Dinosaurs Roar for Comcast; CoreWeave Goes Shopping

In this podcast, Motley Fool Chief Investment Officer Andy Cross and senior analyst Jason Moser discuss: Jurassic World Rebirth ders for Comcast

CoreWeave finally gets it done for Core Scientific

Oracle makes a deal with the federal government

Two stocks to look at if the market pulls back: Samsara and Howmet Aerospace

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A full transcript is below

Andy Cross: Dinosaurs roar for Comcast while CoreWeave makes an acquisition

Motley Fool Money starts now

Welcome to Motley Fool Money

I'm Andy Cross, joined by Motley Fool's Senior Analyst and advisor Jason Moser

Jason Moser: Happy Monday, AC

Andy Cross: Good to see you

Thanks for being here

We got confirmation today that CoreWeave is buying another AI Data Center company, and Oracle is cutting cloud prices for Uncle Sam

We'll also talk two companies we're keeping an eye on if the price is right

But, Jason, let's start with the summer movies, Universal's Jurassic World Rebirth reportedly brought in more than 300 million globally this weekend, giving a nice wind to Comcast, the parent owner of Universal

This continues that strong summer at the box office that included how to train your dragon also from Universal and Apple's F1

Jason, is this good news for long suffering Comcast holders me

Jason Moser: [laughs] It's not bad news

Most certainly it's not bad news

This isn't something from the revenue side that is a tremendous needle mover, but maybe it's a needle mover to the extent that we would say the same thing for Disney

This is the content space that can be very lumpy some years are better than others

But this is terrific news

They have pulled a Disney to an extent and have really expanded and stretched out this IP library

I think that is a good sign for Comcast holders

I see this again, this Comcast stock has not done that well over the past couple of years

Of course, we have the spin off, the spin out of the media perties called Versant later this year, where they're going to spin off CNBC and USA, MSNBC, the Golf Channel, and a few other perties

I think that's got a lot of investors interested in Comcast, at least for me, those of us who own it

It is a Disney play, Jason, because they're using that in their IP

They're using the theme parks

I saw motions all around the world, all around the cable perties for the Jurassic rebirth movie

They were showing older Jurassic movies on some of those cable perties this weekend

I think from that perspective, it does help build that franchise out, and it's going to be a very competitive summer

Disney itself has its fantastic four coming out this summer

We have the much anticipated Superman movie from Warner Brothers coming out this year, but I think it does help build out that franchise that has become more and more valuable to those universal theme parks, including the one that just opened up this year

Jason Moser: No question

This also plays into that summer blockbuster

We always look to see what the summer blockbusters are going to be

I just think it's noteworthy these results, particularly given the tepid reviews that the movie's gotten

That's not lighting the world on fire from a critics perspective, but ly the audience loved it

Andy Cross: Also, Jason, interesting notes over the weekend that Netflix, with its 300 million rs, they said at the Anime Expo in Los Angeles this weekend that more than half its rs now watch Japanese anime

I found that interesting just because it continues to show the power of the Netflix globally as a brand, and one reason why they're along with YouTube, one of the most valuable media perties out there

Jason Moser: We've always said they do such a good job with that data

When Motley Fool Money returns, CoreWeave goes shopping

AI infrastructure company CoreWeave announced that it will buy Core Scientific for around $9 billion in an all stock deal

Jason Moser: This is an arms race we haven't seen in some time

Companies are just rushing to build out their AI capabilities, and this is just another sign of that

But I think it's really noteworthy that Core Scientific s being down so much today

There can be a number of reasons why something that might happen

Investors don't think that it will go through, perhaps another bidder comes in

That's just based on the July 3rd price

But as noted in the release, and this is important

The final value will be determined at the time of the transaction closed

That's not until later in Q4, so I don't know

Do you think this is a glass half empty view on CoreWeave and whether they can hold their valuation

Because the stock has been on fire since it went public

Andy Cross: It went public just this year, and the stock's done just fantastically well, and Core Scientific has done very well, although it has a little spotted history

Now they're paying far more for that

It does give CoreWeave the vertical integration, Jason, that I think that they need to build out

They're going to add 9 or 10 AI data centers of Core Scientifics give them massive gigawatts of capacity

As CoreWeave is trying to build out its own AI data centers, it does need to continue to build out that capacity

CoreWeave is Core Scientific's largest tenet, so it makes sense from a vertical integration perspective

But I think the market is just saying with a issuance, so soon after CoreWeave became public, there are some doubts at what price they're going to have to get Core Scientific into the CoreWeave family

I certainly understand the market's enthusiasm around CoreWeave

When you're selling yourself as the AI hyperscaler

There is something to that, and this is ly a company that's playing a big role in the space

They just reported revenue growth, 420% in this most recently reported quarter

But again, and you're right, vertical integration, this is going to be something that really gives CoreWeave more power over its platform and to that power

