What Drives Investors?

In this podcast, Motley Fool analysts Jason Moser and Emily Flippen and host Dylan Lewis discuss:

• How Walmart is thriving while Target struggles with "decelerating discretionary demand."
• Market expectations affecting reactions to Nvidia's strong quarter and Williams-Sonoma's seemingly weak one.
• Snowflake's strong report and what its new deal with Anthropic means.
• Two stocks worth watching: Tesla and C3Ai.

Adobe CFO Dan Durn walks through how the leading software company for creatives is approaching AI tooling and monetization.

Go to breakfast.fool.com to sign up to wake up daily to the latest market news, company insights, and a bit of Foolish fun -- all wrapped up in one quick, easy-to-read email called Breakfast News.

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

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This video was recorded on Nov. 22, 2024.

Dylan Lewis: It's the most wonderful time of the year unless you're Target. This week's Motley Fool Money radio show starts now.

Everybody needs money. That's why they call it money. From Fool Global headquarters, this is Motley Fool Money.

Dylan Lewis: It's the Motley Fool Money Radio Show. I'm Dylan Lewis. Joining me over the Airwaves Motley Fool senior analyst Jason Moser and Emily Flippen. Fools, great to have you both here. This week, we've got the rundown on how one of the leaders in AI is prioritizing projects, all eyes on NVIDIA's earnings and a look at retail, and that is where we are going to pick things up. Red in the chart this week for Big Red, Jason. Shares of Target down 20% after the company reported third quarter results. What'd you see?

Jason Moser: Well, that was a big move for sure, particularly for a company like Target, obviously a large retailer in the space. It's challenging time for consumers and clearly a challenging time for some retailers. We've certainly seen in regard to Target, we saw a two percent decline in average ticket there. People are going to the store, but they are spending less. For me, that really goes back to something Brian Cornell was talking about in a call there, where consumers just continue to spend very cautiously, most notably in discretionary categories. That's a problem for Target, because if we compare something like a Target to a Walmart, they're very similar, but they are a little bit different.

I think Target doesn't necessarily benefit from the groceries side of things like a Walmart would. So when we hear about headwinds in discretionary categories, that's going to be a really big problem for Target. The other thing that they really suffered from, you remember we've been talking about the dock workers strike over the last several months. That was short-lived. But it was something that actually could have gone on longer than it really did. The thing is Target prepared for that by bringing a lot of inventory in. They really stocked their shelves in order to make sure they didn't witness shortages. Ultimately, what that ended up in was just a little bit of bloke there. Brian Cornell, again, he referred to this idea that they were a little bit fuller than usual and they just don't operate so well when they're as full as they are or when they have as much inventory as they do. I think that ultimately played out in the numbers. I mean, listen, Target they're dealing with some serious competition here in this big retail space. You're talking about companies like Walmart, Costco, and whatnot, and certainly Target's feeling the pressure.

Dylan Lewis: Let's talk about that competitive landscape a little bit, because if you were to focus just on Target, you would have a very specific view of the consumer and what's going on here. But Emily, over at Walmart, we don't necessarily see it playing out the same way.

Emily Flippen: No. In fact, you'd wonder if these two companies were operating in the same environment where Target stumbled, Walmart is just running straight ahead. You'll notice that traffic growth is only marginally better for Walmart. I think they had around 3% traffic growth versus 2% traffic growth for Target in the quarter. But same store sales growth is really where Walmart is starting to shine. Their same store sales growth in the quarter was above 5%. If you compare that to Target, Target was under half a percent. So incredible business there for Walmart, but I do think that just these numbers alone don't really paint the right story.

Now, obviously, Walmart is attracting higher earners who are a little bit more cost conscious. Inflation is obviously on everybody's minds. People are still feeling the pain and Walmart noted that households making six figures or above, were responsible for three quarters of their customer gains over the course of the past quarter. So you can see how that would theoretically steal from customers that would otherwise go to Target. But I'm still not convinced that Target has some systematic issue here. This is what we always see between these two businesses. When people feel cash strapped, they trade down to Walmart and Walmart gets the benefit of having a third party e-commerce site of having healthcare. The sales of GLP-1 drugs, for instance, were beneficial to Walmart in a way they weren't for Target's. All of these other businesses that make them look good when the environment and the economy is a bit tighter. First is Target has a lot of discretionary items.

