In this podcast, Motley Fool contributors Travis Hoium and Lou Whiteman and analyst Jason Moser discuss:
- Netflix's Warner Bros. Discovery deal.
- Mark Zuckerberg cuts metaverase spending.
- Where will disruption come from next?
- Stocks on their radar.
Editor's note: This podcast was recorded before Paramount Skydance launched its competing bid to acquire Warner Bros. Discovery.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.
A full transcript is below.
This podcast was recorded on Dec. 05, 2025.
Travis Hoium: Welcome to Motley Fool Money I'm Travis Hoium joined by Lou Whiteman and Jason Moser. Guys, we got to start with the news of the day. That is Netflix buying Warner Brothers Discovery or at least part of Warner Brothers' Discovery. They're going to be spinning off WBDs Global Networks their Discovery Global. That's the old TV station, CNN, TNT, stuff like that. But Netflix is gonna pay $82.7 billion in total Warner Brothers Discovery shareholder. If you are a shareholder, you're going to get $23.25 worth of cash, $4.50 in Netflix stock. Netflix is also taking out $59 billion worth of debt to finance this deal. It's a $5.8 billion breakup fee? There's a lot going on here, Lou. But what is your first reaction? This news came out early on Friday, and I think it was frankly surprising because it wasn't Netflix it seemed like they were in the lead. It was paramount and paramount Sundance and Skydance? I can't get these names correct. Suddenly, Netflix is the winner.
Lou Whiteman: In 2013, Netflix CEO Ted Sarandos said the goal is to become HBO faster than HBO can become us. Spoiler alert or what is this? Is this a surprise ending or something like what? They are going to become HBO in a weird way. But yeah, the first reaction is, wow. I think it makes sense. I can't help but make the stupid joke. About 25 years ago, there was a market defining deal where the target had Warner in the name, and it marked the top. I think this is different, though, because I do think that AOL might have been coming from a place of desperation. Netflix sees an opportunity here. Netflix sees, I think, an amazing opportunity to get a great content library in a world where it's getting harder for them to license because everybody has a competing product. Nobody wants to give Netflix their content anymore. Yes, it's a lot of debt. Yes, it's a lot of risk. Yes, we'll see what regulators have to say. But this makes sense. I think as a consumer, I probably like this outcome, too. There's a lot of Wow here, but I think a lot to like.
Travis Hoium: Jason, what were your thoughts when you saw this deal? I guess it made me think these annual price increases for Netflix probably even going to go a little bit further because they now really take that top position of what if you have streaming? I haven't had cable for, I think, over a decade now. Netflix is one of those you have to have if you don't have a cable subscription.
Jason Moser: I agree. It's a bedrock streaming subscription for virtually every household, and I think that only becomes more the case with a deal like this. It's funny you saw Ted Sarandos saying, I know that some of you were surprised we made this deal. We tend to like to build things rather than buy them, but they just view this as a unique opportunity as Lou said there, to go ahead and get a catalog of just some very valuable IP. Very valuable content that they know customers like. You look at Netflix, around 300 million subscribers there with HBO Max and all of this, that's a little bit less than half of that. They're going to add some subscribers. There's clearly some overlap there, but they're going to bring some new subscribers into the mix there. And more so they will have just a ton of additional content that comes with it. I think the one thing, I'm not as excited about the deal. I understand why they're doing it. But it also makes me a little nervous from what we were talking about earlier, Travers like the Disney perspective. What I mean by that is, you think about this. Disney has a market capitalization today around $186 billion. That's on $94.5 billion dollar in revenue and $12.3 billion in net income. Netflix, on the other hand, has around $435 billion market cap on just over $43 billion in revenue and $10.5 billion in net income. I think one of the things that's really held Disney back over the last several years, one, I think, a few, I think they relate to the streaming game, but better late than ever, that Fox acquisition, I think, kind of set them back a little bit because it was such a large commitment. I just worry about this from Netflix's perspective in that it is such a large commitment. It could take some time to really flow through the financials and make as much sense. But generally speaking, I do understand the move.If there's a company that's going to be able to execute this, I think it's Netflix, so I get why they're doing it.
Lou Whiteman: Definitely true. I would say, though, it matters what you buy. I do think that I see more logic here. I told the Disney Fox, I see what they were doing, but I do think the target matters, and the target's better. Travis, on the pricing thing as a consumer, all I'd note is that if you actually do want this content, I doubt Netflix raises their price by $11 per month. The minimum to be a Warner Brothers streaming customer was $11 per month. I think that speaks to the optionality here. I think, some of the studios are upset about, will movies go to the theaters anymore, some of those questions. I think Netflix can give in on that pretty easily.