Through this acquisition, CoreWeave is going to own apximately 1. 3 gigawatts of gross power, along with the opportunity of one plus gigawatts of potential gross power available for expansion

A gigawatt is a lot of power, AC

That power is a medium sized city, and you think the Hoover Dam

Hoover Dam, one of our biggest hydroelectric generators here in the country

That's responsible for two gigawatts of capacity

You can see how this could really impact CoreWeave if it goes through

Andy Cross: Prediction time, do you think it's going to go through

Do they have to lower the price, readjust the deal terms

Jason Moser: I think it's going to go through

I think that bably the market's enthusiasm is going to remain for Core

You think the stock will ebb and flow here a little bit

My suspicion is it'll go through

We might see some change in the price there, but my suspicion is it'll go through

Andy Cross: There's definitely some synergies there and some cost savings, but I think it'll go through, too, but I do think they'll have to readjust the terms

Jason Moser: [laughs] Exactly

Andy Cross: Next up on Motley Fool Money, Oracle gives Uncle Sam a deal

Let's move over to news that Oracle is cutting cloud service prices for the US government by as much as 75% as reported this weekend by the Wall Street Journal

Jason, who's a winner here

Is this an Oracle beneficiary, a US federal government beneficiary or a little bit of A, a little bit of B

Jason Moser: I'm going to walk the fence here and say a little bit of A, a little bit of B

It does feel both win somewhat here

This feels a bit taking a page out of the book of Bezos

He was always known for driving down those prices in so many cases

He's got that quote, "Your margin is my opportunity. " He's taking that Uber long-term view

AC, I think for federal agencies, they're under this mandate to modernize while also managing tighter budgets at the same time

So the old saying cash is king, I think, in this case, it seems maybe cost is king, and we're seeing other cloud viders the same lead, Salesforce has done the same thing in regard to Slack, Google, Adobe

This isn't anything necessarily new

But then I think for Oracle, these discounts can help lock in really multi year contracts

That offers more stability for their model and revenue prediction

If they can extend those relationships, then you can start talking a bit maybe exercising a little bit more pricing power down the road if they do a good job

I can see both parties benefiting from that

Andy Cross: I thought this was a little bit more beneficiary for Oracle when I first started studying it

But then I think the GSA, the General Services Administration is starting to shake their big stick here to try to get some pricing out of some of these big players

It is interesting to me that this is for the licensees, not really for the subscription, and it goes through November

The pricing option goes through November of this year

It does give Oracle a foot in

It's really the first deal the GSA cut for government wide solutions, including lots of areas where Oracle and other cloud titans vide some of those services and compete very heavily

I think it's just more evidence of CFO Safra Catz, becoming more and more competitive, trying to push Oracle into

Ly Oracle has had some nice beneficiaries here in the and in their as the stock is gone really well

Thirty five times earnings

That's almost two times its five year average

What do you think Oracle, the stock going forward

Jason Moser: I'm glad you brought that up

Then that IAAS, that infrastructure as a service

Anytime you see valuations that, you have to just step back and say, why is the market doing that

I think that's where they're seeing some of that growth

Now they just have to der

Andy Cross: I think so, too

I do, again, this licensing play because as they continue to push more subscription, this does get into the core part of what Oracle has done for so long and done so well for so many years

I think it is a nice foothold for Oracle

I guarantee that GSA is going to be issuing lots of different pricing asks of lots more viders as they continue to manage their own foot as they push toward to be a little bit more nological savvy at the federal government

Finally, today, Jason, stocks are down a little bit, but passed through all time highs last week

Let's end things with two stocks that we're keeping fresh on our watch list if the prices are right

What are you looking at

Jason Moser: Everybody loves stock ideas, AC

Andy Cross: Of course

Jason Moser: One that I just continue to keep my eye on is a company called Samsara

The platform then establishes this massive network of data and information specific to that company

Now the company's still working its way to fitability

Nically, it's cash flow positive, but stock-based compensation more than eats that up, which isn't uncommon for a company at this stage of its life cycle

It's around 14 times forward sales jections today

It's been a bit of a bumpy ride, and the stock has pulled back a little

But when you look at the fundamentals of this, they just reported first quarter results that exceeded all targets that leadership set a quarter ago, revenue up 32% annualized recurring revenue up 31%

It is a company that continues to grow and establish a fairly dominant position in its market is what it seems

It really does seem this is becoming the top dog at its space

I think it's also a company that possesses a lot of those hidden gems traits

Those principles that our CEO Tom Gardner loves, he's so fond of

You get reasonable, remarkable growth into expanding, check

Led and owned by true long-term believers in the company, check

This is a company that is led by co-founders Sanjit Biswas and John Bicket

That is a double check for a company.