In this podcast, Motley Fool host Anand Chokkavelu and contributors Jason Hall and Matt Frankel discuss:

• AI stocks in the data center space (including CoreWeave).
• Winners and losers in energy and solar from Trump's "big, beautiful bill."
• Ranking the intellectual property of Warner Bros. Discovery, Comcast, Disney, and Netflix.
• Prime Day and other made-up holidays.
• Stocks to watch.

And Dave Schaeffer, founder and CEO of Cogent Communications, talks with Motley Fool analysts Asit Sharma and Sanmeet Deo about how Cogent's deals with customers like Netflix and Meta Platforms work and what keeps him awake at night.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,053%* — a market-crushing outperformance compared to 180% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

See the stocks »

*Stock Advisor returns as of July 14, 2025

This podcast was recorded on July 11, 2025.

Anand Chokkavelu: Yes, we're talking all kinds of stocks. This week's Motley Fool Money Radio Show starts now. It's the Motley Fool Money Radio Show. I'm Anand Chokkavelu. Joining me are two of my favorite fools, Jason Hall and Matt Frankel. Today, we'll talk about stock market winners and losers from the Big Beautiful Bill. We'll pit Superman versus the Hulk, and we'll of course debate stocks on our radar. But first, we'll discuss whether there's an AI opportunity in investing in data centers. Upstart data center company, CoreWeave, again made news this week this time for announcing the purchase of Core Scientific for $9 billion. This allows it to add infrastructure to consolidate vertically as it seeks to gain market share among AI and high performance computing customers. CoreWeave is just the tip of the data center iceberg. Matt, what categories of data center opportunities are out there?

Matt Frankel: First, you have hyper scalers. These are companies like AWS, Microsoft, Desha. They are companies that operate the large scale data centers. They offer computing and storage infrastructures to customers. As Anand put it, there's CoreWeave, which is one of the least understood recent IPOs that I know. [laughs] They rent out GPU data center infrastructures to customers. It's not always practical for companies to invest in all of NVIDIA's latest chips on their own, for example. That's really what they do. There's the REITs still, Digital Realty and Equinix are the two big ones. They own the data centers. CoreWeave is actually a big Digital Realty tenant. Then there's power generation. I know Jason's going to talk about this a little bit later in the show, but data centers consume a lot of power, and it's growing at an exponential pace. These chips that NVIDIA produces, they are power drains. Nuclear, especially, could be a big part of the solution, but solar and other renewables are also in there.

Jason Hall: We're definitely in the land grab phase of the infrastructure buildout for accelerated computing. I think accelerated computing is maybe a better description than just AI. We talk about the Cloud REIT large. As we see more of the companies involved start to monetize things like AI agents at scale. I think that's where these investments are going to pay off.

Anand Chokkavelu: Big question. Do any of these categories interest you all for investing?

Matt Frankel: Well, I'm well known as being the real estate guy at the Motley Fool, so it shouldn't be a big surprise, but Digital Realty is my second largest and my second longest running REIT investment in my portfolio. I'm an Amazon shareholder, and I know that's not their only business, but AWS is the primary reason I own it. I don't own CoreWeave yet, and I think the stock is a little bit pricey, to say the least. But the more I read about it, the more I'm intrigued by the company. As I mentioned, they're a big tenant of Digital Realty, so I have some exposure already.

Jason Hall: The things about CoreWeave that concern me is the stock is definitely expensive. But if the opportunity is even close to as large as we think, it could still work out, but they're going to need a lot of money to pay for what they're trying to do and depending on how much of that is from raising debt versus secondary offerings of shares, there's still a lot of questions there. But, Anand, you've given me a chance to talk about Brookfield here. [laughs] How do I not take that opportunity? But I do think that there's a couple of Brookfield entities that are positioned really well here. I want to talk about the providing the energy part of it. Brookfield Renewable is really in the driver seat here as a global provider of renewable energy on multi decade contracts. It is not just accelerated computing, it's the energy transition REIT large. We've already seen it strike big deals with Microsoft and others to provide renewable power on those multi decade contracts. The dividend is really attractive, too. BEP, that's the partnership, yields over 5%. The corporate shares BEPC, it yields about 4.5%. Since mid 2020, that's when Brookfield Renewable rolled the corporation part out and restructured its dividend. The payouts been increased almost 30%. There's a lot to like here. Beyond the yield, I think it's primed to be a total return dynamo over the next decade. If you don't want to own a company that's in the energy part, you want to own the infrastructure, just take a look at sister company Brookfield Infrastructure. The tickers there are BIP and BIPC.

Anand Chokkavelu: Of course, these aren't the only AI stocks out there. Hi, NVIDIA. Do any other areas of AI interest you guys?

Matt Frankel: I love that. You can't talk about AI and data centers without talking about the chipmakers. NVIDIA just hit $4 trillion today as the day we're recording this. NVIDIA is an amazing business, and it has more room to grow than people think just in the data center accelerator space, which is why they're getting so much attention for good reason. The market size is expected to roughly double over the next five years. That's not even to mention the opportunities they have in chips for autonomous vehicles, chips for gaming and more but I prefer AMD, which is often referred to as NVIDIA junior, but I don't think it should be. It's an incredibly well run company that's been a mistake to bet against in the past. As Intel found out the hard way, just having a dominant market share in an area of chip making is not always enough.

Jason Hall: An area of the market that I think could do really well some of the legacy enterprise software giants. I think there may be underappreciated winners from AI. I'll use Salesforce, ticker CRM as an example. It's really starting to get traction with things like it's data cloud and with AI agents. It's starting to sell. We're seeing really rapid uptake of those things and monetization. It has a benefit, an advantage over a lot of these AI start-ups that are just pure AI businesses. It's already a trusted integrated partner with hundreds of thousands of enterprises. It knows their business, it knows their challenges, regulations, opportunities and that credibility, I think, is an edge that we don't give enough credit to. We shouldn't underestimate switching costs, I guess, is what I'm really getting at. You look at Salesforce rates for about 21 times free cash flow and less than seven times sales. That's a really good opportunity. I think it equates to double digit returns if it can just grow revenue around 8-12% a year over the long term, which I think it can.

Anand Chokkavelu: We started to talk a bit about energy and the need for it with all this AI. Let's talk about the energy industry implications of the Big Beautiful Bill, which was signed into law last week. Jason, can you give us the summary of the energy portions?

Jason Hall: Summarizing anything's hard for me, but I'll try. I think the short version is the incentives for renewables, they're getting gutted, really. There's a 30% investment tax credit or ITC for short. The residential solar and battery systems portion of that had been in place to run through 2032 before gradually declining for a few years after that. That now expires. The systems have to be fully installed and commissioned by the end of this year. The commercial ITC for solar and wind projects was on a similar track, but now it expires at the end of 2027, but those projects must begin construction by July 4th of 2026 to qualify for that 30% tax credit. It also terminates the tax credit for new and used EVs, $7,500 for a new EV and up to 4,000 for a used EV. The purchase has to happen before September 30th of this year, so a couple of months. Lastly, it ends the US regulatory credits around vehicle emissions that automakers buy largely from Tesla. This is a significant and profitable revenue stream for EV makers that essentially is going away.

Matt Frankel: Jason, when you say renewables are being gutted, you're essentially referring to solar and wind, if I'm not mistaken. It's not gutting anything for nuclear power, correct?

Jason Hall: That's correct. These things you get are the pure renewables as we think of them.

Anand Chokkavelu: Let's put a fine point on this with specifics. Who are the relative winners and losers, Jason?