Travis Hoium: They have made some promises that they're going to keep having theatrical releases. But also, Ted Sarandos was the one who said that basically we don't care about theaters. There is some natural tension in the deal, and a lot of times what happens with these deals is you make a promise or a commitment five or ten years from now, you forget about that and [inaudible] .
Lou Whiteman: Let's look at the other way. Maybe I'm being too Polyana here. But does the bigger studio presence mean that it makes more economic sense to lean into the theater as another source of revenue?
Travis Hoium: Actually $9 billion in debt, maybe you.
Lou Whiteman: That's it. I offer new ways to tackle that. I don't know. I think there's a lot of ways to play out. Disney has had good management and less good management over the year. The one thing, again, I would say, too, is that if you're going to bet the jockey, I'm going to bet on Netflix's management team to work through some of the wrinkles, iron out the wrinkles here. And I don't know. I don't want to be too positive. I said, I still wonder if it gets through, especially globally with anti trust. But I do think that, man, you're putting a really smart people in charge of even more great assets and as an investor, there's a lot to think about that company.
Jason Moser: I think that makes perfect sense, too, the other thing to think about too, is because of all of these assets they're bringing in, and this could go one of two ways, but there's a distinct possibility we will see more levels for subscriptions coming from Netflix.
Travis Hoium: You think there's going to be right, Netflix plus.
Lou Whiteman: Netflix wax.
Jason Moser: Let's get a little bit more creative. But you're catching my drift there. I think about Netflix in the day. One of its keys to success was simplicity. It just was easy. As time grows as the competitive jockeying heated up in the space, they had to start offering some more levels of subscriptions to be able to attract various consumers and exercise that pricing power sort of incrementally along the way. It wouldn't shock me at all to see them offering some more levels of subscriptions with this acquisition, which could be good for consumers, but it also means it's going to be a little bit more convoluted or difficult to figure out exactly which level you really want. But that might give them the opportunity to flex that pricing power, a little bit more under the radar, so to speak.
Travis Hoium: I want to get to some of the other competitors here because I think the other piece that we have to think about with Netflix is, I don't think this deal gets done if it's not at least a little bit defensive. Meaning Netflix can now play offense, say, you know what? We're going to be the biggest, and we're going to buy this huge studio, and we're going to keep it away from Comcast and Peacock and Paramount Skydance. Jason, when you look at that, how do those companies survive now? I think that's you do have Netflix. They're by far the biggest. Disney is now profitable in their streaming business. They have a pretty clear strategy. You have Disney plus with kind of the kids stuff. You have more adult general entertainment is under Hulu, ESPN. We don't have numbers behind how many streamers they have, but it seems clear that they're going to be pulling in all stuff with sports. Then you have these other companies that they're just not big enough to be the must have. If you're looking at what you're going to cancel on your streaming bill, it seems like the odds of canceling those even goes up after this if Netflix actually pulls this off.
Jason Moser: I think you're right there. And so to lose point, you wonder if this thing actually does make it past the regulatory side, because it is really a big deal where the strong only gets stronger. We're looking at pretty much the incumbents in the space at this point are Disney and Netflix, and then there's everybody else, and it's very fragmented with all of those different streaming properties. Makes it very difficult for them to operate. They can keep on doing what they're doing. But that doesn't mean it's going to be attractive from an investing perspective, and they're not going to ever really be able to exercise the same level of pricing power unless they have some differentiation, time ago I would have said, maybe that was live sports with Peacock, but we're already seeing. You've got Disney. You've got now Netflix really trying to enter that live sports. Let's not forget about Amazon and their streaming business, as well. I think you look at that trifecta with Disney, Amazon and Netflix, and then there's everybody else. I think the competitive landscape has just gotten a lot more difficult for everyone else.
Lou Whiteman: Maybe it's the banking in my past, but every problem gets solved by deal, guys. You know that. Every problem is solved by deal. Peacock. Paramount.
Travis Hoium: By the way, this deal isn't gonna close for a year and a half.
Jason Moser: Actually.
