Jobs, AI, & Elon Musk's Trillion-Dollar Payday

In this podcast, Motley Fool contributors Travis Hoium, Lou Whiteman, and Matt Frankel discuss:

• This latest jobs data.
• Anthropic's funding.
• Google's antitrust win.
• Elon Musk's potential trillion-dollar payday

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A full transcript is below.

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This podcast was recorded on Sept. 05, 2025.

Travis Hoium: The August Jobs report is in, and it looks like a rate cut is going to be coming. Motley Fool Money starts now.

Welcome to Motley Fool Money. I am Travis Hoium joined by Lou Whiteman and Matt Frankel. The big news for today coming out this morning is the latest jobs report, the market was weak. Once again, 22,000 jobs added in the US in the month of August, unemployment rate ticked slightly higher to 4.3%, although there's some rounding there. They got some rounding benefits last month and not quite the same benefits this month, but up about a tenth of a percentage point. Revisions were a little bit mixed with a decline in jobs in June and a slight gain in July. There's a lot going on here, but Lou, I want to start with you, what was your takeaway from this report from an economic perspective?

Lou Whiteman: I'm glass half full here, Travis. I'm surprised to say it, but look, the overall picture here is still far from bleak, despite the headlines. Unemployment rate, historical standards is relatively low. The number of people employed has held steady since 2023. I really think that what is going on here, nothing is broken. It's just everything is frozen. This is tariffs. This is businesses unsure of what's to come. They're not really doing a ton of layoffs, but they're also not hiring, so there's just this frozen market. I know the markets are happy because it does look like we're going to get a rate cut, and I think that's probably right. But look, I don't think we should chicken little this number.

Matt Frankel: No, I would agree with that, but I would push back a little bit. It's really rare that Lou is the more optimistic of the two of us. But I would push back a little, and Travis mentioned some of this a little bit earlier. It's very sector specific where we're seeing the jobs numbers. In the last month, 22,000 jobs added as the headline, 31,000 jobs were added in healthcare. You back out healthcare, and we lost jobs. The government jobs were down, 15,000 manufacturing jobs were down. I feel other than healthcare where there's been a big shortage of healthcare workers. I'm married to a nursing professor. I can tell you that firsthand, there's a big shortage there. It's not as great as it might seem. I think we are ready for a rate cut, and this really clears the way for it.

Lou Whiteman: Two things on that real quick, Travis. For one, I think any job support, anytime in history has always been, if you break it down on a sector basis, there's always winners and losers. I mean, not to dismiss that, because Matt, you're right. The other thing, too, is I think that the healthcare as the standout supports the idea that it could be just frozen. Healthcare is essential. No matter what tariffs are doing, if you need healthcare employees, you do it. I think that that still can support this idea that other sectors, it's not so much that they're weak. It's just that they're frozen, and if we get clarity, then we could have a bounce back.

Travis Hoium: The other thing that we need to acknowledge is that the numbers are a little different than we've seen historically. Yes, 22,000 is a relatively low number, but the labor force is down 400,000 people since April. This is partially just the number of people who are in the US not growing at the rate that it typically has. That's partly an immigration story. The number of people who are in the workforce, are they retiring? Are they in school? Is not particularly high. Both of those things are working against that overall jobs number. That's why you're seeing the unemployment rate stay relatively low at 4.3% despite the fact that we're not really adding a whole lot of jobs right now. What do you think, Matt?

Matt Frankel: That definitely makes sense. The job market, Lou is right that it's frozen in a way. We're seeing some contradictory data. Like you said, adding jobs is good. Labor force shrinking is not great. That 4.3% unemployment rate, it's not as low as it has been. I forget what the record low is. I want to say it's around 3.6 or something in that range. But it's close. Historically, that's a low unemployment rate. But it seems like the market agrees with me. The priced in rate cut odds have really changed even this morning since we've seen those numbers. Even yesterday, it was pretty much a conclusion that we were going to get a rate cut in September. But now there's actually a non-zero probability priced into the market that we're going to get a double 50 basis point rate cut in September. I don't necessarily think that's going to happen, but just the fact that traders seem to be moving in that direction shows that investors don't think this is a great report.

Travis Hoium: This is one of the interesting things with these reports and the market's reaction. The short-term reaction, I think, Lou, is that, yes, we're probably on our way to a rate cut in September, whether it's a 25 basis point rate cut or whether it's a double rate cut that Matt talked about. We don't really know yet, but likely, at least those short term interest rates are starting to come down. The problem is, they're coming down because we're not adding a lot of jobs. It's, like, good from a market perspective because the market likes to have lower rates, but bad from an economy perspective, because you would like to see more jobs, more economic activity, especially with younger people, that's the one that I'm keeping an eye on is younger people seem to be having a harder time finding jobs, which is alarming because that could be the canary in the coal.