That's typically their spent in merchandising for Target has historically been strong. So the fact that Targets tends to do better in expansionary environments, I think, should not be loss on our listeners because this quarter, in my opinion, is not riding off Target for dead. They do have their job cut out for them, but I do think the holiday sales could be surprisingly where they shine.

Dylan Lewis: You're right. It is officially Mariah Carey season. We are talking holiday sales. It is holiday season and that's top of mind for a lot of people. When you look at the results together Jason, what do you think they're saying about the expectations we should have for retail as we head into that all important Q4?

Jason Moser: Well, certainly the holiday season is a big time of year for everyone. I think when you look at something like a Walmart versus a Target, I mean, one of the things that comes to mind here, is just the advantage of scale. When you think about Walmart, Walmart is basically 10 times the market cap of Target and it's basically seven times the sales of Target. Scale really does matter when it comes to this line of work, obviously, we see Walmart benefit from grocery. But again, I think the common theme, the thread, regardless of the companies, they're all talking about this cautious consumer.

The consumer just continues to spend very cautiously. Even more so, consumers are looking across platforms to find deals. So they'll go to a Walmart and then they'll shop around or to a Target or to an Amazon or wherever else it may be in order to see if they can find a good deal. So I do think we will see that cautious consumer theme continue to play out here over the course of the holiday season.

Dylan Lewis: This is something that's not only coming for the big box companies, we are seeing it show up retailers across the industry. Moving us up market just a little bit, we have fresh earnings from Williams-Sonoma this week. Emily, if you showed me the results and then asked me how I thought the market would react to these results, I would not have guessed that shares would be up 20% after the report.

Emily Flippen: Absolutely incredible reaction to Williams-Sonoma's quarter. I mean, good luck trying to reconcile the narrative we just painted with Walmart and Target with the share price results for business like Williams-Sonoma. But I will just quickly mention, while Williams-Sonoma, if anybody is unaware, owns a host of brands that tend to be a bit more high end. So it doesn't really make sense, then. Why are shares up 20 plus percent if we're all not purchasing things and going to Walmart instead, it's all in the expectations.

I mean, expectations for Williams-Sonoma have been persistently low for a while now. This quarter saw comps only decline 3%. Now, I know you're thinking, 3% decline in comps? That sounds awful. There's been a 10% contraction in revenue, total revenue over the course of the past year. But all of this represents a slowdown in the negative growth, which I guess is a good thing for investors. To give credit where credit is due obviously, I'm taking some shots here at Williams-Sonoma. They are still positive in terms of their cash flow and they're using that cash flow to buy back shares. Their bottom line tends to grow faster than their top. So actually, earnings per share did grow in the quarter. So it's not like this business is completely going into nothing. They also pay a pretty well covered dividend, but you still have to ask yourself, what is the future for Williams-Sonoma? Where is the place in this world? Because if the, I guess, concerning purchasing patterns of Americans continue, I think Williams-Sonoma might have a Target in front of them, literally, in terms of their next quarter.

Dylan Lewis: For the shareholder perspective, a little bit less the consumer perspective, there was a period where Williams-Sonoma, I think, based on those expectations, was down below ten times earnings. It was very cheap on a historic basis. We are now looking at a company that is well above 20 times earning, much more in the zone that it tends to trade in and yet we are not seeing top line. We are seeing that negative growth rate slowing, Emily. Is it a bit of a watch out below type moment for Williams-Sonoma?

Emily Flippen: I should really knock on wood when I say this. I'm inclined to say yes, and interestingly enough, it's not because I actually think the business is doomed, I actually think they have a fair amount of opportunity in front of them. They play it correctly. But I'm concerned about their investments in e-commerce. These aren't brands that have naturally transitioned to an e-commerce model and the fact that we're sitting here, it's almost 2025. Talking about their need to move to an omnichannel approach is absolutely mind boggling to me because this business, in my opinion, is behind on the infrastructure and digital investments they needed to have made to this point.

I think if they're going to keep these brands competitive, that's going to require a fair amount of CapX in front of them, that it's possible the market's not pricing in. Interestingly enough, that's my main concern to them. How are they going to meet the consumers where they are today? Because I don't know they have so far.

Dylan Lewis: Coming up after the break, we've got tech earnings, including the one we've all been waiting for in NVIDIA. Stay right here. You're listening to Motley Fool Money.