Lou Whiteman: But I think, look, there is two tiers, and I think the royalty is royalty. The rest have to team up. Peacock, Paramount, call each other. I think that deal makes sense. I think it would make at least a stronger second tier player. Real question there is ego don't see the Ellisons wanting to give up control. I think Comcast likes having a horse in this race, so I don't know how you structure that, so everybody is happy. But assuming Netflix is allowed to buy Warner Brothers Discovery, and maybe it becomes easier if Peacock and Paramount are together, 'cause you can say, this is another you can at least try and make the argument to regulators, but I do think that further consolidation is the natural result of something this big.
Jason Moser: Makes you wonder if those smaller competitors aren't maybe, behind the scenes knocking on the doors of Amazon, Disney, Netflix and saying, guys, you want to buy us, too? How fun would that be?
Travis Hoium: Here's the other question is, you also have this spin off that isn't getting much attention the cable networks. I believe Comcast is still planning to do the same thing. Is that another deal, Lou, that could potentially happen.
Lou Whiteman: Same answer. The Comcast TV networks for trying to tread water with a little more scale to spread out over the sales team. I think there are too many of these things. Period. As a consumer as a business consolidation slash failure, I think consolidation is more likely because they all do have something of value. I think probably that's the way the world was going before this deal, but a big deal tends to shake things up and cause other deals.
Travis Hoium: Who is the big winner here? That's gonna be my final question. Lou, you go first. If you got to pick one stock, which one.
Lou Whiteman: You want me to say Disney. I may say Disney as sort.
Travis Hoium: By not doing anything Disney is the winner.
Lou Whiteman: The Bull case is we talked about it. Disney had some issues before with some of what they did. If nothing else, you're bringing your biggest competitor drama, too. You're bringing them down to your level. Also I do think that Disney maybe all of that issues will one day look like a first mover advantage. I still think Netflix is a big winner here cause again, I go back to this. Maybe I'm too optimistic, but you give the smartest people in the room more good assets and as an investor, I'll take my chances with that.
Travis Hoium: Jason?
Jason Moser: Lou, you stole my answer the smartest people in the room. I was going to say, I think that, again, if there's any company that's going to be able to execute this type of an acquisition, effectively, I think that Netflix is probably it. They just clearly have a tremendous track record of success. So very smart people in the business. Again, I think a brand that is just a bedrock the home entertainment landscape. I just don't see that going away.
Travis Hoium: When we come back, we're going to get to the other big news of the week, that is meta platforms, spending on the meta verse. You're listening to Motley Fool Money.
elcome back to Motley Fool Money. Meta announced this week that it is cutting investment in the metaverse by about 30%. Now, we don't know the exact details, what's the metaverse, what's AI. But this was a massive investment that Mark Zuckerberg made in trying to build out VR, AR. They even changed their name. So Lou, is this whole metaverse thing been a mistake by the former Facebook, by the way, can we get the name back?
Lou Whiteman: Change it to what, AI platforms? Look, guys, I don't know what to think. I can't figure out if I am going to praise Zuck here or bury him because look, in one sense, this is a growth stock that makes a lot of money. You want these CEOs to be making big bets. Meta has a money printing machine in its advertising business. I don't necessarily want to just pay a dividend there. You want that cash to be invested in the business for big ideas. On the other hand, you judge your CEO on making good choices with what to do with that money. It just isn't a matter of throwing money at the wall, it's let's make good investments. Easy for me to say in hindsight, but was there ever a moment where any of us said, hey, Zuck, why don't you burn $77 billion to put us all inside of a video game? That would be cute. Now, look, a lot of this, I think, is they want to invest in AI. Either good news, bad news, AI is going to make that 77 billion look like pocket change, so here we go again. But I don't know what to think here. Zuck, yes, take big swings, but at the end of the day, you will be judged on the quality of the investments you make. I don't I don't ever really understand where they were going with Meta, and probably for shareholders, good riddance.
Jason Moser: Yeah, I think Lou's right there. It's a little bit of both. You want to praise him and maybe chastise him a little bit for this because, I mean, it was clearly not the right move. You just look back over the last two years, Meta chalked up close to $40 billion in operating losses in the reality lab segment. But clearly AI is the opportunity going for. So it's good to see Zuck at least acknowledging that. As investors, when things aren't working out, you just change your mind when the facts change. Clearly here, I followed the space for several years. While there are some interesting implications of AR and VR, this metaverse concept just hasn't really developed, I think, as he would have hoped. Now, it's not to say that it won't in the future, maybe it'll be well after we're gone, guys. I don't know, but this made me think about Google or Alphabet from the perspective of their other bets segment. When you look at other bets, other bets that segment loses a lot of money, too. But if you just look over the last two years, it's basically its losses are a quarter of what reality labs losses are.
