Truist's Youssef Squali's bullish call on Waymo: It'll generate over $10 billion in revenue midterm
Youssef Squali, Truist head of internet and media, joins 'The Exchange' to discuss Alphabet's AI strength and tech's push into nuclear power.
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Yahoo
an hour ago
- Yahoo
Prediction: Reddit Could Surge by 600% in the Next 10 Years
Reddit runs an online platform where users post content on any number of topics. The company is growing revenue at a year-over-year rate of more than 60%. At least one AI company has already signed a lucrative deal to license its content. 10 stocks we like better than Reddit › Finding stocks with big potential isn't easy -- but it's far from impossible. One of my favorite places to look is within the tech sector, as that is where many cutting-edge companies reside. Today, let's look at a stock that only debuted a little over a year ago, but has already posted a solid track record in its time as a public company: Reddit (NYSE: RDDT). Let's start by understanding how Reddit's business operates. The company runs an online social media platform where users post content on any number of different Reddit boards, which are organized by certain characteristics. For example, musicians might post (or read posts) in any number of communities related to musical genres, instruments, or performers. Similarly, sports fans might engage with posts of their favorite team, sport, or player. In addition, some of the most popular subreddits are for broad categories like "humor" or "askreddit," which boast tens of millions of subscribers. All told, as of its most recent quarter (ended March 31), Reddit reported 108 million daily active unique users. As a company, Reddit capitalizes on this enormous user base and flood of user-generated content in several ways. First, the company raises revenue via ad sales. Roughly 90% of Reddit's revenue is derived from ad sales, which is more or less in line with other social media companies. Meta Platforms, for instance, generates about 97% of its revenue from ad sales. Second, Reddit's vast array of user-generated content provides another, more difficult to value asset: a treasure trove of dynamic, unpredictable, and nearly limitless data. While this unending supply of comments, images, and videos may not seem all that useful to the average person, it is very advantageous to those within the artificial intelligence (AI) community. That's because AI models need a near-constant stream of real-world data for training. Consequently, AI companies are willing to pay up for access to data. Alphabet, for example, has already signed a data licensing deal with Reddit to help train its AI models. The deal is reportedly worth $60 million annually. Going forward, this AI licensing revenue stream could grow in importance for Reddit. So, Reddit has a significant user base and a large amount of data that it could license out to AI companies -- but how can it leverage those assets into a 600% return in just 10 years? The answer -- as it is with most technology companies -- is scale. Let's take a look at Meta Platforms' 10-year stock performance to see why. In May 2015, shares of Meta Platforms (known as Facebook back then) traded for around $80. As of this writing, they trade at around $650 a share. That works out to a gain of about 700%. Over that same 10-year period, Meta averaged year-over-year revenue growth of about 31%. As of its most recent quarter, Reddit's revenue is growing at 61% year over year, or roughly double what Meta produced over the last decade. Since Reddit produces a much smaller amount of revenue, it's possible that the company could grow its revenue faster than Meta did over the last decade. What's more, with a market cap of less than $20 billion, Reddit's stock has plenty of room to grow -- assuming the company can continue to increase its user base and revenue. All that said, Reddit remains a young, growth-oriented company. Therefore, its stock isn't suitable for every investor or portfolio. However, for those willing to buy and hold for the long term, Reddit is a name to consider. Before you buy stock in Reddit, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Reddit wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $656,825!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $865,550!* Now, it's worth noting Stock Advisor's total average return is 994% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 2, 2025 Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Alphabet and Reddit. The Motley Fool has positions in and recommends Alphabet and Meta Platforms. The Motley Fool has a disclosure policy. Prediction: Reddit Could Surge by 600% in the Next 10 Years was originally published by The Motley Fool
Forbes
3 hours ago
- Forbes
Rise Of The Machines: A Dividend Revolution Yielding Up To 9.7%
Army of robots. 3D illustration Big companies are about to make even more money. They have discovered they no longer need armies of new hires to grow—extremely bullish news for shareholders because human employees are expensive. Good ones can also be notoriously elusive. For example, I'm the longest-standing member of my kids' school marketing committee, and we're always scrambling for volunteers (what non-profit isn't?). Until now, that is. Over the weekend, we welcomed the most talented marketer I've ever worked with to our team: ChatGPT 4.5. 