00:00 Speaker A
We’re calling it Market Madness, pitting 32 companies against one another in a tournament style or a bracket style tournament, I should say. Uh Julie Heman earlier today kicked off the competition, taking on the right side, unnamed. We not brand this side. We’ll call it the right side of the bracket. Uh we saw McDonald’s taking down Disney.
00:20 Speaker A
Interestingly, Delta advancing over Apple. Love to talk more about that one. Maybe we’ll we’ll revisit that one uh next week. We’re going to do the left side. We got a lot to get through. We got eight matchups. Brian Mulberry is joining us now. He is Zach’s Investment Management’s chief market strategist. Um so Brian, we got a bunch to get through. There’s a couple of these that you highlighted. So we’ll run through the first one quickly.
00:43 Speaker A
Top left here, Robin Hood taking on United Health. You take Robin Hood as the winner. What’s my elevator picture?
00:51 Brian Mulberry
The elevator pitch here is that Robin Hood still has strong growth in front of it. We’re looking at 21% earnings growth over the next several years, whereas UNH really has some headwinds from a regulatory perspective, which is really even hard to pin down what their EPS growth is going to look like in the next couple of years. So just a clear winner there in our view.
01:07 Speaker A
All right, a match up that’s a little more interesting and one we want to spend some time on. Pateer against Proctor and Gamble. In some ways I think about this as the company that sells everything in your home and the company that most people have no idea what they do.
01:21 Brian Mulberry
Yeah, I think it’s a fair assessment. And you know, on a year-to-date basis, Proctor Gamble is winning this and that they’re still positive for the year. You know, obviously the market just ended. We’re going to have the S&P down around 5 and a half 6% on a year-to-day basis. But Pateer has so much growth ahead of it. And it’s really because they add so much to many different businesses. They are an AI company, but they’re very additive when it comes to productivity. The agency that they can bring
01:54 Brian Mulberry
and help companies do more with less allows them to grow at unbelievable rates. So again, this is one of those things where when I look at the stock price over the last year, Proctor Gamble has done pretty much nothing. The only reason to own it is because it pays a robust dividend, whereas Pateer is still up 65% over the last year. Yes, it’s pulled back some over the the last couple of months, but the growth prospects there are just huge. When you talk about AI spending, there’s been no pull back in terms of the CAPEX committed.
02:20 Brian Mulberry
That means that a lot of these projects are going to land and once they do, that means added revenue for somebody like Pateer.
02:26 Speaker A
All right. Uh moving on. General Motors against Eli Lily. a couple of giants of the Midwest here. The pick is Lily. Uh it feels like we’re so we’re betting on smaller people versus larger cars. Maybe if that’s the way we’re we’re going here.
02:44 Brian Mulberry
Yeah, that’s certainly where the demand is. You said it very perfectly, right? I mean, Eli Lily has done a great job at capturing the demand. Their GLP1s are one of the the most widely used in the market and they’re adopting new delivery systems. The pill form of Monjaro is is expected to be very widely adopted now that people don’t have to take an injection or try and uh give themselves a shot at home and we see the demand only growing for those types of products. Now,
03:19 Brian Mulberry
they’re also seeing other metabolic uses. So the GLP1 systems are even becoming more and more useful for treating other diseases as well. So cardiovascular diseases that might actually show market improvement using these structures. Again, this is kind of one of those no-brainer types of things. When you look at GM having to write down billions of dollars on their their EV products. They’re just not there in terms of revenue growth.
03:41 Speaker A
All right, uh next matchup is a really interesting one. a couple of category leaders, household names. Everyone knows what they do and that is Walmart against Uber. What’s the play here?
03:57 Brian Mulberry
Well, now we get to add to that list. They’re both Nasdaq 100 companies, right? This is my favorite joke tell my clients. that Walmart is is the latest AI stock to be added to the Nasdaq. and I think for good reason. Walmart generates, you know, 180 billion dollars every 90 days in revenue. And so it’s an enormous task for them to grow that by a significant margin, but they are. We’re looking at revenue growth next year in that 7-8-9% range, but EPS growth is 12 and a half. So it tells me
04:39 Brian Mulberry
they’re growing their margins and they’re growing a huge pile of cash on a quarterly basis. and that’s because they’re seeing 27% growth in their e-commerce division. It really is no contest here. We get that Uber has a lot of technology background. They just did a big deal with Rivian to try and bring in more EVs to their fleet and that kind of stuff. But really, this this is uh you know, kind of a mismatch and I think most people might raise their eyebrows at it, but we would pick Walmart all day here.
05:08 Speaker A
All right. Uh moving down to the bottom left quadrant. In every bracket, there are a couple of walkover matchups. I think a couple might be on television right now. First one here feels like a real uh mismatch Alphabet against strategy.