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Dylan Lewis: Welcome back to Motley Fool Money. I'm Dylan Lewis. Here on air with Emily Flippen and Jason Moser. We are right back on the earnings beat. And we've gotten used to some huge market reactions from NVIDIA's results over the last year. Guys, I'm amazed to say it. But this wasn't even the lead story for us this week. Jason, are we now in NVIDIA normal when it comes to some of these earnings reports?

Jason Moser: I like that perspective there, NVIDIA normal. This is a 3.5 trillion dollar company at this point. I mean, these things just don't keep growing forever. Now, what that said, I mean, NVIDIA just remains a company that's in a terrific position. Tech is in high demand. NVIDIA products are in high demand and supply just isn't able to keep up. So when those are the case, I mean, hey, listen, economics work out very well for you. But I mean, the numbers are very encouraging. Revenue of $35.1 billion. It was up 17%, sequentially up 94% from a year ago. When we think of NVIDIA, clearly, we're thinking of AI, first and foremost. I think in regard to AI, the primary focus there is on data center and data center revenue of $30.8 billion dollars. That was up 17% from a quarter ago, but up 112% from a year ago.

Cloud service providers remain such a massive part of that performance. They said, I think the Cloud service providers were approximately half of data center sales with that revenue up more than two times from a year ago. Now, I mean, it's not just data center. I mean, obviously, NVIDIA does other things very well. Gaming revenue was up 15% from a year ago. We saw a professional visualization that was up 17% from a year ago. Then even automotive revenue performed very well. It was up 72% from a year ago. I think it's status quo for this business. They just keep doing what we all expect them to do. The Blackwell technology continues to do very well. Demand, they said, in the call, "That demand is staggering and the hopper demand, I think, is going to be what drives this business at least over the next several quarters." But ultimately, they're guiding for 37.5 billion dollar in revenue for this coming quarter. That would represent growth of about 70% from a year ago. So again, just a company that continues to present just amazing growth numbers.

Emily Flippen: I always can't help but think about the amount of pressure that Jin Zen Wang must be under when running NVIDIA. It's actually almost becoming a concern for me as an investor, when I see quarter after quarter of consistent marginal earnings beats from a business, especially of this size, because the pressure to beat earnings now moving forward for NVIDIA and all of the world's eyes on them as what has now become the operating system of the world, that is a risk factor that I actually think we're starting to need to incorporate into our expectations moving forward.

Dylan Lewis: These are the problems that you have when you're growing only 70%, only 94%.

Jason Moser: If somebody is going to say, hey, Jason, what would you advise the CEO of NVIDIA to do? I can't give them much advice, but you know what? I think I would start getting in the business of sandbagging, set expectations even lower because, man, I'll tell you, the world is expecting the world from this company.

Dylan Lewis: That's a free tip there, courtesy of Jason Moser. Saying in the lane of tech, we have some fresh results from Snowflake this week and Emily shares up 30% after the report. Seemed like the market was pretty happy with what the company had.

Emily Flippen: Granted, I do think similar to Williams-Sonoma, although entirely dissimilar to Williams-Sonoma in about a million dollars other ways, the expectations for Snowflake were a bit lower heading into this earnings report. So when they came out with nearly 30% sales growth and then remaining performance obligation growth of like 55%, that's effectively their backlog. So business is accelerating. There was just so much to like in this quarter, especially because for so many different tech businesses, as companies are spending on NVIDIA and AI and such, the question is, how does Snowflake continue to grow its customer base? They're doing a great job proving that they can continue. I do think that Snowflake's platform is going to increasingly become table stakes for enterprises across the globe. They're proving that out. But I can't help. I'm sorry. I have to say it, not to be the pessimist in the room, but the stock based compensation here is out of control and it has not slowed down. This is a maturing company and they're still spending more than a third of their total revenue on stock based compensation. It's padding their cash flow. If I see one more adjusted number out of this management team, my head just might explode.

Dylan Lewis: [laughs] Jason, are you going to pile on or are you going to take the other side of that one?

