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Welcome to Motley Fool Money. I'm Jason Moser. Joining me today is Motley Fool analyst Matt Frankel. Matt, you got me feeling nostalgic here, man. It's nice to have the band back together.
It has been a long time. Not only are we back together, we're going to be talking about a SPAC later on in the show. It's really nostalgic. Yeah, those were the days. Matt, we want to kick it off today with Apple. It's the WWDC, the Worldwide Developers Conference. It's something that we look forward to every year, or at least most people do, I guess. It's the chance for Apple to get out there and announce everything that they're doing, the things that we can look forward to.
Pat, I'm not going to lie to you. This year, this seems rather underwhelming. There's not a lot going on. Apple, at its core right now, is still very much a phone company. I think they're doing a good job in becoming more like a services company, for example. I think the services part of the business is really going to be what investors focus on here in the future. This
conference thus far, it seems like the theme is, you see this everywhere, it's liquid glass. It's this design that they're going to
essentially roll out that you all of their hardware together, give you a more seamless and consistent experience. It seems like through all of their hardware interfaces. Now I'm an iPhone guy. I do have an iPhone beyond that. I'm not an Apple guy. I just, I don't have any other Apple devices. Not that there's, you know, I don't have a problem with it. It's just,
I like having choices, Matt. But to me, this conference so far, it seems to be a bit underwhelming, particularly on the AI side. AI has been the point of focus for so many companies over the course of the last couple of years here, really. We're not getting a whole lot of information there either. What are you taking away from this so far?
The liquid glass thing, I think you might be a little more excited than you're leading on about that. But having said that, I'm not an Apple guy. I have my Galaxy right here. One of the big things when I was reading through the summaries of the WWDC, especially when you mentioned all their AI rollouts that they're doing, and I was thinking to myself, it sounds like Apple's behind the curve. Pretty much every
Recap, a review of the conference that I read confirms that. They said Apple is behind its peers when it comes to AI innovation. For example, they're rolling out a way to automatically separate spam texts through their AI technology. My phone's done that for two years. They're doing an automatic language translation of phone calls and texts. Galaxies have been doing that. They are behind the curve on AI. It really hasn't been a focus.
I almost feel like Apple, because they have such a loyal user base -- my wife's an iPhone user and wouldn't take a Galaxy phone if it was free -- they have such a loyal user base that they got a little complacent when it came to the pace of AI innovation, I think would be fair to say. It's like nothing. They're bringing their product up to speed.
But they're behind the rest of the market. So, it feels really underwhelming. I was going to ask you, I wonder why that complacency exists. I agree with you. I think that makes sense. They do feel like they're a little bit behind the curve there. I'm wondering why that is. You said it. They have, obviously, a very loyal user base. I think most people, once you get
used to using one of their devices or any kind of technology. You stick with it for the most part. Maybe they took that a bit for granted. Or do you feel like there's a little bit of hype there in regard to AI? They don't necessarily feel like they need to be out there shouting from the mountain.
top that we're doing all of this for the AI. Like, I mean, I don't know. I just, I know that they, they just haven't made that, that progress that people were expecting, but I wonder if they just feel like it's not perhaps necessary at this point, at least from the consumer perspective.
Yeah, and you make a really good point. Apple definitely has the deep pockets to compete on AI if they really wanted to. That's really the head scratcher here, I guess you would say. I think it boils down to a cost-benefit analysis in their mind. They don't need to be the leader in AI if they think some of the features aren't going to be widely used. I mentioned the thing that automatically translates your phone calls into a different language with the touch of a button.
I've never used that. There are a lot of AI features on my phone. I have the new Galaxy S25. No phone has more AI features than that. I don't really use many of them that often. I love the spam text screener. That comes in handy. But a lot of the AI features I have, especially when it comes to photography and things like that, I just don't use. Maybe they feel like investing in building those out is
not as important of an expense as some of their peers feel it is. Yeah, I think that makes sense there. I mean, it's kind of a marathon, not a sprint. They're doing their job, they're working, they're building that stuff. And I mean, obviously, AI is...
tremendous value-add in so many different regards. They don't feel like it's a sprint there, and so they're just going to take their time and hopefully do it right. It's like Tim Cook has always said, we're not trying to be first, we're just trying to be best. I think that obviously time will tell where Apple goes next, but they've certainly done a good job thus far. I'm going to give them credit where credit's due and hopefully investors will do the same. Well, next up, we're digging into Opendoor's reverse split and the stocks we just bought.
