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Apple’s Latest, Hot IPOs, and the Future of AI

Apple (NASDAQ: AAPL) unveils new iPhones and iPads. Intuit (NASDAQ: INTU) buys MailChimp for $12 billion in cash and stock. Amazon (NASDAQ: AMZN) gets ready to sell Amazon-branded TVs. Coffee retailer Dutch Bros. (NYSE: BROS) rises 60% on its IPO. Walmart (NYSE: WMT) and Ford (NYSE: F) team up on robo-deliveries, and Taco Bell tests a taco subscription service. In this episode of Motley Fool Money, Motley Fool analysts Maria Gallagher and Jason Moser discuss those stories and share two stocks on their radar.

Plus, Karen Hao, senior artificial-intelligence editor at MIT Technology Review, talks with Motley Fool senior editor Anand Chokkavelu about machine learning, which industries are being affected the most by AI, and the new jobs being created.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.

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This video was recorded on Sept. 17, 2021.

Chris Hill: It's the Motley Fool Money radio show. I'm Chris Hill. Joining me this week, senior analysts Maria Gallagher and Jason Moser. Good to see you both.

Maria Gallagher: Nice to see you, Chris.

Jason Moser: Hey.

Hill: We've got the latest headlines from Wall Street. We will dig into the business of AI, and as always, we've got a couple of stocks on our radar. But we begin with the big macro: Retail sales in August rose 0.7%. Not only does that bounce back from a drop in July but economists were expecting sales to fall nearly 1% for the month. When you combine the higher than expected retail sales with initial jobless claims staying near their low for the pandemic, Maria, the U.S. economy is looking pretty good considering the delta variant.

Gallagher: Yeah, it is. Those gains in August were prompted by a rise in spending on clothing, electronics, furniture, and home goods. That's boosted by back-to-school shopping, child tax credit payments through the government. Spending for clothing in the week ending Sept. 11 was up 27% year over year. Sales at department stores rose 21%. With this Delta variant, you do see a shift away from services, things like travel and concerts, but it's back toward goods. That'll be interesting to monitor going forward, especially as we get closer to the holiday season. However, the sales of cars and auto parts were down a lot. We're still seeing that slowdown in supply due to the semiconductor shortage. Toyota recently announced plans to slash production by about 40%. Dealership inventories are running low. I learned that the number of semiconductors in a modern car is over a thousand, so cars really need semiconductors. So that will be interesting to monitor as well.

Something that I find super fascinating that I think has really big implications is that the Atlanta Federal Reserve's wage tracker for August, for the third month in a row, wages for lower-skilled workers have risen faster than wages for higher-skilled workers, so that's only happened in the 25-year history of collecting this data in two months in early 2010. That's great news for the economy since low-wage employees are actually more likely to spend their increases as opposed to higher-paid employees that are more likely to save. It could have implications for inflation, but I think that's also definitely something to watch as we move forward in the recovery. But all in all, it was a pretty good sign.

Hill: Jason, Maria mentioned the semiconductors. We don't want to say that we're out of the woods because we're not out of the woods. But it is nice to see surprisingly good news on the consumer spending front.

Moser: It is good. I'll tell you, honestly, personally, I wasn't really that surprised. My first reaction was perhaps the level of fear out there is as great as the headlines would like us to believe. If you're a sports fan, then no doubt, you've been watching football these past couple of weeks. You're seeing what I'm seeing: Stadiums are packed, college and pro alike, offices are opening back up, and Maria mentioned another tailwind at back to school. Even bars and restaurants, those sales were flat for the month. They were still 32% ahead of where they were just a year ago. All of this points to these signs. I just think a lot of people are ready to move forward. They're taking that step. They're feeling a little bit more comfortable. The vaccines are doing their job. Certainly, shoppers are still turning online, those non-store sales jumped 5.3%. But I think when you just take a boots-on-the-ground look at what's going on, it does seem pretty clear that folks are ready to start getting back out there, getting back to some semblance of normalcy, and I think that's a good thing.

Hill: Earlier this week in Cupertino, California, Apple CEO Tim Cook and several other executives took the stage to unveil the latest versions of the iPhone as well as a new iPad and Apple Watch. Jason, customers get longer battery life and shareholders get Apple continuing to charge high prices for these products.