Jason Moser: Well, I'm not going to take the other side. I think she makes a great point. I think it's something worth keeping an eye on for all investors. Another company that stands out to me, I thought about this because I was putting together some notes recently on Cloudflare. Cloudflare performance has been tremendous here over the last several years business wise. But when you look at the stock based compensation, that has represented the lion's share of operating cash flow. If you even look over the last 12 months, it really has been most of operating cash flow. Now, it's worth noting that is starting to pivot. We're starting to see that change. I think for investors, that's just something to keep an eye on. It's one thing for early start ups for businesses that are just getting involved or getting established. We expect that. But as they mature, you definitely want to see those numbers pivot. At SBC, you want to see that number come down.

Dylan Lewis: If you're going to stick with the optimistic tone a little bit, there is an AI horn to toot for Snowflake. In addition to earnings, they announced a partnership with Anthropic who's the owner of the Claude Large Language Model . They'll be bringing those models to Snowflake on AWS. Emily, this is LLMs in the Cloud, very in the weeds. Give me a hand. What does the average investor need to know with a development like this?

Emily Flippen: I love this. This question is a huge question. I think we're at a precipice right now, which is, are we going to go with one single giant LLM that does everything or lots of tailored LLMs that do lots of little things. I think Snowflake is very much in the second group of that. I love seeing this partnership because it shouldn't be, at least for the time being too capital intensive for this company. So it's a low upfront cost with a high opportunity to deepen engagement with their customers and generate revenue from the partnership alone. So I think it's smart. I think we're headed to the latter, but we're not writing off the former. It's still possible. If that were to happen, Snowflake would need to iterate.

Dylan Lewis: Wrapping us up on the earnings beat. We also had results from cybersecurity firm Palo Alto Networks this week, a bit of a head fake as the market reacted to the results, we saw what looked like a pretty downbeat reaction, only to recover and wind up up for the week. Is that encouragement from the company's guidance? Some processing on the earnings side? What were you seeing, Emily?

Emily Flippen: You can tell that management was disappointed with the market's response because they've been in the process of transforming their business, trying to get away from being just a firewall provider to truly being this platform. They believed this quarter with 14% sales growth, with even faster services growth. So lots of software, annualized recurring revenue growth here that is great from their core customers. They feel like this was a testament to the success of an initiative they launched earlier this year that resulted in a lack of fanfare from the market. I still think it's maybe too early to be taking the victory lap. Platformization is the standard. They're not the first ones to the game, despite management's insistence that everybody is copying them and they were the first. I'm pretty sure a few companies beat it to the punch there. But I do think this is great to see that they are growing ARR per customer and acquiring larger customers at an increasingly expedited pace. All of those directions pointing in the right way. Plus, a rising tide lifts all boats in the cybersecurity industry.

Dylan Lewis: Is platformization a new buzzword we need to be watching out for in company earnings calls? This one we need [inaudible]

Emily Flippen: Palo Alto, certainly watching out for this. They said it was used 50 times more frequently this year versus last, I'm like, why are you collecting that data? What are you doing?

Dylan Lewis: You got to have it handy just in case. Emily, Jason, we're going to see you guys a little bit later in the show. Up next, NVIDIA, not the only company grabbing AI headlines. Adobe is at the forefront of how a lot of end users interact with technology. We hear from their CFO Dan Durn about the company's approach to developing and monetizing AI. Stay right here. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. I'm Dylan Lewis. With AI front and center in 2024, we wanted to hear from the leaders in this space about how they're building tools and the frameworks they're using for allocating resources to the technology. This week, Adobe's CFO Dan Durn joined me to talk through the digital shift the company continues to see, Adobe's creator friendly approach to AI and how we want shareholders to grade the company's efforts. I'm excited to be talking with you because Adobe is probably one of the companies that is most at the forefront of so many major trends right now that the market is focused on. Heavy digital presence. You guys are in the AI conversation and really leading what's going on in that space, as well. Before we get too deep into anything, I'm just curious. What is the atmosphere like at the company right now?

Dan Durn: It's a great time to be at the company. I think the best place to start is maybe explain a little bit about who we are. We're the creative digital content company with our creative cloud business. We're the digital document and digital workflow business with our document Cloud business, and we're the digital interface between a company and its customers with our digital experience business. Against the backdrop of this pivot we see happening in the global economy, where global economy is moving from global economic growth, being driven by oil and gas for the better part of a century to increasingly being driven by digital content and data.

