The Market's Volatility, CoreWeave's IPO, Bitcoin's Future, and More

In this podcast, Motley Fool analysts Asit Sharma, Ron Gross, and Matt Argersinger talk about:

• Market volatility.
• Inflation.
• The struggling dollar store industry.
• A new AI initial public offering (CoreWeave).
• Recent earnings reports.
• Stocks to watch.

Writer Ben Wallace joins us to talk about the history and future of Bitcoin.

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A full transcript is below.

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Ron Gross: Keep calm and volatility on. Motley Fool Money starts now.

From Fool global headquarters. This is Motley Fool Money. It's the Motley Fool Money Radio Show. I'm Ron Gross sitting in for Dylan Lewis. Joining me today are senior analysts Asit Sharma and Matt Argersinger. Fools, how you doing?

Asit Sharma: Ron Gross.

Matt Argersinger: Hey, Ron. How are you doing? Great to be here.

Ron Gross: I am well, Fools, a lot to unpack here. Today we're going to talk earnings, divestitures, and a new IPO, but we begin with the Big Macro. This week we had more news on tariffs, continued market volatility, revised fourth quarter GDP numbers with the large investment houses cutting 2025 growth estimates, and on Friday morning, new inflation data came in hotter than expected. Asit, a lot to choose from, what's your headline? What are you watching?

Asit Sharma: Ron, my headline is inflation coming in hot. Better turn on the AC. We saw not a huge jump in core inflation in today's numbers. In February, the rate hit 2.8%, so that was higher than consensus expectations, if you can like in waiting for stock results. The spending increased about 0.4%. Why is this important? I mean, that's not a huge leap up, but just the persistence of inflation we've seen, these small rises month to month start to add up. What you get here is a Fed being put in a very uncomfortable spot. As you remember, it wasn't very long ago, we were all talking about how many times the Fed would cut rates this year, so some of those cuts are probably off the table. But I want to just briefly mention the T word here, tariffs. Because that's going to play into inflation later this year. Now, the Trump administration has been going back and forth with the actual tariffs it's implementing, but some are starting to stick, and particularly in the auto sector on, I think we're going to see higher auto prices later this year. What does this bring to mind for me? Anticipatory inflation.

What the heck is that? Well, that's when producers of goods and services anticipate that prices are going to rise because they see the writing on the wall, and so they start raising prices on their goods and services. My gut is that we're going to see that inflation rate creep up as the year goes on.

Ron Gross: You mentioned the T word, I'll mention the S word, which is stagflation, a word no investor wants to hear. Growth, but in persistent inflation, how worried should investors be, Asit?

Asit Sharma: Yeah, I think that we're sitting on a precipice in some ways. You could say that the effect of tariffs is going to be temporary and fleeting and so the inflationary effects won't be that significant, but you can also see this other side of the coin where demand starts to drop off because the economy is getting tough. That, of course, has the opposite effect and we could see just a slowdown in the economy, which brings up the fear of stagflation. For me, I'm pretty much trying to think of this as being a feature as we go forward, inflation being a feature, tariffs being a feature of the landscape, and to make my investment decisions and personal consumption decisions likewise, I'm plain as I go, Ron.

Ron Gross: Sounds good. Matt, what stands out to you? Anything other than what we've chatted about?

Matt Argersinger: Well, I would just say my headline would be known unknowns that are becoming ever more unknown because the cliche is there, but it's true, is that the stock market hates uncertainty. For everything Asit said about the tariffs and where things are going, there's just still a lot of uncertainty. We had temporary tariffs against Canada, Mexico, and China. Those have been pulled back to a certain extent. We had the auto tariff that Asit mentioned the 25% across the board tariff there. Then next week we're supposed to get, I guess, a sweeping round of new tariffs across multiple countries and multiple regions. They're supposed to be more permanent and sticky, we don't know. Then, of course, we also don't know how countries like China, Canada, or regional blocs like the EU are going to react to our tariffs.