05:22 Brian Mulberry
Yeah, absolutely. I mean, Alphabet has so much scale and they are investing in every line of business, right? Uh, they have such a huge market share when it comes to their core business, which is just advertising. but the the investments and advancements that they’re making in AI, owning their own model, which is Gemini, and it’s giving chat GPT a real run for its money in terms of its efficiency. The the pro version of Gemini is being widely adopted and people are saying that uh its use case
05:58 Brian Mulberry
is being very, very strong. So, yeah, this is one of those walkover matchups. So master, you know, it it’s one of those things, they have such a huge investment in Bitcoin. Their cost basis in Bitcoin is $75 to $77,000. So now that we’re back below 70, it’s like the the whole business plan is underwater at this point. So yeah, this this is definitely one of those walk-off kind of matchups.
06:17 Speaker A
Yeah, I just wanted to, you know, we have a little time here. I wanted to just ask about strategy. just like what you make of not just not strategy themselves specifically, but the entire digital asset Treasury trade. Um, it already feels like in early 2026, it’s one we look back on. It was so hot last year, is kind of a head scratcher of like, everybody thought this was going to work, just buying crypto with with debt. It’s a very strange kind of market moment.
06:50 Brian Mulberry
Yeah, I mean, we hear about tokenization all the time. It’s becoming more and more of a thing even in our business and in financial services, but it’s such a small segment of the market. Originally what we were told is now that there is a a backdrop that there has to be treasury backed uh crypto that you could use that for transaction processing and it would be more or less close to a zero cost. And when you compare that to normal credit card processing fees, this would be the wave of the future. But as it turns out,
07:29 Brian Mulberry
in terms of the real adoption rate, that’s only about 5% of the transaction market. So it really wasn’t that big of a deal to start with.
07:44 Speaker A
All right, moving down the bracket here, AMD against Coca-Cola.
07:51 Brian Mulberry
Yeah, this is one of the tougher ones. Coca-Cola has been successful in widening out their offerings, getting into some of the healthier foods and avoiding some of the sugary snacks that Pepsi’s been having a problem with. But we would actually pick AMD here. You know, their epic processors have been incredibly powerful and they’re starting to land in all kinds of different products. So the the demand for the high functioning but efficient processor that they’ve been offering is inside now Lenovo laptops and and everything
08:31 Brian Mulberry
else. And so from a processor point of view, they’ve really done a good job of connecting the utility and efficiency in their programming power with what people are needing inside of hardware.
08:44 Speaker A
And a great quarter out Wednesday uh from that company. Rough couple of days following that, but that stock could have been up about 60% year to date, I think going into that print. Um, all right, new energy versus old energy, Tesla against Chevron here. Very interesting matchup.
09:05 Brian Mulberry
Yeah, absolutely. And and and certainly recognize that Chevron owns some very valuable real estate when it comes to old energy. They’re the largest owner in the Permian basin here domestically. They also have the most assets in Venezuela. And so when you talk about where, you know, petroleum products are going to come from both as crude oil and refined products. Chevron is a real big player here. But again, you cannot really match the growth potential for Tesla. What you’re finding in their new power generation when it comes to the
09:41 Brian Mulberry
power wall, solar and everything else in the charging scenario, their growth is absolutely phenomenal. It’s getting to a point where that business segment might start to generate more revenue than the automotive segment in the next couple of years. You add in the value of full self driving as a property that or a technology that they could license just in the same way that they’re doing with that charging technology. I think Tesla just really has a lot better growth prospects from here over the next couple of years.
10:28 Speaker A
Yeah, and that energy business would be much better margin profile than the auto’s business as well for Tesla. All right, final one here, if I can call it, maybe a little bit, maybe a little bit of an upset your pick here. Bank America versus Costco. How do you round us out?
10:41 Brian Mulberry
Well, look, the whole pressure on the market right now over the last couple of weeks is about higher input costs, right? We can see when oil gets this high and if it stays high for long, that means higher fuel costs and everything else that’s refined products, that means higher shipping costs and it really does impact Costco’s margins in a very negative way. We also have concerns that there might be a pull back in consumer discretionary spending. So if we’re not seeing the kind of deals that you’re expecting at a Costco warehouse
11:18 Brian Mulberry
and they’re supposed to be, you know, the wholesale price for the retail customer, it might turn sentiment away. Bank of America just has really strong prospects. They’ve been growing multiple business units in double digits for the last several years in a row, and we definitely see that continuing. In particular, you know, their wealth management business has been gaining traction growing anywhere between 11 and 13%, and that’s very high margin, valuable, profitable type of business. So we would actually pick Bank of America over Costco this time.
11:42 Speaker A
Maybe I will bring in my receipt on Monday from my Sunday Costco trip, which is already on the books. I mean, I can’t can’t get out of there for under $400 bucks. So I don’t know
12:00 Brian Mulberry
I know it. I feel the same.
12:02 Speaker A
I don’t know if that’s my fault, if I need to be looking harder. That’s that’s all I know. You go to the register and I they don’t even need to tell me. It’s going to stop.
12:08 Brian Mulberry
Well, and that’s part of the pressure, right? If that becomes a $500 trip, then maybe people go less and that’s the concern, right?
12:18 Speaker A
Yeah. That’s right. Well, listen, I’m not the one demanding uh freeze-dried mangoes in my house. Uh that person is 18 months old and they need their mango. So we’ll be going there to get that. All right, Brian Mibury, I really appreciate your time. Have a great weekend.
