00:00 Speaker A
with heavyweights, Walmart, Alphabet, Tesla, still in the draw. This morning on Market Catalyst, Amazon took out JP Morgan. McDonald’s came up on top against Coinbase to reach the final four. Let’s now zone in on the left side of the draw with some hotly contested match ups. Greg Halter, director of research at Carnegie Investment Council, join me now for Market Madness brought to you by Everpure. Greg, it is good to see you. So first up, all right, I got Google versus Tesla, Greg. You say
00:30 Speaker A
it’s Google. Make the case. How come, Greg?
00:36 Greg Halter
Yes, I would uh both companies are excellent. I would have to admit for sure there, but got to take Google based on the current valuation levels and the fact that they are just a immense cash flow machine. Obviously spending a lot on data centers and and uh capex at this moment. I mean, you you strip that out, not that you can, but at some point you will and you’re talking $200 billion dollars a year in free cash flow, that goes a long way towards other things that they’re working on, their so-called other bets and such.
01:07 Speaker A
Greg, what do you mean though? Bullish that you are, you talk about Google having a tobacco moment.
01:13 Greg Halter
Potentially, um, I mean these things as we know, play out over many, many years with the ultimate decisions, you know, undetermined and years out there. It’s certainly a risk. It’s been known as a risk for 10 years. Maybe finally something comes to fruition here, but they certainly have the financial wherewithall, we think to handle that. Of course, you never know what these judgments are. I mean there’s been other cases including the J&J with Talc that have been going on forever and
01:46 Greg Halter
you hear about these awards in the billions and then by the time they finally get adjudicated and so forth, it’s not nearly that high. So it’s a risk. We’ll see, um but we think it’s manageable.
01:59 Speaker A
What about Greg, sort of the long-term Open AI threat? Uh analysts will say, hey, listen, Sam Altman’s company. It’s only been around for a few years, but obviously very popular. The ad opportunity they’ll say, very real for Mr. Altman. Do you see that as a real risk or no? Do you say the online ad market it’s so big, it can accommodate multiple winners?
02:22 Greg Halter
Definitely think it can accommodate multiple winners. You know, a year ago we were talking that uh Google was dead because no one was going to search anymore and that turned out to be wrong. Uh I do have to couch all of this is with the fact that technology is so fast moving these days that what I say or you say today could be totally wrong next week.
02:46 Speaker A
Greg, why, by the way, is it not Tesla?
02:51 Greg Halter
Tesla has some incredible exciting technology. I again, it depends on your your view here. I don’t know the uh time frame you’re looking at, but over the long long term, given robotics and autonomous, that could just be huge for this company. But what do you want to pay for that at the current time? I guess that’s the that’s the debate that’s out there. That’s the debate that we have at our office actually all the time.
03:19 Speaker A
All right, next up, Palentier versus Walmart, Greg, you say it’s Walmart. Make the case.
03:26 Greg Halter
Yes, Walmart 10, 15 years ago, maybe longer was going to be totally disrupted by Amazon. And again, kind of like Google a year ago, in this case, uh Walmart was able to bring in some different management folks that saw the future and made changes and spent the money to get them into the online space and they’ve also gotten into the advertising area.
03:55 Greg Halter
You know, I can’t say that the stock is cheap here, but relative to Palentier, it it is, I guess. Um we we continue to like uh Walmart as a fundamentally solid company and a business.
04:02 Speaker A
You touched on it Greg, but I just want to pull on this. I mean, the stock is up 40% over the past 12 months, Greg, but you’re saying valuation is still relatively attractive.
04:12 Greg Halter
Again, relative to Palentier which is 112 times or whatever, it’s definitely more attractive. Of course, Palentier has much higher margins and is growing faster. I know some people view it as a black box and such. Nothing wrong with their technology whatsoever, but again, we are more valuation centric and based and pay attention to that more. And um, I can tell you we have more dollars in Walmart than we do in Palenteer and maybe that’s wrong, but that’s where we sit currently.
04:52 Speaker A
Yeah, you know, I had a guy right on before you, Greg, tell me it was Palenteer because it’s an AI winner, cuz the strong topline growth, cuz it was down hard from the all-time high. said, hey, that’s an opportunity. That’s what makes a market, Greg. Thank you, sir. Appreciate it.
05:04 Greg Halter
Thank you.