All this just leads to so much uncertainty. I like what Asit said about anticipatory inflation. The problem is, I just don't know how as a CEO of any company, especially a global company, how you allocate capital in an environment where there are just so many unknowns. By the way, it's not just on the corporate level, I think consumers are feeling that as well. We saw consumer confidence hit a 12 year low this past week. I just think it spells a lot of trouble for the economy as we go forward with this.

Ron Gross: What you're saying is we don't know?

Matt Argersinger: We don't know anything. Do we ever?

Ron Gross: We'll find out.

Matt Argersinger: That's right.

Ron Gross: On Wednesday, Paychex reported what I'll call good but not stellar first quarter operating results, but investors liked it sending the stock higher. Asit, what did you think?

Asit Sharma: Yeah, Ron, I thought these Paychex numbers were like a bowl of warm soup in this very chilly environment of uncertainty as Matt points out. I mean, looking at the just headline numbers here, Paychex revenue for the quarter increased by 5%, operating income increased by 6%. We had a nice adjusted diluted earnings per share bump up of 8%. These aren't screamingly exciting numbers. But businesses like this with high returns on capital, with solid cash flows, built in customer basis, they start to look attractive in times of uncertainty when growth companies, as Matt so rightly points out, are pulling back on their capital expenditure. The stuff they need to invest in to grow, they're wary of spending that money. Then we like to look at businesses like Paychex. I also like the fact that it's a bellwether stock. I like combing through the results to see what management is saying about the economy at large, because they see so many hundreds of thousands of payrolls across the country every week.

So far, I guess, good, Paychex said that based on the checks they're counting, so this is actually just running the numbers on payrolls, the labor market looks steady from management's perspective. I wanted to just throw this out there when times get really iffy and the markets are volatile. The warm soup companies are ones we should pay attention to. I know both of you knew this, but did listeners know just how effective a capital allocator Paychex is? It throws off a lot of free cash flow, intends to pay out a very nice dividend. This is a company that generated quite a bit of free cash flow last year, last trailing 12 months, and it's paying out something like 60-70% minimum in its dividend payout. I think it's the company that might appeal to Matt on a total return basis. It's absolutely skunked the market over the last 10 years in excess of 320% in total return when you reinvest those dividends.

Matt Argersinger: I like companies that can skunk other companies. Awesome. Nice verb there.

Ron Gross: For sure. Warm soup companies, let's trademark that. Asit, they're acquiring Paycor. Are you a fan of that acquisition?

Asit Sharma: I think I am, Ron, and I'll just be brief here. This is a smaller company that operates in the peril and human capital management space, so I think HR out of Cincinnati. This is an all cash acquisition for 4.1 billion bucks. That's paying roughly 35 times pay course trailing 12 month free cash flow, so it's a tad expensive, and it's going to throw some more goodwill onto Paychex's books. But they're buying a company which has native Cloud and AI strength, which Paychex is trying to bulk up, so that's good. It'll complement Paychex's small and medium sized business portfolio. They can cross sell services, I like that. If you picture a gas gauge in your car with the left side being like just a financial acquisition, just doing it for the numbers and the cash flow, and the right side, the F or the full being more of a strategic acquisition, this sits for me somewhere about three quarters of the way toward a strategic acquisition. I think they can make something out of the parts they're acquiring that will help earnings and cash flow in the future, so I'm in favor.

Ron Gross: Sounds good. Also on Wednesday, Dollar Tree reported fourth quarter earnings and announced that it would sell its struggling Family Dollar business to private equity for $1 billion. Matt, let's unpack these one at a time. Dollar stores in general have been struggling lately, how did these earnings look to you from Dollar Tree?

Matt Argersinger: From Dollar Tree, the results? Well, just taking on the continuing operations, Ron, which is the Dollar Tree business going forward, actually, we're pretty decent. You had same store sales up 2%, 0.7% increase in traffic, and a 1.3% increase in ticket for a business that is mostly catering to your lower spending consumer. Those are pretty decent results. Earnings per share came in a little better than expected, as well, and guidance looked pretty good to me. I mean, same sales growth is expected to be between 3-5% this fiscal year. At the midpoint, earnings per share of five and a quarter up about 9% from fiscal 2024, so not a terrible story for Dollar Tree at all in this quarter.

