous that they could not. They could no longer observe society without being bombarded. And they said, look, in the early days, before they were famous, they would go sit in a. In a deli and watch how people order their food and make a skit about that. It was observational. And as he became mega stars, they could not go sit in the deli and observe people. They couldn't do it. So he said he quit the show because what made them so good at comedy, it was just being pushed to the side. They couldn't do it anymore. And I think the other thing, why people love them so much is because a comedian wants to deliver their insight and just make you laugh, whereas so many other people who are trying to make you smarter want to make themselves look good. It's almost the exact opposite if you are a PhD talking head going on TV and look, maybe I would put myself in this category as well. You want to deliver insight by making yourself look smart. A comedian wants to deliver insight by making you laugh. The audience member. It is so different, and it is so much more effective to do it that way. And of course, I will end with one of my favorite comedy bits that I think is so incredibly insightful. If you think deep about it. George Carlin said, have you ever noticed that everybody driving faster than you as a maniac and everybody driving slower than you as an idiot and a. It's. It's so true, it's so funny. But it is like one of the best ways to contextualize that your view of the world depends on where you are. It's relative to everybody else. And I think you can take that so much broader.

G (28:11)

I actually took a class about how using comedy in speech writing or in even in a board meeting is a superpower. And I so I truly believe that comedians are geniuses and that if you want to connect with people, making them laugh is the best way to do it.

David Gardner (28:28)

Absolutely.

Randy Zuckerberg (28:28)

The beauty is it really is a gift. I mean, they tr. I love the point that you're making, Morgan. And I too have been a talking head at different points in my life. I think we all have the difference between trying to make yourself sound smart and making someone else laugh is all about the other. It's not about self aggrandizement. It is truly giving a gift. We all want to laugh, we all love to laugh. You both have made me laugh already a bunch of times and I know I'm not the only one listening in this week, but what a wonderful insight. I thought you were to say that you've decided that all of the people who are the most important psychologists or scientists in this are the most were crazy. I thought you were going to go that direction because it's probably also true. Like there are lots of really get sick.

Asit Sharma (29:09)

So crazy. There's a quote from Chris Rock that I love that he says anybody who thinks for a living is going to be depressed. He was talking about himself in his own field. Anyone who just sits in a room and thinks about how the world works is probably not going to be the most happy, joyful person because of it.

Randy Zuckerberg (29:25)

Great line and a great way for us to close our amuse section in this first ever episode of Three Fools. Thank you so much, Morgan. Thank you so much, Randy. We've educated, we've amused. Two down, enrich to go. Morgan, we have you leading off our enrich section. Are you ready?

Asit Sharma (29:44)

I'm ready. Let's do it.

Randy Zuckerberg (29:45)

How much richer are we going to get with this one? Like if you were trying to gauge it.

Asit Sharma (29:49)

Look, let's set expectations low, but I'll do my best. This is something that I just did a week ago, very recent thing, but it was one of the most haunting but I think enriching things that I've done in a long time. I went to ChatGPT and I fed it a bunch of accurate biographical information of myself through about age 20. I said, this is who Morgan Housel was at age 20. This is where he grew up. This is where his parents were. This is how he did in school. These were his. His hobbies, a bunch of things. It was all accurate through age 20. And then I said, tell me a story about what happened over the next 20 years. So I was starting at an accurate point, and I said, make a story about how the rest of Morgan's life turned out. And some of. And I did this. Late into the night. My wife was wondering what the heck I was doing sitting in front of the computer so late. But it was so incredible and haunting, I would say, because a lot of the stories that I came up with were really sad. And stories of how my life spun off the rails and stories of how this didn't happen. And there were tragedies in my life, and some of them were incredible. Some of the stories that came up with us, that would have been a great life, too. It was so incredible to think of all the different ways my life could have turned and anybody could do this, of course. And you realize that the life that we have right now is one of infinite other possibilities. It could have turned out an infinite number of different ways, some of which may have been okay, some of which would have been incredible, some of which would have been really sad and bad. And it was. It was. I think it made me appreciate a lot of the things that I have in my life right now, because most of the stories, I did not tell it to do this. But most of the stories that Chat TBT came up with were sad. It was, hey, here's Morgan's life through age 20. Here's what happened over the next 20 years. And it was a story of a downfall. I don't know why it did that, but it was. It was haunting because the stories could have been accurate. It was, you know, since I was feeding it accurate information. Yeah, it was. It was going in paths that were almost the path of least resistance of where I was at that age in life.