Lou Whiteman: This is definitely be careful what you wish for, because rates come down when the economy isn't doing too well. We went through an extended period with very low rates. I think the market is almost too addicted to that or addicted to the idea that. I do think there is some overreacting, but there's too much euphoria there with it. Look, Travis, I don't want to be too Pollyanna here, too, because I don't want to say all this well, and this is a word the Fed hates now. More so than inflation being transitory, I think that these jobs numbers could be transitory. I do think that there's a chance that if we do get clarity on tariffs, that we could see a bounce back and that just one month's data point shouldn't be [inaudible] .

Travis Hoium: Businesses are looking for certainty if they get that certainty.

Lou Whiteman: If we can get certainty. This is why I say, I do think I agree. I think we will get a rate cut in September. I continue to believe that the Fed is much less of a hurry to bring down rates than the market is, and I think that that will play out. Again, if we do get some certainty and jobs look even a little better, or they don't continue to trend downward in the months to come, I think, given what we've seen with inflation and what might still be to come there, I continue to think that the market might be surprised at how reluctant the Fed is. The Fed, at the end of the day, Travis, has one tool and one tool only. They do not want to expand that tool ahead of time.

Matt Frankel: No, they definitely don't want to go past neutral when it comes to rates. Right now, I'm looking at [inaudible] .

Lou Whiteman: What exactly is neutral?

Matt Frankel: Neutral would be about a percentage and a half below where we are right now, is where I would think of neutral. Like in the 3% ballpark on the federal funds rate. Right now, the market's pricing in over seven rate cuts by the end of 2026. That would take us a little bit below neutral. The president has called for a 1% interest rate. He said, we could lower rates to 1%, and it would be fine right now. One thing that people listening need to really be aware of, if either of those things happened, the 1% is a little bit of a stretch even by historical standards. But if we had to lower rates past neutral, it would probably be because the jobs market got even worse than it was now or because we saw deflation or we saw something really negative in the economy. It would not be because good things were happening.

Travis Hoium: That's always the push and pull here. The other thing I wanted to touch on, get you guys thoughts on is the Fed controls short term rates, what we call this, the Fed funds rate. That's the headline number that we hear reported all over the place. That's the cut that we're talking about. They do not control, at least really control longer term rates, 10 year, 20 year, 30 year rates. Those rates are what mortgages are driven by, what auto loan rates are driven by. We're starting to see a bit of a decline in the last few days, but those rates are about flat from where they were in early November 2024. Is there a chance that even a double rate cut, Matt, wouldn't spur the market or wouldn't spur the economy because it doesn't actually have that much of an impact on making homes more affordable, making vehicles more affordable? It is a tension because let's say that mortgage rates do come down a percentage point, if we have fewer jobs, that means that there's gonna be fewer people to actually take advantage of that.

Matt Frankel: If we get to the point where mortgages are 3% again, it's going to be because bad things are happening in the economy. Now, you mentioned that short term interest rates don't really have an impact on most consumer interest rates, and they don't a few that they do. Like, your credit card interest rate is directly tied to the federal funds rate. But is the difference between 24.5% and 24.25% really going to make a big difference in your life? Probably not. Mortgage rates tend to track the ten year treasury is a really good gauge for that, and you can't just wave a magic wand, even if the Fed were to cut rates to 1% tomorrow like the president wants. That doesn't mean mortgage rates are going to drop by three percentage points. It would definitely they tend to move in the same direction. There tends to be a little bit of a spread that widens and contracts between long term and short term interest rates, and they move in the same direction. It's a lot tougher to predict or control where mortgage rates and auto loan rates are going. I'm sure all homeowners, including myself would love for low interest rates to come back. But it's really not that simple, you're right.

Lou Whiteman: Bottom line here is, as you say, long term rates are more dictated by what traders are willing to pay for debt. There is enough going on outside of the Federal Reserve from just all the questions of Fed independence to where we're going with trade, with the weak dollar, strong dollar. There's just so much going on right now. It's hard to predict, but if nothing else, I think we can say there likely won't be a proportionate drop in long term rates. I do think anything the Fed does right now will have less of an impact on mortgages, on the real economy than we might hope. I think we just go into it with that in mind, and the details will work themselves out.

Travis Hoium: Definitely, something we'll be covering throughout the end of the year. Next up, we are going to talk about the latest in artificial intelligence, some big funding rounds and some big changes or alphabet you're listening to Motley Fool Money.

Welcome back to Motley Fool Money. AI is arguably holding up the market right now, so we need to touch on the latest news in AI. Open AI announced a deal to acquire Statsig and Vijaye Raji is going to become their new CTO of applications. The turnover with their staff there seems a little bit crazy for how big of a company this is right now. But the other thing was that Anthropic raised $13 billion at a $183 billion valuation. Matt, what do you take from the week?

