What Worked and What Didn't This Earnings Season

In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Travis Hoium and Lou Whiteman and Motley Fool analyst Jason Moser discuss:

• What worked (and what didn’t work) this earnings season.
• What’s wrong with restaurant and apparel stocks.
• Should inflation talk worry investors?
• Plus, the stocks on our radar.

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.

This podcast was recorded on May 15, 2026.

Travis Hoium: IPOs are hot again. Welcome to Motley Fool Hidden Gems Investing. I'm Travis Hoium, joined today by Jason Moser and Lou Whiteman. Guys, there is a lot going on in the market. We are through earnings season, so we don't have quite as many numbers to talk about. But we've gotten inflation data, we've got the market going absolutely crazy. Lou, I wanted to start with you. When you look at where we are in this market, there's so many pieces that seem to be pulling in different directions. Inflation data was really high this week. We saw interest rates jump. That seems bad, but at the same time, earnings are relatively strong. We have this AI trade that is going absolutely crazy. Where are you seeing opportunities and threats, and just what's your pulse of the market right now?

Lou Whiteman: It's amazing, for all the time we spend talking about so many different things like inflation, like jobs numbers, all of the GDP, the market has blinders, and the market really only cares about earnings. Earnings has done very well despite all of it. S&P 500 earnings were up 28% year over year on average. That's the sixth consecutive quarter of double-digit profit growth, that's margin growth. It's partially AI efficiency, but the real story here is that pricing power that companies first started exploring during the pandemic has been sticky, and companies had a lot more pricing power than they might have realized. That is what the market is focused on. All of this other stuff could come into play at some point. We have to watch it, but look, even among the non-tech, the other 493, we are seeing just really strong results, and as long as we see earnings grow, you're always going to be amazed at the market's ability to just look past everything else going on.

Travis Hoium: Jason, it does seem like the numbers have been really good. At least in segments of the market. We're going to talk about some of those areas of weakness, companies in shoes and apparel, and restaurants. But are you seeing that same strength and then some of these data points, we're seeing with some weak consumer spending, with inflation, gas prices are starting to really hit people's pocketbooks. Is that something that, well, maybe that will impact the second quarter, the third quarter, the fourth quarter, but we're not seeing that yet, or is it just noise in the system?

Jason Moser: Well, I think it's, I guess, the easiest answer is a little bit of both. I think we're seeing prices generally right now; inflation is being driven by energy. There is certainly the potential where this energy situation becomes resolved sooner rather than later. Let's hope so. I think, to lose point, even looking at the other 493, all told, this one of this year was really a blowout earnings-wise. Yet, basically, 85% of the S&P 500 has beaten earnings per share estimates. That's the highest rate since the second quarter of 2021, and we're seeing that companies reporting earnings better than 18% above estimates, which is well above the five-year average of 7.3%. We're having these conversations about these headwinds, whether it's inflation or whether it's interest rates or energy or what have you. But by the same token, Lou referenced the AI trade that just keeps sending things to ever higher levels. There's just still a lot of enthusiasm, and I think a lot of that is because these companies really are bringing it down to the bottom line.

Travis Hoium: Lou, that bottom-line improvement is undeniable when you look at the numbers, and some of the AI trends also undeniable. What I keep wondering is what is sustainable? I like to look at the S&P 500 heat map and just look at where are stocks going this year. You look at hardware related to chips, memory stocks, anything energy related is up dramatically. A lot of that is downstream of these massive spending numbers around AI that we've talked about. I think we're at about $700 billion that's going to be spent this year on capex from just the biggest handful of companies in technology. That can drive earnings at least in the short term, but eventually, that money and they're spending their cash flow, and they're starting to take out debt, that growth in that spending that's driving a lot of these companies in the S&P 500 can't go up anymore. At least in theory, it has so far. Does that worry you about the future, or are we at some local maximum where everything is just going so crazy and everything is so compute-constrained that it's, I will pay whatever it takes for energy. I will pay whatever it takes for chips or memory. It doesn't seem like that's where we'll be forever.