Moser: Chris, I think that's exactly what I expected. We were talking about this on MarketFoolery earlier this week, and I said no real surprises, and that's not to say it's a bad thing. I just think we're at a point where that's what these events are about until they can come up with that next life-changing product. No big deal, just come up with another life-changing product. Come on, this is Apple. I think many were probably disappointed that they didn't unveil some type of immersive technology device, a headset or something like that. But given Cook's fondness of the technology, I think it's safe to say they are working on it. It's just a real challenge I think to come up with something, that killer app so to speak on the consumer side, the thing that makes a potential headset or glasses focused on immersive technology, something that makes our lives better. That's still a bit of a tough nut to crack. Seeing a lot of progress on the enterprise, the industrial side. The consumer side, it's going to take a little bit more time, but we'll just continue to wait until they decide to hit us with something special.

Hill: The award for deal of the week goes to Intuit. The maker of TurboTax is buying digital marketing firm Mailchimp in a cash and stock deal worth $12 billion. Maria, it really looks like Intuit is paying a premium for Mailchimp. But I got to say, their track record on acquisitions over the past decade, kind of hard to argue with.

Gallagher: Yeah, this was pretty interesting. You had a Credit Karma acquisition for $7.1 billion, which was a very big acquisition. Now, they've topped that with this $12 billion acquisition. We're seeing that Intuit's continuing to expand their product offerings so that it's integrating options for businesses and customers so that it's expanding into an addressable market. It's integrating Mailchimp with QuickBooks to help clients better figure out how to target their customers. Mailchimp is focused on digital marketing services, including social advertising, shoppable links, and automation products. It has 13 million total users globally, 2.4 million monthly active users, 800,000 paid customers with 50% of those customers outside the U.S. So it's definitely expanding that product offering. It's an interesting acquisition, we'll see how many of their customers want to integrate those offerings, and how a new pricing structure will work. It's definitely a hefty acquisition. They definitely paid a premium for it. I think it'll be interesting to watch and see how it goes.

Hill: Right before we started recording, we got the news that Intuit's going to have a dome, because Steve Ballmer, a former Microsoft CEO who owns the Los Angeles Clippers, the Clippers announced they've got this brand-new dome they're building starting in I believe 2023, and the naming rights have been purchased by Intuit. The Clippers are going to be playing at the Intuit dome. Who doesn't want a dome?

Gallagher: It's a 23-year agreement that cost about $500 million. A fact about me that no one's ever asked about is I've only ever been to three basketball games in my life, and one of them was an L.A. Clippers game, and the dome was very nice. I may be going back to the Intuit dome at some point.

Moser: I wonder if they're going to get a tax break on that thing.

Hill: Once you spend $12 billion on Mailchimp, another half-billion for the naming rights, that's just a drop in the bucket. The Everything Store is getting an early jump on the holiday shopping season. In October, Amazon is going to start selling Amazon branded TVs that range in price from $400 to $1,100. The company is also planning a three-week event in October around sales of beauty products. Jason, global beauty is estimated to be a $500 billion market. When you consider that, I guess a three-week event makes more sense.

Moser: Yes, it does. It turns out there is a lot of value in having two core businesses that the world more or less cannot do without at this point in retail and cloud. Those are Amazon's real specialties, and having those two core businesses to rely on gives them the opportunity to take bigger risks, try new things, and more importantly, fail without truly jeopardizing the business. It gives them a chance to learn. Listen, our house could always use one more TV. I'd be lying if I told you I weren't at least entertaining the idea of getting one of these TVs, Chris, but it makes a lot of sense. It's essentially a little bit more vertical approach, giving Amazon more control over that user experience. The connected TV advertising market is tremendous. We're talking about $13 billion-plus this year. According to eMarketer, it's forecast to reach $25 billion by 2024. Amazon taking more control of that ecosystem gives them the opportunity to participate more in that market opportunity which makes a lot of sense, and then they can leverage that through their e-commerce platform and other places. In regard to the beauty event, I totally agree. This is a massive market opportunity. We've seen a lot of the success that Ulta has witnessed to date here. I think this is a smart move. Beauty products and cosmetics, they're a tremendous market like we said. We talk about school and the three R's; reading, writing, and arithmetic. I look at beauty products, honestly, there's three R's going on there with beauty products, too. It's reliable, resilient, and recurring. So I don't blame them at all for trying to pursue that market opportunity.