Ron Gross: Now, they're dumping Family Dollar for about $7-8 billion, less than they paid for it. Shrewd. But is it still the right thing to do, regardless?

Matt Argersinger: That is the story here. Actually, it is. It looks like it's a fire sale price. I mean, they paid almost nine billion for this business, Family Dollar in 2015, now selling it for just over a billion. There are so many reasons why this turned out to be a failure. We don't have time to go into them. But I think this tells the story. If you look at Family Dollar, it's very different than Dollar Tree. I didn't really know this, but family dollar, mostly urban, mostly rural, sells more items, food items, essential items, and that part of the dollar store category has not held up as well. Dollar Tree really thought they could raise the profitability profile of Family Dollar, it just didn't work.

If you look at, they don't break out the Family Dollar results, but what you can, if you compare Dollar Tree to Dollar General, Dollar General being very similar to Family Dollar. The profitability per store of Dollar General is about half that of Dollar Tree. You can see Family Dollar has been pretty deluded to Dollar Tree's results. In fact, it lost, if you look at the discontinued operations, it lost about four billion last year. Dollar Tree getting rid of that is really going to boost their profits. I think it's the right move, even though it feels like a fire sale price.

Ron Gross: Coming up, we'll talk athletica, housing, and a brand new IPO. You're listening to Motley Fool Money.

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Welcome back to Motley Fool Money. I'm Ron Gross here with Asit Sharma and Matt Argersinger. On Thursday, Lululemon reported fourth quarter earnings that beat expectations, but it was forward guidance that spooked investors sending the stock down sharply. Asit, quarterly results look pretty good, but management concerns about consumer spending, the potential impact of tariffs are really what investors are focused on. Short term concerns or something more to worry about here.

Asit Sharma: An interesting question, Ron. Lululemon, well-known brand, had a great quarter in my eyes. I mean, their top line increased by 13%. Even if you take out an extra week in the last trailing 12 months, they had a benefit of a 53rd week. They still increased their revenue by 8%. Hit operating income of a billion bucks, gross margin expanded. All that looked good, but going forward, Lululemon is looking at some slower growth and particularly in the US and North America. This is what the market is getting hung up a little bit. The company is expecting revenue to hit somewhere between 11.2 and 11.3 billion bucks. That's growth of 5-7%, which you might say is not bad in this economy. But I think the drag here is that most of the business is anchored in the US, and that is slowing down. There are a few factors that are affecting the outlook.

One is lower foot traffic into the stores, which management says is an industrywide concern, and that's not hard to figure out. We're seeing consumers pull back everywhere. Another is a little bit of worry about margins, how those might be affected by tariffs. Management has said it's accounting for a little bit of tariff impact, not a huge amount, about 20 basis points out of a point in gross margin decline. But really the story here is just the speed at which China is growing. Actually, that's not bad for tariffs because they can manufacture some goods in China and sell them there. China's growing at 25-30% annually, but the drag with the US is what's producing that mid single digit growth and it leaves open speculation that some of these very fierce competitors, brands like Vuori, are really starting to grab customers' attention.

Now, Lululemon is replenishing apparel lines on. They're going to have a lot of new styles, and management has been emphasizing new colors as well. But maybe as you know, great athlete lines with different colors are going to pull customers back in the store. The worry is, what is the customer going to be feeling later this year? We've talked about the Big Macro. If that customer is reluctant and has more choices, it means they may disappoint a little more on that top line, longer term. I don't have concerns about this brand. It is a stellar brand with highly technical clothing and a loyal base, but the near term does look giffy.

Ron Gross: Earlier in the week, KB Home's shares got smacked as first quarter results came in lower than expected. Matt, take us through the quarter, but then I'd love to hear your thoughts on the housing market, the home building industry in general.