Jason Hall: This could be an hour long show, but I'll try to summarize it here. Thinking about the companies that are most directly affected, I think Canadian Solar, which is a large manufacturer of solar panels and energy storage, and they really largely target the utility market, but also residential is definitely a loser here. In the near term Sunrun, its business model is tied to these tax credits as an installer and to some degree, First Solar is also going to be affected. I don't think there's really any winners out of this when it comes to solar. But I think Enphase is probably still in a better position in the market may believe. Maybe First Solar as well. It's been through these battles before, and it has been a winner over the long term. If you look at wind, GE Vernova has been on a huge run. I love that business, but I don't love the stock right now. Tesla, I think maybe one of the bigger losers that investors haven't really considered. Last fiscal year, it earned 2.76 billion in revenue from regulatory credits. That's largely pure profit. Then there's also the loss of those EV tax credits for buyers. That might be offset from some incentives for US made autos that are part of the bill now that were part of the law, but I think this puts Tesla in a tougher spot. The tailwinds are not favorable for fossil fuels before this. This doesn't really change any of that. There's opportunities there, but not because of the law.

Matt Frankel: The reason I asked about nuclear a minute ago is because that's really what I see as the big winner here. I like some of the nuclear focused utility providers. Constellation Energy is one that comes to mind. One of their stated goals is to have the largest carbon free nuclear power fleet in the US by 2040. Jacob Solutions, they provide consulting and design services to the industry. Ticker symbol is J, so it's really easy to remember. They recently had some really big nuclear contract wins. I'm going to push back on Jason's Tesla as a big loser. One, they're American made cars. They qualify for that new auto loan interest deduction, so that could help offset what they're losing from the EV tax credits. They have a big energy storage business, and AI has not only giant power demands, but very variable power demands, and it's going to create a lot of need for large scale energy storage, and Tesla does that. I think they're worth watching.

Jason Hall: That's the one part of Tesla's business that's done extraordinarily well. Over the past few years, as the EV business has weakened, is that the battery business.

Anand Chokkavelu: Now quickly the big question, is solar still investable, Jason?

Jason Hall: I think so. We have a very US centric view, obviously, and the US is a massive important market for solar. But you look around the world and the regulatory environment is still largely favorable. I think if you're willing to write out plenty of volatility, that global opportunity is still really good. Businesses like Enphase, businesses like First Solar that have been through these battles before, and even a Canadian Solar, where it has a ton of projects that it's been funding to build on its books that the math just got changed for them in some big ways. The valuation is so cheap that I think that there's some opportunity there.

Matt Frankel: Taking a step back, the reason you have incentives for solar energy, for EVs, for all this, is because without them, they're not price competitive with the existing technologies. The gap has narrowed significantly, especially in solar over the past say 10 years as to the efficiency of the products themselves and just how much they cost. Eventually, solar is going to be able to stand on its own without incentives. But like Jason said, you have to be able to write out some volatility because that could be five years, that could be 10 years, that could be 20 years so eventually, it won't matter.

Anand Chokkavelu: After the break, we'll move from solar to something else that gets its power from the yellow sun. Stay right here. This is Motley Fool Money.

Welcome back to Motley Fool Money. I'm Anand Chokkavelu, here with Jason Hall and Matt Frankel. One of our Brothers Discovery's much anticipated latest reboot of Superman hits theaters on Friday. Hoping the Justice League can one day catch Disney's Marvel cinematic universe and hot on the heels of last week's Jurassic World Rebirth from Comcast. In honor of Summer movies, we're going to rank those three companies based on the value of their intellectual property. We'll throw in Netflix for good measure. Its headline this week was stating that half of its global audience now watches anime. Chokkavelu household certainly does with one piece. My kids have gotten me into it. For those unfamiliar, they have more episodes than the Simpsons. Matt, once again, your four choices are Warner Brothers Discovery. That includes the DC Universe, Superman, Wonder Woman, Green Lantern, Harry Potter, the Matrix, Looney Tunes, all our favorite HBO shows. You got Comcast with Shrek, Minions, Kung Fu Panda. You got Disney with Marvel, Star Wars, Pixar and Mickey Mouse. Finally, you got Netflix with things like Stranger Things, Bridgerton, Squid Game, newer Adam Sandler movies, and tons of niche content. Mentioned anime, you could argue whether that's niche content or not at this point. Whose intellectual property do you most value, Matt?

Matt Frankel: See, I said Disney. All four of these have excellent intellectual property, and I'll give you a more elaborate description there. In my household, you mentioned your household, how you have all these streaming things. We have a streaming service from all four of these. We have the Peacock service, which is a comcast product. We have HBO Max, which is a Warner Brothers discovery product. We have Disney Plus, and we have Netflix. Disney Plus also has Hulu attached to it. I ask myself, which is the least dispensable? I could cancel all the other ones before I'd be allowed to cancel Disney Plus for the other members of my household. Their film franchises are beyond compare. They have a much longer history of building intellectual property than all of these, especially in terms of valuables. Mickey Mouse is so old, it's not even intellectual property anymore. It's over 100-years-old, so I think it's actually in the public domain now. I have to say Disney, although it's a lot closer than I would have thought a few years ago.

Jason Hall: Yeah, if you had have asked me a few years ago, I absolutely would have said Disney, but I'm going to give the advantage to Netflix here. Let me contextualize that. I think the total value of Disney's IP is probably higher, but Netflix's ability to monetize it more effectively all over the world, I think, is even better than Disney's. I don't think any of these businesses in their studios have done a better job of making content that's relevant in more markets around the world than Netflix does. Let's be honest, I was able to watch Happy Gilmore with my eight year old son this weekend and I watched that on Netflix, that's bridging generations right there.

Anand Chokkavelu: Three things. One, Chokkavelu household is very excited for Happy Gilmore, too. Even my wife is in on it. Two, the Steamboat Willie era, Mickey Mouse is free to the world. The other ones aren't. I'm glad I'm not the only one with way too many streaming services, Matt. Let's talk about Last Place. Who are you cutting first, Matt?

Matt Frankel: Well, all those streaming services are still less than I was paying for direct TV a few years ago, so I think I'm doing all right. For me, the last place, it was between Comcast and Warner Brothers Discovery, both of which have amazing intellectual property, just to show you what a tight race this is. Comcast has universal. I was just in Orlando, and the universal theme parks are massive down there. But I have to put Comcast in last place. Just because Warner Brothers, I think the HBO Max acquisition was such a big advantage for them. They have some of the most valuable television assets of all time. More people watch the sopranos now than they did when it was originally on TV. It's a very valuable valuable asset, Game of Thrones. All these HBO shows that are among the highest rated shows of all time are part of their library. In addition to their film studio and all the other assets that we can't name because it's not that long of a show. I'd have to give Comcast last place, although, like I said, there's a good argument to be made for most of these to be in the top one or two.

Jason Hall: Yeah, I think that's fair. I agree with Matt that Comcast is the Number 4 here. But I don't think that's a flaw. It's just the nature of its business. About two thirds of its business comes from its cable subscriptions and high speed Internet. It's built differently than these other companies. I think it's fine that it's a little bit smaller.

Anand Chokkavelu: I will say, just to defend Comcast a little. I was thinking about my parents live in Florida, and it's high time we bring my two boys to Disney World or something like that. Honestly, the Universal theme park, the new one with Nintendo, Mario and the Harry Potter realm, it's close. We might we might prefer that one, but just to give a little love to Comcast and Universal. Jason Hall and Matt Frankel, we'll see you a little bit later in the show, but up next, we'll talk to the founder of one of the top five networks in the world, so stick around. This is Motley Fool Money. [MUSIC].

Welcome back to Motley Fool Money. I'm Anand Chokkavelu. Dave Schaeffer is the founder and CEO of Internet Service Provider Cogent Communications. Believe it or not, Cogent's the seventh successful company Dave Schaeffer has founded. Shaffer joined Fool analysts Asit Sharma and Sanmeet Deo to discuss how it deals with customers like Netflix and Meta platforms work and what keeps him up at night.

Asit Sharma: Well, hello, fools. I am Asit Sharma and I'm joined by fellow analyst Sanmeet Deo today, and our guest is Dave Schaeffer. Dave is CEO of Cogent Communications. He's also the founder of this company founded in 1999. Dave has grown Cogent Communications into a global tier one Internet service provider. It's ranked as one of the top five networks in the world. Dave is also a serial entrepreneur. He's founded six successful businesses prior to Cogent, and foolishly, he's also one of the longest serving founder CEOs in the public markets. We're delighted to have him with us today. Dave Schaeffer, welcome.