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Matt, Opendoor was one of the most popular momentum stocks in 2020 and 2021. Obviously, the investing landscape was far different for many reasons during that timeframe. But now, you look at the company, it's essentially at penny stock prices. The news is that they are planning a reverse split. As a reminder for listeners,
Tell us exactly what Opendoor does, and then let's also dig into exactly what went wrong. Opendoor is what's called an iBuyer. They're really one of two that are left. An iBuyer is a company that directly buys homes from sellers, does a little bit of cosmetic repairs, things like that, and then directly sells them to
to homebuyers. The goal is, obviously, the price that you buy the home for is significantly less than the price you end up selling it for.
The idea is to do this on a wide scale and essentially turn homes into a commodity. Not a commodity, but something that is bought and sold like a retail item instead of the complex transaction that it is today. It's a great concept. It actually worked really well in that 2020-21 period when money was free. The problem in today's environment
is that interest rates on mortgages are 7% or 8% still.
And the real estate market is very slow. Opendoor is buying homes, holding them on its balance sheet for several months and paying interest on the money that it's borrowing to buy them. It really just changed the economics of it. The real estate market is really slow. Remember, this was the company that was largely credited with starting the big SPAC boom. After COVID hit, this was the first big SPAC deal that was announced. It was a Chamath Paliapatiya SPAC. It shot up
higher, it was buying homes left and right, it was really helping fuel the big real estate boom that we saw in that time. The real estate market, not only did it really turn when 2022 happened and rates rose and things like that,
But the agonizingly slow real estate market has persisted for a lot longer than anyone really thought it would, especially Opendoor. We saw the big companies with iBuying businesses like Zillow and Redfin get out of it, and Opendoor is still trying to make it work. Yeah. That's a really good point there in regard to how sensitive a company like this is to interest rates. It just makes me think of
Last Friday, when we were talking about this stuff on Motley Fool Money, the jobs report that had come out, there's some thoughts out there, at least,
The jobs part that came out and the wage growth that comes with that, it's starting to shape up like maybe we'll see some rate cuts this back half of this year. Do you feel like that's enough for a company like this to be able to get it back on path? Or has the train left the station here? Opendoor can definitely make money with this model in a very active real estate environment. They showed that in 2021.
The question is, this needs to be a sustainable business model no matter what the real estate market's doing. You can't just count on the real estate being at 2021 exuberant levels all the time. It needs to work when there's a slow real estate market. There needs to be a way to still make money. They really haven't shown that. Yes, the general direction of interest rates is expected to be lower over the next two years.
That is clearly a positive catalyst for the housing market. It should help Opendoor at least make money on an adjusted basis. They're not going to be gap profitable anytime soon. But at least not be hemorrhaging money. But as far as the long-term investment case, they really haven't proven it. If anything, the slow real estate market has shown
that they need a good real estate market to be profitable. It sounds like you're saying that for folks who are perhaps interested in a company like this, maybe it's better to take a pass.
To be perfectly clear, I've been rooting for Opendoor and the other one is Offerpad that's still publicly traded. I've been rooting for these companies because, let's face it, buying and selling a home is clunky at best. It's a highly emotional and frustrating process. The mortgage process is in desperate need of improvement. I can walk into an auto dealership and buy a $100,000 car and get a loan in 10 minutes, but it takes me 30 days to get a mortgage.
for an appreciating asset, that makes sense to me. I've been rooting for a better way to do real estate. I was really hoping that this was it. Maybe it's too early or they haven't figured it out yet. I don't want to say it's game over, but it's not really investable to me. I love the idea. But man, oh, man, it clearly
Clearly has some work to do. Well, Matt, let's wrap up today. We wanted to get back to our roots. We've had a lot of fun doing this before. We like talking about the stocks that we most recently bought and why. We enjoy asking listeners these questions as well. Hey, if you're a listener, you want to tell us the stock you bought last and why, hit us up on Twitter @MotleyFullMoney, let us know. But Matt, let's talk about this. We've got two stocks. I'm going to go ahead and let you lead here.