Matt Argersinger: Not great on the home front, Ron. First quarter revenue, earnings per share, both below consensus for KB Home. Deliveries were down 9%, absorption rates were lower. Average selling price, however, was up 4%, and that's been the theme for these homebuilders, just lower deliveries, but higher selling prices. Still, gross margin overall came down about 100 basis points. If you look forward, management's comments about deliveries, net orders are now going to be down 17% in the quarter. Backlog value has declined. They lowered the full year revenue guidance by about $500 million from about 7.3 billion to 6.8 billion, which is a pretty decent move.

Not a great report and management's comments about the housing market echoed what we've heard from other homebuilders. It's a slower than expected spring selling season, as so far, it's still pretty early. You have consumers that are facing affordability issues. That's well known. There's economic uncertainty now with tariffs and those kinds of things that are weighing. Even though management says they're seeing strong traffic to a lot of their communities and showrooms, buyers just aren't pulling the trigger. I think this is concerning for the overall housing market because we know the situation on the existing home side. Homes are not moving, you've got would be sellers locked into those low rates, 4%, 3%, even less. They're not willing to move up to a mortgage of 6% to buy a new house or move. You've had this inventory freeze on the existing side. That's been lasted for three years now. That left the homebuilders as the only game in town, but now they are facing challenges. Inflation has made housing construction more expensive, they're reluctant to cut price to move homes. This is a bad housing market, I think, all around, existing or new. If it persists, this could be widespread damage. I mean, we're already seeing results from companies like Whirlpool, Home Depot, tracks that show this and there's a lot of companies hoping, even praying now that we have a better housing market in the near future. I don't see one coming.

Ron Gross: Concerning.

Matt Argersinger: Very concerning.

Ron Gross: Reverberate around the economy, for sure. Let's move to something that is new in the news lately. On Thursday, artificial intelligence start-up CoreWeave raised $1.5 billion in its IPO, pricing shares at $40, significantly lower than the expected range of $47-55 per share. Asit, tell us what you think about CoreWeave the company and then what about this week IPO. What does that mean for either IPO or AI stocks?

Asit Sharma: Ron, CoreWeave the company is pretty interesting. It is a renter out of GPUs, so it buys a bunch of GPUs. Their Nvidia GPUs, about 250,000 spread across 32 data centers, so it's a lot of computational power. The company has a concentration in Microsoft, so Microsoft is using a lot of its services. That's like a 62% concentration. It's a business model that on the surface of it has a lot of promise if AI computation is the future, which most of us believe it is. But the issue I have with this is they've spent so many millions to buy Nvidia GPUs, and Nvidia is moving so fast with new generations of its blackwell and going on to verubin computation of platforms. It's almost like, will their stuff be outdated in just a few years? Last thing I'll say about this is the IPO is like underpriced because the buzz is going away from AI as companies pull back on that data center spend. One to monitor and not necessarily jump into, in my opinion.

Ron Gross: I saw one report that Nvidia is going to anchor the public offering by investing $250 million. Perhaps, it'll be interesting to see if that order gets filled and if that happens.

Asit Sharma: Use some chump change to help support the young's chump change or Nvidia.

Ron Gross: Fools, we'll see you a little bit later in the show. Up next, a conversation with author and reporter Ben Wallace about the evolution of crypto and his book, The Mysterious Mr. Nakamoto. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. I'm Ron Gross. Over the past 16 years, we've seen Bitcoin go from Internet fringe to being fully embraced by the big money of Wall Street and even be considered as a store of reserves for companies and the US government.

Dan Boyd: For as much as the world of crypto has evolved, it's still left with one fundamental question. Who founded Bitcoin? Who is Satoshi Nakamoto? Ben Wallace set out to answer that question. He's an author and reporter who has written for Wired, the Wall Street Journal, Vanity Fair and New York Magazine. He spoke with my colleague Dylan Lewis about his latest book, The mysterious Mr. Nakamoto and how Bitcoin's pseudonymous founder shaped its development and adoption.

