In this podcast, Motley Fool analyst Jason Moser and host Mary Long discuss xAI's latest purchase, Apple's healthcare endeavors, and what BlackRock CEO Larry Fink is looking forward to.
Then, Motley Fool host Anand Chokkavelu and contributors Jason Hall and Tyler Crower gather for a Scoreboard episode on NextEra Energy.
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 video was recorded on March 30, 2025
Mary Long: XAI eats its sibling. You're listening to Motley Fool Money. I'm Mary Long, joined today by Mr. Jason Moser, JaMo, thanks for joining us on this Monday. How you doing?
Jason Moser: Very happy to be here. Thanks, Mary.
Mary Long: We'll kick today off with some news that actually hit on Friday. Mr. Elon Musk, who just happens to always be finding a way to stay in the news cycle, announced that he sold X, the social media company formerly known as Twitter to xAI Musk's AI start-up, price tag for that, about $45,000,000,000 net 12 billion of debt. What is combining these two Musk-owned companies allow for both this hybrid model to do that couldn't happen when they were separate companies.
Jason Moser: It seemed like this was always the plan in the back of his mind. I know he had mentioned it before, and the general idea was to do this eventually. I think there are a number of potential benefits, risks that come with it, as well. It's just like any investment. But when you consider the nature of Twitter or X in what it does that is just a free flowing stream of just information at all hours of the day with, a considerable number of global users. You think combining these two, you could certainly open up xAI to a lot of data, a lot of information as he tries to establish Grok and build out his versions of his own like, ChatGPT.
But I think having those tools and having these companies work together, you can see a better user experience in the way of both. You're going to get more data over there to Grok, and Grok's tools might actually be able to build out a better, more personalized, more useful experience on X. It certainly gives them the opportunity to innovate because they'll have so many tools at their disposal. There won't necessarily be the separation that existed before. They absolutely maximize efficiencies there. They may not need to necessarily have everybody and everything with the two companies remaining separate. As we see with acquisitions, oftentimes, they get in there and they cut the fat a little bit, and they get a little bit more efficient I think it certainly can open up to additional tech developments and synergies, as they love to say in this world. Then I think the economies of scale to come with this. You combine the operations, I said, it'll lead to cost savings, essentially improved profitability in the long run, assuming this is executed effectively.
Mary Long: X and xAI aren't obviously not Musk's only companies. Do you see there being potentially another chapter here? Does this move? Musk has done this before. Tesla bought a Musk related company back in 2016. Might we see Tesla swallow up this new X, xAI hybrid? What about the boring company Neuralink, these other companies that exist within the Musk universe? Might we see more of them start to fold together explicitly?
Jason Moser: Certainly Musk does not stand still. He is always doing something, and he's got a lot with which to work. I don't know that that would necessarily be the most effective move there, but I think what we learned with him is you just never say never. I would expect something of that nature to appear on the horizon at some point or another. It's difficult to say exactly what would go where. With Tesla, I don't know. To me, that's one that it's already becoming a little bit understandable because the energy tie ins there, along with the car company, the battery technology and the solar and what does it all mean? There is a downside to making a business too complex and too complicated to understand.
Mary Long: It's always an impossible question to ask you to predict the future, but I think, especially when Elon Musk is in the equation, the crystal ball gets even hazier because you never really know what his next move is going to be. When it comes to X and xAI, the clearest story line here, and you mentioned this, synergies is that unfettered access to X allows xAI to train its large language models to be even more human like. They've got this treasure trove of human language. Like, it's quirks, it's abbreviations, it's personalities. XAI already had some access to the platform X. Just how big a boost does this combining actually give Grok?
Jason Moser: That's difficult to say because we don't really know exactly how close that relationship was. When you think about it's beyond data. It's about developing these APIs for other developers to use and obviously, introducing more document production documentation. But yeah, that's very difficult to say, But my guess is, again, you said that word, I think unfettered. This really, I think, just cleans up the lines of communication between the two and probably makes it a little bit more efficient.
Mary Long: What's interesting to me about this is Meta already has access to this treasure trove of human data, arguably, even more so than X. It's got pictures and videos and really developed user profiles. Have we seen that data benefit Meta's Llama, LLM in the way that many might expect it to?