Lou Whiteman: Eventually is doing a lot of heavy lifting in that, though, because you were right. Nothing can go up forever, and this will not sustain forever, but the devil is in figuring out when it ends. I’ve just taken the companies at their word. I was actually curious, this earnings season I was wrong. I was expecting some like telegraphed flinch from some of these big hyperscalars, just some preview of, hey, maybe we don't want to spend everything we said just because it is so much, and we did not get it. We got all in, so no, it can't last forever.

Travis Hoium: Isn't that partly Microsoft did that, I think, for one quarter, and they were just punished for it?

Lou Whiteman: It's a standoff right now. I still think that every CFO at every one of these hyperscalers would love to collectively talk it down, but if it's only going to be one, the implication is our stuff isn't as good, and everybody else's is. No, I think it's going to take more. Can it continue? It can, we still have all of this spending going on. We still have a critical mass of consumers who are spending, but look, household purchasing power is flat, energy's up. We're trading at more than 20 times forward earnings. I am definitely on guard for the fact that it may not, that at some point it will end, and it could be sooner than we think. But for now, all we can look at is the actual data, and the actual data does not suggest we are driving towards a cliff.

Jason Moser: Well, I think it's going to be really interesting, too, to pay attention over these next few quarters and start looking for the guidance from these big hyperscalers and how they intend to spend in 2027, because it sounds like they're not ready to take their foot off the gas anytime soon. From Nvidia to Amazon, Microsoft, to Alphabet, and Meta, these companies are spending money hand over fist. If that remains the case, and I think that can go on longer than maybe we assume because these are such successful businesses with so many resources at their disposal, if that narrative continues, well, that spending goes somewhere, and we're likely to see this enthusiasm continue.

Lou Whiteman: That's the thing. It doesn't really even have to go up, it doesn't have to keep growing at the level it is. If they just sustain at these levels, that's pretty good for the economy. I think we have seen that with some of the reactions from, say, in Nvidia’s quarter, and things like that is the market is maybe pricing in. Maybe it won't continue to grow at the rate it is, but if we can just plateau at this level for a long time, that is a lot of spending going into the economy.

Jason Moser: It does.

Travis Hoium: I will say that the word plateau always makes me think of the spending that went into the fiber build-out during the late ‘90s and 2000s. What we talk about as the bursting of the dot-com bubble or the telecom build-out bubble actually happened to win that spending plateaued. It didn't really go down, it just flatlined, so these companies went from growth to no growth, and then the cost structure didn't quite work.

Lou Whiteman: Well, Travis, that's your word eventually again.

Travis Hoium: You did a lot of work. I wanted to get to the IPO market. Jason, this week we saw Cerebras’ IPO I would say it was, in the words of the market, a successful IPO. It's weird how we talk about this. The stock jumped for people who were able to get on the IPO, but it was actually down during trading yesterday. We're hearing that SpaceX is likely coming next month, I think. We could get OpenAI, it's possible we get Anthropic. When you see these huge IPOs, I think Cerebras is trading for 200 times sales at least one point. How do you think about that? Because if I go back to 2020, 2021, that was a sign of the top of the market, a frothy point in the market. If we could go back to the 90s, it was the same thing, but is there something to be concerned about, or is this something to just watch? How do you think about IPOs in today's market?

Jason Moser: It was a good IPO for the company. Obviously, able to raise a healthy amount of money, bad IPO for retail investors who bought shares at $385 that they're now sitting underwater. It's perspective there, but I think the key is because there's obviously a lot of enthusiasm in that IPO, and you're talking about some of these IPOs that likely will be coming up soon with just these massive valuations. That's one of those things that makes me wonder how over the top is the enthusiasm? When insiders and VCs, who know their companies better than anyone, really, when they're choosing to sell to the public at these stretch valuations, that historically is a pretty darn reliable bubble indicator. It's just going to be [OVERLAPPING]

Travis Hoium: They don't have to raise money from the public the way that they used to. If you go back to the 90s, there was no $10 billion round that Amazon could have raised. That money didn't exist. You had to go public.