Dylan Lewis: I want to get into Satoshi Nakamoto and the lore and the appeal of this anonymous founder, but I want to lay some of the foundation on cryptocurrency first for some of our listeners who maybe aren't as familiar, aren't as initiated. Can you take me back to the Bitcoin white paper and the initial appearances of Satoshi?

Ben Wallace: The first time that the pseudonym Satoshi Nakamoto appeared on the Internet was October 31st, 2008, I believe it was Halloween night 2008, and there was a list serve known as Mets Doubt. It was a cryptography list serve people who are either cryptographers or very cryptography interested, which a certain percentage of them were, like, libertarian computer scientists. Out of the blue, Satoshi Nakamoto posts this. The first thing he posted was not the white paper itself, but a paragraph or two with the basic idea for Bitcoin and then he subsequently posted this white paper, which was a more elaborate, more scholarly in style document breaking down the idea.

Dylan Lewis: You pick up this story several years after that as you begin reporting on it. We are now a decade and a half past that moment. At what point did you realize we are looking at something that has tremendous staying power, and this is going to be a story that you're following for such a long time?

Ben Wallace: Well, it was definitely not when I first wrote about it because the headline on that article for Wired was the rise and fall of Bitcoin.

Dylan Lewis: It sounds like headline has been written many times.

Ben Wallace: It has and there's actually a website, I think, called Bitcoin obituaries that has more than 400 articles, including the one I wrote that have prematurely stated that Bitcoin's over. Obviously, it had incredible and unforeseen staying power. It's gone through at least five major booms and busts. I think each time it's had a bust, people declared it over and then it rose again from the dead. Each boom was bigger than the previous bust, and so it fitfully has made its way onward and upward. When did I first realize that it had staying power?

Again, I mean, I would say that in 2014, so that's three years after I wrote my article, I had bought a small amount of Bitcoin when I was writing about it in 2011. 2014, I think it had already gone above 1,000, but now it was back down to 500 or $400. I thought, it's going to go to zero. Like, I better just sell off my remaining seven Bitcoin. I put in a cell order with the exchange that held those coins. Unfortunately, it was just before the exchange, which was known as Mount Gox imploded in a fireball of hacks and scandal and bankruptcy. I lost my bitcoin. But my point being only that even then I thought, it's over. Then, again, it rises. At that point, I just I tuned out for a few years, but every now and then, I would receive an unsolicited email from someone. I imagine other reporters who were on this story early also received these emails saying, I know who Satoshi is or I am Satoshi.

Dylan Lewis: I loved reading the book because it was a haul of the Internet, in a way. Like, it was fun to be able to walk through and relive some of the moments and the way that the Internet worked over the last 20 years or so. It's fun to revisit that and also to go to all of these characters and doors that you knock on in trying to figure out where this idea came from, where this cryptocurrency came from. Where were some of your favorite places to visit with that?

Ben Wallace: From the beginning, there were some usual suspects, like, people who would come up whenever someone tried to crack this mystery. They tended to come from one of two communities and they were both Silicone Valley techno utopian subcultures of the 1990s. One was called the Cypherpunks, and these were guys who were, again, either cryptographers or cryptography interested, who during the '90s, I mean, it's ancient history now, but there was something called the crypto wars when the government was trying to keep cryptography or strong cryptography, like in browsers, for instance, they were trying to keep that as the preserve of the government and not allow it to be exported to other countries. The Cypherpunks commitment was to try to make cryptography available to the masses. That included a lot of libertarians and these were also people who were interested in digital money because digital money that would be decentralized and divorced from governments and banks. You can see the seeds of the Bitcoin idea there.

The other group were called the Etropians and these groups had some overlap, and several of the usual suspects were in both groups. But the Etropians focus was longevity and future positivity and extreme life extension up to and including conics, which meant freezing yourself when you die or are deanimated as they like to call it in the hope of being re animated when the technology has advanced to the point where you could be re animated and back to real living person.