Dave Schaeffer: Hey, well, thanks for that great introduction.

Asit Sharma: To get started, let's jump in. Dave, for our members who might be unfamiliar with the ISP or Internet service provider industry, can you just explain what Cogent does and how it makes money?

Dave Schaeffer: Yeah, sure. Cogent provides Internet access to customers and to other service providers. I think virtually everyone uses the Internet, but rarely understands how it operates. Cogent has a network of approximately 99,000 route miles of intercity fiber that circumnavigates the globe and serves six continents. We then have an additional 34,000 route miles of fiber in 292 markets in 57 countries around the world. That network is solely built for the purpose of delivering Internet connectivity. When a customer buys Internet access, what they are really buying are interfaced routed bit miles connected to other networks. If you tried to sell a customer that they would have no idea what you're talking about. The average bit on the public Internet travels about 2,800 miles. It goes through eight and a half unique routers and 2.4 networks between origin and destination. Coaching carries approximately 25% of the world's Internet traffic on its network and has more other networks connected directly to it than any other network.

Asit Sharma: Yours is a primary network. Oftentimes, we hear of middlemen carriers in between ourselves sending that bit. Let's say I'm chatting with Sanmeet over Slack, sending him some bits as we have been exchanging through the day and him receiving that. But you are, I think we can think of Cogent as being the primary fiber that is the backbone of this information communication network, is that correct?

Dave Schaeffer: That is correct. We operate two very different customer segments, roughly 95% of our traffic, but only 37% of our revenue comes from selling to other service providers. We provide Internet connectivity to 8,200 access networks around the world and about 7,000 content generating businesses. Whether it be Bell Canada, British Telecom, China Telecom, Comcast or Cox. They could be customers of Cogent on the access side, where they aggregate literally billions of end users. Then on the other side, we sell connectivity to large content generating companies like Google, Amazon, Microsoft, and Meta, where they use us as their Internet provider. The second portion of Cogent's business is selling directly to end users. That represents about 63% of our revenues, but only approximately 5% of our total traffic. Cogent is an ISP, primarily in North America, where we connect to a billion square feet of office space, where we sell directly to end users. Then globally, we sell to multinational companies, oftentimes using last mile connections from third parties.

Asit Sharma: I always like to understand how exactly the companies I'm looking at make money. For example, for Netflix or Meta, or you pick a content provider, whoever it might be, when they work with you, explain that to me how they buy? Do they buy bandwidth in a package? Do they have a contract? How does that work? When they look to you to say, hey, we want to buy some bandwidth?

Dave Schaeffer: Yeah, so typically, we will provide them connections in multiple markets around the world. They will then have a minimum commitment level, and then above that, they pay on a metered basis. The way in which we bill is megabits per second at peak load over the course of the month. We bill at the 95th percentile, which means if you have a very spiky event that lasts less than 18 hours in a month, you don't pay for that incremental bandwidth but everything below that peak utilization, you pay a bill on a per megabit basis.

Dave Schaeffer: That is the way in which any service provider, whether it be an access network like Telkom South Africa, or a cable company like Rogers in Canada would buy from us. But for our corporate customers, the billing model is very different. For corporate customers, they typically buy in end user locations, not in data centers, and they are paying us a flat monthly fee for a fixed connection that is unmetered. I think of it as an all you can eat model.

Sanmeet Deo: There is a monthly recurring revenue that you get. It's just that with your network or your content customers, it could vary based on their usage. They could dial it up, dial it down, based on, like, this week, actually, they're dropping Squid Game, so they can anticipate they're going to need a lot of bandwidth versus maybe next month, their content late is a little lower, so they won't use up as much versus the corporate customers are paying more of a recurring, not based on volume. Is that accurate?

Dave Schaeffer: Is correct, Sanmeet. Virtually all of our revenue is predictable, even for those variable usage customers, there is oftentimes a very consistent pattern to their usage, and their bills do not vary by more than a couple percent month over month.

Sanmeet Deo: Dave, let's go on to looking at a review of recent performance. 2024 was a great year for Cogent. It crossed $1 billion in annual revenue. Can you just walk us through the highlights of your key business segments, wholesale, enterprise, net-centric? What drove the performance? Also did anything about the year surprise you as you went through it?

Dave Schaeffer: Two things. First of all our Internet based business represents 88% of our revenues across all three segments. We do derive about 12% of revenues from selling some adjacent services. Those being co location in our data center footprint. Optical transport or wavelength services and the leasing out of IPV4 addresses. We did generate about $1 billion in revenue in 2024 and 2024 was a year of significant transition for Cogent. Cogent had organically grown between 2005 and 2020 as a public company with no M&A at a compounded growth rate of 10.2% per year average over that period. We also were able to experience significant margin expansion during that period, where our EBITDA margins expanded at roughly 220 basis points per year over that same 15 year measurement period. When COVID hit, our corporate segment slowed materially because people were not going to offices, and as a result, Cogent's total growth rate had decreased to about 5% and our rate of margin expansion slowed to about 100 basis points. In May of '23, we acquired the former Sprint Long Distance Network, a Sprint Global Markets Group business from T-Mobile. That business was actually in decline and burning cash. In 2024, we significantly reduced that cash burn, and we were able to begin to repurpose some of the flow Sprint assets. In order to facilitate this transaction, T-Mobile paid us in cash over a 54 month period beginning in May of '23, $700 million. In 2024, a significant milestone for Cogent was our ability to take out much of that burn from that business and to actually accelerate the decline in that acquired business, as many of the products that were being sold or gross margin negative services.

Anand Chokkavelu: 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 is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. See our full advertising disclosure. Please check out our show notes. Up next, we've got stocks on our radar. Stay right here. You're listening to Motley Fool Money.

I'm Anand Chokkavelu, joined again by Jason Hall and Matt Frankel. This week's been Prime Day week invented out of thin air in 2015 to boost sales. It's almost literally become Christmas in July for Amazon, and to a lesser extent, all the imitating retailers. Got me wondering. Is this the greatest feat of something from nothing marketing we've seen? If not, what's competing with it, Jason?

Jason Hall: I think it's not even something from nothing. I think they stole this idea. Christmas in July has been around literally since the 1900. I think they're getting maybe a little bit too much credit for just being a really big retailer, smart enough to say, hey, we're doing a sale when there was nothing else going on, and people were like, oh, it's a big sale. Well, people kept coming, so it just gets bigger every single year.

Matt Frankel: Before e-commerce, Jason's right, remember the Sunday paper that had all the flyers from all the stores. They'd have their semi annual sales. The President's Day weekend sales were the ones I remember that were the biggest deals ever that really were just meant to invigorate sales in a historically slow time of year. But really, this concept has been applied over and over. Think of how many tourist destinations create random festivals in the worst months to go, like, weather wise. I used to live in Key West, Florida, and the biggest party of the year is called Fantasy Fest. It was created to invigorate tourism during hurricane season. It's a concept that's worked over and over, and this is a big one.

Anand Chokkavelu: Dan.

Dan Boyd: I just wanted to jump in here and mention Father's Day and Mother's Day. Surprised that you guys didn't mention those. We're all fathers here on the podcast, so I know that we enjoy Father's Day, but, like, come on. They're nothing. They were just created to sell stuff.

Anand Chokkavelu: You're not going to mention Valentine's Day, Mr. Grinch.

Dan Boyd: Valentine's Day has somewhat historical significance with all the St. Valentine's stuff. I didn't want to go too far into it in my grumpiness Anand, but I guess we can throw that one on the fire.

