The "Motley Fool Hidden Gems Investing" podcast, hosted by Travis Hoyam with Lou Whiteman and Jason Hall, opened with a discussion on Meta's new Muse app, followed by Apple's latest product announcements, a look back at the growth of several major companies over a decade, and a segment on inflation and interest rates.
Travis introduced Meta's Muse app as a potentially "underrated biggest news of the day," prompting Jason to call it the "best packaged AI agent" for consumers, yet questioning its long-term adoption due to the potential for "more noise" and the need for emotional payback. Travis highlighted the app's "Apple-like" user experience, noting its ability to declutter digital life by efficiently organizing information like a child's sports schedule from emails and calendars. However, Lou expressed significant privacy concerns, particularly given Meta's history, and the "work" required from users to trust the app with their personal data. He also questioned why existing phone functionalities like Google's Gemini or Apple's Siri couldn't offer similar services natively. Jason echoed the "dubious" sentiment about Muse's five-year survival, citing trust issues and friction for users. The hosts also pondered the elusive business model, with potential ideas including a cut from commerce transactions or a paid premium version, acknowledging the high costs of AI development and consumer reluctance to pay for services they might expect for free.
Next, the trio turned to Apple's recent product launches, including a new iPhone Pro and a $2,000 foldable phone, the "Duo." Lou, a "bleeding edge tech adopter," expressed skepticism about the foldable phone's mass appeal, seeing it as a niche product for those needing "screen real estate" rather than a revolutionary "iPhone moment." Jason agreed it wouldn't be a "watershed product" but emphasized Apple's strength in incremental improvements and its robust ecosystem. He predicted Apple's entry would expand the currently small (less than 2% of global smartphone sales) foldable market and yield strong margins. Travis noted that phone prices didn't increase as much as expected, suggesting Apple might view component cost surges as temporary or faces more pricing power limitations than perceived. They concluded that Apple remains a great business with strong margins and a loyal customer base, even without a clear "next big thing" on the horizon. Concerns were raised about the significant development work required for the new foldable form factor and updated Siri, potentially leading to initial user experience issues.
The "Time Machine" segment looked back at companies' performance a decade ago. Uber completed 4 billion rides in 2017, growing to 14.8 billion last year, showing how the pandemic temporarily set back its consistent growth. Disney Parks' operating income tripled from $3.3 billion a decade ago to $10.8 billion last year, underscoring its consistent cash-generating power despite attention on movies and streaming. NVIDIA's data center revenue exploded from $338 million in fiscal 2016 to $278 billion last year, representing an 84% compound annual growth rate and an 82,000% total change, highlighting the rapid ascent of AI infrastructure. Tesla sold 76,230 vehicles in 2016, reaching 1.75 million last year, with growth significantly accelerating post-2016 with the Model 3 and Y. Finally, Costco's paid members grew from 47.6 million in 2016 to 81 million today (a 6% CAGR), yet its stock returned almost 500% over the decade, illustrating that growth can come from multiple expansion and other factors beyond just member growth.
The podcast then addressed inflation and interest rates. With CPI up 3.4%, Lou stated inflation is "holding steady," which is "not great" but the economy can tolerate it. He distinguished interest rates, arguing their rise is due to a supply/demand imbalance in bonds, influenced by capital demand for AI build-out, rather than inflation alone. Jason agreed that while current rates are high compared to the last two decades, they are "relatively cheap" historically. He advised investors to seek opportunities in fundamentally strong companies facing a "macro pinch," using such periods to "buy greatness for the long term."
Finally, for "Stocks on Radar," Jason recommended TJX Companies (TJX), arguing its 25-26% stock drawdown was an overreaction to flat traffic amidst strong Q2 results (4% comp growth, 24% net income increase) in a challenging consumer environment. Lou suggested Helmet Aerospace (HWM), whose stock fell over 10% after GE Aerospace acquired a rival. He saw this as a buying opportunity, believing that while GE might integrate some business, Helmet could gain new customers from GE's competitors.