Dylan Lewis: I think on that, then, who do you believe or what's your favorite theory for who Satoshi is?

Ben Wallace: It depends what you mean by favorite, because, I mean, there's my favorite person who I would like to be Satoshi, and who is a leading candidate to be Satoshi and that is Hal Finney who I actually got to interview by email when I was working on the original story, and by that point, he already had ALS, and he could only communicate by he used an AI tracker, and so it was an email interview. But he graciously agreed to field some questions. He is by far the most likable of any of the people who are considered to be leading candidates for Bitcoin. People liken him to almost a Mr. Rogers type of person or someone else said he reminds me of the Monty Python song, always look on the bright side of life.

I mean, almost to a comical degree, like when he was in the advanced stages of ALS, he was on message boards on the Internet talking about how he was looking forward to some of the challenges of ALS because he'd never experienced them before. He's like most people don't understand what I mean when I say that, but it's really exciting to me. I mean, it looks like a very positive, interested and future positive person. There's a lot of evidence for why he might be Satoshi Nakamoto, and then there's some evidence for why he might not be. My favorite candidate because he was so unexpected was a guy who was on both of those lists, the Etropians list and the Cypherpunks list. His name's James Donald. He was an ethereal figure. Some people thought he was dead. Some people thought he was Canadian. Some people weren't sure if it was his real name. I just stumbled upon him as a candidate because when I really got into the weeds researching this, I was scrutinizing everything, including the different candidates' use of English language. I found this one word that Satoshi Nakamoto used and that had only appeared once in all of the years of the Cypherpunk mailing list, the Extrapians mailing list, a bunch of other mailing lists, fencible able to be fenced. I think Satoshi had used the word non fencb and Donald had used the word fencib in 1998 on the Cypherpunk list. I just was like, this is it. I found him and it wasn't only because of that coincidence.

I mean, there were a bunch of other coincidences that made him a real candidate. But what interested me about him was that once I got focused on Donald and began looking into who he was, he was a politically radical, had a blog that wasn't attached to his last name in which he espoused, like, extremely offensive opinions about lots of things. I thought, well, that would be very interesting if it turns out that Satoshi Nakamoto is not this benevolentvgod that he has been made out to be by some of the more zealous Bitcoin people. In fact, perhaps he left his name off the project, not because of Bitcoin becoming a problem for him, but because he might be a problem for Bitcoin.

Dylan Lewis: What do you think of the role that Satoshi being anonymous has in the Bitcoin community and what Bitcoin has been able to become? Like, do you think that would have been possible if there was a figurehead, a very public figurehead for Bitcoin?

Ben Wallace: I don't I think it's been very key for Bitcoin's growth. First of all, it's very much like on brand for a decentralized currency to not have a leader. The Bitcoin community likes that Satoshi is unknown, and they generally not big fans of people like nosy reporters who try to investigate who Satoshi is. I think that the mystery has been an amazing marketing benefit for the currency. I mean, it's just incredible. People are so interested in this mystery because it's such a weird and unusual and unprecedented thing. Like, there really aren't other inventions like this where you don't know who the creator is and the person doesn't take credit for it and doesn't touch what seems to be an enormous Bitcoin stash. The minute you put a face on Bitcoin, maybe they're palatable to one group and not to another. It just not having a creator makes it inoffensive.

Dylan Lewis: One of the interesting developments for me in tracking this space was seeing institutions and what we'd call big money starting to step in here. I mean, we had an inflection point a little while ago where Bitcoin spot ETFs were approved. We had very large money managers buying and selling and having long positions in Bitcoin. How do you think that that financialization of it stacks up with the original founder vision and what people thought it would be originally?

Ben Wallace: I think it's pretty far from it. I mean the whole idea of a money that was freedom money, freedom Internet money that was a response to problems in the banking system. The idea of it being then adopted and co opted by the banking system seems quite at odds certainly with the spirit of it's invention and the early adopters who many of whom were either libertarianly focused or money nerds who, you know, were interested in things like Ithaca dollars and just, like, random money projects like that.

