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From Fool Global Headquarters, this is Motley Fool Money. It's the Motley Fool Money radio show. I'm Ricky Mulvey. Joining me on the internet today, it's Matt Argesinger and Jason Moser. Motley Fool analysts, Matt Argesinger and Jason Moser. Great to have you both here. Mr. Mulvey, good to be here.
There's a big tech, and I'm going to call it a macro story going on that I think we should dig into at the top of the show. And it's about data centers, the amount of real estate and big tech spending going on here. And we have someone who looks at tech. We have someone who looks at real estate. So we're going to get both sides of that story. McKinsey estimates, and let's take that estimate with a grain of salt from our friends at the consulting firm, that
global data center spend will require nearly $7 trillion in capital outlays. And the New York Times recently reported on Amazon's Project Rainier and just the massive investment going on here. It's Indiana facility, JMO, will require enough electricity to power 1 million homes. That's a lot of juice. JMO, what does Amazon want from Project Rainier? Rainier is...
Rainer? Rainer. Rainer. Project Rainier. Let's just say Project Rainier. That's what I'm going to go with. I don't know. But what is Project Rainier? It is a massive, one-of-a-kind machine. It's a mountain, J-Mo! It's a mountain! It is a mountain! This is the project, though. This is the project. It's this massive, one-of-a-kind machine, which is ultimately designed to bring in this next generation of AI. It's spread across multiple data centers here in the U.S.
This cluster ultimately will connect hundreds of thousands of Amazon's Tranium II chips across the U.S. as well. Now, what is Tranium? Tranium is that family of machine learning chips designed by Amazon Web Services, specifically designed for AI training and inference. What this does, it takes you back to something Jensen Huang, CEO of Nvidia, said a little while back. He envisions a future where data centers are AI factories.
processing massive amounts of data to train and refine AI models. This concept of the data center being the new unit of compute, I think we're seeing that play out. They've built
Amazon's built seven data centers in Indiana alone. There are going to be 23 more. This is just a massive, massive presence. This is also for one customer, this one, just for Anthropic, which has the LLM clod. When you think about these AI factories that are being built at these data centers, it's impossible to imagine all of the use cases. But what do you think that Amazon is hoping that Anthropic and Amazon can achieve with these massive centers?
I know Anthropic is going to use this cluster, this new AI compute cluster, to ultimately build and deploy future versions of its AI model, Claude, as you noted. The project is going to provide five times more computing power compared to Anthropic's current
largest training cluster. That's obviously a big step up. When you consider Anthropic, they're trying to build an AI system that essentially matches the human brain, and then we'll go from there. Obviously, this is a big task. They have big ambitions
They plan to train and build AI systems with this complex. But then, Amazon also notes that it should ultimately serve multiple needs. Like, if when training becomes significantly more efficient, or if AI development hits a wall, I can imagine at some point we'll run into that situation. Then, this facility, this project could be used to deliver AI technologies to customers. So, there's a big focus on efficiency here as well.
And when we think about Amazon as a whole, as a company, from a buyer, from a retail perspective, most of your interactions with that company are buying things on the internet and having them come to your door within the next two days. But if you own the stock, you really want to look at Amazon Web Services because that's where most of the operating profit is.
comes from. Looking at these big outlays of these massive data centers being built, certainly Amazon's betting on that. But do you expect that to be true, that Amazon's going to make most of its operating profit from Amazon Web Services? That's the profit driver for this company in the next five to 10 years.
I think that's more than likely the case. The company made close to $69 billion in operating income in 2024. AWS was about $40 billion of that. Around 58% of total operating profit came from AWS. It's worth noting, in 2023, it was actually 67%. That number has pulled back a little bit. Obviously, they're making a lot of big investments. I would say AWS is going to remain a very key driver.
And I think in time, as investments are realized, we can certainly see that number go back up. My suspicion is it will. But again, as an investor, and I'm a long-time shareholder of Amazon, the beauty of Amazon is, it makes its money in a number of different ways. You just look at their ad business alone now, tracking on around $80 billion annual run rate, and that growth rate is also tracking with AWS. Now, I don't think it necessarily has the same market opportunity that AWS has,
But it just goes to show that Amazon has a lot of different ways it can win.
