Semiconductors and Housing and Retail, Oh My!

In this podcast, Motley Fool contributors Tyler Crowe, Matt Frankel, and Jon Quast discuss:

• Another quarter of monster numbers from Nvidia.
• Home Depot's and Lowe's thoughts on the housing and home improvement market.
• Walmart's quarterly numbers make Target's management look silly.

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A full transcript is below.

This podcast was recorded on Nov.20, 2025.

Tyler Crowe: The biggest names in semiconductors, housing, and retail are all putting up numbers this week. This is Motley Fool Money. Welcome to Motley Fool Money. I'm Tyler Crowe, and today I'm joined by longtime fool contributors, Matt Frankel and Jon Quast. We're going to talk about earnings and more earnings and more earnings because we had Walmart. We had Lowe's. We had Home Depot. We had Target. We had a whole bunch of other companies. We normally do stocks on our radar, but frankly, we just didn't even have time this week. But we're going to start with the biggest company in the world reporting earnings, and that's Nvidia. It would almost be malpractice if we didn't talk about it. It's a $4.4 trillion company. It reported earnings yesterday and delivered another quarter of, frankly, in my opinion, hard to believe earnings. It's still like I'm still wrapping my head around the idea that a company of this size getting $185 billion in annualized earnings is still putting up 65% year over year revenue growth. It's just blowing my mind at this point. Now, again, all of this surprising. I'm sure you guys had some surprises, as well. I want to go around the room here and see what were your biggest takeaways from this earnings.

Jon Quast: Yeah, Tyler, these are big numbers. You look at the trailing 12 month revenue. It's up 65% from the comparable trailing 12 month revenue. That's a huge growth rate. It expects 65% revenue growth rate in the next quarter, so fiscal fourth quarter at this scale, that's almost incomprehensible. But here's the quote from CFO Collett Cress. We currently have visibility to half a trillion in Blackwell and Ruben revenue from the start of this year through the end of calendar year 2026. Basically, according to this quote, 11 months of that's already in the book, so we're looking at the next 13 months. If this is correct and this isn't orders, this isn't revenue in the bag, but this is visibility. It's implying roughly 300 billion in data center revenue in calendar 2026, so next year. That's an ongoing incredible growth rate, astronomically large incomprehensible growth rate at this scale, and that's keeping its margins high right now at 63% operating margin in Q3. I don't know if we've ever seen anything like this.

Matt Frankel: Yeah, for me, and I'm glad Jon brought up a quote from their management, because for me, also, the biggest takeaways might be qualitative, not quantitative. For example, Jensen Huang said that the cloud GPUs and NVIDIA makes, Jon mentioned a couple of the products are essentially sold out and that compute demand keeps accelerating and compounding across training and inference. To follow up on what Jon mentioned with profitability, it's worth noting that in margins, like you said, keep getting better somehow. It seems like they can't, and then they do, which means earnings are growing faster than revenue. Earnings in the third quarter growth 67% year over year versus 62% quarterly revenue growth. It's not only a story of growing revenue, it's growing profitability as well.

Tyler Crowe: This past week, I would say the day that NVIDIA reported aside, there has been some, I would say, larger than usual drops in stock prices for some of the big tech companies, and by default, the broader market because the top 10 companies make up such a large portion of the broader market these days that they are going to pretty much move the market where they see fit. We continue we as investors, like three of us, Motley Fool, we continue to believe that as long as the thesis of an investment is intact, investors are best off just buying the stock and sitting on their butts. Charlie Munger said something different, but I don't want to get in trouble with my producers. The thesis altering item, so if the thesis does change, it seems like it would be spending on NVIDIA chips and all the supporting infrastructure that we've seen over these past quarters and maybe a year, two years, three years, you could say that if it's being done in this arms race to control the most chips and things like that, instead of being allocated as the best place to make a return. That would seem like it would be thesis altering, and that is kind of the thesis to say that we're in a bubble. I'm going to bring it back up again because we bring it up so many times, and it gets discussed so much in financial media these days is the obligatory bubble question. To each of you, does this most recent NVIDIA earnings report ease your concerns about a potential bubble or exacerbate them?