Jason Moser: You're exactly right, they don't need to do it. The fact that they are doing it, I think, is just something to keep in mind.

Lou Whiteman: Definitely agree. It has to be noted, but the other side of it is that the FOMO is strong. If you look at the eagerness to get in, the market still thinks that AI is a thing, and all valuations are up, so you've got to get in whenever you can, when something new is coming. I hate to come back to it, but eventually that will likely come back to bias. I just don't know if it's going to be anytime soon. I just don't want this to be a market-timing call, because those tend to be really hard to get right.

Travis Hoium: Eventually seems to be the word of the day. When we come back, we're going to talk about what's going on at restaurants and shoe and apparel companies. You're listening to Motley Fool Hidden Gems Investing.

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Travis Hoium: Welcome back to Motley Fool Hidden Gems Investing. One of the interesting spaces we talked about some areas of strength in the market around AI trade technology. But one of the interesting areas has been restaurants because that's something where you're seeing where consumers are spending their money. It flows down to a lot of people who work at restaurants. Lou, there was a period after the pandemic where these were really recovering really rapidly. Now that seems like that has all evaporated, and almost every restaurant stock has really struggled over the past year. There have been negative comps at companies that I didn't think we'd see negative comps for a very long time. What's going on here? Is this the Wegovy effect? Is this population numbers are maybe down in certain areas? What is going on? Because there's also higher prices, they're having margin pressure. It just seems like a lot of headwinds are facing the restaurant industry today.

Lou Whiteman: I think there's a lot of factors, and probably what I want to talk about isn't the most important one, but I have a pet theory on this. Look, when I was growing up, Travis, you're young, but fast casual did not exist. You either went out to the steakhouse for a big family event, sit down, or you grabbed McDonald's on your way to practice, and there was no in between. Entrepreneurs realized that there was a huge hole in this market for fast casuals, something that's a little nicer, maybe a little more expensive, but you don't have to sit down. They ran into that market. We have now overbuilt that market, and that market wasn't going to take 100% of restaurant spending. We just we've reached a critical mass here where we have just so many choices, and they're all suffering because of it. This is just how economics works, and it will even out over time. But this is my little pet theory on a lot of these names that we love to watch is that's nothing really wrong with them. But there's all of these macro factors, plus the fact that you just have a ton of choices. I don't know about you guys, but I only eat so many meals a day, and I think it's just coming out to bite them a little.

Travis Hoium: Does that make sense, Jason?

Jason Moser: I think that's right. I think Lou's correct in it's a lot of things all at once. I mean, it does feel like a market that is over-saturated with options, and that certainly can hurt all of them at once. Probably it is at Wegovy effect, as you mentioned there. I think it's just interesting data there today, about one in every eight U.S. adults is currently taking a GLP-1 drug. JPMorgan estimates that by 2030, more than 30 million Americans could be on a GLP drug, up from roughly 10 million today. Now, the interesting thing is Bloomberg Intelligence survey found that 54% of those on those drugs said they dined out significantly less or less frequently since starting the medication. There is an impact there, I think policy and immigration, that's definitely something that is playing out as well. I think if you look back in 2025, we had a National Guard deployment here in Washington, DC. OpenTable data showed a 24% drop in reservations in just a single week in August of 2025, with reservations remaining mostly negative for the rest of the year. Then you add to that, food prices are up 37% since 2020. It's a lot of things at once, and it's not helping their cause.

Travis Hoium: It seems that has to have an effect when you have such success with Eli Lilly and Novo Nordisk, in particular, with these prescriptions, and then you have Retatrutide, which is coming next. That has been talked about as a potentially $1 trillion drug. Seems it's got to be at least part of the equation, but a lot of factors going into restaurants. The other thing I think was interesting from earning season, Jason, you brought up the fact that Nike is struggling, and I just wanted to pull some of the numbers here. Nike sales about flat year over year in the quarter, Under Armour, negative, about 4%, Lululemon, over the past years only up about 5%, so that's no longer a big growth stock. What's going on with these shoe and apparel companies? Because that would be another indicator of what consumers are spending their money on if they're not going out to eat as much. They're also not spending that money on shoes and clothing.