So, lots to dig into in the New York Times story. It's titled, At Amazon's Biggest Data Center, Everything is Supersized for AI. If you want to get upset about a political story, one you can, is that Indiana gave Amazon a 50-5-0 year sales tax break for data center equipment. And that goes, I think, across the board for big tech companies. So, just something to ruffle your feathers a little bit as we get to the real estate side of this story. Matt Argesinger, what's your take on this?
We are not the first ones to notice the boom in spending and demand for artificial intelligence. There's a huge amount of interest among REIT investors, real estate investment trusts. You look at something like Digital Realty Trust. It operates data centers, and it is now trading at an earnings multiple of 150, 150 times. You see that for a growth stock sometimes, but not for a REIT, man. What's going on here?
Well, so, on the surface, Ricky, that definitely appears like an incredible valuation for digital realty. But you have to remember with REITs, particularly one that's completing a lot of developments, making a lot of acquisitions,
they generate a lot of depreciation expense. When you value a REIT, you want to strip that out as well as other non-recurring expenses. You get what the REIT industry calls funds from operations or FFO. That's basically the ongoing cash flow to a REIT. If you look at management's latest guidance, Digital Realty is on track to generate around $7.10 in FFO per share this year. That puts its earnings multiple around 25%.
Still lofty for a REIT, but a lot more reasonable than $150. And maybe not so inappropriate for a REIT that is really at or near the vanguard of this AI investment cycle we've been talking about. Okay, so $25 is a little bit better than $150. But I still see a lot of interest here. And I remember what happened
sort of, let's say, peak COVID, when there was the real estate story of the great move to the Sunbelt, where people are going to work from home and they're going to need apartments in the Sunbelt. It happened in Mid-America apartments. And a lot of growth can get pulled forward. And then there's a leveling off, sometimes for years at a time. Could the REIT market specifically for these data centers be a little frothy right now? Any hesitation for investors looking at this space?
I'd say it is a little frothy, Ricky. I mean, and I think the apartment comp you make is a good one. So many developers rushed in to build apartment buildings in states like Texas, Florida, Arizona, right after COVID. And that led to a huge oversupply that has pressured rents on these buildings in those states. And it's
It's hard to say whether data centers are in that same bubble loop, but the sheer amount of spending to me is just extreme. It's coming from so many different players, whether it's REITs like Digital Realty, which we talked about, you've got the hyperscalers like Amazon, Meta, and you've even got private equity.
In that New York Times report as well, you've got Blackstone, BlackRock, KKR making huge investments. I think taken all together, it feels a little frothy. You have to remember to me, we're dealing with technology here. What if smaller, more powerful chips come out over the next decade that just don't require the same amount of space or the same amount of power? Could that render a lot of this build-out we're seeing obsolete? It's not an unreasonable question.
After the break, hims and hers get knocked down more than 30% on a bad breakup. What happened there? Stay right here. You're listening to Motley Fool Money. At GMC, ignorance is the furthest thing from bliss. Bliss is research, testing, testing the testing until it results in not just one truck, but a whole lineup.
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Welcome back to Motley Fool Money. I'm Ricky Mulvey, joined by Matt Argersinger and Jason Moser. Listeners and Matt and Jason, before we get back into the show, I just want to note that next Friday will be my last time hosting Motley Fool Money. More to come, but for now, I just want to express my gratitude to this organization, to you, the listener, for making us a part of your daily routine in some cases, and for
and just say that I will dearly miss working with the good people at The Fool every day, and that I'm optimistic about the future. I'm excited about what's to come. No good way to get to the next story for that, but I will try. Let's get to this HIMS and HERS story. Earlier this week, online healthcare company HIMS and HERS dropped by more than 30% after Novo Nordisk accused the company of illegally selling knockoff versions of Wegovy
Hems & Hers CEO Andrew Dedum biting back, responding on X that, "Novo Nordisk's commercial team increasingly pressured us to control clinical standards and steer patients to a go-ve regardless of whether it was clinically best for patients." This breakup comes shortly after the partnership was announced. J-Mo, why was this partnership such a big deal for Hems & Hers in the first place?
So, you know, it gave them access to a leading GLP-1 drug, which I think enhanced credibility, which I think could help the company achieve its long-term growth plans. And I think it was some validation of the model, right? Now, on the flip side, and HIMSS is certainly not the only company that does this, but I mean, they have a
focus as well on these compounded drugs, which serves a purpose for sure, particularly in shortages. But they're also not FDA approved, so there are questions as to whether they're actually serving the patient's best interests.