Anand Chokkavelu: Speaking of Singles Day in China. The Alibaba took that cemented in the '90s. I think less commercy, but then it became more commercy. Two other things, Sears' catalog. Let's not forget. A lot of times Sears really is the Amazon before Amazon we forget about it because we see it at its late phases. It wasn't the first catalog, Tiffany, Montgomery Ward, they beat it to the punch. But when it was going, it was called the Consumer Bible. Then on a smaller scale, I'll give one more. Just shout out to Spotify rapped. They do a wonderful job inventing a thing to get us more engaged. Let's get to the stocks on our radar. Our man behind the glass, who we just recently, Dan Boyd, is going to hit you with a question. We're more likely, historically, an amusing comment. Jason, you're up first. What are you looking at this week?

Jason Hall: How about Church and Dwight? Ticker C-H-D. I don't know if we give some of these legacy consumer brands companies enough talk. What's Church and Dwight? You've probably heard of Arm & Hammer baking soda. But they also own a lot of other retail brands. You might be familiar with Orajel, if you've ever had a sore tooth or you have a baby that kind of thing comes up. They own Trojan, which is another brand that people might be familiar with. But here's my personal. Right now, I have a cold. I'm living and functioning off of Zicam. That's a Church and Dwight product that's really getting me through. Over the long term, it's been a great investment. Over the past 10 years, the stocks returned about 10.5% in total returns. That's underperformed the market, but it's better than the market's long term average. I think there might be something there.

Anand Chokkavelu: Dan, a question about Church and Dwight?

Dan Boyd: Not really a question, Anand, but more of a comment. Jason, you forgot to mention OxiClean in the Church and Dwight product catalog here as a parent of a three-year-old and a nine month old laundry is a very important thing on our house, and I don't think we could survive without that OxiClean.

Jason Hall: I will raise your three-year-old and nine month old with an eight and a half year old who plays soccer. My house runs on that stuff. I'm with you there.

Anand Chokkavelu: Matt, what's on your radar?

Matt Frankel: Well, now what's on my radar is the OxiClean that I have in the closet right there. But as far as the stock, I'd have to say SoFi. Ticker symbol S-O-F-I. Fantastic momentum. They've done a great job of creating capital white revenue streams in recent years. The growth is actually accelerating. They recently announced they're bringing crypto back to their platform now that the banks are allowed to do so. That's going to be a big driver. Not only crypto, they're going a step further. They're going to start bringing blockchain facilitated money transfers across border for free. They have lots of big plans. They recently started doing private equity investing for everybody. Guys like you and me can invest in companies like SpaceX and OpenAI that are pre IPO through SoFi's platform through venture funds. There's a lot going on in this business, and it's still a relatively small bank, and they aim to be a Top 10 bank within the next decade.

Anand Chokkavelu: Dan, question about SoFi.

Dan Boyd: Well, absolute F to name. SoFi, just terrible. I feel like smart people like them could have come up with something better, but private equity investing is very interesting, Matt, though a little scared to me without the reporting regulations that public companies have to do.

Matt Frankel: I do think it was a natural thing, though, now that all these companies are waiting longer than ever to go public. SpaceX is a massive business. OpenAI has a, $100 billion plus valuation. There's a lot to like there and a lot of potential.

Anand Chokkavelu: Dan, which company you're putting on your watch list, OxiClean or private equity stuff.

Dan Boyd: I'm going to go with Church and Dwight for some of that beautiful OxiClean.

Anand Chokkavelu: That's all for this week. 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. 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. Anand Chokkavelu, CFA has positions in Alphabet, Amazon, First Solar, Microsoft, Netflix, Salesforce, SoFi Technologies, Walt Disney, and Warner Bros. Discovery. Asit Sharma has positions in Amazon, Digital Realty Trust, Microsoft, Nvidia, Salesforce, Upstart, and Walt Disney. Dan Boyd has positions in Amazon and Walt Disney. Jason Hall has positions in Brookfield Asset Management, Brookfield Infrastructure, Brookfield Renewable, Enphase Energy, First Solar, Nvidia, SoFi Technologies, Upstart, and Walt Disney and has the following options: short January 2026 $27 calls on SoFi Technologies, short January 2027 $32.50 puts on Upstart, and short January 2027 $40 puts on Enphase Energy. Matt Frankel has positions in Amazon, Brookfield Asset Management, Digital Realty Trust, SoFi Technologies, Upstart, and Walt Disney and has the following options: short December 2025 $95 calls on Upstart. Sanmeet Deo has positions in Alphabet, Amazon, Netflix, and Tesla. The Motley Fool has positions in and recommends Alphabet, Amazon, Brookfield Asset Management, Constellation Energy, Digital Realty Trust, Equinix, First Solar, Meta Platforms, Microsoft, Netflix, Nvidia, Salesforce, Tesla, Upstart, Walt Disney, and Warner Bros. Discovery. The Motley Fool recommends Alibaba Group, Brookfield Renewable, Comcast, Enphase Energy, Ge Vernova, and T-Mobile US 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.

Brookfield Asset Management (NYSE: BAM) is an attractive dividend growth stock. You could also look at it as a desirable growth and income stock. The two stats backing that up are the above-market 3.1% yield and the huge 15% annual dividend growth rate that management is projecting out to the end of of the decade. What does that mean for investors? And what happens after 2030?

What does Brookfield Asset Management do?

Before looking at the dividend growth opportunity with Brookfield Asset Management, it is important to understand what the company does. It is a large Canadian asset manager with a historical focus on infrastructure. It has long invested on a global scale, as well, so it has a very broad investment universe. In recent years it has expanded the universe, too, adding a bond specialist to the mix and broadening its efforts in private equity.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Brookfield Asset Management operates across five different platforms: renewable power, infrastructure, real estate, credit, and private equity. It believes it is positioned to benefit in all of these business lines from key long-term trends, including the shift toward clean energy, the world becoming increasingly digital, and de-globalization. The goal is to increase the fee-bearing assets it manages from $550 billion to $1.1 trillion by the end of the decade.

As an asset manager, Brookfield Asset Management charges fees for managing other people's money. So growing fee-bearing assets will lead to higher revenues and earnings. If it hits its current targets, the company believes it can grow the dividend 15% a year through the end of 2030.

What will Brookfield Asset Management look like in 2030?

Assuming Brookfield Asset Management can live up to its dividend growth goal, which is not unreasonable, the dividend will grow from about $0.44 per share per quarter to $0.88. If the stock price remains the same in 2030 as it is today, the dividend yield would increase from 3.1% to 6.3%. If, as is more likely, the stock price increases as the dividend grows, the stock will rise from around $56 per share to $112 if the yield remains at the 3.1% level. But, in the price increase example, the yield on purchase price for an investor buying today would still be 6.3%!

That's great and should interest dividend growth as well as growth and income investors. But what happens over the five years after that? If the company can keep growing the dividend by 15%, which would be a very tall order, the dividend in 2035 would be $1.77 per share per quarter. That would suggest a yield on purchase price of 12.6% and a stock price of $224 per share if the market continued to afford the stock a 3.1% yield. Wow!

However, 15% dividend growth for a decade is a pretty aggressive expectation. What if the dividend growth is just half that rate after the first five years, slowing to 7.5% a year between 2031 and 2035? In that case the dividend will grow to $1.26 per share per quarter and the yield on purchase price would fall to "only" 9%. If the stock is still yielding 3.1% in 2035, the stock price based on the higher dividend would be around $160 per share. So it is still a very attractive outcome even if Brookfield Asset Management's growth slows materially in the back half of this 10-year outlook.

A lot depends on Brookfield Asset Management's execution

These are just estimates played out using a spreadsheet. Real life is always more complicated. Brookfield Asset Management's future is highly dependent on its ability to execute and, frankly, the ups and downs of Wall Street. However, if Brookfield Asset Management can live up to its lofty goals over the next five years, it is a very attractive dividend growth/growth and income stock today. And if it can do half as well over the five years after 2030 it will still be an attractive investment over that 10-year horizon.

Should you invest $1,000 in Brookfield Asset Management right now?