Jason Moser: Yeah, I think so. I think not only is this helping Meta develop things like agents which most are out there trying to work with, but it's also the technology that's ultimately serving its advertising business. We know that's the crux of the business today. More than 4 million advertisers are now using at least one of their Gen AI ad creative tools. That's up from 1 million users just six months ago. We've seen growth really ramp up there. That's just indicative that they're getting a line out of it and having fun using it and building on it. That's that meta open source model, so to speak. When you you go back to the most recent earnings call, Zuckerberg, I think, has a lot of aspirations. He believes this year is going to be the year when a highly intelligent and personalized AI assistant reaches more than 1 billion people, and right now they stand at around 700 million with theirs. But we know he places a lot of value in that 1 billion number because that becomes very difficult to disrupt, and it can be very rewarding from a data perspective, as well.
He also said he expects this year is going to be the year where it becomes possible to build an AI engineering agent that has the coding and problem solving abilities of around a good mid level engineer. Now, I don't know about you, Mary, but I think I'm aiming for something a little bit better than a mid level engineers. This is a process. It's just progress. My suspicion is we would see that language change in 2026 and 2027 to eventually an expert engineer. I think that's what this is all leading to. I think from Meta's perspective, they're doing a lot on this front, and it is absolutely helping their business in all regards.
Mary Long: It's one thing in my mind to talk about how social media companies like X, like Meta, can use data to train their own AI models. There's an inverse angle here, too that I'm curious about, and it's how increasingly powerful AI actually affects the platforms themselves beyond coding, but the actual experience for you. Earlier this year, Meta had a back and forth in the news about AI powered accounts because in early January, their VP of generative AI told the Financial Times the company expects homemade AI users to appear on its platforms much in the same way humans do on a lot of backlash for this ultimately rolled back that statement a little bit. But when that statement first came out, Meta was quite excited about it. To me, that sounds like a nightmare. Already, the incessant advertisements on social media make them a far less appealing platform to me. I want to see my friends. Why would I want to see AI chatbots? I might be different than the rest of the populace, but why is that so appealing to Meta in theories?
Jason Moser: I think you made a good observation there, and you may be different than others, and that's what we all have to remember, because I agree with you on this one. It's not something that's very attractive to me, but I also fully know not to extrapolate those views out to the greater audiences that they serve, because there could be plenty people that are interested in this. Not exactly sure why. I don't really care so much about following just made up accounts. It's the rise of the virtual machine, so to speak. It feels like it takes away from the personal connections that have earned those platforms, their success and the large audiences to date. But by the same token, I do understand the desire to try something new.
If they feel like there's a next evolution of social networking where people want to interact with those catered experiences, then it could be something that adds to the engagement factor. I think that's ultimately what they're trying to figure out here. Maybe it works, maybe it doesn't, if it does great, if it doesn't certain they take some lessons from it. But yeah, it does feel like they take their foot off the gas on that one a little bit because maybe the general public wasn't quite as on board as they were from the beginning there.
Mary Long: We'll move to another AI related story to start off our week and close out the month. Apple is planning to build a health coach, an AI health coach into its Apple devices. This is called Project Mulberry. Previously, it was called Project CRTs, and it involves a completely redesigned health app that includes an AI health coach. Potential release date for this is maybe Spring or Summer of 2026, but it would work like this. The health app gets data from your devices, and then an AI coach uses that information to make personalized recommendations for you about how to improve your health. With the caveat that we just made that, hey, what I might not be with the general populus one's, JaMo, altered to you. Do you see yourself using a platform like this? Is this something that's at all appealing to Jason Moser?
Jason Moser: Personally, for me, no. I think I get a kick out of checking my step count after I get done mowing my lawn, because I'm just always astounded that it takes me about five miles of walking to get all the work done. I'm not interested in any an Apple watch or device like that. I'm not looking to be that connected. That's just me personally. I think that in regard to Apple, at least in the near term, I don't think this is about monetizing something like this, as much as it's about adding another reason for users to stay in that Apple ecosystem. It's about engagement. We see them do that all along the services front with all of their different offerings that they have. They're just wanting to give users of their hardware another reason to stick around. For a lot of folks that healthcare data is something they're into.