I think when you put all of this together, it just gives investors at least a little pause. I'm not saying it's something fatal for the company, but I think it gives investors a little bit of pause there. Dave Moore, the EVP of Novo's U.S. operations, said as much regarding the decision. He said, "We expected that the efforts towards compounding personalization would diminish over time. When we didn't see that, we had to make a choice on behalf of patients."
So, it's just very interesting to see him's perspective there and Novo's perspective there when it comes to the best interest of the patients. I guess we will see how this evolves. But it's worth noting, give HIMS a lot of credit. Shares have been on a tear recently, and it's easy to see why. The company's grown revenue.
annualized 80% over the last five years. I mean, it's just been on fire. This is a company I've taken a look at. And the bull case that I've heard, there's a lot of excitement. The bull case for hims and hers is that it could pull like a Netflix or Spotify for direct-to-consumer healthcare with personalized treatments. And you've also got an AI-driven platform. We're redefining healthcare. Are you buying the bull case?
Sort of on the fence with this one. I think it's certainly possible. But they need to be careful how they go about it. This is something that comes with some reputational risk. If they come to this platform that just provides non-FDA-approved compounded drugs and utilizes questionable marketing tactics, that could absolutely scare people away. That sort of
in the best look when it comes to healthcare. They'll just need to be very thoughtful, I think, about their next steps and how they ultimately communicate with not only their prospective customers, but also investors. Part of their growth strategy is explicitly stated in building partnerships and expanding globally. If they're not able to achieve that, that's going to be a big problem for the growth picture going forward. Matt, any concerns when you hear, "X stock is the next Netflix, the next Spotify?"
You always have to be careful with those, Ricky. I mean, it wasn't, I think, more than several years ago when investors were calling Nikola the next Tesla. Remember Nikola? It demonstrated its electric trucks by rolling them down hills. And there have been so many companies I've fallen for this over the years that have compared themselves or called themselves the next Berkshire Hathaway. I have a long list here. I won't get into it. But I've learned, and I think Jason has as well, when you say XYZ is the next ABC,
You're almost always better off holding or buying ABC. I feel like you were getting ready to say Big Laurie Holdings. I was! It was on the list. I thought you were getting ready. Boston Omaha is on there. Sears Holdings, by the way, when A. Lampert was running it. Yeah. Hey, don't forget Boston Omaha had a guy running it who was Warren Buffett's great nephew. I think he's still running it. I think he's the guy who's now the only CEO. But yeah, definitely not the next Berkshire Hathaway. I can promise you that. That's a real stretch. I got to start publishing who my cousins are on the show. All right.
I want to do this story and I'm stealing it from a podcast. I really like Matt Bellamy's the town and at the midpoint of the year, which we're at about at, they looked at sort of the overrated and underrated business stories of the year. So I thought for entertainment for them, but I thought it would be fun to do it more holistically for business stories. Um, I'm going to stay on Matt with this. So Matt, first up, what is your overrated story of the year so far?
All right. I don't want to ruffle any political feathers here, but Doge. Remember Doge? I do. I mean, there was supposed to be, I don't know, $2 trillion in savings, and it became $1 trillion in savings, and they got rid of the guidance. But I mean, I don't know. Most reports right now say that Doge, by the way, the Department of Government Efficiency previously run by Elon Musk, it
it's cut somewhere under $100 billion in costs. There's even some reports out there that suggest that it's actually cost taxpayers more, some of the efforts because of the inefficiencies and some of the replacement costs. Again, I don't want to get into politics at all, but I think
Clearly, there was both significant hype and significant concern about Doge. And it basically has turned into a nothing burger, as far as I can tell. I went to a crypto convention earlier this year, and they had a McLaren that had the Doge logo on it, and then a stand that was just for the Department of Government Efficiency at this cryptocurrency convention. On McLaren. And Matt, that is when I first started to have my doubts about that.
project. Jason, what is your overrated story of the year so far? Well, I'm sure this is going to ruffle a few feathers, too, but I got to tell you, that Tesla robo taxi thing just seemed like a dud, man. Musk has been promising this thing for years.