Jason Moser: In regard to China, that article that we were reading about Nike in China, competition, I think, is the main factor there. There is just more competition there in that market that is certainly going to play out on the business in the near term. Now, I do like Nike's brand power, that's not really a competitive boat or anything like that, but I do think there's some brand equity there that ultimately serves it well. But when you look at it across the board, over the last year, On Holding is down 36%, Nike's down 30%, Under Armour's down 17%. None of these companies is having a really good stretch here. It is partly due to competition. Certainly, the China market is a very important one, especially for Nike, but I think you're also seeing the consumer has to be a little bit more thoughtful these days about where they spend their dollars, and it's impacting all of these businesses.

Lou Whiteman: I do think the consumer has to be saying something here, or this has to be telling us something about the consumer. But look, there's a lot of different things going on here. On Holding they're down, but they're still what double, I think, since the beginning of 2023.

Travis Hoium: They are a little bit different than these other companies that are negative.

Lou Whiteman: With Lulu, too, I mean, the problem with retail and the problem with being a hot brand is it is really, really hard to sustain the hot part, and then you have to deal with it. The other thing, too, here is, and I do, again, I think, I love the company, not the stock. If you think back, again, just like with restaurants, I'm going to talk about my age, the age when Nike had to spend a couple of million dollars, and Sonny Vaccaro had to go gym to gym to build a brand. Today, you can do that on Instagram with one good influencer. I think just the barriers of entry and the economics of the business has changed to the point where I don't think anyone is going to dominate or have the massive success that you did years ago. I think it's great for On Holdings and the next On Holdings or wherever that is. But I think we have to stop thinking about Nike as the Nike of the 80s. Their goal now should be to carve out their own niche and just be a profitable company, but I don't think they're ever going to be the dominant company that they were just because the barriers of entry are so low.

Travis Hoium: Maybe we should be looking at these as free cash flow stocks as value stocks. Is that the right way to think about it?

Jason Moser: I think that's fair. I own Nike, but I own it primarily for the dividend. I didn't think there's any major capital appreciation. I think that the share price probably recovers from these lows, eventually, but I own it primarily for the dividend because that's going to be, I think, reliable for the foreseeable future.

Lou Whiteman: Makes sense to me.

Travis Hoium: When we come back, we're gonna get to which one of these are their favorite stocks? You're listening to Motley Fool Hidden Gems Investing.

Welcome back to Motley Fool Hidden Gems Investing. We talked about some of the stocks that have been beaten up recently in the last segment. But I want to get an idea where there's actually value in the market. We're going to call this what are the best of the rest. Let's start with restaurants, Lou. I know, you are at least doing your two or three meals a day. When you're looking at restaurants, stocks, what ones look attractive? I'm going to throw out five ideas for each of these that potentially could be long-term values, Darden, Texas Roadhouse, Bloomin, Cheesecake Factory, and Denny's. We haven't talked about Denny's. I feel like it's an overlooked company.

Lou Whiteman: Maybe. I will continue to overlook it, though.

Jason Moser: You don’t like yourself a good Moons over my Hammy?

Lou Whiteman: Well, I don't know. If I've ever been in, But, look, I little behind the scenes for everyone at home that J-Mo actually did his homework here, and I didn't I know what J-Mo is going to say, and it's what I agree with. I am going to go off script and go Cava instead of any of those five.

Travis Hoium: Do you down the growth story is going to continue for Cava?