I think they see that and say, we've got this large base of users that we feel like would get something out of this. It's not really about, Hey, we're trying to directly make money off this as much as we're trying to make our platform a little stickier and keep people in our universe so that they'll upgrade to that next iPhone. Maybe they will go buy an Apple watch or the air buds, whatever they are, AirPods or whatever other hardware development may end up coming up with in the future.
Mary Long: Tim Cook has said repeatedly that at the end of the day, when all said and done, Apple's greatest contribution to society will be in healthcare. Seemingly, this is a step closer to that. But I hear that. I think that is a big bold statement from the company that invented the iPhone and truly changed personal computing and large and how humans interact with hardware devices. You got any immediate takes on that? Yes, it's one thing to want to keep people in the Apple flywheel. It's another thing to say, Hey, we know we've done some big stuff, but what's coming next in healthcare is even bigger.
Jason Moser: It is a very bold statement. I think it's important to parse that out and say, well, he said greatest contribution. I would say, that doesn't necessarily mean like this is going to be the biggest revenue creator for Apple in future as much as they feel like this is how we can contribute to society. I don't know how that'll shake out, ultimately, but you're right, it is a very bold statement, and only time will tell if that actually is the case. I do think if it is the case, it's likely much further down the road. It's going to come from some future invention device, service that they come up with. I think that probably goes back to these health aspirations in this new AI generated platform that they plan on introducing. That could just be another step along the way on that journey.
Mary Long: Yeah, and anything health related is admittedly it's just inherently lofty. Even if your goal isn't for that to be your biggest contribution, it's hard work.
Jason Moser: It is.
Mary Long: Apple is known for having great devices with smooth user interfaces. Yet, still the Apple watch is not necessarily the go to wearable for athletes. It's still far away from being a medical lab on your wrist, which is what it's hoped to be. The health app is pretty basic, ultimately. The company has been working on a non invasive glucose monitor for over 15 years just to underscore how difficult this stuff can be. Why do you think Apple's health ambitions have proven so difficult, despite this being something that seemingly they care a lot about?
Jason Moser: I think that part of the challenge with health at this level is it's a two way transaction. Having the technology is great, but you also need the folks that want to use that technology and use it consistently, and not everybody feels the need to be so connected and get so granular with their day to day health data. It's great that the technology can do that, but is it something that you go to really stay in touch with every hour of every day? I don't know. If you're younger, you probably don't care as much. If you're older, you're probably paying a little bit more attention to that stuff, but when it requires a lot of effort to keep up with all of this data, whether it's food management or checking your exercise or your sleep patterns or whatever, it does require effort on the part of the consumer to actually get in there and do that work.
I would assume that they're working on developments to help reduce that friction because I think reducing that friction might make it more attractive to more people. It's not to say there aren't plenty people out there who aren't interested today, they are, but their goal is obviously to have this be their greatest contribution to society. That means they need as many people on board as possible.
Mary Long: I'll close that today with a nod to BlackRock CEO Larry Fink. His annual letter to Investors was published this morning. It's a 27 page letter. It's part love note to capital markets and part roadmap for BlackRock's recent past and their future. A big theme of the letter is infrastructure. Fink argues that governments need to fund infrastructure, but they can't do that through deficits because deficits can't really get much higher. Instead, governments he's predicting are going to need to turn to private investors. Fink sees a need for $68 trillion in new infrastructure between now and 2040. He calls out in the letter, I'll quote here because it really stuck out to me. That number 68 trillion by 2040 is the equivalent of building the entire interstate highway system and the Transcontinental Railroad start to finish every six weeks for the next 15 years.
That's the end of the quote. Jason Moser. Big number to me. Any immediate reactions to that and Fink's whole argument?
Jason Moser: It is a very big number, and I think he's likely not far off. Infrastructure has evolved over the years with all of the investments in AI and data centers, for example. It's not just roads and bridges and power grids anymore. It's something to keep in mind that infrastructure evolves as technology evolves, and that, I think, continues to offer really attractive market opportunities. Of course, this is one of them. He noted, even in that letter in idea Jensen Huang said, right now, we're $150 billion of AI infrastructure into trillions of dollars we have to go build. In that short little time frame on that one little opportunity there, we see massive opportunity for growth there, but his 0.2, it's not always an easy market to gain entry to these days, which is why he started talking more about private markets. It does sound like that might be starting to change, as well.