I call it digitalization of the global economy against the backdrop of digital content and data fueling global economic growth. Any one of those businesses that we have would be a great company. Having all three of those businesses under one roof, I think, makes us a special company. I think there's a strong sense of the moment inside of the company, there's a vibrancy, there's an energy. It's palpable. You can feel it. It's a great time to be at the company at this moment.

Dylan Lewis: I think one of the main things that people are focused on with digitalization and tech right now is artificial intelligence. Why don't we talk a little bit about? I think there are some folks who look at your company and say, Adobe is probably one of the companies most poised to benefit from the proliferation of AI and Gen AI. There are also some folks who think, this is a little bit of a threat to a business that has had really clear ownership of a space for a long time. How are you guys approaching that market?

Dan Durn: Generative AI is this incredible opportunity that we have in front of us. When I think about the mission of who we are as a company, we're going to change the world through digital experiences. When I think about AI and generative AI, it only expands the three massive opportunities that the company is exposed to. We're going to unleash creativity for all. We're going to accelerate document productivity, and we're going to power digital businesses. AI only expands those three massive opportunities, and I can't think of a better company to be at that leverages this technology again to fundamentally change how people live their lives and also how companies compete in their markets. It's a great time to be at Adobe.

Dylan Lewis: You're talking about expanding there and I've heard the thought that things like generative AI could take a lot of the creative tools that you guys make available and make them more accessible to people who have less technical skills. Think about this conversation that we're having right now. Our engineer will be editing this in software that I'm not well versed in. But there are probably a lot of people who have creative ambition but maybe don't have the technical skill set yet. Is that a pathway that you see for new customers or maybe meeting some markets that you're not currently meeting?

Dan Durn: Absolutely, that's going to be a byproduct of the technology we see being increasingly adopted out in the market. But I think it's even broader than that. But let's start with that democratization of access to the creativity process. I think we're in the golden era of creativity. Creativity is no longer just a process that's accessible to the creative pros in this world. These technologies that we're increasingly are adopting are lowering the barrier to entry for a broad cross section of people to now be successful in the creative process. There's a democratization of creativity that is underway. When I think about the creative process, up till now, the most important and valuable skill or the commodity that a creative professional has is their time.

What is the surface area of ideation they can explore? Before they find that spark of magic that they take further in the creative process and really bring to life what is in their mind's eye into the digital world, these technologies are now going to just make that ideation, that exploration far more expansive. Creativity is a uniquely human characteristic. Ingenuity, uniquely human characteristic. Generative AI isn't going to replace human ingenuity and creativity. It's going to augment it. It's going to amplify it. It's going to make the creative people, the creative participants even more productive than they've been in the past and they're going to find that spark of imagination faster and in higher quality ways and then have more time to bring it to life in the digital world. I get really excited about the pervasiveness of these technologies and the way they have to potentially amplify and augment that uniquely human characteristic called creativity.

Dylan Lewis: When we hit these inflection points, there tends to be a tension between being first in this market that has a lot of green space and wanting to make sure that you are being mindful of the legal ethical considerations, particularly with something like AI generated content. How are you guys balancing that with what you develop and roll out to users as products or as features or tools within your software?

Dan Durn: This is where it's really great to be at a company like Adobe. We take our responsibility to the community very seriously, and we've got a differentiated approach to how we're bringing these technologies to life. We're going to do it in a responsible, commercially safe way. What do I mean by that? If we take a look at the AI stack, there's three elements to the AI stack. There's data, there's models and then there's the interfaces that our customers know and love that defines their day to day workflows. We're a participant and a leader in each of those three elements. From a data standpoint, we don't train on our customers' data. We only train on data that we have IP rights to, and we compensate the contributors of that data to our model training.

That's a very differentiated approach versus what others are doing. When you think about the models, we've got decades of experience that give us real differentiation in the market when you talk about things like imaging, design, vector, video, and so where we can differentiate ourselves based on those decades of experience, we're going to produce first class, world class models. But again, we're going to do it in a responsible way. We're co-founder of initiative called content authenticity, where we've created the baseline open source technology around content credentials. Our tools automatically embed these content credentials into the content that's produced. It's like a digital nutrition label. Those that consume the content can see where it came from and can trust the veracity of the content.