Hill: The longer Amazon is around, the more it seems like they don't really do anything unless they can get multiple uses out of it. We had talked a few weeks ago on this show about Amazon opening up large department stores. One of the things we've traditionally seen that works and helps bring traffic into department stores are beauty counters and the ability to test those products in person.

Moser: Absolutely. We talk often about investing, and typically, the best action for long-term investors is inaction. You always want to do something, but really, the best move is to probably not do anything at all. Just sit on those shares that you own and keep adding to those money positions. Amazon's in the situation, though, for this business. Really, they always need to take action. They always need to be doing something. Like Jeff Bezos always said, he wakes up every day feeling threatened from the competition, nervous about the competition. So they're always going to be trying new things. They don't always work, but they glean lessons from those things that they try, and certainly, the beauty products initiative just plays right into their e-commerce expertise to begin with.

Hill: Up next, We've got a hot IPO and a busy week for the business of deliveries. Stay right here. This is Motley Fool Money.

[...]

Welcome back to Motley Fool Money. Chris Hill here with Jason Moser and Maria Gallagher. On Wednesday morning, Dutch Bros. went public at $23 a share. The drive-through coffee chain is based in the Pacific Northwest, has nearly 500 locations, and the stock is definitely off to a good start. Shares of Dutch Bros. up 60% on its first day of trading. You tell me, Maria, how worried should Starbucks and Dunkin be?

Gallagher: I think Starbucks and Dunkin are always thinking about smaller chains. But if you're thinking about direct competition, if you're comparing based on size, Dutch Bros. has 471 locations in 11 states. Dunkin has 8,500 locations in 41 states, over 11,000 locations worldwide. Starbucks has 15,000 locations and a market cap of $135 billion. I wouldn't be that nervous that they're going to take a lot of market share. Like you said, it's only drive-through. Starbucks I think has carved out that niche as a good study; it's where people go and sit and spend time. Maybe more of a competition for quick on-the-go like you see with Dunkin. Some facts about Dutch Bros. that I think it's pretty interesting: it's the largest IPO in Oregon's history. It was founded by two brothers who operated an espresso push cart in Oregon in 1992. Sales were up about 60% in 2020. It added 71 new company-owned locations, so it's a mix of franchises and company-owned. They have a goal to have 4,000 stores across all of the U.S. It has a really well-known brand name in the stores it currently operates. I think it'll be an exciting one to watch, but I wouldn't be too worried if I was Starbucks or Dunkin.

Hill: This coffee chain's IPO is bigger than Nike's?

Gallagher: Adjusted for inflation apparently, yes.

Hill: Nice bragging rights in Oregon. The delivery industry is getting more crowded. This week, Ford Motor and Walmart teamed up to test robo-delivery services in Miami, Austin, Texas, and Washington, D.C. Shares of DoorDash rose nearly 10% after getting an upgrade based in part on the belief that over the next five years, DoorDash will expand significantly into delivering groceries, alcohol, and other items not affiliated with restaurants. Jason, which do you want to take first?

Moser: Let's talk about DoorDash. I absolutely believe that the delivery space is here to stay, of course, and to my mind, it's very plausible that nonfood items outweigh food in time. Something like DashPass that they offer holds a lot of potential there if they can grow the offerings available under that DashPass subscription. That's I think a $9.99 per month subscription. You can have your deliveries sent at zero cost or very low-cost comparatively speaking. Over time, we've seen the power of a subscription model based on offering the customer more convenience. Younger generations coming up view driving a little bit differently than perhaps we did. We were talking about this a little bit earlier. Car ownership is not necessarily the priority, at least for some earlier in life, and this could grow over time. I think delivery could be seen as less of a want and more of a necessity, which then clearly plays into DoorDash's advantages well and moving beyond food.

Ultimately, I think regardless, the real path to profitability in this space is automation. I appreciate those bets that Walmart and the like are taking. That's going to take a little bit more time. But I do believe that automation in this space, that's what's going to have the greatest impact on these companies' bottom lines. It's going to give them the opportunity to scale that out to the largest customer base as possible and make it work I think most effectively.

Hill: But Jason, do you think delivery is now at the point as essentially an offering, where once upon a time, every retail business had to figure out what is our online strategy, what is our e-commerce strategy? Is that now the case with delivery, where businesses basically have to decide, OK, either we're going to partner with someone or we're going to try and build this ourselves?