Travis Hoium: It's diversified losses too.
Jason Moser: That was going to be my next point. Exactly. It includes businesses like Calico, which is biotechnology, G Fiber, you've got the Verily in health science, you've got Waymo, you got Wing, which is drone delivery. They've got their X, which don't mistake that for the old Twitter, X is Alphabet's moonshot factory, which is that research and development facility. To your point there, yeah, that's a very well diversified other bets business. I think the market has always given it a lot of credit for that. Facebook, Meta, whatever they decide to call themselves, it's still an advertising play. That's not a bad thing. They do that very well, but trying to figure out that next iteration, that next paradigm, turns out that's a little bit more difficult than perhaps we thought.
Travis Hoium: The other thing that goes against what the release was or the information that came out about these cuts at the metaverse is they hired Alan Dye, who was coming from Apple. He was one of their design executives. He is known for things like the Apple Watch and the Vision Pro. So when you look at something like their AR ambitions with the glasses, you have that risk device that senses what you're doing with your hand. You have displays. So there's a lot of overlap there. It almost seems like they're shifting from this metaverse idea to going all in on what it was described as he's going to be running AI-equipped consumer devices. So are we we just renaming the metaverse to AI verse Lou?
Lou Whiteman: Renaming, I don't know, because I do think there is a difference. You have to stick in the real world with the glasses and stuff. You don't get to go into the cartoon. But, yes, I think it's pretty clearly if we want to give Zuck a more charitable read, he did see that in the future, we are going to be experience augmented all sorts of reality plus scenarios, and maybe he was wrong on the video game world, but he may not be wrong on the AI-assisted reality. So it is more of a shift than it is just a we were wrong.
Travis Hoium: Definitely going to be interesting to see what they do with all that cash because AI is costing a lot of money. They don't have a clear strategy there, but they're obviously spending a lot of money to pull people in to try to figure this out. It seems like Zuckerberg's long term reputation is going to be determined over the next 5-10 years. When we come back, we're going to play unstoppable force versus immovable object. You're listening to Motley Fool Money.
Welcome back to Motley Fool Money. Today, we're gonna play unstoppable force versus immovable object. The unstoppable force is these disruptive companies that it seems like just keep growing and compounding year after year. So think about Amazon or Netflix. Do those companies win long term in some of these industries we're going to talk about, or is it the immovable objects, the incumbents that just don't seem to go anywhere. Let's start. I'm going to go with you, Jason. Is our electric vehicles an unstoppable force of disruption in the auto industry or have we gotten past that, and the immovable object is going to be Detroit and big oil and the current political environment? Were we taking away some of these incentives for electric vehicles and maybe going back to the big gas guzzling SUVs?
Jason Moser: I think that longer term, I think the electric vehicle is the unstoppable force. I think with most things with most tech advancements and tech waves, there's a lot of hype and a lot of expectation in that things will happen a lot more quickly. History just shows that they tend to develop and evolve a little bit more slowly than we had hoped. For example, we're seeing folks now all of a sudden saying, well, maybe I don't want a gas vehicle. Maybe I want a hybrid. It could be a plug in hybrid or just a regular hybrid. They start making that shift away from what we've done traditionally through the years. I think that when you're looking at it through the right time lens, I think electric vehicles are absolutely an unstoppable force. I guess if you're looking at stocks in this space, Tesla is the obvious name, and given Elon Musk's resources and ability just to continue allocating and accumulating resources, it's hard to bet against him. I know it's mercurial and gets people worked up, but it sure feels like Tesla is going to be an important company in our economy for many years to come.
Travis Hoium: Lou?
Lou Whiteman: For the record, I love my hybrid. I will never buy another car other than a hybrid, but I'm not ready for EV, so it makes sense. Jason's spot on. The narrative wasn't wrong. The narrative was just going too quick. Electric vehicles, I think, are an unstoppable force, period. It'll just take a while. For me, the stock to play on that and not just kiss up to the host is that if this is going to take longer than you think, so there is a market for ice vehicles longer than you think, but we are heading toward an electric future. General Motors, with the resources to both invest in the future and still supply today, I think that's a pretty good stock to just play the reality, not the hype.