Before you buy stock in Brookfield Asset Management, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Asset Management wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $713,547!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $966,931!*

Now, it’s worth noting Stock Advisor’s total average return is 1,062% — a market-crushing outperformance compared to 177% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool recommends Brookfield Asset Management. The Motley Fool has a disclosure policy.

Brookfield Renewable Corp. (NYSE: BEPC) is a complex entity. It has sister units that trade as Brookfield Renewable Partners (NYSE: BEP), and both are run by another company, Brookfield Asset Management (NYSE: BAM).

But given the plans Brookfield Asset Management has for investing in clean energy, high-yielding Brookfield Renewable Corp. could set you up with a lifetime of reliable income.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Here's what you need to know before buying it.

What is Brookfield Renewable Corp.?

From a high-level view, Brookfield Renewable Corp. is a source of permanent capital for Brookfield Asset Management. So, too, is the sister unit, Brookfield Renewable Partners. In fact, they represent the exact same business and pay the exact same quarterly dividend amount. But Brookfield Renewable Corp.'s dividend yield is 4.7%, and Brookfield Renewable Partners' distribution yield is 5.8%.

How can these two Brookfield entities be the same but have different yields? That gets to the heart of the issue.

Brookfield Renewable Partners existed first, but as a partnership, many institutional investors couldn't buy it (institutional investors are often barred from buying partnerships by their investment mandates). So Brookfield Renewable Corp. was created to allow a larger pool of investors to buy into the Brookfield entity. The yield difference reflects the fact that the corporate share class is more popular than the partnership units.

And this all ties back to the fact that Brookfield Asset Management runs Brookfield Renewable. In either form, it is really just a way to invest alongside Brookfield Asset Management as it invests in clean energy infrastructure.

Infrastructure has long been the Canadian asset manager's specialty. Brookfield Renewable is valuable to Brookfield Asset Management because once it sells a unit or share, that unit or share continues to exist until it is bought back by Brookfield Renewable. In other words, the cash raised doesn't have to be repaid, like a bond would require.

That's a lot to work through, but it is important to understand as you think about buying Brookfield Renewable Corp. and its lofty 4.7% dividend yield.

What does Brookfield Renewable Corp. do?

With that foundation, it is time to examine the actual business of Brookfield Renewable. As its name implies, it owns renewable power assets. Its portfolio spans across solar, wind, hydroelectric, and battery storage. More recently, it added nuclear power to the equation.

It basically provides exposure to every kind of clean energy power source that is scalable. And it invests on a global scale, with operations in North America, South America, Europe, and Asia. Brookfield Renewable, in either corporate or partnership form, is basically a one-stop-shop for clean energy investing.

The dividend here has grown steadily over time as Brookfield Renewable's portfolio has grown. The goal is for annual dividend increases of between 5% and 9%. The long-term growth that backs those increases will come as Brookfield Renewable is used as a funding source to support Brookfield Asset Management's growth plans. And those plans include roughly doubling the asset manager's investment in clean energy between 2025 and 2030.

While it would be hard to suggest that growth is locked in, it seems highly likely that Brookfield Renewable Corp. will have the wind at its back on the growth front. But there's another wrinkle to keep in mind.

Brookfield Renewable's parent is an asset manager, and it is always buying and selling assets. Thus, Brookfield Renewable's portfolio is always changing, too. This is not a regulated electric utility and shouldn't be viewed as one, even though the energy contracts that back the business create a reliable income stream.

Can Brookfield Renewable Corp. set you up for life?

Given the purpose of Brookfield Renewable Corp. and Brookfield Asset Management's growth plans, it seems highly likely that buying Brookfield Renewable Corp. can set you up with a lifetime of reliable income. So, too, could higher yielding Brookfield Renewable Partners, if you don't mind owning a partnership. But the key is to understand what you are buying, given the complexity of the interconnections that exist here.

Should you invest $1,000 in Brookfield Renewable right now?

Before you buy stock in Brookfield Renewable, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Renewable wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $676,023!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $883,692!*

Now, it’s worth noting Stock Advisor’s total average return is 793% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Asset Management, Brookfield Renewable, and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

The world is in the middle of an energy transition. It isn't the first time it has gone through a transition, so there's a rough roadmap when it comes to understanding what comes next. The big picture is that energy transitions take decades to play out. That's why dividend investors should be looking closely at this clean energy-focused investment and its major yield.

What is going on with power?

The modern world doesn't exist without reliable power. That's the core factor to consider here as you examine the energy landscape that exists today and what that landscape may look like tomorrow. Since power isn't optional, the big-picture shift away from dirtier carbon fuels toward cleaner ones that is taking place today simply can't happen overnight. It has to be a slow and steady transition.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

In fact, even some of the oldest energy sources haven't been eliminated, even though they have been usurped by newer energy sources. For example, burning wood is still a frequently used power option. While coal use has been falling in the United States, usually being replaced by cleaner-burning natural gas, coal is still a huge force in the world.

That brings the story to solar, wind, and energy storage. These sources of power are growing rapidly and will likely continue to do so for many years. In the United States alone, wind power is projected to increase 5x over by 2050. Solar is expected to increase by 7x. And battery storage, which is very small today, is projected to grow so much that the numbers aren't meaningful.

The big takeaway is that there's likely to be huge growth ahead for clean energy investments. One of the best ways to take advantage of that growth is Brookfield Renewable (NYSE: BEP)(NYSE: BEPC) and its lofty yield of up to 6.2%.

What does Brookfield Renewable do?

Brookfield Renewable is controlled by Brookfield Asset Management (NYSE: BAM). Brookfield Asset Management has a 100-year-plus history of successfully buying, operating, and selling infrastructure assets on a global scale. This is actually an important fact to keep in mind because Brookfield Renewable is not operated like a utility. It's operated more like a private equity shop, buying, operating, and selling assets over time.

Brookfield Renewable's portfolio spans the entire clean energy spectrum. It owns hydroelectric, solar, wind, battery, and even nuclear power businesses. Those businesses are spread across North America, South America, Europe, and Asia. Given the multi-decade growth opportunity ahead, Brookfield Renewable is likely to see material growth in its business, and it can play wherever clean energy growth is offering the most attractive investment opportunities.

There are two ways to buy Brookfield Renewable. The most attractive, yield-wise, is a partnership share class, which is the one with the 6.2% yield. But for investors who prefer to avoid partnerships, there is also a corporate share class that has a dividend yield of around 5%. The only difference between the two share classes is demand, with many large institutional investors barred from owning partnerships. Small investors will probably prefer the higher-yielding partnership, which is structured so that it doesn't run afoul of the rules for tax-advantaged retirement accounts.

Brookfield Renewable is unloved for the wrong reasons

Brookfield Renewable has been a poor performer on Wall Street as excitement over clean energy has waned. With a pullback on government support in the U.S. market, it would seem like now is a bad time to invest in clean energy. But Brookfield Renewable doesn't expect the U.S. government's pullback to affect it much, if at all. It generally works with companies under long-term contracts, and companies around the world remain committed to shifting toward clean energy.

Moreover, the backing of Brookfield Asset Management means there are still some very deep pockets backing Brookfield Renewable as it looks to grow. Since Brookfield Asset Management's goal is to roughly double its investment in clean energy over the next five years, it seems highly likely that Brookfield Renewable will grow right along with its parent. If you are looking for a high-yielding investment today, clean energy-focused Brookfield Renewable should be on your short list.

Should you invest $1,000 in Brookfield Renewable Partners right now?

Before you buy stock in Brookfield Renewable Partners, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Renewable Partners wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Reuben Gregg Brewer has positions in Brookfield Renewable Partners. The Motley Fool recommends Brookfield Asset Management, Brookfield Renewable, and Brookfield Renewable Partners. The Motley Fool has a disclosure policy.

Brookfield Asset Management (NYSE: BAM), one of the top alternative asset management firms in the world, went public in 1983. But in December 2022, it rebranded itself as Brookfield Corp. (NYSE: BN) and spun off its core asset management business as the "new" Brookfield Asset Management.