Matt Frankel: First of all, you said AI is arguably holding up the market. I don't know how arguable it is. It's clearly holding up the market, in my opinion.

Travis Hoium: Maybe holding up the economy at this point. If you look at some of the numbers, data centers is driving about half of the economic growth right now.

Matt Frankel: Would the S&P have returned as much as it has over the past year without AI? Probably not. But valuations are getting lofty in a lot of cases, including the two you just mentioned. But it's not totally unjustified.

Matt Frankel: Anthropic for example, they announced they've reached a run rate of $5 billion of annualized revenue. That's a five X since the start of the year. I don't know about you. I have some companies in my portfolio that trade for valuations north of 30 times sales like this. They haven't five X their revenue this year. If they can keep growing like this, it's not entirely unjustified. Look at Open AI. They're valued at, a half a trillion in their latest stock sale. That's up from a $300 billion valuation in March. But with about $12 billion in annualized revenue now, they have a similar valuation as Anthropic and a lot of other tech stocks that are honestly putting up less exciting growth numbers. Yes, their valuations are a little bit lofty, but the numbers are backing them up a little bit.

Travis Hoium: We've definitely seen a lot of revenue growth, and the Anthropic numbers are really impressive, but I've got to ask how durable these businesses are, Lou. Anthropic in particular, five X in your revenue in eight, nine months is incredibly impressive, but a lot of that has come in from companies like Cursor, who is a development tool, they're using AI models, paying those API, so basically Anthropic is a B to B business. It's not a B to C business or business to consumer business like Open AI, where, millions of people are paying a subscription every single month. The problem there potentially could be if a better model comes out, Cursor and companies like that could just replace them. How does that play into how you think about how durable these businesses and these valuations are? Because eventually these companies are going to come public.

Lou Whiteman: Yes, so durability differentation, I think, too, is also what I wonder about. If we're all going in the same direction, if we're all going toward these, smart, helpful AI models, what is going to make you pick one over the other, and does that lead to commoditization? Does that lead to all just issues with pricing? I don't know how durable they are because I don't know what's going to make one business stand out over time from the other. I do think that's why we've moved into the Show me phase with the M&A we've seen, with the talent wars we've seen. I think the next big challenge for these companies is, what do you do with all of that spending you've done? How do you create a product that not just is must have, but is must have versus all of the other products out there?

Travis Hoium: The company that all of these start-ups are going to have to deal with is Alphabet. Alphabet got some pretty big news this week, not directly related to their AI business, although they are talking about potentially including Gemini in iPhones in the next update there, so we'll hear more from Apple next week. We know that companies like Meta and even Open AI are starting to use Google Cloud. It seems like they're rounding into shape, and they now we know, don't have to split off the Chrome business or Android, they also get to keep paying $20 billion a year to Apple to keep that distribution going in the Safari browser. It seems like their distribution muscle continues to be really strong. Their models continue to get better. Lou, it seems like Alphabet had about as good a week as they possibly could, and they're really the company that all of these start-ups are going to have to deal with over the next decade or so.

Lou Whiteman: Yes, the bottom line is, you said it, the cash cow continues. For both Alphabet and Meta, and I'm being flip here, but the seemingly endless supply of new cash coming in from these core ad businesses, they're the key to all of their AI hopes. They're the reason why they're the ones to beat. Look, I think status quo, which is basically what we got out of his Core, I think that works just fine for Alphabet. I think it's really interesting. The court I give the judge a lot of credit. It's possible, Travis, that the best remedy for this case was to just realize, things are shifting, and so what was true in the past isn't as big of a deal as it was. That's what the court did here.

Travis Hoium: Matt, the big winner may not have been Alphabet. Apple has got a pretty big stake in this case, as well.

Matt Frankel: Yes, well, Alphabet pays Apple billions of dollars a year to keep Google as the default search engine on iPhone.

Travis Hoium: We don't know the exact number, but it's somewhere around $20 billion.

Matt Frankel: Yes, personally, I couldn't imagine a world where everyone doesn't use Google to find things on the Internet. But that's really what was at stake in this case, is that, other companies could outbid Google and things like that, and, Alphabet. It's a big deal for Apple, as well. Their stock was up roughly 5% after the announcement of this news, as well. Yes, it's not just Alphabet. It has other implications.