Moser: I think you have to choose one or the other, absolutely. To me, it fits into that omnichannel strategy. That is part of the omnichannel strategy, ultimately being wherever your customers want you to be when they want you to be there. If you are a business, retail, food or otherwise, opening your doors today and not considering some type of delivery component, you're missing the boat.

Hill: Last thing before we move on, where does delivering people fit into this equation for you as an investor? Where do you put Uber and Lyft on your list of delivery-oriented businesses that I might want to buy shares of?

Moser: I love the service as a consumer, but clearly, the economics have not shaken out yet like some would hope. But again, perhaps, the path to profitability there is automation, but the safety implications are far different when you're talking about delivering people versus delivering pizza, liquor, groceries, whatever it may be. That's going to be a bigger hurdle to clear. It's not to say it can't be done, but I think that's a little bit further down the road.

Hill: Yum! Brands is the parent company of KFC, Pizza Hut, and Taco Bell. The company is testing out a new subscription service. At Taco Bell locations in Tucson, Arizona, customers can start trying out the Taco Lover's Pass. You get one taco per day for a month. The pass costs somewhere between $5 and $10. Maria, it's tacos as a service. How interested are you in this either as a customer or as an investor?

Gallagher: It's a great deal if you're a customer. You'll break even in a couple of days. I don't think it's a great deal for your body as a customer. It can't be good for you to eat that many tacos. But I think it's interesting. It's only in Arizona, about 17 locations. They say they could roll it out nationwide. I think people who are ardent fans of Taco Bell are thrilled about it. I think it will be funny to see what happens, but I don't think that it's going to be rolled out nationwide because it's just too good of a deal.

Hill: Jason, I don't want to bet against the people who put this idea to work, I'm sure they were very thoughtful about it. Tucson, Arizona, that's a big college town. Is it possible that instead of rolling this out nationwide, they just target big college areas?

Moser: I feel like with Tucson, Arizona, given the location, don't you think there's probably a slew of great taco joints out that way? I'm not sure I'm going to Taco Bell first and foremost, but I also understand. It's college, it's a late night, you're probably not that picky. I want to know, can I bank those tacos? Does it have to be one per day, or can I save them up? Like starting on Monday, can I have seven tacos on Sunday?

Hill: No.

Moser: That's the question, really.

Hill: No. I have the answer for you. The answer is no. It's one per day in the same way that Panera rolled out their coffee subscription program, and it was like, "No. One coffee." Because I asked the people at Panera.

Moser: I feel like we need to consider evolving, consider iterating this offering a little bit. But in all seriousness, I love that they try this stuff. Whether it's KFC crocs or a Taco Bell resort, they just try these things that are wonderful marketing tools, they keep the brand front and center, and clearly a lot of people love the offerings. So, hats off to them for trying something new.

Hill: Jason and Maria, we'll see you later in the show. More companies are spending more money on artificial intelligence than ever before. Details after the break, so stay right here. You're listening to Motley Fool Money.

[...]

Welcome back to Motley Fool Money. I'm Chris Hill. According to Fortune Magazine, in a survey conducted last year, 34% of businesses said they would spend anywhere from $500,000 to $5 million on AI initiatives. When that survey was conducted again in 2021, the number of businesses saying they would spend that amount rose to more than 50%. To learn more about the growing business of artificial intelligence, we turn to Karen Hao. She's the senior AI editor at MIT Technology Review. Recently, she sat down with my colleague Anand Chokkavelu, a senior editor here at The Motley Fool, as he asked her about where AI talent is going, which industries are being affected, and the new jobs being created as a result of AI.

Anand Chokkavelu: What's the difference between AI and machine learning, and does the distinction matter?

Karen Hao: Machine learning is a subset of AI, and this was one of the first things that really confused me that I had to learn myself. Machine learning is specifically where the AI learns through statistical methods. There are other branches of AI where you're teaching the machine or encoding knowledge in the machine in completely different ways. Like there's another school of thought called old fashioned AI or old school AI, which is really about actually creating databases of knowledge and then relating all the knowledge within the database so that the brain, so to speak, can then rapidly retrieve information based on questions that you might be asking. That's usually the brand of AI that IBM likes to be involved in and like IBM Watson when it was playing Jeopardy, that was like the AI that it was using. But machine learning is all about let me take a massive amount of data and then having the brain crunch through numbers using statistical techniques to figure out what are the correlations and relationships within the data. At that point, you're not explicitly telling the AI how to actually relate the knowledge; it's discovering the relationships itself. These days, most of the AI that you see is machine learning-based, so in theory, it doesn't really matter, the distinction, because if someone says AI, almost definitely, they're talking about machine learning. But if you do want to start parsing through, getting into the nitty gritty details of start-ups to figure out whether you should invest in them, it's good to have a little bit of knowledge on what are the differences.