Brookfield Corp. now serves as the parent company of Brookfield Asset Management, which it holds alongside its other investments. The new Brookfield Asset Management became a pure asset manager, which earns management fees through its investment funds.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Brookfield Asset Management's stock has risen in price nearly 50% since its spinoff listing in 2022. Should investors still buy it as a safe-haven play in this turbulent market?

How do you gauge Brookfield Asset Management's growth?

Instead of investing in traditional assets like stocks, bonds, and Treasury bills, Brookfield Asset Management gives its investors exposure to "alternative" assets in the real estate, infrastructure, private equity, and credit markets.

As an asset management firm, Brookfield gauges its growth with three key performance metrics: its fee-bearing capital (FBC), or its total managed capital from its clients; its fee-related earnings (FRE), or its total earnings from its management and advisory fees; and its distributable earnings (DE), or its available cash flow for covering its dividends and interest payments. All three of those metrics grew at healthy rates over the past three years.

Metric	2022	2023	2024
FBC	$418 billion	$457 billion	$539 billion
FBC growth (YOY)	15%	9%	18%
FRE	$2.11 billion	$2.24 billion	$2.46 billion
FRE growth (YOY)	15%	6%	10%
DE	$2.10 billion	$2.24 billion	$2.36 billion
DE growth (YOY)	11%	7%	5%

Data source: Brookfield Asset Management. YOY = Year over year.

Brookfield's robust growth was mainly driven by institutional investors, many of whom rotated from traditional assets toward alternative ones as rising interest rates, inflation, geopolitical conflicts, and other macro headwinds rattled the stock and bond markets. Many of Brookfield's funds also lock in their investors for more than 10 years, so it's well insulated from the near-term headwinds.

Brookfield is also a cloud and AI play

Brookfield's high exposure to the infrastructure and renewable energy markets puts it in a strong position to profit from the growth of the cloud and artificial intelligence (AI) markets. As cloud companies expand their data centers to accommodate the latest AI applications, their soaring energy needs should generate strong tailwinds for many of Brookfield's infrastructure and energy investments.

It's been increasing its exposure to the AI market. Earlier this year, it announced a 20 billion euro ($22.4 billion) investment over the next five years to expand France's AI infrastructure. It also expanded its U.S. onshore renewables business to meet the AI market's insatiable appetite for more electricity.

It can easily cover its dividends

Brookfield Asset Management generated $1.28 in DE per share in 2022, and that figure rose to $1.37 in 2023 and $1.45 in 2024. Those earnings easily covered its annual per-share dividends of $0.56 in 2022 and $1.28 in 2023 -- but they didn't quite cover its $1.52 in dividends per share in 2024.

That slightly higher payment isn't too troubling, since Brookfield's other growth metrics are still healthy. In fact, Brookfield actually raised its annual dividend rate to $1.75 this February -- which will still eclipse its projected DE per share of $1.65 for 2025.

Is it the right time to buy Brookfield Asset Management?

At $59 a share, Brookfield doesn't look cheap at 36 times this year's DE per share. Its forward dividend yield of 3% probably won't dazzle any income investors when the 10-year Treasury still pays a 4.5% yield. That high valuation and average yield could limit its upside potential.

Brookfield still looks like a sound long-term investment, but it probably won't head much higher over the next few quarters. Investors can nibble on it now, but they probably shouldn't accumulate more shares before its valuations cool off to more sustainable levels.

Should you invest $1,000 in Brookfield Asset Management right now?

Before you buy stock in Brookfield Asset Management, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Brookfield Asset Management wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $826,385!*

Now, it’s worth noting Stock Advisor’s total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Brookfield, Brookfield Asset Management, and Brookfield Corporation. The Motley Fool has a disclosure policy.

In this podcast, Motley Fool analyst Jim Gillies and host Dylan Lewis discuss:

• Warren Buffett's plan to step down as CEO of Berkshire Hathaway.
• The parallels between Berkshire's succession planning and Apple's transition from Steve Jobs to Tim Cook.
• The available cash, opportunities, and challenges ahead for Greg Abel and team.

To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. When you're ready to invest, check out this top 10 list of stocks to buy.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

A full transcript is below.

Should you invest $1,000 in Berkshire Hathaway right now?

Before you buy stock in Berkshire Hathaway, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Berkshire Hathaway wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $717,471!*

Now, it’s worth noting Stock Advisor’s total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 5, 2025

This video was recorded on Mai 05, 2025

Dylan Lewis: After 60 years, Buffett passes the torch. Motley Fool Money starts now. I'm Dylan Lewis. I'm joining for the airwaves by Motley Fool candidate analyst Jim Gillies. Jim, thanks for joining me on this momentous Monday.

Jim Gillies: Indeed. Thanks, Dylan.

Dylan Lewis: We talk about the news very often. We don't always get something this good when something happens over the weekend. To quote the great Warren Buffett himself, the Time Has Arrived. After 60 years as CEO of Berkshire Hathaway, Warren Buffett announced he'll be stepping down at the end of 2025 for a well deserved semi retirement. He announced this Jim, closing out the annual meeting in Omaha over the weekend, which was news to basically everybody except his kids.

Jim Gillies: Correct. Yes, I had I had a number of friends on the floor, and one of them texted me with literally as he was speaking going, holy insert golf word here. Buffett just announced his retirement and I'm like, OK, I have to take a moment to process this.

Dylan Lewis: Yeah, in typical Buffett fashion, it wasn't I'm leaving the CEO seat. It was him handing over the reins, but it was in an overview of board meetings and votes, and recommendations. I think if it weren't for the standing ovation, if you had tuned out for a second, you actually might have missed it because it was right at the end of the meeting and discussion.

Jim Gillies: Yeah. Look, I'm a Berkshire shareholder for almost three decades. The entire way, Dylan, I've been told, aren't you worried? He's so old. He's going to die soon. Thankfully, a key lesson from Buffett reiterated many times over the years, including in this most recent annual meeting is like, you know what? Take your time, think through, things things are not that imperative in the moment. I'm very glad I've ignored all of the people saying, Oh, boy, he's really old. I similarly think about it a little bit today. It's like, Buffett has been prepping people for this for quite honestly nearly two decades. I remember after his first wife passed away, Susie, it was always the intent of the Buffett to give away the vast wealth that he's created. Susie was supposed to be the one because she was expected to outlive Warren. She was going to be the one handling the dispensation of that money. Susie's been gone for almost two decades now, Dylan.

We've seen him, I remember back might be 15 or so years ago now where they were first started talking about having the names of multiple people who could take over for him, step in whenever. The names in the envelope that could step in for him have changed. But a number of years ago, Charlie, who, of course, left us just over a year ago, Charlie let slip at one meeting that the only real name in the envelope that could take over for Buffett was Greg Abel, longtime CEO of Berkshire Hathaway Energy, MidAmerican Energy beforehand, and that he just confirmed what everybody largely knew. I don't think much is going to change. First off, in a completely unsurprising development, the board did, in fact, vote unanimously along with Warren's suggestion hands up, who thought that wouldn't happen.

Dylan Lewis: Yeah, zero surprise here.

Jim Gillies: Exactly. Well, also two board members are Warren's kids who, as you said, knew about this. They have, in fact, voted unanimously to pass the CEO's title to Greg Abel. This is the start of 2026. You've got another almost eight months with Uncle Warren at the helm, at which point he will remain as non-executive chairman. He did allude to the idea that should markets behave in a certain way, and he didn't say it, but I will plunge precipitously, they would be interested in deploying some of the massive cash hoard they've got now, which I think is playing with $350 billion. That he would be useful, perhaps reputation wise to help deploy some of that capital should circumstances require it. Again, he was too polite to say, if the markets blow up and people freak out. But that's what we're talking about here. Go back to 2008.

Dylan Lewis: If you find my advice helpful during any time, just let me know, essentially, the.