Lou Whiteman: Here's the big thing. If you look at Kava's restaurants, they are mostly on the two coasts. There is the stereotypical, like Mediterranean play in flyover country. I think it does. I think there's a lot of opportunity to grow. I think at the end of the day, Wall Street pays for growth. I do think part of this is for some of these companies, saturation. I'm going to lean into something that I'm biased. It's the only one of these that I personally like to eat at. I'm probably totally biased on that. But I do think that it's a better growth story than somebody's better saturated ones. Otherwise, on the list, I'll just let Jemo take over because I think I agree with him on which of these five. I just think it’s funny that Lou made a compelling argument that this entire fast-casual space is just completely oversaturated. Then the stock he's picking is the company that's trying to grow into. Because, Travis, it's my favorite of them, and I'm just blinded like every other person to what you like. All right, Jemo, what do you think?

Jason Moser: I do. I get it, Lou. I mean, I'm a Cava fan as well, so it's hard to argue against that. I've still never had it. Maybe I need to do a research trip and come.

Lou Whiteman: You could fly. It's tasty.

Jason Moser: You know what the other thing, though, is? It's fairly replicable. In other words, I make a lot of Cava at home. Like, once you learn the ingredients that you like, you can make your own Cava bowl, really, whenever you want, and you usually do it for a little bit less money. But it's just, you wonder how much competition is going to get out there to try to replicate that concept. I'm sure there's already some Denny's, listen, I mean, the Moons over my Hammy. I've had more than once. It's good. It's nostalgia.

But I think for me, I've got to look at Darden as probably the one that I like the most, I think, primarily, it's just because of the breadth of his portfolio. I mean, we're talking about restaurants that include Olive Garden, Longhorn Steakhouse, Cheddar Scratch Kitchen, Chewy's. You ever been to Chewy's? Chewy's good stuff. I like it. Yardhouse, Ruth's Chris. Capital Grill, Season 52 EddiVsPrime seafood, Bahama Breeze, the Capital burger. I mean, that's a lot of restaurants in a lot of ways for them to win and a lot of value points for the consumer, as well. I mean, they're not all just one price. You got some higher rents, something like EdiV's. Was you're going to get a more affordable meal if you go to something like a shoes. I just like the breadth of their portfolio and think that it probably sets it up for success over the longer haul.

Lou Whiteman: It does seem like there's got to be some opportunities here. Restaurants even if people are taking GOP ones, even if the economy is a little weak, it's the one central place that you can go out and hang out with people, whether it's friends or family and maybe Lou is right, that we're oversupplied in certain segments of the market, but it just seems like there's got to be some opportunity over the long term. All right, the next one gets to something we talked about earlier with Nike shoes and apparel companies. Got a few numbers here that I want to add in because as I was looking at these, some of the price earnings multiples just seem crazy to me. Nike, pretty normal price earnings multiple on a forward basis. These all be forward basis, 23 times. Under Armor, 5.4 times. You got to buy a company that has negative sales growth, but 5.4 times. Lululemon, 9.6, Deckers 14 times forward earnings and on holding 22 times forward earnings. You look at that list, or you can add your own Lou. Where's your head go at for the best of those shoe and apparel companies? I'm going to just be controversial here, and I know, especially some of my colleagues will yell at me for this, but under armor and yes, Lululemon, I'm just not convinced they can ever get the Mojo back. I mean, Lululemon, as soon as they complain that Costco has too good of a competitor for them.

Jason Moser: I think that's a real.

Lou Whiteman: It's like complaining about weather in your earnings. Well, it's a Streisand effect. It's like, Hey, everyone, the Costco brands are very good. I don't know. Like, some of these brands are just, you catch the magic, you catch the genie in the bottle, and it's really hard to get that back once it's gone. I like Nike here for some of the reasons that Jemo talked about just as a dividend play, but if anything, I'll probably take Deckers because they have a combination of brands. I know, like Hoka is beloved by people who seriously run. I just think that they have shown nimbleness before and an ability to reinvent. Maybe there’s more of a chance there versus asking Under Armour to reinvent or come up with something new, or even Lululemon. I'd probably lean here, but if I'm honest with you, I'm probably avoiding this whole category as an investor.