'GPT' graciously accepted our volunteer position, and we're already actively boosting online referrals for the school. I'm learning cutting-edge 'AI referral' techniques straight from the entity that invented them. It was the easiest recruitment effort I've ever experienced. GPT and I were already collaborating closely to market and sell several software products, so extending our teamwork to the non-profit world was seamless. The same dynamic is quietly playing out at for–profit companies, particularly the tech giants that dominate the cap-weighted S&P 500. A senior executive friend at Meta (META) recently confirmed to me that the company has essentially frozen hiring, pivoting entirely toward AI-driven growth. It already shows in the numbers. Over the past year Meta has increased revenues by 22% while only hiring 10% more people. Sales are growing faster than humans, a trend that I expect to accelerate in the months and years ahead. In fact, I wouldn't be surprised if Meta has already reached peak headcount—which means profits are set to surge even more. And Meta isn't alone in this 'growing without hiring' trend. Alphabet (GOOG) grew revenues by 14% without any net new hires. And Nvidia (NVDA) did grow headcount by 13%, but for good reason—sales exploded by 126%! Microsoft (MSFT) is likewise sailing along without the need for new engineers, with 16% revenue growth on just a 3% headcount increase: Tech Growth The AI adoption at these companies is just beginning. These profit machines are already selling $1 to $2 million in product per employee, but their profits are going to pop as they sell even more without the expense drag of adding new employees! This four-pack packs 20% of the S&P 500 index. When we combine Amazon (AMZN), Tesla (TSLA), Netflix (NFLX) and Apple (AAPL)—four more tech companies that are scaling without hiring—we have 32% of the index. Earlier in the year, I warned that the 'tech heaviness' of the S&P 500 was dangerous—and it sure was during the tariff troubles of March and April. But with trade tensions fading and tech profits exploding thanks to lean payrolls, these big 8 companies are now set to power the index higher. Plus, we have a weakening US dollar. Stocks are, of course, priced in dollars. So, a softer dollar is another bullish catalyst for the S&P 500. As income investors, we can tap this rising tide for steady income. To do so, we'll use covered calls—a strategy where we buy stocks and then sell ('write') call options to other investors. We earn income now from the option premiums we collect, paid upfront to agree to sell our shares at a higher price later. Market volatility from a tumultuous spring means these options pay generous premiums right now (covered call options pay more when things are bouncing around!). So, this is a good market moment to cash in on leftover fear. I'm talking about dividends up to 9.7% that will benefit from the S&P 500 soaring towards 9000. (Yes, it sounds wild—but with record profits plus a declining dollar, this is a potential price target before the end of Trump 2.0.) Eaton Vance Tax-Managed Global Diversified Equity Income Fund (EXG) yields 9.2% and trades at a 6% discount. That's a sweet deal because it holds big winners like Amazon, Alphabet, and Microsoft, then boosts income by selling covered calls on the S&P 500 and international indices. The income from these constantly expiring calls is the key to the EXG's sky-high 'synthetic yield.' The fund collects premiums from option buyers immediately after it writes these calls, generating steady income for shareholders. We can think of this as 'renting' out positions to generate extra cash. EXG owns the underlying shares behind the S&P 500. Each month it leases its collection of stocks and collects the option premiums. Rinse and repeat. Nuveen S&P 500 Buy-Write Income Fund (BXMX) pays 8.1% and trades at a 9% discount to its net asset value (NAV)—another good deal because we're talking Apple and Amazon for 91 cents on the dollar. Finally the Global X S&P 500 Covered Call ETF (XYLD) dishes a 9.7% dividend. It is an ETF, so it trades at par ('fair value'), as most do. XYLD owns the S&P 500 stocks and has also written calls on the S&P 500 that expire later in June. When that happens, the fund will write new calls for July—delivering more tasty income to its investors. Covered Call Funds As sellers of covered calls, they exult in market volatility that delivers high option premiums. Plus, their NAVs have a tailwind—tech profits popping! Brett Owens is Chief Investment Strategist for Contrarian Outlook. For more great income ideas, get your free copy his latest special report: How to Live off Huge Monthly Dividends (up to 8.7%) — Practically Forever. Disclosure: none
Yahoo
4 hours ago
- Yahoo
Alphabet to Expand Engineering Ranks Through 2026
Alphabet (NASDAQ:GOOG) CEO Sundar Pichai vows to keep hiring engineers into 2026 as AI investments ramp, saying human talent remains crucial amid Google's $100 billion-plus AI push. Speaking at Bloomberg Tech in San Francisco, Pichai said engineering headcount will grow from current levels into next year, believing more engineers will boost productivity by automating mundane tasks. The comments come as peers retrench: Microsoft (NASDAQ:MSFT) cut hundreds of roles after its largest layoff in years, and Intel (INTC) joined the wave, with 137 tech companies shedding 62,114 jobs so far in 2025 per Though Google itself has trimmed staff in recent years, Pichai argued AI still makes fundamental coding errors, underscoring the need for engineers to oversee model development. Are we on an absolute path to AGI? I don't think anyone can say for sure, he said, highlighting uncertainties around artificial general intelligence. As Google integrates AI more deeply into Search, publishers fear traffic losses from AI-generated answers, but Pichai assured that Google will continue directing users to websites. We designed AI Overviews to prioritize high-quality outbound links, and years from now that's how Google will work, he noted. Although tech layoffs have eased, sector cuts underscore headwinds. Pichai's emphasis on engineering investment signals that Alphabet sees personnel as a moat against rivals. Meanwhile, Meta Platforms' (NASDAQ:META) CTO Andrew Bosworth said Silicon Valley is now more open to supporting U.S. military projects, referencing Meta's partnership with Anduril Industries to supply XR gear for the Army. Investors should watch whether Alphabet's engineering investments pay off as rivals cut costs, because talent retention could determine AI competitiveness. Investors will eye Alphabet's Q2 earnings and headcount data when reported next month. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