Matt Frankel: I've said before that I feel like AI is in somewhat of a selective bubble right now. What I mean by that is some stocks out there, not NVIDIA, are very inflated because investors think AI is going to 10X the business quickly. Companies like Palantir come to mind when I say that. But when it comes to the big tech companies that are really building out the infrastructure for AI itself, I really don't see it as a bubble. For one thing, they're building real things with practical use cases like data centers and as these large language models and just AI technology in general gets more capable, the need for more compute will grow almost exponentially, like Jensen Huang said. One number that stood out to me is the 65 billion in revenue that's expected in the fourth quarter, which would be an additional 14% growth sequentially in NVIDIAs revenue. That has to be a direct impact of when you saw companies like Google, like Meta, Amazon investing more than anyone had expected in AI infrastructure. For the big ones, I don't really think it's a bubble.

Jon Quast: Yeah, this report from NVIDIA is easing my concerns when it comes to an investment bubble. I agree with Matt. There are companies out there that are overvalued, and I don't deny that, but that's kind of always the case. When it comes to this whole AI play, this AI trend, you start to look at some of these numbers and you're asking with a bubble, when does the spending peak? Personally, I still haven't seen the top of the mountain when it comes to the spending. We already had the NVIDIA quote, but all of these other players are continuing to say, look, as far out as we can project, we're sold out. You look at the memory players as well. The ones who are supplying the memories for these data centers, they're saying, look, we're already taking orders for 2027 because 2026 has already sold out. That, to me, says, it puts me a little bit more at ease when it comes to this talk of a bubble. Now, why am I concerned about a bubble in the first place? Because these numbers are so stinking large. We're talking orders and hundreds of billions of dollars. We're talking about trillions of dollars in infrastructure spend as a whole annually. Those numbers are too big for my puny mind to comprehend. I do get concerned about a bubble, but the NVIDIA report continues to put it at ease because there is real ongoing demand there.

Tyler Crowe: One sector that I think really wishes they could get some of that trillions of spending going on is the housing industry. Coming up, we're going to do some earnings reports from the home improvement sector.

Of all the retail companies out there, Home Depots and Lowe's are, in my opinion, some of the most fascinating to follow. Not because they put up weird surprises from quarter to quarter. Like, surprise, you didn't know this was coming. But more, in my view, it gives us a unique window into the housing market. They are the two largest home improvement retailers and the third, I don't even know if I could name the third and who is the trailer behind these two companies because they are almost a duopoly. Both Home Depot and Lowe's reported earlier this week and like the prior quarter, the thesis that we're still in a weak housing market still seems to be holding up with tepid housing sales, tepid issuance of second lines of home credit for home improvement and things like that. It seems to be relatively consistent, and I wanted to get your guys' takes on the companies a little bit more specifically, starting with Home Depot and Lowe's, like, giving a compare and contrast of the two. Did we see similar results from both of them, and if not, what one did better in your view?

Matt Frankel: Tyler, you're right about the Duopoly. If I had to guess, my best guess would be that Ace Hardware is the Number 3, but I don't know that for effect. Neither one of these companies, I wouldn't call either of them great in terms of earnings. Home Depot missed earnings for the third consecutive quarter. I remember when they used to beat quarter after quarter after quarter, and they lowered their guidance. They now expect a 5% year over year earnings decline for the full year of 2025. They blamed the weak housing market correctly for the lack of demand and the relatively calm natural disaster season we saw it hurt expected sales of things like generators and roofing supplies. Although I think we would all agree that that's a good problem to have better than just generally consumer headaches. Mortgage rates continue to stay very high, and keep in mind that the main way homeowners finance large projects is by tapping into home equity.