Jason Moser: Yeah, maybe the easiest answer is just to own Amazon, and you get your stake in Zap, I mean, like, you own Zappos by owning Amazon. It's kind of like owning Google or Alphabet. You have a nice little stake in SpaceX as it goes. But yeah, I think, Under Armour is a funny one. I've owned Under Armour forever. Now, I sold a ton of it back in the day and actually did well with the investment. I’ve maintained just a small position, just as a core. I just thought, maybe one day, they would get their mojo back. I think, really, what we've seen there is just a failure on the part of leadership, Kevin Plank, I think is really just he has really struggled in.

Lou Whiteman: Seems like one of those we typically want to buy companies that are run by founders, but he seems like one of those founders that had a brilliant idea, built it into a really big business, and then should have handed it off to somebody else. It's just so interesting. GoPro is another example. They're looking for strategic alternatives this week. Another example of a company where the founder got it to this really, really impressive point and then just went, I can't do the next thing.

Jason Moser: Yeah. Well, I think you're right. There were some bad acquisitions that he made back when they were trying to get into, like E-Fitness and whatnot with those apps. I think it was a combination of things that really has hurt the company. By most accounts, he doesn't sound like he's really that great of a leader at the end of the day. It's his way or the highway, and he doesn't seem to be open to constructive criticism and other viewpoints. I think the company's just certainly suffered from that. It's weird because I think Under Armour makes good stuff. I mean, I do like their gear. Wear their pants every day. They're terrific. The shorts are great. I mean, it's golf equipment. I mean, good stuff for, on the golf course for a guy like me. But yeah, I don't know that I see them figuring it out. I think, ultimately, this is probably a situation where he's got to figure out a way just to sell this company off. I mean, something's going to happen there. But yeah, I go back to Nike. I just think the competition notwithstanding, and I think we're not seeing something necessarily just fundamental with Nike. I think the space is really difficult right now. You mentioned the forward earnings multiple there, that doesn't make it a no-brainer. That's not like screaming value play. It's also not screaming value trap. Again, I own shares for the dividend primarily, and I thought perhaps about adding a little bit to it on this wheat is, I think it was very interesting to see some relatively meaningful insider purchases from CEO Elliott Hill and even board member Tim Cook. That speaks something to me and should to investors. It's a relevant business. I think it'll see better days.

Lou Whiteman: I got to make the case for On Holding, apparently, because this was not only is it the fastest growing out of these companies that we've talked about, they are leaning into pricing power. They made a long-term goal of getting into a 60% gross margin, which is far higher than any of these other companies. They're at almost 65%. The consumer is weak, and they're saying, You know what? We're raising prices. I just think here, and another idea would be, I think, when you mentioned just either avoiding it or a different way to play it. Like Amazon, Dick's Sporting Goods trading for about 15 times forward earnings. That's their stores have gotten more impressive over the years, as well. All right, let's get to I want to get your ideas on some of these medical companies. This is an area where I think there's innovation growth. You have more tailwinds than some of the restaurant and shoe and apparel spaces. Jason, Intuitive Surgical, TransMedics. By the way, all these stocks are down pretty significantly this year. This is why they're on my radar. Abbott Labs, Boston Scientific, and GE Healthcare. If you got to pick one of those, where does your head go?

Jason Moser: Well, I picked Intuitive Surgical back in 2019. I recommended it at our immersive technology service. Its shares have done well. I mean, they're up about 150%. Now, it also is an underperformer at this point, and that really is thanks to the recent pullback in shares. But I still, at the end of the day, this is just a very innovative business. They've done so well with the DaVinci system to this point. Now, this ion bronchoscopy machine, which I think is just offers them another avenue of growth here. I mean, it clearly is a very competitive business. I mean, they're not the only ones focused on robotic surgery. You have a lot of big companies out there that are investing lots into this space as well, Medtronic, for example, and more. But I do love the innovative nature of the business. It is just this massive installed base already with DaVinci, and on is certainly gaining some traction as well. I think I’m going to go with Intuitive, Lou.