Jim Gillies: Yeah, exactly. But I don't think a lot's going to change, and part of that is because they've been gradually transitioning the day to day operating business into the hands of Greg Abel. They've long transitioned the decision making at GEICO or I say GEICO, just in the insurance arms, all of the insurance arms into the hands of Ajit Jain. They have long been adding to the responsibilities of Ted and Todd, the investing lieutenants. Buffett has long espoused that a ham sandwich should be able to run this business. In fact, I saw someone was quipping. Another Fool was quipping with us this morning. I hope Greg had a T shirt at that board meeting that said ham sandwich on it. I see the stock fell as much as 6 or 7% today. I wish it fell more. I hope it falls more in the next week or so, because obviously, I'm talking about it now, so I'm locked out. I would be a happy buyer of shares today without a thing and without a concern, frankly.

Dylan Lewis: Yeah, I was going to say this is the first time we've ever seen the market have to weigh what they think of a Berkshire without Buffett, maybe a 4% or 5% discount on shares today. I don't think anyone could find that unexpected. It's a surprise, no matter when it happens. It's a surprise no matter how well they lay out the succession planning. We've known Greg Abel since 2021 formally, would be taking over this seat. I think you're right. I think they've done such a nice job telegraphing what's coming and also telegraphing. There are core Berkshire principles to the way that we approach things, and that probably isn't going to change very much. I remember looking back on some of the content from the morning meetings and the Q&As, and stuff like that over the weekend. Someone had the foresight not knowing what was coming to ask, hi, Greg, what is something you've learned from Warren Buffett over the years? Incredibly pressing question, it turns out.

He talked about how when they were first meeting talking through MidAmerican Energy Holdings and that acquisition, the first thing that Buffett did was zoom in on the balance sheet. The first thing he did was zoom in on the derivative holdings for the company and start asking all these questions about risk exposure, what was actually there. Abel and Buffett both talked quite a bit at the annual meeting about the importance of being balance sheet oriented, looking at the fundamentals of these businesses. If you're a Berkshire shareholder, none of that stuff is going to change. That is going to continue to be the guide for how this management team is making decisions.

Jim Gillies: Yes. I don't think it was a surprise to anyone who's been a long term Buffett slash Berkshire follower. If you were not aware that Uncle Warren likes his balance sheets. If you ask Greg, what's one thing you learned? I thought you were going to say how to keep a secret because it did that a little bit.

Dylan Lewis: I'm guessing Greg maybe had a little heart palpitation there on stage, learning alongside all the Berkshire shareholders that this was happening.

Jim Gillies: What a vote of confidence, though to have that even though he knows the job is going to be his? Again, look, Uncle Warren is 94. He'll be 95 at the end of the summer. If you don't expect someone approaching that anniversary of their existence to be maybe wanting to slow down a little bit, plan for retiring. It had to have been the subject. Well, as I said, I have heard variants of the, are you sure you want to be here for as long as I've held shares, and my own personal shares, at least my earliest ones, I can legally rent a car in the US.

Dylan Lewis: Yes, they've matured.

Jim Gillies: Exactly.

Dylan Lewis: Way to put it.

Jim Gillies: They should hit the gym more. They're starting to have that middle age precursor happening there. Continue anyway.

Dylan Lewis: As you noted, this is a business now sitting on an incredible amount of cash, 347 billion, I think, as of most recent report and the updates over the weekend. I have to imagine that that was also some of the intentionality with this planning was Buffett unwinding some of the large positions that existed with Bank of America with Apple over the years and really putting Abel and the management team in a position to make decisions that they were excited about that they were interested in that followed Berkshire playbook and probably to be opportunistic as there's possibly some clouds out there on the horizon.

Jim Gillies: Yeah, he downplayed some of the people saying, Oh, you're just trying to set up things for Greg Abel. It's like, no, I'm not so charitable to make life easy for him. If an opportunity was here for me, I'd take it paraphrased. Apple is unquestionably the best a stock investment that Buffett has made. You could argue others have done better percentage wise or over a longer term. But in terms of the sheer amount of money, Buffett himself said, Tim Cook, Apple's CEO. Tim Cook has made more money for Berkshire shareholders than I have.

Dylan Lewis: Point taken.

Jim Gillies: Well, point taken. I will push back a little bit on Buffett and say, yeah, but you were the one that went into it. Again, ignoring what other people were saying, which 2016 ish was that it's the biggest company in the world. How much growth is there left turned out to do OK. I think it's going to be prescient for Berkshire because, of course, Apple itself went through its own, shall we say, high profile succession plan back in 2010-2011, because founder Steve Jobs, of course, famously, unfortunately, and I say this with all respect, drew the short straw in life. Had a health issue that tremendously shortened his life, and that was tragic. But before he went, of course, and Tim Cook had stepped in for a lot of the day to day stuff with Apple before that. But officially, I think a few weeks before, it's now it's back in 2011. It's a few weeks before Steve's ultimate departure. Tim Cook was made the official CEO. On that day, the stock didn't have a great day. I've said for a number of years now on various Foolish forms from a value creation perspective. Tim Cook has been a far better CEO for Apple than Steve Jobs was. Now, Tim Cook doesn't get this opportunity without Steve Jobs and without the vision and the idea.

I always say, Tim Cook is an execution guy. Steve Jobs is an idea guy or was an idea guy. The execution guy doesn't get to work as magic without the idea guy to start, and so you need both. But the sheer value that's been created at Apple in the Tim Cook era greatly outstrips what was created during the Steve Jobs era. But you got to give Job some credit for what he planted the seeds so that Tim Cook could have the harvest. I think that's what's probably going to unfold with Berkshire Buffett, Greg able is that Buffett has put all seeds in play and has put the culture in play, and has been, as we said before, slowly farming out bits and pieces of the business to the key players at Berkshire. He himself has said, literally at this meeting that he thinks the Greg Abel era going forward will probably make more money for Berkshire shareholders than he would.

Dylan Lewis: Yeah, I think he said, I will remain a shareholder, and that is a financial decision.

Jim Gillies: Exactly.

Dylan Lewis: I trust the management team here. I'm glad you brought up the Apple example because Buffett gave a nod to that, too. He hit a quote, "Nobody but Steve could have created Apple. Nobody but Tim could have developed it like he has." I think you could swap out the names there, and he's essentially talking about his own business.

Jim Gillies: He is. Now, will Greg Abel overseeing Ted and Todd? Will they be able to create some of the magic that we've seen in stock picking? I think actually, that'll be a tough sell. But I also think it's a tough sell under Buffett because of the size of the company. Again, Apple has been the last real big home run. There's been a bunch of little things that haven't worked out, and that's fine, or IBM didn't work out, or the airlines didn't work out. Now, I'm of the opinion that Buffett got out of the airlines during COVID. Because when the facts change, I changed my mind. What do you do, sir? The world changed. A worldwide pandemic that shuts down air traffic for a not insignificant period of time makes those airlines worth it changes the calculus about how you calculate the fair value of those airlines. He knew they were going to need government assistance, and he also knew that the optics of having Warren Buffett one of the richest people on Earth through Berkshire Hathaway, it wasn't Warren Buffett owning them, but it was Berkshire.

The fact that Berkshire Hathaway being the largest shareholder of all of these airlines that now all of a sudden need a bailout, the optics of that are going to be pretty bad. He also knew he didn't want to be the guy bailing out the airlines. I'm going to sell my shares. That takes him off the board and takes Berkshire off the board. That way, they can qualify reasonably well for government funding and whatever you think about airlines and their perpetual need to go hand in hand with the government at every crisis. I leave that as an exercise for the listener. I think it will be an interesting play from here. I don't think, and I say this again. I know I've said I'm trying to remain respectful and giving Warren Buffett and Berkshire Hathaway have been very good to me personally. As I've mentioned, it is my largest shareholding. It is my longest held shareholding. But let us be honest. The stock picking over the past decade or so has not been spectacular aside from Apple. I would argue that is not because Warren Buffett has faded in abilities or anything. That is because this is a $1.15 trillion company with a bazillion different irons in the fires, and there's not a lot. They mentioned there was a $10 billion acquisition, as well that they passed on. My response to that, all I could think of when I heard about that over the weekend was, who cares $10 billion? A $10 billion acquisition for a company with 348 or 350 billion in dry powder. It's 3% of your cash.