Chokkavelu: For folks who don't follow the spaces as closely as you do, can you give us one or two tales from the cutting edge? Things you're seeing and writing about that would make a layperson just go, whoa.

Hao: This is hard for me because I don't spend a lot of time talking with laypeople, so sometimes, I see things and I'm like, oh, people probably know about that, and then I talk to friends later and it blows their minds. But one thing that I've been following for the past three years is deep fakes, which is like AI-generated media. It used to be AI-generated images, and then it became AI-generated videos, and then audio, and now we're talking about AI-generated text. The technology in that space has just advanced so quickly that it's really remarkable and freaks me out a lot sometimes. But just the other day, I was looking at this new movie that's coming out, I'm blanking on the actor's name, some A-list actor, it's called Reminiscence.

Chokkavelu: Hugh Jackman.

Hao: Yes, Hugh Jackman. Thank you. There's this movie, Reminiscence, featuring Hugh Jackman, and it's all about this idea of him going through his memories and trying to recall a lover that he once had. To promo the movie, they created this site where you can upload a photo of someone that you're trying to reminisce about, and it uses this deep-fake technology to animate it and put it into some scenes in the movie. I was really impressed, because I've been seeing this technology evolve over time, and a lot of the more creative applications of the technology, you can detect some wonkiness happening. But with this site, it was pretty flawless and pretty seamless. We're basically ready for this technology to be incorporated in movies.

Chokkavelu: If you're one of the best minds or folks in AI, where is that talent going? Is Big Tech where you'd go, or is it a start-up? Is it somewhere else? Is it academia?

Hao: It's very much Big Tech at the moment. It's Google [Alphabet], Facebook, Microsoft, Amazon, and a little bit of Apple as well. I think that is slowly starting to change, though, very, very slowly. I think a lot of researchers have started having more qualms in the last year or so about actually using their talents to aid just Big Tech giants growing bigger. I think it's very much part of the just general wave of tech lash sentiment that's happened in the last five years. I have seen more researchers start thinking about when they leave the tech companies. Some have gone back into academia. Some are actually starting non-profit organizations or some non-governmental organizations to do their research. Then others will break off and start start-ups because there's just so much opportunity to fill in those cracks. But by far, the most number of researchers are at Big Tech companies.

Chokkavelu: Are there any industries you can think of that won't be affected pretty meaningfully by AI in the coming decades? Something like, if I might say, what about consumer goods? What about Coca-Cola? That kind of thing.

Hao: I think Coca-Cola's already been affected for sure. No, I don't think I can think of a single industry. There are some industries where machine learning might not be affecting the core aspect of the industry, like in beauty for example. There's some machine learning that happens at the fringes that is not necessarily about the core products that the beauty industry sells.

Chokkavelu: But even there, you have Stitch Fix in making the boxes that people get. I don't know whether that's real AI or not.

Hao: I have no idea. I have never even talked to Stitch Fix about their AI. But every industry, there's some AI opportunity in like the logistics that's happening with any online retailer or anything like that. There's always something happening with image recognition and product recommendation. There's just so many opportunities regardless of the industry that I can't really imagine anyone that won't be affected.

Chokkavelu: It's easy for most of us to envision self-driving cars, that you need some AI for that. As soon as I said Coca-Cola, you said, no, they're definitely using it. Can you give folks an example of what types of things Coca-Cola could benefit from AI?

Hao: Yeah. Definitely like the behind-the-scenes which is like the logistics. I'm sure Coca-Cola has a very intense logistics operation and that could be optimized with AI. But also, there are definitely a lot of companies. I don't know if Coca-Cola is among these, but there are many food companies that will use machine learning to experiment with different flavors. They'll develop some machine learning system where they feed a lot of data on user preferences to this machine learning algorithm, and then it will come up with new combinations. Lay's chips does this. They've come up with some really random combinations that have hit a niche spot in the market this way. Anheuser-Busch also does this with their beer. That's like another more forward or consumer-facing way that machine learning could be involved.