Lou Whiteman: I think that makes sense, and I agree. I think what's going with them is more just it's a bad time for hospital budgeting, so they're only getting the razor blades, not the razors right now, but that won't last. Look, I feel pretty good about all of these. Maybe Transmedics is the wildcard just because I really want them to succeed, volatile stock. It's been on my radar for a long time, but I can't get my head around. What they do is really hard. What they want to do is really hard. Then you throw in the logistics side of it, which is just a ton of expense. I don't believe they would have taken that on unless they felt they had to. Yeah, just I want them to succeed, but they're the ones maybe I'd question. If not intuitive, maybe GE Healthcare would be the one I'd look at here just because I think they are a little more commoditized than what Intuitive does, but the advanced medical devices, intelligent diagnostic tools. This is, I think, the future of medicine more than just, A, I replacing your doctor. I think, look, maybe it's not going to be an amazing 5X, 30X, but I just have no doubt that there will be demand for their products well into the future.

Travis Hoium: Hopefully, it gives you some ideas of where there might be some values, and it looks like many segments of the market are getting pretty frothy, but these ones may be a little bit more opportunistic for investors. When we come back, I want to get Jason and Lou's thoughts about the state of inflation, and also we'll touch on the stocks on our radar. You're listening to Motley Fool Hidden Gems Investing.

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Jason, one other topic that we touched on briefly early on, but I think deserves a little bit more attention, and that's the inflation data that came out this week. We got a CPI reading, the Consumer Price Index was up 3.8% from a year ago. PPI producer price index, this is going to be what manufacturers and companies like that are paying, up 6% from a year ago. Energy is a big piece of the story, but the other context I want to bring in is interest rates are going up because of this. This was a precursor in 2021 to the big market downturn and the rapid rise in interest rates. How do you wrap your head around what we're hearing about inflation today?

Jason Moser: Yeah, I think we've talked before. I mean, this is primarily driven by energy prices. But that's not all of it. I mean, the tariff impacts have absolutely played a part in this as well. Even we're going through this refund stage now, but, like, we think about just the chaos of last year every day. It was a new headline on tariffs are going to be this much. Now, they're going to be that much. Companies had no idea what to do. We're seeing, those costs play out as well. Ultimately, I think the interesting thing to keep in mind is just what this does for interest rates. The argument for cutting rates was that, well, inflation is back in check or getting there, and so we could afford to do that. Well, that obviously isn't the case, and we have a new Fed chair coming in, and while the White House is certainly going to turn up the pressure to cut rates, it's going to be very, the Fed chair doesn't make that decision. They still vote, and my suspicion is that they're going to look at this and say, You know what? Just logically speaking, it doesn't make sense to cut rates in the face of rising inflation numbers. It's going to be it's going to be an interesting rest of the year. I mean, we're seeing all the big banks now. I mean, Goldman Sachs now expects the next two Fed cuts to come in December 2026 and March 2027, JP Morgan.

Lou Whiteman: That far out.

Jason Moser: I mean, that's just projecting.

Lou Whiteman: Almost always inaccurate.

Jason Moser: They're just projecting. But, I mean, it's interesting to think we were talking early on in the year, and late last year, like, the cuts were coming, and I don't think that's going to be the case.

Lou Whiteman: The interesting thing here is, what does it mean for the market? Because at the end of the day, we're investors. This an investing show. I don’t warn, I’m going to be a little dark here, guys, but I do think just to look at it, U.S. wealth inequality is at a 100-year high. Going back to the roaring ‘20s. The top 50% of U.S. households hold 97% of household wealth. Why does this matter? That tells me that consumer spending can sustain because there is a critical mass of people who can still afford to spend. Now, there are all issues here, too, and you can remember the Roaring 20s ended up with the 1930s, so we need to be very careful. But for now, does all of these headwinds, all of this inflation, will that sink stocks? I don't know if I think it will. Again, not to dismiss it, but it's a weird time right now.