Granted, he's delivering in some capacity. Obviously, he never really hits his timeline. But all the way, he's been ripping on geofencing. They have to use geofencing. He's been ripping on having human supervisors in cars. He had to have human supervisors in cars. The rollout was to a very limited invite-only audience. You have to assume that's a very biased audience in Tesla's favor. They're going to say it was great no matter what.
The videos that I've seen, the accounts of misfires, some of the things these cars did, I think just demonstrates that they still have a lot of work to do. I'm not saying they won't get there eventually. I want to take my hat off to them for doing what they're doing. I think it's important technology.
But man, it's just going to be a while. And that event, I thought, was just overhyped and underdelivered. I'm going to give you a quick one that's non-Musk. And that's the rise of investor interest in e-votels, these personal air electric taxis. There's companies bidding up these companies. There's investors bidding up these companies by the
billions for companies that don't have revenue and a lot of big questions about the regulatory landscape for putting these electric air vehicles in cities. This is one of those things you hear about self-driving cars crash. What happens when that's an air taxi? That's a negative story. Let's go to underrated stories of the year so far. Matt.
What's your underrated story of the year so far? This is going to be strange based on what J-Mo said, but my underrated story is actually Robotext. Yes! I love it! I'm not reversing this here. I think the Tesla rollout was pretty much a disaster. But I think the concept in general
is going to be hugely life-changing. If in five years, most of the taxi rides you get in a major city are through an autonomous vehicle, I think that has major implications for life, for the economy, etc. I actually think even though it's all over the headlines, we've talked about it, it seems underrated still. J. Mo, as we start to wrap up, you got an underrated story of the year so far.
Sure, yeah. We talked about this a few weeks back. But I think we're starting to see the IPO market open up a little bit.
there's some potential for some above-average activity here in the back half of the year, looking at technology, healthcare, and fintech. We've got some drivers there, private equity looking to cash out, you get stabilizing interest rates, it looks like relatively strong market performance, which could help drive that demand. It just doesn't seem like something that's being talked about a whole lot, but I expect activity to pick up here in the back half of the year going into 2026. There's been some big IPOs so far this year. Yeah.
My quick one will be the return of speculative bubbles. I think there's a lot of speculative investing action going on in 2025 that seems a little like 2021. All right, up next, we are checking in on a company solving one of the most important healthcare problems. Stay right here. You're listening to Motley Fool Money. I never meant to call you when you found me.
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Welcome back to Motley Fool Money. I'm Ricky Mulvey. Pete Anefsky is the CEO of Progeny, a company solving a life-creating problem. Progeny specializes in fertility benefits, especially for self-insured companies. Anefsky joined Motley Fool senior analyst Tim Byers and Holly Anderson, who works on our benefits team, to talk about Progeny's growth path ahead and the company's unique partnership strategy.
Pete, so great to see you. Thank you for being here. We really appreciate it. I mean, we gave you a quick intro for what Progeny is, but we would love to hear before we get into the opportunity how you see Progeny. How do you describe it? And again, thank you for being here.
Yeah. So first of all, thank you as well. I was really looking forward to this for a couple of reasons. One, as you guys already mentioned, you're a partner and you offer progeny to your employees. We're really proud of that. But also just for my own personal success, fuel or achievement, I'm
I discovered Progeny personally, not Progeny, sorry, Motley Fool personally in the early 90s. Used it a lot, loved it, loved it as a service. And so to come full circle and be invited to do an interview on the platform, on the show, is really a fun fact for me personally. So thank you. So Progeny is a global leader in women's health and family building solutions. We focus on areas that
are either overlooked or underfunded by managed care. And we address issues that fill those gaps. And so that's generally what we do across all of our products. We started first in the facility and family building solutions product step, but then have expanded beyond that. So really excited to talk about what we do.