Chokkavelu: No, that's a great answer. I think that helps a lot of us just visualize or think about what's actually happening. Whenever there's a new technology, it usually brings some fear of losing your job. But let's go to the positive side. What kinds of new jobs will actually be created by AI?

Hao: It's a complicated question. I just wrote a story yesterday about a new wave of robotics entering warehouses, and automating some of the picking work and box packing work, and things like that. There have been some studies in earlier waves of automation that I've looked at [...] level, how does a robot coming in to automate some jobs end up affecting the workforce overall. Effectively, what usually happens is a company will become more productive because they're able to automate some stuff, and then more jobs will be created from that productivity, but it won't be the same jobs that were automated away.

So, if you're a warehouse worker, you might become a robot supervisor. Instead of being the one that's packing the boxes, you're the one that's watching the robot pack the boxes and stepping in when it inevitably falters. But also, if you're packing more boxes and fulfilling more orders, then you're going to have to have more staff to handle deliveries and more staff to handle logistics. So there's going to be more job creation downstream from where you automated and increased productivity. But effectively what happens is, in a lot of instances, you end up gouging out the middle skilled jobs because that's the sweet spot for AI technologies to automate. Then you end up generating a lot of low-skill jobs, which are the supervisors of the AI, and then high-skilled jobs, which are the downstream second-order effects of the increased productivity. So in some ways, yes, we are going to see more jobs over time, but also, we're breaking the career ladder where we just are increasing the extremes and removing the middle. I think that's just something that technologists and policymakers are really going to have to think hard about because that's not necessarily a good trend to be going down.

Chokkavelu: Perhaps relatedly our last question, is it more important for kids to learn a foreign language or coding?

Hao: I would say a foreign language. Machine learning has become increasingly commoditized to the point where you don't actually need to know how to code anymore. You can build machine-learning models with very little coding knowledge or no coding knowledge, and that is increasingly going to become true over time. What a lot of AI experts have realized is that what's more important is actually domain expertise in the particular industry that you're going to apply AI to. I would say just learn another language and maybe have domain expertise in that language, and you'll be just fine without coding.

Hill: If you want to keep up with the latest in AI, you can read Karen Hao's coverage online at technologyreview.com. But up next, Maria Gallagher and Jason Moser are coming back with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money.

[...] Welcome back to Motley Fool Money. Chris Hill here once again with Maria Gallagher and Jason Moser. Remember, you can catch the show every week on radio stations across America and on your favorite podcast platforms: Spotify, Apple Podcasts, Amazon Music, and more. One click of a button, that's all it takes, people. One click of a button. That's all it takes to follow or subscribe to this show. Our email address is radio@fool.com. I've got a note from Danny R. who writes: "Long time listener, first-time emailer. Chris has mentioned a few times that he believes having exposure to cybersecurity is essential for most stock portfolios. Would it be possible to hear a breakdown of some different companies in this space as a primer? Thanks. Love the show." Thank you for that, Danny. Thank you for the question. Jason Moser, what do you think?

Moser: You see, Danny, sorry, I couldn't help it, you can look at this a few ways. For me, I know cybersecurity, I agree with you, Chris, it's very important. I also know my scope of knowledge in this space is extremely limited. Unless I become a specialist in this space, which I'm not, that is always going to be the case. For me, I look at a company like Cloudflare, for example, as one that fits my style. It's a stock that I own, of course, as I've talked about on the show before, because there is a strong security component to the business. But there's also a whole lot more. There's edge computing, it's a content delivery network, there is a lot to it. It's like Amazon in that regard, it's a diverse business. It's not necessarily reliant on one thing anymore. So I feel like I'm getting that cybersecurity exposure that I want with a company that I believe in that doesn't really put all of its eggs in one basket. That's one way to look at it.

Hill: Maria, what about you?