Matt Frankel: Lowe's had many similarities to Home Depot, as you would expect being a duopoly. It also lowered its full year earnings and guidance, for example, Lowe's grew comparable sales slightly in the third quarter. They beat expectations, which is the biggest contrast. Home Depot fell by about 6% after earnings. Lowe's gained 4%, and it's really just because one beat expectations and one didn't, although it's not as big of a gap as that makes it sound.

Jon Quast: Yeah, if I was forced to pick a winner between these two companies, I think I would choose Lowe's. I think it's report was just a tad better than Home Depot. But really, there's no strong material difference between the two reports. They're both seeing pretty much the same thing. They both mentioned that lack of hurricanes was a headwind to the business in this quarter, and as a Floridian, I'm grateful for that. I agree with Matt. It's a good problem. But organic growth is hard to come by for these businesses right now because of the market that they are in. Really the only material growth for either company came from acquisitions. Home Depot acquired GMS, which distributes drywall and steel framing to job sites.

Lowe's acquired a GMS competitor in FBM, both of these businesses, as a Duopoly, right, they're fiercely competitive, and so they're both going after these professional customers. When one makes an acquisition, you know the other one's going to make a similar acquisition so that nobody takes market share from anybody else. They're going to try to preserve what they have, but not a lot going on for organic growth right now, but a couple of acquisitions boosting the top line.

Tyler Crowe: Now we're going to do my favorite part where we try to read through the tea leaves a little bit of the conference calls, the earnings reports, maybe some little tidbit in the press release. Was there any clues to you or worthwhile tidbits about the housing market writ large that you saw from either of these companies?

Jon Quast: Yeah, if you look at the results, both of these companies are trying to service two customer bases. One would be the homeowner, and the other would be the professional. You look at the homeowners, they seem like they're doing fairly well. They're in a good place. They're still spending, and homeowners will continue to spend regardless of economic conditions. They may take on big purchases, but the little things we're going to replace the light bulbs, that sort of stuff. Homeowners are doing OK. The pros are the ones that are struggling a little bit more because the housing market is stuck in neutral, and Matt will speak more to that in a minute. That's really what's going on right now is that there's not a whole lot going on in the professional market, but homeowners are doing just fine.

Matt Frankel: Yeah, to Jon's point, Lowe's CEO Marvin Ellison, he said that homeowners are healthy financially, but the uncertainty is making them pump the brakes on large projects. Home Depot similarly, he said homeowners are in a deferral mindset when it comes to spending on projects. There's a reason that home equity in the United States is at its highest level ever right now. It's because people are largely on the sideline. Really, we need either for home prices to come down significantly, which I don't see a particularly likely or for mortgage rates to trend significantly lower, which is more likely but could take a while and that's really what we're going to need to thaw the housing market and to return Home Depot and Lowe's to any type of growth. It's not really a question of demand. People want to do projects, people want to buy homes. It's just cost prohibitive right now.

Tyler Crowe: I want to toss one more kind of tidbit into that, too. As you said, housing prices, mortgage rates. But also, there's that sentiment thing, and I think there's a lot of consumer sentiment, especially around things like unemployment. We're seeing job cuts. We're seeing consumer sentiment surveys are way down and even with lower mortgage rates, if people are in such a malaise in terms of their spending, that's going to make it that much harder to take it one step further, it's not just the rates have to come lower. People, I think are going to have to actually get comfortable with those rates to really take on that big project. Coming up after the break, the marathon for earnings continues with America's largest retailer.

Now normally, we wrap up the Thursday show with stocks on our radar. But with so many intriguing earnings stories this week, we're going to do one more, and that's Walmart's earnings. This one stood out again this quarter because after Target reported earlier this week and went into their bag of management excuses, Walmart once again put up great numbers and raised its sales outlook for the fiscal year. Now, Jon, you, Rachel and Travis covered Targets earnings yesterday, so we're not going to get too deep into Targets numbers specifically. Matt, I want you to give the results of Walmart, and then, Jon, I want to ask, after seeing Walmart's results, have it changed your opinion on Targets at all?