Mary Long: Yeah, private markets and expanding access to that, also a massive theme with a letter. Notably, that's a space that BlackRock is increasingly stepping into. That's something to keep in mind when reading. I'll close us out on this one question because Fink's letter opens talking about volatility. He addresses up front, literally within the first sentence that basically everybody he's talking to is "more anxious about the economy than any time in recent memory." What's interesting to me is he opens with that, and then he paints this picture about something that he's seemingly very excited about for BlackRock, and for largely the world. That's, again, infrastructure. I mentioned this because we got Tariff Liberation Day coming up in two days. That's causing a lot of anxiety among investors and other folks, as well. Nobody really knows what to expect, what things are going to look like on Wednesday, after Wednesday. Let's maybe step away from the anxiety and close us out today with something that you're hopeful about. Fink said infrastructure. What say you, Jason Moser?
Jason Moser: I definitely think infrastructure is an attractive opportunity, and I know it can be easy to get frustrated during anxious times like these. There's a tremendous amount of uncertainty there, and it seems like every day brings a different headline with a different priority, but as we always say in investing it's a forward looking exercise. I would say, personally, really, I'm just excited about the future, Mary. I think there are going to be a lot of great opportunities that come up with the places that AI and extensions of that technology will take I think it's fair to say, too, this is a new paradigm with AI and even just understanding exactly what it means for businesses and how they can use it effectively. That will take a little time as most important things do for us to really understand those best use cases. But sitting still also isn't an option. You've got to keep moving forward. Generally speaking, directionally speaking, that's where the puck is headed. Companies will need to continue working on trying to figure out how to make it work best for them. I think that, to me, is really exciting in the near term, discovering all of these best use cases for AI technology and all the great things that are built on top of it.
Mary Long: Mr. Jason Moser, always a pleasure to talk with you. Thanks for starting your Monday with us.
Jason Moser: Yes, ma'am. Thank you.
Mary Long: Since we're already talking about excitement for the future, one area with a lot of promise is renewable energy. On in [inaudible] hosts Fool contributors, Tyler Crowe and Jason Hall for scoreboard episode on NextEra Energy.
Anand Chokkavelu: Business first, including factors like industry and competition. A 10 is invincible, a one is hopeless. Both of you are at nines, Tyler.
Tyler Crowe: It's a regulated utility. Utilities are a really durable business, especially regulated ones like NextEra Energy's core business, which is Florida power and light. It has the rarity in utilities where it's growing at a faster rate than most other utilities because it has a combination of strong demographic trends in Florida from migration, things like that. It has an unregulated side of the business that builds renewable energy capacity, and it's allowed them to grow considerably faster than you would consider your run of the mill regulated utility.
Jason Hall: Yeah, what Tyler said, but I think it's especially the combination of the demographic trends in its geography and then bolting on that unregulated business that has so much room for growth. Even though we'll talk about it, they have had a little bit of a flesh wound with that business on their bottom line.
Anand Chokkavelu: Yeah, when I saw the nines, I was amazed, and then I was like, yeah, it is a utility. It makes some sense. Let's talk about management. A 10 is Warren Buffett. A one is Homer Simpson. Jason's at a seven, Tyler, you're a little lower at a six.
Tyler Crowe: I'm talking it's a points because it really dragged its feet with a subsidiary, NextEra Energy Partners. This was a financing vehicle for a lot of its renewable energy. It's now changed its name to XPLR infrastructure because I don't know, maybe NEP was just too toxic of a name these days. It was a project finance vehicle that they over leveraged, but kept telling all its invest it was fine, and the dividend growth would continue. They need to bring out their debt, though, apparently because last month the SPLR infrastructure suspended its dividend indefinitely to repair the balance sheet. It was really pulling the wool over investors' eyes here. Even though it is a subsidiary, NextEra Energy had considerable control over the business.
Jason Hall: It's definitely more than just a scratch, too, because the idea is to drop down those assets to what was formerly NEP, but still through its equity ownership and control of the partnership, to get dividends and get cash flow from them. Now that's affecting it directly as well as the shareholders of that business as well. Definitely this was a management mistake. If you run a utility, you have to get the financing right for your non regulated business because you don't get regulators to bail you out at the expense of ratepayers, like they do on the regulated side. That non regulated business, you got to get your financing right and they've stumbled in that.