Yeah, we're going to get into more of that because you're right. There's been some expansion in what you do, but I want to just start. We're going to get a little bit more into your story in a minute. But before we do that, let's get into the progeny story. This is how I've heard you describe it, Pete, is that the opportunity is there are about 105 million covered lives in
that you could address and you're currently addressing i'm these numbers may have changed fools so don't hold them to me exactly but roughly 6.7 million of those are about six and a half percent 6.4 so
How much do you need to invest to scale that? Because this does sound like if I'm an investor, this is a scale story. This is a benefit that we could scale to a lot more people. What do you need to do to scale that? What does that cost? Yeah, it's a great question. So it's not necessarily a cost answer. It's a constant evangelizing and
and creating awareness around and understanding of why this benefit is a top-five benefit that your employees want. Millennials, as an example, in the workforce are the largest portion of the population today in the U.S., right? Millennials are also the age group that
will use a fertility benefit. The average age of a woman going through fertility treatments that's infertile is 36 years old, right? So it's an important part of your workforce. It's usually your middle management. It's usually the blue that holds a lot of things together. And so it's a really important benefit. And it's one that, you know, based on benefit consultant surveys that
employees look for when they're looking for a job because it's that important to them. It's a really important area. It's constantly competing with other decisions that companies are making relative to managing benefits overall, relative to addressing medical cost inflation, relative to
anything that's out there that they're struggling with. It's a prioritization exercise for them. Whether they do it today or do it down the road, more and more companies are adding the benefit and will keep doing that. As more and more companies offer the benefit, those other companies who realize they should be offering the benefit but aren't come on board. It's constantly educating the market.
One thing that stands out to me about Progeny is the unique smart cycle approach to fertility benefits. So I'm curious, when you're looking at potential partnerships or acquisitions, what's your process for identifying opportunities that will enhance both Progeny's services and financial strength? And then also, what ensures that these partnerships stay true to Progeny's mission? I love the question. So we leverage partnerships
In many different ways, right? We leverage them relative to go-to-market. So in terms of financial strength, we leverage them and go-to-market. And so we have partnerships with many of the constituents within healthcare. So for example, we've been adding a lot of payer partnerships. So we've taken what our...
competitors, and now they've become partners. The payers recognize that we have a solution that's differentiated versus what they're offering. It's a function of the fact that they're dealing with managing thousands of conditions, and we're focused on one, so it could do a much more comprehensive job.
And as a result, the most recent announcement around that was our agreement with Cigna. And so that's one of the partnerships. We use partners relative to advancing our ability to go to market with products.
to the extent that we can do that. And so whether they're partners or an acquisition opportunity, we'll look for those opportunities to the extent that they're on our roadmap and things that we're looking at. Or if it makes sense with the audience that we address today, we will add...
those as well um and so it's it's a you know on a product basis it's a classic buy versus build or partner um and then and then in terms of go to market um uh relative to the overall offering it's leveraging you know the the partners that are out there in the healthcare ecosystem
I think one of the tough things is, progeny seems to be one of those benefits -- and Holly, maybe you could speak to this first -- it's one of those benefits that doesn't come up until somebody has a question about, "Hey, does The Motley Fool offer this?" And then we introduce them to progeny, and it's amazing.
And they end up doing it. So there's like, you talked about this in terms of evangelizing, but Holly, what do we do on our end? Like, how do we get more of our people sort of digging into the progeny benefits? We do a lot of training, education. We've sent out postcards, or actually we didn't. Progeny sent it out on our behalf for Women's Month. That was awesome. We promote it to our...
prospective employees. And I say that because we've had people join the Fool and start using Progeny the very next day. So we've had to be very quick on getting them enrolled so that they can start. And now one person in particular, she has a baby now because of it. So I love the benefit. And I think that it just really, it's a benefit forever in a sense that once they have a baby,
from The Motley Fool as support of Progeny that even 10, 20 years down the line, they'll look back at The Motley Fool and Progeny and think, look what they gave me. I think my passion and our passion as a company also helps because we're always sharing. It's a great benefit. It is. And I have to say, I won't go into the details for privacy reasons, but I have a
I have recently held a baby that came into the world with the help of Project Neva, and it's pretty amazing. Peter, I want to come back to a bit of financial reality. Again, Fools, you can ask questions about this. This is a Rule Breakers pick, and it hasn't quite worked out yet. I want to talk a little bit about unit economics. You've already answered some of this, so I'm going to flip it a little bit. You've talked about expanding the opportunity.
Could you help us understand, what's the situation that really is ideal for Progeny? What you want to see? Is it overtime?