Being a leader in building models and bringing them to life in a commercially responsible way, I think is really important. When we think about IP protection, when we think about content authenticity, when we think about digital nutrition labels, and we think about natively and deeply embedding these technologies again, into the surfaces that our customers know and love and defines their day to day work product. They're more likely to adopt these technologies knowing that they're safe and respectful of the ecosystem. We don't scrape data. We don't train on our customers' data. We don't infringe on other people's IP, and we indemnify our customers for the safe use of the models. Our approach is very differentiated in the market, and, again, it's great to be at Adobe and know that you've got a very ethical, responsible market participant at a time of a major inflection like this.

Dylan Lewis: One of the things I really wanted to get your take on was that there's this question right now out in the market, I think, about a lot of AI spend, where we know at some point we'll need to see return materialize, both for end customers and for companies that are heavily investing in AI applications. How are you guys thinking about the amount of leash that you want to give projects internally, knowing that there will be a pay the piper type moment for some of this stuff?

Dan Durn: Here's the, and I'll talk out of both sides of my mouth on this for a second, because I sit in a unique seat inside of a company where I have to have that spark of imagination to work at a great company like Adobe that is capable of innovating and doing great things, but you got to overlay discipline in the process. The natural tension and balance between those two concepts is really where the magic comes to life within technology companies. Innovation is our lifeblood. We need innovation.

The industry defining categories, the industry defining platforms, the products our customers know and love, and the feature sets, the rich feature sets that make them successful is really why our customers keep coming back to the Adobe ecosystem. The way in which we do that, the discipline we apply is really important. What I'll often say in an environment like this where there are so many interesting things to apply our attention and resources to. A company like Adobe, there isn't anything we can't do. We've got the customer relationships, the product portfolio, the industry defining platforms and products, the geographic distribution and footprint, the financial performance. I don't say this arrogantly, but there isn't anything we can't do given who we are as a company, except one thing, and that's everything. Let's prioritize. Let's think very clearly about what is going to make our customers successful. Let's narrow the aperture around those must win initiatives, and then let's sharpen the execution crispness around them. What happens in a moment like this is velocity of innovation will go up, and execution crispness will go up this is what you see from Adobe right now. I think our innovation engine, it's second to none, but it's moving with a velocity that's probably faster than at any point in the company's history.

I really love what I see in terms of the velocity, the innovation, and the execution out of the company. Really proud of the hard work and what this team is doing. Companies that will get distracted by shiny objects in this environment, try to do too much, and then you see the execution crispness atrophy. Right at a moment when a company should be fast, they become slow. This is the real danger in an environment like this. While the spark of imagination is lit and what the possibilities entail, it is an amazing time to be at Adobe, but we're going to be disciplined. We're going to have a very clear sense of prioritization, and we're going to invest and execute against the most meaningful opportunities and make sure we have a velocity with the way in which we execute right now.

Dylan Lewis: I guess on that, you're talking to an audience here at the fool who follows the company, and I know there are a lot of people who will listen to this that own the stock. What's the rubric that you'd like to be graded on when it comes to the development and the commercialization of AI? You may have touched on some of these things in some of your answers already, but I'm curious, are there any specific things you think, this is really our target here, and this is the way we want shareholders to be looking at our plans in this space?

Dan Durn: Well, ultimately, I think it comes down to having a customer centric approach and making your customers successful. If you bring this innovation to life in a customer centric way and make them successful, you see the simultaneous benefits of revenue growth. Bottom line profitability and the cash flow that's derived from that equation. Ultimately, I'd like to see that customer success manifest itself in the top line growth and bottom line profitability of the company. That's the ultimate proof point that we've gotten it right with our customers. All at the same time, doing it in a commercially safe way and a responsible way that's respectful of the community of creators out there that we serve and the employees who have a very strong ethical underpinning. Being responsible while driving customer success is a really powerful combination.

Dylan Lewis: Listeners, if you've got someone we should interview for the show, let us know. Shoot us a note at radio at fool.com. Coming up next, Emily Flippen and Jason Moser are back with some 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, so don't sell anything based solely on what you hear. All personal finance content follows the Motley Fools editorial standards and is not approved by advertisers. TMF only picks products it personally recommend a friends like you, and we are back. I am Dylan Lewis, joined again by Emily Flippen and Jason Moser. As we tape, we are just a few short days before Thanksgiving. Before we get over to our usual radar stock segment in observance of the holiday, I need to ask, what are your radar plates for Thanksgiving dinner? Jason, I know you are a foodie. You are Mr. McCormick. What are you looking forward to eating?