Randy Zuckerberg (31:51)

Did you let it know it was you?

Asit Sharma (31:53)

Yes, I did.

Randy Zuckerberg (31:54)

That probably has to affect it a little bit. The Heisenberg uncertainty principle. We're changing it a little bit by letting us know. Letting it know. We're observing it being observed itself. I. I wonder if Chat gbt, if you defended it, Morgan, the day before or something the week before. And it was taking a little bit out of like it didn't have to go negative that much.

Dylan Lewis (32:13)

Yeah.

Asit Sharma (32:13)

And you know, and some of the story, if I remember some of it was, you know, in the, the Great Recession in 2008, I lost my job and I never recovered after that. And I became an alcoholic and whatnot. And some of those, it's like that that could have happened that easily could have happened. One of them was I had a great life and I married and had two kids, which is accurate. And one of those kids got cancer and died at age 5. And it was one of these things where it's like, look, hey, both of those things happened to many, many people. So these are not pie in the sky theories. Again, I think that the point for me was realizing all the different ways all of our lives could have turned out.

Dylan Lewis (32:49)

Listeners, I think we're all glad to be living in a world world with the versions of Morgan Housel and Randy Zuckerberg that wound up writing books. And the one where David Gardner co founded the Motley fool and brings his perspectives on life and investing each week over at World Breaker Investing. Coming up next on the show, Jason Moser and Asit Sharma return talk about stocks that are on their radar this week. Stay right here. You're listening to Motley fool money.

Asit Sharma (33:09)

I forget the lines, but I don't forget the streets. We still hit the road.

Dylan Lewis (33:37)

As always, people on the program may have interests in the stocks they talk about. And the Motley fool may have formal recommendations for or against snow buyers selling anything based solely 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. Friends like you. I'm Dylan Lewis, joined again by Motley fool analysts Asit Sharma and Jason Moser. And fools, the fried chicken capital of the United States is moving from Louisville to Plano, Texas. Jason, this week KFC announced the company will be relocating its headquarters to Texas as part of larger strategic plans by its parent company, Yum Brands. I'm going to give you a philosophical question to start here. If the drumstick on your plate is made by a company domiciled in Texas, is it really Kentucky Fried Chicken?

Jason Moser (34:23)

I suppose, yes. Given the roots of said chicken, you know, where they live today maybe doesn't necessarily change the actual history of the matter here. But yeah, this is definitely something we're seeing a lot more of. I thought it was very interesting that the relocation here, it's ultimately still part of a bigger plan For Yum, they're going to have two corporate headquarters. There'll be the one in Plano, Texas, but there's also going to be one in Irvine, California. It's worth remembering. Yum obviously is a very big company with a number of brands. Pizza Hut, Kentucky Fried Chicken, Taco Bell. Dylan, for me there was some irony in this one. I don't even know if you know this, but I'm going to go ahead and lift the hood here a little bit. You know where Texas Roadhouse is located? Dylan?

Dylan Lewis (35:04)

I would have guessed Texas, but now I'm doubting myself.

Jason Moser (35:06)

Well, that'd be a fair guess. That'd be a fair guess. Texas Roadhouse's headquarters is in Louisville, Kentucky. I mean this is like the Bizarro Jerry episode of Seinfeld. I mean up is down. It's just none of it makes any sense. But I mean this is absolutely a trend we've been seeing play out here recently. I don't suspect it'll stop anytime soon given the inflationary environment and how companies are looking to find new ways to become a little bit more efficient. But again, I think it's worth noting that Yum will still ultimately maintain headquarters in both Texas and California.

Dylan Lewis (35:40)

Yeah, Yum not the only company that has moved to Texas in recent years. Tesla, SpaceX, Charles Schwab, Oracle, many more and asset. Texas has over 50 of the Fortune 500 companies there, most of any state. What's so appealing about the Lone Star State?