Travis Hoium: By the way, the number 2 EV maker in the US, A lot of people don't realize that GM is actually actually pretty big, and they've got similar margins to Tesla at this point. So if making money matters, GM's actually pretty good at that. Next up, wind, solar batteries, renewable energy. This has been between 70 and 90% of new capacity being built in the US. As we move to artificial intelligence, if we need more power, that seems like where we should be going. But you have the immovable object of the existing infrastructure, the political lobby, tariffs, the reality of renewable energy being an intermittent energy source, which always seems to come up, especially with these AI discussions. If we do have an energy boom driven by AI over the next 5-10 years, which it seems like we're going to; are wind, solar batteries, are these renewable energy technologies going to be the winners or is it just going to be the old guard? Lou, I'm going to have you go first.
Lou Whiteman: Yeah, not to mention. The other thing here is the old guard is still more efficient. Burning dinosaur fossils, it's not good for the environment, but it is still the most efficient way to get things to go. But yeah, I think I hate calling renewables an unstoppable force because I don't know how or when renewables are going to end, fossil fuels, but I do think they are a big and important part of the overall solution that will continue. So definitely a force, maybe not unstoppable. Tesla is tempting here, too, I guess, but we already mentioned Tesla and Tesla, they only do some things. I want to play the field here because it scares me just taking on one wind or even one solar project or trying to bet on one thing. Brookfield Renewable Partners, BEP, just a collection of all of this and riding the trend without having to pick winners. I think that this is a force, and I think that is a stock to invest to benefit as this happens.
Travis Hoium: An old guard company with newer technology underneath.
Lou Whiteman: Yes.
Travis Hoium: Jason, what do you think?
Jason Moser: I think renewables are the way of the future. I mean, it just we're clearly headed in that direction. Again, it goes back to it's just going to take a little while to fully get there. It's a big world out there, but it's funny. I was down in Georgia for the holidays, driving to my parents' house down in Moultrie, Georgia, and just along the way, saw plenty of solar farms out there with a lot of solar cells out there generating electricity, a lot of farm laying down there. So we're seeing even agriculture starting to adopt that solar mentality, and there's a ton of sunlight out there. I think I'm going to take this a couple of different ways. One, I know that we've got a lot of folks in our Foolish universe who like First Solar. First Solar, I think, it's a compelling idea. It does not come without risks. I think the solar space in general is just really difficult. Again, I think, ultimately, it's just too great of a resource to pass up on. But then the flip side of that, too is, I'm going to go back to Amazon and what Jeff Bezos was talking about a few months ago with data centers in space, Travis. The beauty of having the data center in space is just unlimited power because you're up there with the sun. Now, who actually is providing the generation there, I guess, remains to be seen. Maybe First Solar will be a part of that. Probably it will be another company that has yet to even start, but I think it just makes you think of things through the appropriate time lens. If you can conceptualize data centers in space, then I think you can conceptualize the idea that absolutely renewals are going to be the way.
Travis Hoium: It seems like a pitch for a Jason Moser DC fund to space projects that probably won't happen for another 10 or 15 years.
Jason Moser: We'll connect after the show. You're a little younger than I am, so maybe if we partner up, you can be there to watch and succeed eventually.
Travis Hoium: I want to get your thoughts on what's going on in healthcare right now. This seems like an area where there's much more innovation than has happened over the past 20 years. I've got young kids, so I'm seeing this upfront the points of frustration, the points of opportunity. Do we have an immovable object, Lou, in big pharma, big insurance, the establishment in healthcare, or is there an unstoppable force of disruption in telehealth and direct to consumer medicine? You have a start-up from, I'm blanking on his name, the old Mavericks owner Mark Cuban. You have stocks like Hims & Hers. Where is your head at with these companies, because this looks like both an opportunity and a threat, depending on what your view is.
Lou Whiteman: I am siding with the immovable object here, but with a huge asterisk. It's broken. Healthcare is broken in this country, and I think some of these forces that are coming in need to augment it and change it. But I think there's so much established. I don't see the immovable objects going away. So it's a weird answer because yes, they're broken, yes, they need to be disrupted, but there is just too much infrastructure in place. What Mark Cuban is doing, what these telemedicine they contribute, they help, but they are not in and of themselves an answer. We need a better answer. We need a better unstoppable force. I don't think I've seen it yet.