Anand Chokkavelu: Let's talk about the financials. A 10 is a fortress, one is Yikes. Both of you are at a seven, Jason.
Jason Hall: The one thing that they haven't done as well as you would want to see for a utility company. The reality is that over the past decade plus, growth was wallpapering over what was a growing problem with a lot of their financing. But when the growth slows, the warts show through. But again, I'm picking nits here because this is a very strong business and its balance sheet is perfectly fine. It does have plenty of ability to continue to grow its cash flows just based on being an adequate managed business that happens to have all of the benefits of growth that most utilities just don't have.
Tyler Crowe: The financials for the parent are still, I would say, decent, not great because it did transfer a lot of debt risk to that subsidiary that we've been talking about. The one thing I did notice on its most recent investor presentation is its debt levels are hovering relatively close to a threshold that would merit a credit rating downgrade from the ratings agencies. Something to monitor, and I would like to see how it manages its spending and leverage in the coming years. Obviously, the regulated side, probably not as much of a problem, but that unregulated renewable power business is going to significantly change, and I'd like to see what they do with it.
Anand Chokkavelu: Jason, for valuation, I have these questions, three. How well will NextEra's stock do over the next five years? How safe is it, keeping in mind that 10 is a sure thing. A one is a lottery ticket, and what is the airspeed velocity of an unladen swallow?
Jason Hall: My question for you is, is that a European or an African swallow? Don't say that because we need you around for a couple more minutes to finish the show on it. My safety score is an eight and I expect returns around 5-10%. For the first time in years, thinking about the safety side. NextEra Energy is actually priced appropriately for a utility company. Along that great growth run, we saw so much expansion of its multiple. Now, you get to a reasonable valuation that's in line with most of its large peers, combine that with its ability to grow earnings at a faster rate. Three percent dividend yield, I think it's dividend is pretty well protected at the corporate level. I think hitting that 5-10% range of returns without the downside risk that the valuation created in the past, when money was cheap and investors didn't appropriately price that risk of higher capital costs, I think the higher end that outcome is probably the most likely case.
Tyler Crowe: I actually had the same in returns and safety. Manager was protecting earnings growth rate in the 6-8% range for the foreseeable future and civil or dildGrowth which lines up with its historical returns. But basically, the stock hasn't done anything for the past five years. That's come from valuation contraction. It went from, like, 60 times earnings down to 20. I think it seems more appropriately valued now and can land close to that 10% range.
Jason Hall: I'm going to pivot a little bit because I'm contractually obligated to mention a Brookfield entity in every Monthly full appearance that I make. But seriously, I want to talk about Brookfield Renewable. Like NextEra Energy, the stock is down a lot, but the difference is that Brookfield Renewables business has probably never been stronger, and the worries about utility scale wind and solar are probably inflated right now because of political reasons that I don't think are going to carry over to the real world decisions, particularly for a business that's increasingly growing outside of North America. Whether it's the partnership, BEP, or the corporation, BEPC, I think that's where I would be looking right now.
Tyler Crowe: Well, I'm also contractually obligated to mention the most obscure stocks possible whenever I make my appearances. I'm going to go with Pinnacle West Capital Corp. This is actually the Arizona regulated utility. Same idea regulated electric utility. Similar demographic trends as Florida in terms of, like, net migration to the state, favorable demographics. Also, it has a massive industrial manufacturing growth going on recently. I don't know. It seems like every single time you read a newspaper about a new manufacturing plant, for some reason, it's in Chandler, Arizona, for some reason. I think that will drive electricity demand in the state significantly, benefiting both unregulated people like Brookfield as well as Pinnacle West. You know, the projected earnings are a little bit slower than NextEra Energy because it doesn't have that unregulated side, but it's a much more conservative balance sheet, and trading at a considerably lower price to earnings multiple.
Mary Long: Every now and then, we share scoreboard episodes on Motley Fool Money, but premium Motley Fool members get access to all Scoreboard episodes which drop every weekday at 7:00 P.M. Eastern. To become a premium Motley Fool member and join our flagship Investing Service, stock advisor heat ww.fool.com/SINEP. We'll also drop a link in the show notes. 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, so don't buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and are not approved by advertisers. For the Motley Fool Money team, I'm Mary Long. Thanks for listening. We'll see you tomorrow