Dylan Lewis: Was that inevitable? I mean, I look at, like, other things that have developed over the Internet over the last 20 years and there is, I think a microcosm here with Bitcoin, where you have something that is cool and cottage that becomes mass market and all of these other trappings come along with it.

Ben Wallace: I do think it was inevitable because all the the truly more ideological Bitcoin people from the beginning, they all wanted their money to increase in value. The only way Bitcoin was going to increase in value is by the market size increasing. It was just inevitable that if you want the thing to become more popular, which they all did, without maybe totally like taking into account or foreseeing that had to mean eventually, it went mainstream, and that meant eventually that, again, the adoption would become co option.

Ron Gross: Coming up after the break, Asit Sharma and Matt Argersinger return with a couple of stocks on their radar. Stay right here. You're listening to Motley Fool Money.

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. 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. The Motley Fool only picks products that it would personally recommend to friends like you.

Ron Gross: Welcome back to Motley Fool Money Ron Gross here with Asit Sharma and Matt Argersinger. Fools, we've got time for one quick story before we hit stocks on our radar. This weekend, the elite 8th of March madness will be determined. Fellas, it took nearly a decade, but someone a lucky someone has finally won Warren Buffett's $1 million NCAA tournament bracket challenge. The winning Berkshire Hathaway employee took home the grand prize after picking 31 of the 32 first-round games correctly. Only one person got that prize, 11 runners up, got $100,000 each from the company. Pretty exciting. Does this excite you guys? Are you March Madness people?

Asit Sharma: I mean, it excites me Ron, if you're offering us some money for next year.

Matt Argersinger: I'll briefly say it's so Buffett, right, because he's so interested in future projection and understanding where things will fall out and he's talked in the past about the impossibility of getting a bracket correct. I think it's fun. I mean, from that perspective, just to try to vision out the future and for someone to get it right.

Asit Sharma: I'm sorry. It used to be a lot harder, because you had actually picked the entire Sweet 16, I think. Now it's even easier. But it just shows you it's funny this year, and I'm not following it very closely, but this year, a lot of favorites have won. The There's only been a couple maybe surprising upsets. Yet, it's still an impossible tournament to predict, even at the Sweet 16 level.

Ron Gross: Absolutely. Any predictions? Anybody want to throw out a name as the ultimate winner?

Matt Argersinger: I will go out on a huge limb here and say that number one Duke is probably gonna win. I mean, Cooper Flag is a beast. So I think that's my favorite.

Ron Gross: Anything Asit?

Asit Sharma: As a UNC alumnus, I will say that Duke University is my second favorite choice to win. I want my conference to do well, but boy, I like Florida. Talk about fluid offense, really aggressive defense, a passion to win so many points off the bench. I think they're going to be formidable and tough to beat. Duke will maybe they'll take it, but I like Florida's. Is it like an underdog here? Can we come and call them that?

Ron Gross: Dan Boyd, give us the right answer. Who's going win?

Dan Boyd: I'm more excited about the return of baseball. MLB baseball played opening day yesterday, so it is back. That's what I'm paying attention to, Ron.

Ron Gross: Sounds good. Fools, time for a couple of stocks on our radar, and I'll bring in our man Dan Boyd, to ask a question and pick his favorite. Asit, you're up. What do you got?

Asit Sharma: I've got McKesson Corporation, symbol MCK. This is the United States largest distributor of pharmaceuticals. I like that they sort of win whatever happens with GLP one drugs between the different manufacturers. They're going to distribute those drugs. It's a company that throws off a lot of free cash flow. It's like Walmart. The margins are very skinny here, but because they're so big, they have a sizable bottom line, and they usually convert most of their net income into free cash flow and use that free cash flow to buy back shares. It's a real simple, almost mathematical proposition. Lastly, I'll say the margins are starting to improve because they're moving into buying, like, oncology practices. Even, like, ophthalmology practices and adding that to the mix. It's an interesting business. It's a radar stock, to me, because it floats under the radar for most investors. But McKesson is one, I think again, it's a little bit warm soupy.