Lou Whiteman: Just on that theme, I'm going to do a stock that's way out there, but just on hope that maybe I'm going to take Amazon for this. Because Amazon keeps trying to disrupt or get involved in different parts of the healthcare environment. They have a ton of money to throw at the problem. I don't know how to solve this. I wish I did, but maybe people in Amazon are smarter than me, guys, and maybe they can figure out how to do it.
Travis Hoium: Jason?
Jason Moser: Yeah, I agree with Lou on the immovable object. It does feel like for as many great and innovative companies there are out there trying to help reshape the health landscape and utilize technology. I think they're more of a feature. They're an add on to this immovable object that is our healthcare system. I think of companies. Look, you guys, I've always talked about Teledoc being a wonderful service. We've used it so many times, just in our household. Travis, you mentioned having kids, we had stretches where they were taking care of pink eyes situations, and we never had to leave the house. That was just really convenient. But ultimately, we've seen these companies sort of have some difficulty making that leap into the next sort of level of the healthcare system. I think, we're seeing what His and Hers is doing. The market clearly has a lot of enthusiasm for that company day. Again, I think they're features of this broader healthcare system. I'll share that several months back. I actually bought shares of United Health just when the stock was tanking because I view that as one of those companies that essentially, and I don't want to jinx it, it just feels too big to fail, it is so big and so integral to our healthcare system. Rather than it going away. It's going to have to be a part of how we reshape it. But to me, between the dividend and the depressed stock price, I thought, hey, there's an opportunity for a little healthcare exposure with one of the top dogs in space.
Travis Hoium: The Minnesota economy, thanks you, Jason, the headquarters. Too far from me. I want to end on this one, and that is a topic that's been really popular on the market today, especially with a lot of the leaders in tech, that's AI in the physical world. Is that going to be an unstoppable force? You can take this any direction that you want or is the immovable object that you know what? People are still ultimately what's going to matter? There's just so many areas that we talk about being disrupted with humanoid robots or there's so many potential opportunities, and I keep coming back to, I don't know, maybe my kids are just doing the same stuff I'm doing today. Jason, where does your head go when you look at robotics and AI in the physical world being an opportunity? Because Jenson Wong talks about this. Elon Musk talks about this. These are some of the wealthiest people in the world are making the decisions about what's going on in tech, but are they right?
Jason Moser: I think with AI, the conversation we're having with a lot of us today, at least, is, with these just absurd amounts of money that are being invested in AI, what does AI mean? That's a very broad term. Understanding sort of physical tangible examples of what AI can do for us in our life. It's just not always so clear how companies are ultimately going to be able to monetize that, but when you start talking about robotics, I think that's where, that tangible example starts to make sense. That's probably oftentimes going to be more in the industrial side of things as opposed to, like, the consumer commercial style of things.
Travis Hoium: At least early on.
Jason Moser: At least early on. You look at the obvious examples with Amazon and its Kiva acquisition, incorporating the robotics into their warehouses. That is only becoming more and more the case where these robots are taking care of business and working alongside humans, it's not like humans are going away. But maybe you don't need that same size workforce. It's boring companies like UPS, again, incorporating AI into their logistics model and robotics in order to be able to help take care of problems like that. Then companies like AMD and Nvidia developing the technology along the way. Certainly I see AI and the physical world making a lot of sense from that perspective, even today.
Lou Whiteman: AI is going to make the world easier. Robotics is going to make the world easier. It's not going to replace people. Like Jason said, whether or not it's just we need someone to babysit the robots, repair the robots, maintain. I don't know what the future looks like, but I'm very confident that there will still be a big role for people. As far as the stock here, give me Honeywell, or at least Honeywell, once they break into three parts. Automation is a big thing.
Travis Hoium: It's just going to be like a success story of the GE breakup where finally, you can start on. I will say, I have no desire to own Honeywell right now, but all three of those parts that their- I think it definitely could be. There's a lot of companies. GXO Logistics is one I love to go to, but just automation and it's not- it's about making human workers their lives easier and maybe, changing the job function. I don't see any time in my foreseeable future where it's just nothing but robots, but I do think that blend will hopefully improve quality of life all across.
Jason Moser: We'll need to work together, people to babysit the robots or ultimately, people to disable the robots when they inevitably turn against us.
Lou Whiteman: Yes Jason, that's why my prime director. These robot lawn mowers, we do not want to arm the robots. Factories are fine.
Jason Moser: Once they got one. Not blades, please.
Travis Hoium: When we come back, we're going to touch on earnings and get the stocks on our radar. You're listening to Motley Fool Morning.