David Gardner (35:57)

They have these big population centers. Obviously they've been competing with California, trying to recruit out companies from Silicon Valley with their business friendly climate, relatively less regulation, maybe better tax environment depending on how your company is structured. So they have just a lot of positives that they have been using to make Texas bigger and bigger. I mean how big can this get in terms of gdp? But they've been doing a great job and I think companies on the other coast and middle America also looking okay. It's not just about you pulling companies away from California. That looks like a pretty friendly place if I want to grow. I'm going to say here though, I saw this writing on the wall in the early 90s when Kentucky Fried Chicken went to KFC.

Dylan Lewis (36:44)

It does remind me a little bit of the nature of sports franchises. It's like they are going to move to where the incentives are aligned for them to be. There's not a lot of loyalty here even. Jason, to your point about Texas Roadhouse, this is not the first time we will see this when it comes to the name and where the company lives, no question. Let's move things over to stocks on our radar for the week, as he does each week. Dan Boyd, our man behind the glass, is going to hit you with a question. Jason, you're up first. What are you looking at this week?

Jason Moser (37:10)

Dan, this is a company I've never mentioned to you before. It's a company called Axon Enterprise Ticker is a X O N. While Axon has had a nice year to date, shares are off to a rocky start here in 2025, down more than 25% just this week. Now, Dan, you may be asking why. Well, I'm going to tell you why. Most of this is due to a headline we got in regard to a breakup in its partnership with a company called Flock Safety. Now, this is a safety technology startup known for its automated license plate reader or ALPR solution. There's a statement from Axon saying that Flock had increasingly imposed artificial barriers on integrations, access to agency owned data. Ultimately, Axon is just deciding to go its own way. I think this is an interesting situation here in that, yes, it's an attention getting headline. However, this could also be a sign that Exxon intends to continue building out its own solutions that can impact growth, of course, in the near term, but it could also have more positive long term implications. We know this is a company with grand aspirations, that they intend to do a lot of things. We will learn more about this when Axon reports earnings next week on February 25th. It's also worth noting, I'll say I'm going to get the great opportunity to speak with president of the company, Josh Isner again after the call. Next week we will have that interview for listeners to enjoy.

Dylan Lewis (38:34)

Dan, a nice little preview of coming attractions there. I'm curious, a question about Axon Ticker. Axon, Jason, you ever been tased?

Jason Moser (38:42)

I've not. I've not. It doesn't sound like a very pleasant experience. I hear you wet yourself. I've never been Tased either and I.

David Gardner (38:49)

Don'T want to be.

Dylan Lewis (38:50)

I think the company was smart to rebrand Axon and move away from the Taser branding. I think Axon not only a more interesting business for a lot of investors with the cloud revenue that's coming in, maybe a little bit more of a friendly brand name. A brand name that people are a little bit more willing to be associated with. Jason.

Jason Moser (39:05)

Yes.

Dylan Lewis (39:06)

All right, Asa, what do you have on your radar this week?

David Gardner (39:07)

I've never been Tased, but I have been exhausted, confused and dazed. And once in a while when that's happened to me, I found it really great just to relax in an Airbnb that I have rented. They should call this company Air B and Dollar Sign, but I know the SEC doesn't allow special characters in the ticker symbol. My colleague at the Motley fool, investing colleague Tom King, recently reminded me of its virtues, especially its free cash flow generation. This is a cash flow monster. It's generating about 4 billion bucks in free cash flow a year and buying back shares. Now, we all know the regulatory environment about Airbnb, competition from other platforms, but this is a company that's slow and steady scaling and is really generating returns for its shareholders. So I'm looking at Airbnb to deliver me some more steady eddy returns in the coming years.

Dylan Lewis (39:54)

Dan Asit is spitting bars and pitching you Airbnb ticker. Abnb question or comment?

Jason Moser (40:00)

Asit, where are you going? You got a voucher for Airbnb anywhere? Where's it?

David Gardner (40:04)

Istanbul, Turkey. And. And like Jason, you've probably never heard me say that before.

Dylan Lewis (40:09)

All right, Dan, you have a clear negative association with the former name of Axon. I don't know if that's going to play into your watch list decision. You also have Airbnb. Which one are you going with this week?

Jason Moser (40:18)

You know, I used to like to travel, but then I had kids. So we're gonna go Airbnb.

Dylan Lewis (40:22)

There you go. All right, Dan. Appreciate you weighing in asset, Jason. Appreciate you guys bringing your stocks. That's gonna do it for this week's MON radio show shows. McFly. Dan Boy. Don Lewis, thanks for listening. We'll see you next time.