Matt Frankel: Yeah, you're right. Target had a rough quarter after four years of what I would call essentially flat revenue and with an incoming CEO. I wouldn't say it was a big surprise that the quarter was rough, but Walmart, their earnings really just highlight how resilient the business is during uncertain times. There's a core customer base that's going to shop at Walmart, no matter what. But during uncertain times, customers who typically shop at higher end grocery stores and things like that, they often gravitate toward Walmart to stretch their budgets, and during the 2008 Great Recession, for example, Walmart was the best performing stock in the S&P 500, and that's why their sales actually went up. Not only was Walmart's Q3 impressive, but they did raise their full year sales guidance, which is especially interesting, given the government's shutdown disruptions in the fourth quarter, including SNAP benefits not coming to some people. But it does make sense, considering the grocery inflation we're still seeing out there. Consumers want to make sure they're getting the best possible deals, and you're not going to get that at Publix or Kroger. You're going to get it at Walmart.

Jon Quast: Yeah, to your original question, Tyler, I think that Walmart's results confirm my beliefs that Target had a bad quarter. I think there's a good lesson in here for investors because if you want to go deep in your research as an investor, I think listening to the conference calls is a good place to start, but then going even deeper still is evaluating that management commentary in light of the financial results of some of the competitors out there. If you were to listen to Target earnings report, they mentioned a lot of things that competitors didn't seem as impacted by specifically Walmart. Target said the consumer was cautious, Walmart didn't. Target said consumer sentiment is at three year loss, and that's actually true. But Walmart wasn't affected by that. Target mentioned that consumers are worried about jobs and tariffs, but Walmart didn't mention those things either. I will say that Target did mention that consumers want value. Walmart agrees, and herein lies what I think the real problem is here. This is a hot take. Walmart has a reputation for value. Target doesn't as much, and so Target is in between worlds. It wants this elevated experience. That's how it talks about it, but it also wants it to be known for bargain prices, and I think it's struggling to be both things at the same time, whereas, Walmart isn't trying to give consumers an elevated experience, in my opinion, and its customers just accept it. That's where you're going to go for the deals. I think that Bath & Body Works might be in the same kind of in between worlds problem that Target has right now. Bath & Body Works stock down big today. It's trying to provide this maybe higher experience, but also its consumers want value prices. It's tough to be both things at the same time. Walmart doesn't have to try to be both, and I think it's showing in its financial results, just laying out a better quarter than Target.

Tyler Crowe: Yeah, at this point, I'm not sure how many more excuses Target can have because this is becoming quite the quarterly tradition where management says something outside of their control is wrong. Then Walmart makes Target's management look silly less than 48 hours later, even with a change in CEO, because we got a new Walmart CEO this quarter, and it'll be interesting to see if Target's saying new guy on the job, thing like that and I'm sure that Walmart is just going to put up great numbers again even through a transition. We'd love to keep going, but that's going to be all the time we have for today. Matt, Jon, thanks for sharing your thoughts. Quick programming note. We won't be doing a show next Thursday for Thanksgiving. This crew of rotating Motley Fool hosts and analysts will get to be the first people to wish everyone a happy Thanksgiving.

As always, people on the program may have interests in the stocks they talk about, and the Motley Fool may have formal recommendations for against. Don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards, and it's not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. See our full advertising disclosure. Please check out our shows. Thanks to our producer Dan Boyd and for the rest of the Motley Fool team. For Matt, Jon and myself, thanks for listening, and we'll chat again soon.

Jon Quast has no position in any of the stocks mentioned. Matt Frankel, CFP has positions in Amazon. Tyler Crowe has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet, Amazon, Home Depot, Meta Platforms, Nvidia, Palantir Technologies, Target, and Walmart. The Motley Fool recommends Kroger and Lowe's Companies. The Motley Fool has a disclosure policy.