Dylan Lewis: It's not material.

Jim Gillies: It's irrelevant. I don't want to hear about $10 billion acquisitions prospectively. I want to hear about minimum $100 billion prospective acquisitions. Bigger is better. How many of those companies are out there that will be available at a price that Berkshire and Buffett, and Greg Abel, and Ted and Todd would think compelling? I submit to you there ain't many, which is one reason why I think Buffett is, Oh, you know, I'll go play. He's going to go day trade.

Dylan Lewis: It's a good time for him to step away. The house is relatively tidy. He's been able to put things in pretty good shape.

What is amazing to me, taking a step back on Berkshire is sitting on record levels of cash, and we know what cash is earning right now. It's year to date up more than 10%. The market is in the opposite direction, down about 4% year to date. Investors haven't seemed to mind giving them a little bit of time to put that money to work, and they've been rewarded for their patients so far. I don't think that will change. I think anyone who's expecting anything really large is going to be waiting quite a while. I think we're going to see a capital allocation and deployment strategy that is very much like what we've seen in the past, and that might mean we're looking at three figure billion dollar of cash on the balance sheet for a long period of time.

Jim Gillies: Yeah, I think you can probably assume because they've said this. Expect that cash balance to never again drop below 50 billion. Now, when you have 350 billion.

Dylan Lewis: There's room to go down.

Jim Gillies: Oh, we can just hold that, and it's fine. I'm genuinely curious to see, and I don't think you're going to see it anytime soon. I think Buffett probably needs to ultimately exit the board fully before you'll ever see anything here. But I'm curious to see because it took about a minute and a half after the announcement before various denizens of Twitter started saying, Oh, break up Berkshire Hathaway now. It needs to be broken up, or when are they gonna pay a dividend? Calm down, folks. I think really truly, nothing is going to change. Nothing is going to change as long as Buffett is consuming oxygen. I think nothing changes. When he ultimately leaves the scene, I think nothing's going to change really for a little while longer. I think they will continue in reinvesting in their existing businesses. It wouldn't shock me to see them deploying incremental capital in some of their already existent areas. More energy. They famously talked over the past, I'll say 15-20 years about how they like businesses where they deploy significant capital at good expected returns, but that would be the railroad, and that would be a few of their other businesses where again, have the utilities. I would be shocked outside of a market dislocating event. I would be shocked to see them make any meaningful draw down of that cash hoard. I don't think they're going out and buying Disney tomorrow. I don't think they're going out, or to go out take out Hershey, or try to acquire MARs privately. They might but these are the types of businesses that would be fun to see them make a run at Coca Cola. I will say that would tickle me a little bit.

Dylan Lewis: It would fit the profile, and it would certainly fit Buffett's tastes. Yeah, I think you're right. The market may give them that dislocating moment. We've talked at length on the show about how there is a bit of a precarious situation going on.

Jim Gillies: I don't know what you're talking about.

Dylan Lewis: Buffett has provided some commentary on that, and I can't think of a better position to be in to have $350 billion in cash if you expect there may be a lot of headwinds away and there may be some discounts available to the business. You mentioned railroads. You talked about energy a little bit. Any other sectors you think might fit the profile for a Berkshire acquisition if we start seeing some things on sale.

Jim Gillies: Coca Cola would be funny, but it's also possible. I don't know how far they'd get. No, I think you want to look in a space where they already have an interest. It will not be technology motivated. It's always going to be, well, where we like to invest in places where we think we know. There's the famous story about what was the best selling candy bar in the 80s? Well, it was Snickers.

Dylan Lewis: Snickers.

Jim Gillies: What was it in the 90s? Well it was Snickers. I don't know who's going to have the dominant operating system in 20 years. You probably make a good guess.

Dylan Lewis: But people are going to still be eating Snickers.

Jim Gillies: But you're probably going to be buying Snickers, and the pricing power of a Snickers or the pricing power of a can of Coke is probably going to or a bottle of ketchup he's famously got the Kraft Heinz Association is probably going to be there. I would like to see them. It's going to be a low technology possibility. The obvious things are more insurance, more energy consumer products with a significant brand mode. A Coca Cola, I joke a little bit, even at Disney, but even Disney's there are problems if Disney were to ever be something like that. I think it's going to be interesting to see where it goes. I'm signing up for the ride. I've been signed up for the ride for a while. At the very least, I'd like to not vacate my shares while I'm still drawing a regular paycheck because I don't particularly want to hand the government a large check. As you say, it's a great place to be. It has been a great place to be in the cornerstone of my philosophy.

My investing philosophy has to have the ballast holdings in my portfolio, of which Berkshire is absolutely one. It's the largest one, as I've said. Those ballast holdings that, for me, Brookfield is another one. Some people really like Fairfax Financial. Have your ballast holdings so you can go out and do some more riskier plays. I'm not talking day trading or penny stocks, or stuff like that. But still, things that may or may not work out for you, but you've always got the ballast and just to keep you calm. Then in days when you see those market dislocations, I would really encourage people to go back and look at what Buffett was doing during the global financial crisis, the 2008 crisis. He wasn't panicking. Stock got hit along with everything else. That's fine.

Buffett has said even this weekend. We don't care about that stuff. Berkshire's fallen, I don't know how many times by 50%. Doesn't bother us in the slightest. Focus on the business, all that wonderful stuff. But remember what he did back then. Goldman Sachs came hat in hand. The vampire squid came hat in hand. Buffett said, sure, I'll help you. Here's your 15% anchor. Harley Davidson came hat in hand. Sure, we'll help you. Here's your 15% anchor. Bank of America. I think gave penny warrants or dollar warrants as part of the investment. Don't call it a bailout, as part of the investment that Buffett made in Bank of America, and there's others. That's one thing I think I want people to remember about. Buffett's got this kindly Midwestern old dude cut of persona. When it comes to allocating capital, dude's killer. You want my money, it's gonna be 15%. My end is 15 precious, and that's how we're starting, and we'll take a little bit of equity comp, as well. I hope that Greg Abel and Ted and Todd can be similarly value extractive, shall we call it, during future market dislocations, which as Buffett again, said this weekend, are coming. We don't know when they are. They will come. Probably be a Tuesday. He seems to think that the business is in good hands with Greg running it. Again, if we have trusted Buffett's process on the building of Berkshire, I would suggest to you we should be similarly trusting of his transition planning for the business that he's booking.

Dylan Lewis: Jim, it sounds like even though he won't be calling the shots for your largest holding, his tenets, his investing style, remain the pillars of your portfolio and how you expect the Berkshire will continue to be rough.

Jim Gillies: Sounds about right to me, yes.

Dylan Lewis: Jim, thanks for talking through it to me.

Jim Gillies: Thank you, Dylan.

Dylan Lewis: As always, people on the program may have interests in the stocks they talk about and Motley Fool make formal recommendations for or against. So far it's I think based on what you hear. All personal finance content follow Motley fool editorial standards is not approved by advertisers. Advertisements are sponsored content, provided for informational purposes only. See our full advertising disclosure. Check out our show notes for the Motley Fool Money team. I'm Dylan Lewis. We'll be back tomorrow.

Bank of America is an advertising partner of Motley Fool Money. Dylan Lewis has no position in any of the stocks mentioned. Jim Gillies has positions in Apple, Berkshire Hathaway, and Brookfield Asset Management. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, Brookfield Asset Management, Fairfax Financial, Goldman Sachs Group, Hershey, International Business Machines, and Walt Disney. The Motley Fool recommends Kraft Heinz. The Motley Fool has a disclosure policy.