A progeny client tends to add more services and spend more money. In terms of a unit economic benefit, staying power, aging is something that really works best for you. If you have a client that has been with you for five years, the margins on that client tend to get better. Or is it something else? Help me understand the unit economics. How do you grow, or maybe put it this way, expand
the cash flow that you're already generating today? How do we get it to even higher cash flow margins and say over the next 10 years, what needs to happen for that to come to be? Yeah. So there's a couple of things that are really important. I'll also throw in the macro trend that are going on that's helping fuel, you know, the need for, for our services, right? The
natural, the fertility rate overall nationally has been declining, continues to decline each and every year since 2000. The age of a woman having a baby in the U.S., in the latest reported data from the CDC, more babies were born to women over 30 than under for the first time. And the average age of a woman, there's a decline in number of babies being born in the U.S. over the last 10 years of roughly 1.7%. But
but the 35 and over population has been growing at a compounded rate over the last 10 years of 2.5%. And again, the average age of a woman going through infertility and needing fertility treatment is 36 years old, right? So that macro trend is fueling sort of the need overall, right? The trend with our clients since the beginning is a couple of things. One, we have a 99% retention rate and have had that for years. That's
unheard of in the healthcare space. There's a reason for that. We provide a great service and we help a lot of people out and we're very differentiated. But the second piece of that, and The Motley Fool is an example of it, is the product expansion. So, every year, roughly 20% and last year it was 30% of our clients add
add to the benefits somehow. They expand either smart cycles, they'll maybe add egg freezing and fertility preservation if they didn't have it, they'll add adoption and surrogacy if they didn't have it. And in the latest year, on top of those things, they also added menopause and pregnancy and postpartum. And so, it's all of the above. As time goes on, it's continuing to provide a differentiated, value-based
service that changes people's lives and create more and more of those solutions so that you have a stickier overall client base. And on top of it, continue to create products that are useful and address a larger population, larger portion of the employer's population so that more and more problems get solved and we help more and more people. And then obviously the financials take care of themselves when that happens.
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, so don't buy or sell stocks based solely on what you hear. Our personal finance content follows Motley Fool editorial standards and are not approved by advertisers. Advertisements are sponsored content provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. Up next, radar stocks. Stay right here, you're listening to Motley Fool Money.
If this were a Reese's TV ad, you'd be staring at a Reese's peanut butter cup. And sure, my voice is peanut buttery smooth, but still, you need to see the peanut butter cups, right? No? I can really just say Reese's and you'll go get some? Okay. Reese's. Reese's. Reese's. Really working, actually. Reese's. Reese's. This, I'm on to something. Reese's. Reese's. Reese's.
welcome back to motley fool money i'm ricky mauvey joined again by matt argersinger and jason moser fools a good time to check in on the summer box office season well underway and one surprise to me is
is this opening of Elio, which was the Pixar movie this summer. Usually that does really well. It's a family friendly original film from Disney brought in 21 million at the domestic box office this past weekend. Matt, it turns out audiences, they're not asking for original movies. They want IP.
This is interesting to me because there's parts of Disney where they've done really well. They had Inside Out 2 last year, one of the biggest animated films of all time. But it's definitely had some stumbles lately. I'm a Disney shareholder. How should I take in this news, if at all?
It's not great news, but Disney has such a vast and diversified portfolio now. In the past, it really needed that once-a-year or once-every-two-year Pixar film to really hit. Now, it can have a clunker like Elio, as long as there's Inside Out 2, Moana 2, or even the Thunderbolts movie earlier this year did a lot better than expected. I think there's a lot more, though, riding on this Fantastic Four film coming out next month.
Because if it's a hit, it will set the stage for kind of that next leg of MCU films over the next several years, which are going to be a lot more vital to Disney. But I don't think Elio is going to be going to mean much in the long run. Which are no longer guarantees, by the way. So Thunderbolts, which was a good movie. Critics liked it. Audiences liked it. I saw it. I had a good time at the Thunderbolts. And, you know, you would think, oh, with Guardians of the Galaxy, you can get people in to see new superheroes. Not really. The film didn't perform that well.
Right. We'll see. I think that's also a function of, it's a different time. Getting people out into the theaters is just a tougher proposition because we have so many other things competing for our attention today. It's not just making a great movie
doesn't seal the deal, right? You still got to get butts in seats and that's just more difficult to do today than it was 10 years ago. And great original movies can still bring people in checkout centers. It is awesome.