Ron Gross: Dan, you got a question about warm soup for Asit?

Dan Boyd: COVID seems rather mature, Asit. Are you expecting big-time growth out of McKesson, or is this more of a value play?

Asit Sharma: I like the story of the senior citizen who discovered stationary rowing. I think he's from Scotland and just became this champ at it. In that sense, Dan, they're not going to just blow the covers off that ball, but they really will start to see a little bit of acceleration for mature company, even a few percentge points makes a difference.

Ron Gross: Matt you're, what are you looking at?

Matt Argersinger: Well, Asit is going warm soup. I'm going cold fish because cold fish is what the MAG 7 are so far this year. Look at this. Apple is down 14% from its high, Microsoft down 16%, Amazon down 17, Meta down 18, Alphabet down 21, Nvidia down 27% and Tesla bringing up the rear down 45% from its all-time high. But, guys, there's one. There's one MAG 7 that I'm interested in buying and that is Amazon. Ticker ZN, I can point to strong reasons why I don't like all the other MAG 7. Nvidia could have a bad semiconductor cycle. Customers realize they can do AI stuff much cheaper. Another deep secret too. Apple, super high valuation, low growth, Chinese phone competition. Microsoft, super high valuation, low growth, Alphabet AI disrupts core search business, Meta, shifting user behaviour, weak advertising market a bad economy. Tesla, where do you begin? But then there's Amazon. Double-digit revenue growth. High, but reasonable valuation, less than 30 times forward earnings. That's cheaper, by the way, than both Walmart and Costco. ADBS is stronger than ever.

Third-party e-commerce business is unmatched, and retail margins improving. The fast-growing advertising business, prime membership, and AI can actually have real impacts on Amazon's business when it comes to automation, logistics, warehouse, distribution, robotics. This is the one MAG 7 people that I want to bet more on.

Ron Gross: Passion. I like it, Dan, question.

Dan Boyd: I'm already an Amazon shareholder, so I don't know if I can actually put them on my radar. I guess I could, but whatever is anything muddy disrupting Amazon as the top of e-commerce infrastructure.

Matt Argersinger: Dan, short of a meteor hitting the world, and I saw going away? No, I don't think so at all. I just think this is a company that's already what, 2 trillion? I'd see it going to 5 trillion. Just getting bigger. I got it.

Ron Gross: Is McKesson on by default, Dan, or what are you going to do? You going to double up on Amazon?

Dan Boyd: I think I'm a little more interested in McKesson, to be honest, Ron.

Ron Gross: Sounds good. Asit Sharma, Matt Argersinger, thanks for being here. That's going to do it for this week's Motley Fool Money. Our engineer is Dan Boyd. I am Ron Gross. Thanks for listening. We'll see you next week.

Suzanne Frey, an executive at Alphabet, 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 Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Charles Schwab is an advertising partner of Motley Fool Money. Asit Sharma has positions in Amazon, Costco Wholesale, Dollar General, Microsoft, and Nvidia. Dan Boyd has positions in Amazon, Berkshire Hathaway, and Costco Wholesale. Dylan Lewis has no position in any of the stocks mentioned. Matthew Argersinger has positions in Alphabet, Amazon, Charles Schwab, Home Depot, and Tesla. Ron Gross has positions in Amazon, Apple, Berkshire Hathaway, Bitcoin, Charles Schwab, Costco Wholesale, Home Depot, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Bitcoin, Costco Wholesale, Home Depot, Lululemon Athletica, Meta Platforms, Microsoft, Nvidia, Tesla, and Walmart. The Motley Fool recommends Charles Schwab, KB Home, and McKesson and recommends the following options: long January 2026 $395 calls on Microsoft, short April 2025 $75 puts on KB Home, short January 2026 $405 calls on Microsoft, and short March 2025 $80 calls on Charles Schwab. The Motley Fool has a disclosure policy.