Gallagher: I would say similar. I think a lot of us here are generalists, so we look at a lot of different companies. I understand that I am not a software engineer and I probably will not become a software engineer. So I ask myself some questions when I'm looking at these complicated sectors to break it down into digestible parts. What customers is it serving? Are they doing it well? What are its retention rates? You can watch a lot of YouTube videos of a lot of these more-complicated companies. Cloudflare is a great example where they have a big YouTube presence where you can see what this company does, what is the edge. I really watch a lot of interviews with people who work there, leaders at the company, and see if they can speak to people at their level of knowledge and understanding until getting to a point where I understand it enough, and I can understand what is the difference in what it does and what is the difference between them and some other players. I know some other players in the cybersecurity space are CrowdStrike, ZScaler, those are ones we've talked about a lot. I think looking at all of those different aspects of it is a good way to make it more digestible for an average investor.

Hill: Let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Jason Moser, you're up first. What are you looking at this week?

Moser: Sure thing. A company I've talked about here before, Teladoc Health, ticker is T-D-O-C. It's just a neat headline that crossed the news this week. They are partnering with a company called Proximie. Proximie is a healthcare technology company based in England. They enable clinicians to virtually participate and provide support for procedures from anywhere around the world. But the reason why this is so cool, among other things, Proximie uses augmented reality to let surgeons supervise and consult on operations remotely. It gives them the ability to show where to make an incision or how to utilize a particular technique actually during surgery. It's just a neat I think logical step for virtual healthcare in that regard. But I got a good question on Twitter this week in regard to the pullback in Teladoc shares lately, how is it logical. Just to encourage you, remember, valuation near-term is rarely logical. It's very often emotional. To me, this seems like a reset after a really big deal with Livongo, some profit-taking from the year's speculation. Just remember the words of Ben Graham. He said in the short run, the market is a voting machine. In the long run, it is a weighing machine. We're just going to focus on Teladoc getting heavier and heavier year by year.

Hill: Dan, question about Teladoc Health?

Dan Boyd: Chris, you know how I know that nature is healing out there? Because Jason's back on Motley Fool Money talking about Teladoc Health, one of his two favorite stocks. That and McCormick spices, of course.

Moser: Dan, you know me so well. I've always got a seat at the dinner table for you, my man.

Hill: Maria Gallagher, what are you looking at?

Gallagher: On my radar this week is Duolingo (NASDAQ: DUOL). If anyone knows anyone who's learning languages, I'm sure they're familiar with Duolingo. In 2020, there were over 500 million downloads. It's the top-grossing app in the education category. On Google, people actually search "Duolingo" nine times more than they search the phrase "learn Spanish". It's revenue increased over 100% in 2020. I think it's going to be really interesting to understand what will stick as people go back to life more with what was just a phase of playing on your phone, gamifying learning, and what will continue to be what people do as life gets more back to normal. But I think it's a pretty interesting company.

Hill: The ticker symbol?

Gallagher: D-U-O-L.

Hill: Dan, question about Duolingo?

Boyd: Is Duolingo still doing those really somewhat aggressive notifications on your phone about missing lessons?

Gallagher: They try to gently encourage you to log on and complete your lessons.

Boyd: I don't know. Every time I have a friend who is doing Duolingo, they show me these notifications. It's ominous if you miss a lesson.

Gallagher: It's not as ominous as the app Co-Star. If that's your barrier, it's fine.

Hill: What do you want to add to your watch list, Dan?

Boyd: Teladoc is a fantastic company. Jason has been talking about it for 300 years. I'm actually going to go with Duolingo, I'm familiar with the service. I'm not too familiar with the company.

Moser: How do you think I've lived so long, Dan?

Hill: Jason Moser, Maria Gallagher, thanks so much for being here.

Gallagher: Thanks for having us.

Hill: That's going to do it for this week's edition of Motley Fool Money. This show is mixed by Dan Boyd. Our producer is Mac Greer. I'm Chris Hill. Thanks for listening. We'll see you next week.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Anand Chokkavelu, CFA owns shares of Amazon. Chris Hill owns shares of Amazon, Apple, Intuit, Microsoft, and Starbucks. Jason Moser owns shares of Amazon, Apple, Nike, and Starbucks. Maria Gallagher owns shares of Intuit. The Motley Fool owns shares of and recommends Amazon, Apple, Facebook, Intuit, Microsoft, Nike, Starbucks, Stitch Fix, Ulta Beauty, and Zscaler. The Motley Fool recommends Uber Technologies and recommends the following options: long January 2022 $1,920 calls on Amazon, long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short March 2023 $130 calls on Apple, and short October 2021 $120 calls on Starbucks. The Motley Fool has a disclosure policy.


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