As always, people on the program may have interest in the stocks they talk about in The Motley Fool may have formal recommendations for or against, so don't buy or sell stocks based solely on what you hear. All personal finance content follows the Motley Fools editorial standards and is 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. We did have some earnings this week. Jason, what did we learn from Salesforce? This is one of those AI plays, but is that really the story for them?
Jason Moser: Yeah. We're talking about tangible examples of AI and what it could be doing. It seems like at least for Salesforce, these investments are working for the business. Shares have been having a tough year for sure, but they continue to connect the dots, I think, to where big AI investments are actually driving growth. If they can keep doing that, ultimately, the stock price takes care of itself. But to me, Salesforce's business is one where it is a bit more obvious about how AI tools can their customers in customer relationship management. They talked about it on the call. They said it was the best third quarter ever in the history of the company, and it was the fastest growth that they did in bookings. But then they also noted, and I thought this was interesting because it reminded me of crowd strikes and earnings earlier this week. Net new average order value. They had the fastest growth in net new average order value. That, to me, tells us a lot, bringing in that new business and assuming, the reason why they're bringing in that new business is because they continue to advance with these AI tools and helping their customers in that customer relationship management business. It was interesting, there was one example BenniF called out in the call with Agent Force that annual recurring revenue around $540 million. That was up 330% from a year ago. And he pointed to the William Sonoma example of their AI Sous Chef named Olive. If you have any questions as to, like, what is Salesforce, go to williamsnoma.com, and check out their AI Su Chef Olive. It's their chatbot. It's just fun to play with if you're a kitchen and cooking nerve like me.
Travis Hoium: I definitely need to check that one out. These AI plays are so interesting because their revenue grew 9% year over year. That's what I always wonder about is, is AI going to ultimately drive a lot of revenue growth for these companies? We always end with stocks on our radar. We bring in Dan Boyd for comments or questions. Lou, what is it on your radar this week?
Lou Whiteman: Dan, I'm looking at Delta Airlines, ticker a DAL. Delta this week came out with an estimate on the cost of the government shutdown, which included, of course, a curtailment of their flying. So there was going to be a hit. It was $200 million, about half of what analysts had expected, and part of the reason why was the continued strong pricing power they're seeing. Dan, this is a best in class operator in a market of haves and have nots that just keeps winning. They have 30% of the lucrative business market, despite having only about 20% of the seats in the US. And here's the punch line. Delta, which is a clear market leader and has been doing better than the industry trades at about half of the earnings multiple as rivals like American and Southwest, who, quite frankly, aren't doing as well. That's a really weird time to be an investor. These are cyclical, but lot of really interesting things going on at Delta right now.
Travis Hoium: Dan, are you a Delta guy?
Dan Boyd: I'm not a Delta guy, but, Lou, where are you going, Pal? You're flying Delta. Where's the destination?
Lou Whiteman: Can I go to New Zealand? Can I go visit Peter Beck?
Dan Boyd: That sounds fun.
Travis Hoium: Jason, what is on your radar this week?
Jason Moser: We were just on Delta over the holidays. They just treated us very, very nicely. I'm going to go with DocuSign. Ticker as D-O-C-U. They reported earnings this week as well. It's been a less than sour year for the stock, but the business actually continues to perform quite respectably, they pulled the old beaten rays. They beat their internal benchmarks. They raised guidance for the year. They saw revenue growth there, not lighting the world on fire, but to your point of Salesforce, it was 8% growth for the quarter, Billings grew 10%. They continue to generate cash flow. They continue to repurchase some shares, and the dollar net retention rate was 102%. That was up from 100% from a year ago. Importantly, that number of large customers that spend over $300,000 annually with the company, that clocked in at 1,165. That was up 8% from a year ago. Again, I think this is a business. They continue to do what they say they're going to do, and I think that's incurring. I just might not be growing as fast as investors were used to several years ago.
Travis Hoium: Dan, what are your thoughts on signing online?
Dan Boyd: Only 1.7 million clients for DocuSign, Jason, seems low.
Jason Moser: You got to remember, Dan, it's a lot of enterprise clients out there, so it's not representative of just individuals.
Travis Hoium: Dan, Delta or DocuSign, which stock has going on your own I'm flying like an airplane today, Travis. Let's go Delta. Warren Buffett avoids the airlines or says he wants to avoid the airlines, but Lou is dragging us back in. That's going to do it for us. We will see you tomorrow.