Awesome. Question before we get to radar stocks, though. If you could buy stock in one movie coming out this year, even in this tough environment, J-Mo, what stock are you buying? Okay, so is this a movie that has been released or has yet to be released? Because it feels like to me it begins and ends with the Mission Impossible movie with Final Reckoning. Like,
Tom Cruise is single-handedly saving the industry on his own. But I will say, if you're looking for one that is to be released,
I'm going a little under the radar here. Spinal Tap 2, the end continues. I think it comes out in September. Turn it back up to 11, Ricky. Matt, I thought it was pretty clear we were doing movies yet to be released. All right. I just wanted to make sure. Less information about it. But Moser wanted to cheat a little bit. That's okay by picking a Tom Cruise movie that's already come out this year. Spinal Tap 2 is my final answer. Fair enough. Matt, what stock are you buying? I'm buying Spinal Tap 2.
I'm buying Superman, Ricky. Next month, James Gunn. I mean, this is a pivotal movie to revive the DC Universe film franchise, which actually has never been that great. So I really hope it succeeds. I also have a vested interest as a big owner of Superman comic books. So I have a lot riding on this release next month.
I'm pumped. I'm excited. For my pick, I'm taking one battle after the other. $100 million plus Paul Thomas Anderson movie, but I think that movie rules. I hope it does. I really do. Let's get to radar stocks. You'll pitch a stock that you are interested in, and then Dan Boyd, our man behind the glass, will hit you with a question, concern, or a backhanded compliment. J-Mo, what you got this week?
Yeah, I'm going to go with Uber, ticker UBER. We were talking earlier about Tesla's robo-taxi event. And on Tuesday, Waymo robo-taxis became available to Uber users in Atlanta under much less fanfare. And that's honestly kind of one of the things I like about Waymo is they're under that shelter of Alphabet. So they don't really have to get out there and sell the sizzle. You know, I mean, they just kind of get to work and do what they can. But it seemed like it was received well. It covers approximately 65 square miles around the city and it's
It's something that is available to Uber passenger rides only, not Uber Eats deliveries. But when you look at Uber, we talk about how autonomy is going to disrupt them, perhaps. It's very clear that Dara Khashoggi is completely in on the autonomous future. I personally would not look at Uber and say, "Well, this is the company that's being disrupted." They're a company that's participating.
participating today by the partnership with Waymo, for example. And we'll see how that all goes. But I don't think this is a winner-take-all market. I assume Tesla will succeed. I also assume Waymo succeeds. And I think that Uber succeeds by virtue of however it approaches the space. And right now, it's via that partnership. But in the most recent quarter they had, they grew bookings 18%. They grew trips 18%. Revenue was up 17%.
I just think this company has so many different ways to win, and very forward-looking. I think it's one worth keeping on the radar. Dan, question about Uber. Yeah, Jason, how's that total addressable market looking these days? Does it steal the entire population of planet Earth? I think that's a fair assessment. They just bought this 85% stake in a Turkish food delivery platform called Trendy. I'll go for $700 million. They're going global, Dan. Matt?
what you got this week. I hope it's not a Turkish food delivery platform. No. Otis Worldwide, ticker OTIS. This is, of course, the elevator escalator company. It was spun out of United Technologies in 2020. It's actually only been a public independent company for about five years now. As you guessed, it's a leading manufacturer, and this is key though, leading maintainer of elevator and escalator systems around the world. 20% market share of new equipment sales,
But here's what I like best, 2.4 million unit maintenance portfolio. That means Otis has this very large stable base of units that has to keep in working order if you're a landlord or a major building manager,
you've got to keep those elevators running. You need Otis to come out there and service them. With Otis in service and modernization, which is about 65% of revenue, 24% operating margins on that business. It's a great business, great recurring revenue business. The dividend yield is only about 2%, but they're raising that dividend by quite a lot. They've grown it by 110% over the last five years, also buying back a lot of stock.
Dan, quick question about Otis. Yeah, I think with respect to Uber, but I think that if Otis disappeared tomorrow, I think the impact would be a little bit bigger than if Uber did.
So I think I know what's going on your watch list this week, but Dan Boyd, what stock is making your watch list? Sometimes we go up, sometimes we go down, but this week we're going with us. I love it. I hate it. I hate it. You can love it, but I hate it. Okay, that's the end of the show. I'm Ricky Mulvey. Thank you to Jason Moser. Thank you to Matt Argesinger. And thank you to Dan Boyd for mixing the show.