What is the stock you most recently purchased and why? It's going to surprise people. It's not a financial stock. It's not a real estate stock. The last stock I bought is AMD Advanced Micro Devices. A lot of people think of it as Nvidia's distant second cousin. But it's a lot more than that. The company has done a great job of executing. They are the distant second when it comes to data center accelerators and things like that.
There's a lot more to the business. There's the PC business. I don't know if you realize this, but AMD used to be the cheap alternative to Intel when it came to buying a laptop or a PC. They've more than doubled their share of that market over the past 10 years. They're roughly a quarter of the market now. They were about 10% 10 years ago. There's that. There's the embedded division, which has a lot of big opportunities, especially when it comes to autonomous vehicle chips. They make a lot of those.
There's a lot to like about this business. The valuation is right. It's a lot cheaper than Nvidia and has a lot of similar opportunities.
It really appealed to me from someone who wanted AI exposure, but is also a value investor at heart. That's really why I added it to my portfolio. I love that. I tell you, their CEO, Lisa Su, she is just tremendous. It's the exact same word. It's just her track record with this business. I think she's grown the company since she took over as CEO.
back in 2003 or something like that. But she's grown the company, the market capitalization, better than 80X over.
I mean, she's just done an amazing job. And I think to your point there, she's done a really good job of seeing where things were going and understanding the opportunity in the AI space. And it's really positioned, I think, this company -- it's not all Nvidia, right? Nvidia is great. We all love it. But I think AMD often gets overlooked because of all the attention we give to Nvidia.
You're still gaining share in that PC market. You remember when AMD was considered the poor man's Intel. Today, AMD, shockingly, has a market cap more than double that of Intel under Suze's leadership. It's been really remarkable. I'm excited to see the next few chapters of this company. Absolutely. Hats off to her. Hats off to you. That sounds like a wise purchase. Thank you.
Trash is everywhere, and it's not going away. My most recent purchase -- and I did this in my retirement portfolio and primarily focused on
growing my dividend exposure, but about waste management. It's a position that I intend to grow over time. When I thought about actually doing this, it took me back to that old David Gardner axiom, winners keep on winning. You look at this company over really any stretch of time, and it's just been a terrific winner.
winner. The stock has performed well, it just continues to outperform the market. It's the market leader in its space. And again, whether it's recycling or trash, this is a company that is just doing something that we all absolutely need. I got an e-mail the other day from our trash collector here in Fairfax Station, Virginia.
And he said, hey, by the way, the county passed on this 13.5% increase to whatever, so we're going to have to increase your bill. You know what? I deleted the email, Matt. I didn't even think twice about it. You think I'm going to actually do anything about it? I'm like, okay, yep, sure. Passed it.
What, are you going to cancel your trash service? Nope, I'm not going to. I have a feeling that most people are going to behave the same way. I love their commitment to the dividend. I like the fact, too, that the sharing purchases actually bring the share count down. But this is one of those companies where I hope to own it indefinitely and add to this position as I continue to have the opportunity to do so.
AMD and waste management, a couple of ideas hopefully that the listeners maybe can dig a little bit deeper into. I will say, waste management is one stock I can think of that is in no way disruptable by AI. Everyone's going to produce trash no matter how automated our lives become. I tend to agree. I tend to agree. Well, Matt, we'll leave it there. Hey, listen, Matt Frankel, thanks again so much for being here.
Yeah, it's been a blast from the past, and I hope we can do it again soon. 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 Motley Fool editorial standards and are not approved by advertisers. Advertisements or sponsored content are provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. I'm Jason Moser. Thanks for listening. We'll see you tomorrow.
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