Jason Moser: Yeah, it's that K-shaped recovery we talk about. I mean, there are plenty of people out there that, yes, costs are higher, but many of us can still deal with the burden of that. But lower earners are finding it more and more difficult. I think that's going to be something to keep an eye on.

Travis Hoium: All right, let's get to the stock Center radar and bring in Dan Boyd from behind the glass. Jason, what do you got this week?

Jason Moser: I'm sure have all heard of Starbucks, a Ticker SBUX. It's a company that I've owned for a number of years. The good news, is that Brian Niccol took over in September of 2024, September 9, I think it was. The stock has returned 20% since then. Not a bad start. The bad news, guys, is that the market is up 40% over that same stretch. It is an underperformer. We just saw news today that they announced another round of layoffs. This is the third round of layoffs since Niccol took over. If you look back to February 2025, they were cutting 1,100 jobs and not filling several hundred other open positions. Then seven months later, another 900 jobs cut as part of the one billion dollar restructuring plan. Keep in mind. I mean, these are mostly corporate jobs. Keep in mind, Starbucks employs 381,000 people globally. It takes a lot to run those stores, but it definitely makes sense for the company to want to be as efficient as possible. The thing is the stock is still over 40 times full year estimates today, which I just think is really optimistic. Yeah, I'm keeping my shares, but I don't know that I think it's a tremendous buying opportunity today.

Travis Hoium: Dan, is Starbucks where you get your coffee?

Dan Boyd: No, it is. Well, OK, yes and no. If my wife wants coffee, then yes, we'll go to Starbucks. But me, no.

Travis Hoium: The answer is yes. I don't think you have a vote on this.

Dan Boyd: It's hard to argue with coffee, and it's hard to argue with my wife.

Travis Hoium: Lou, what's on your radar this week?

Lou Whiteman: Nothing as interesting as coffee, unfortunately. But, Dan, I am watching CH Robinson, Ticker CHRW. Robinson is an asset-light shipping broker. Basically, they are the middleman that connects companies that need to move something to the trucks that can do it. The stock was down this week after the Supreme Court ruled that brokers can be held liable for doing business with unsafe trucking companies. It was previously assumed that brokers wouldn't be held at fault, so this hit the stocks. This will raise insurance costs. It will raise other costs for brokers like Robinson, but I think it will also benefit well-capitalized best-of-breed companies. That's what CH Robinson is. I think it could actually help them gain share because they are ready to fill this need. Stock has been on a roll until this ruling. I think any pullback could be a huge buying opportunity. I'm watching this one closely.

Travis Hoium: Dan, what do you think about logistics?

Dan Boyd: I love logistics, pal. Stuff's got to get places, right?

Travis Hoium: All right, Dan, which stock is going on your watch this week?

Dan Boyd: I mean, they're both pretty good. Like, it's hard to argue with coffee, and again, stuff's got to get places, but I think CH Robinson has a little less expensive for what it is. I'm going to go CH Robinson this time around.

Travis Hoium: That's all the time we have on Motley Fool Money. Thanks for listening. Thanks for listening to Motley Fool Hidden Gems Investing. We'll see you here next time.

Jason Moser has positions in Alphabet, Amazon, Nike, Starbucks, and Under Armour. Lou Whiteman has no position in any of the stocks mentioned. Travis Hoium has positions in Alphabet and On Holding. The Motley Fool has positions in and recommends Abbott Laboratories, Alphabet, Amazon, Cava Group, Chewy, Costco Wholesale, Deckers Outdoor, Eli Lilly, GE HealthCare Technologies, Intuitive Surgical, Lululemon Athletica Inc., Medtronic, Meta Platforms, Microsoft, Nike, Nvidia, On Holding, Starbucks, Texas Roadhouse, and TransMedics Group. The Motley Fool recommends C.H. Robinson Worldwide, Novo Nordisk, and Under Armour and recommends the following options: long January 2028 $520 calls on Intuitive Surgical and short January 2028 $530 calls on Intuitive Surgical. The Motley Fool has a disclosure policy.