Jason Moser: Well, listen, I'm going to spatchcock the turkey on the Trager. We're going to have some good smoked turkey there. Listeners know that I love peanut butter stuffing, but the problem with spatchcock turkey is you can't really do that. Another tip, fried okra. I know that seems like a Southern summer dish, but it works very well for Thanksgiving.

Dylan Lewis: I'm excited. That sounds pretty good. I might have to stop by your house. Emily, what are you looking forward to?

Emily Flippen: Well, there's one dish that I love so much that I actually don't allow myself to make it any other point of the year because I have no self control. It is like this cranberry dip that you pour over cream cheese and use crackers to dip it. It's a side dish, but it is incredible. I'm sure there's a million recipes out there for it, but I can only have it this once, so that's the thing I'm looking forward to the most.

Dylan Lewis: Hey, you have to celebrate the holiday in traditional form. Whatever that is for you, you got to find it, you got to make space for it.

Emily Flippen: Exactly.

Dylan Lewis: Let's get over to stocks on our radar. I'm here by the classic Rick Engel is going to hit you with the question. Jason, you're up first. What are you looking at this week?

Jason Moser: Well, just C3 AI., a company we've talked about before on this show, Tickers AI. It was a heck of a week for the stock community, it's up around 30 percent on news that they have expanded their partnership with Microsoft in order to accelerate enterprise AI adoption. As a reminder C3 AI, it's an enterprise AI software company. They ultimately provide a platform that enables their customers to design, develop and operate enterprise AI applications at scale. While there are still some questions, I think in regard to how AI is ultimately going to impact us at the consumer level, it does feel like there are a lot of opportunities there on the enterprise side that really does play right into C3's wheelhouse. It's worth noting this is not new news in the sense that these companies have been working together for a while, but it's encouraging to see that they've expanded their relationship. It does really speak to the value proposition that C3 holds in that value chain. I think it could bode well for its future.

Dylan Lewis: Rick, a question or a comment about C3 AI.

Rick Engdahl: C3 AI, ticker symbol AI. They make AI for companies who need AI. Is this a real company? This is a little on the nose for me.

Jason Moser: I was expecting a C3 PO question, Rick. I'm going to defer to answer your question later.

Dylan Lewis: Seems legit, Rick. I don't know. That was a total non-answer. Emily, what's on your radar this week?

Emily Flippen: Tesla's actually on my radar this week, and I've been spending a lot of times spinning my wheels about the impact that President elect Trump's policies may have on the company, on the good hand, they're talking about reducing regulations for the cyber cab. On the other side, I think removing the consumer tax credit may hurt EV adoption, but even more concerningly, over a quarter of Tesla's operating profit is generated from the sale of tax credits to other vehicle manufacturers, and I have this lingering fear that removing the consumer tax credit may incentivize the government and states to remove their other tax credits, which actually maybe could hurt Tesla. I'm probably throwing this out of proportion, but it's on my radar.

Dylan Lewis: Rick, a question or a comment about Tesla?

Rick Engdahl: Any concern that Elon's overcommitted? He's got a lot going on, right?

Emily Flippen: I think the more overcommitted, the better.

Dylan Lewis: He just runs a few companies and does a couple of different things. Rick, which one's going on your watch list this week?

Rick Engdahl: What was the first one again? 3D something. C3PL.

Dylan Lewis: The AI one. It's say fete. I think it's where the market is these days. Emily Flippen, Jason Moser, thank you for coming and bringing your radar stocks. Let's go to do it for this week's fool for money radio show, shows mixed by Rick Engel. I'm Dylan Lewis. Thanks for listening. See you next time.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dylan Lewis has no position in any of the stocks mentioned. Emily Flippen, CFA has no position in any of the stocks mentioned. Jason Moser has positions in Adobe, Amazon, C3.ai, and McCormick. Rick Engdahl has positions in Adobe, Amazon, Costco Wholesale, McCormick, Microsoft, Nvidia, Palo Alto Networks, Snowflake, Target, and Tesla. The Motley Fool has positions in and recommends Adobe, Amazon, Costco Wholesale, Microsoft, Nvidia, Snowflake, Target, Tesla, Walmart, and Williams-Sonoma. The Motley Fool recommends C3.ai, McCormick, and Palo Alto Networks and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.