Travis Hoium: It will be interesting to hear what Apple announces next week. They seem to be trying to figure out how they're going to deal with Siri, going forward, that's their AI tool that we would probably see first, but they have not been able to build models that are effective, so are they going to use something from Open AI or are they going to be using something from Alphabet and just continue this relationship that they've had with Alphabet? There's a lot that they have to answer, but you're right. They may financially be the biggest beneficiary because they keep that money coming in. Ironically, Alphabet gets to keep their monopoly status. That was what was at stake, but they still have to deal with competition from companies like Open AI. This will be something that continues to play out. Alphabet seems to be in a pretty good spot. When we come back, I'm going to get a vibe check from Matt and Lou about where we're sitting, not only with the economy, but with some really important and interesting companies who reported earnings recently, you're listening to Motley Fool Money..

Welcome back to Motley Fool Money. This section, I want to get a vibe check on some of the stocks that have had some big moves, and I want to get an idea what Matt and Lou think is going on. I'm going to have the rate these 1-10. We couldn't come up with a great term for good or bad vibes without sounding older than we actually are. Let's start with Lululemon. Lou, they had a pretty rough quarter in the most recent quarter. The vibes around Lulu seem pretty bad, but is there something structural going on with them specifically? Or is this consumer taste changing? Is this a tariff story? What in the world is going on with Lululemon?

Lou Whiteman: Here's my fear. Two things can be true. These can be great clothes, and they can also be too expensive for their market clothes. To what extent has competitors out there copied them at lower prices, and if they have, where is the gross store going to go from here? Lulu all but admitted they have troubles here when they sued Costco, basically saying the cheaper alternatives that Costco was doing are really good. I wonder about this. This is a two or three for me. It's a nope, not a dope, Travis, if we're going to really get into vibes, because look, it still can work as an investment, even if the Gross story doesn't recover, but that would mean Lulu just turning into a mature retailer. I don't know. I have real questions about this one.

Matt Frankel: Yes, I agree with Lou. They have a product problem, not a tariff problem or a consumer spending problem, and that's a harder fix. A tariff problem is temporary, a consumer spending problem is cyclical. A product problem needs leadership to really step it up. I'd say.

Travis Hoium: How do they fix that? I think it's easy to say I listened to their conference call. They seemed like they thought they maybe had some answers in some areas that they maybe weren't the biggest in some cozy home clothing. That's not really what I think about them as historically. But that's their answer, and it doesn't necessarily sit well with me listening to the call, and it certainly isn't sitting well with the market. It shares are down 17% as we're recording right now. I get that it's a product problem, but is there a product answer?

Matt Frankel: Well, one of the things is they haven't put out any new products for the most part lately, and that's one of the things they said is, you know, our products are getting old and dated. Going forward, new styles are going to make up a lot bigger mix of their products starting in the spring, they said. Clearly the market's not happy with that answer, but they believe the answer is to kind of really refresh what they're selling.

Lou Whiteman: If the answer is, we're a lifestyle brand, a high end brand, that scares me because that is so fleeting. Maybe it'll work, maybe it'll last for 10 years, or maybe something new comes along tomorrow. I hope there's a better answer than that.

Travis Hoium: Well, it doesn't seem like Lululemon is the new cool thing these days. That was probably the story 15 years ago for them, not necessarily today. Speaking of another company, the vibes have shifted Nike they actually haven't done as poorly as I thought over the last year, the stock is down 8%, but a lot of challenges for Nike during the pandemic, they gave up on their wholesale relationships. They're trying to rebuild those. But you go to a store like Dix and you're going to see a lot of other competitors in there where Nike used to have shelf space. Matt, I want to start with you. What are the vibes around Nike right now, and is there anything they can do to improve them?

Matt Frankel: Yes, they can become cool again. What I mean by that is, like, just as an anecdotal example, my favorite football team if you couldn't tell from all the decorations on the wall, is the University of South Carolina Game Cox. They just dropped their 15 year relationship with Under Armor in favor of Nike. It starts in 2026. Nike's doing a great job of getting back to brand awareness, getting back to, being the cool brand because, they announced this like a month ago. Up until then, Nike was the brand that we used to wear 15 years ago. That's just one example. They're trying to get back to cool, and I think it's the right way to go.

Lou Whiteman: Nike can get back, but they can't get back to where they were. They can be a relevant part of a big market. But the days where Sonny Vicario, to really date myself, guys, but can just go in and splash cash, and you can dominate the market, and you need millions of dollars to break through, those are over. Now, one good Instagram influencer can do as much damage to the competitors as it once took Nike a multimillion dollar ad campaign to do. The world is different. Nike can rebound and do deals like that South Carolina deal and become part of this market, but the idea of just that dominant brand that everybody had to have, no matter what you were doing, the way it felt in the 80s, that's gone forever. For Nike, it's, again, a mature retailer. They can gain from here, but it's never going to be, I don't think the Blockbuster growth story it once was.

Travis Hoium: I want to bring another brand into this because one of the things that I think could be happening with both Lululemon and Nike is just shifts in what consumers are looking for. Both of these brands have been around for a very long time. Lululemon, definitely a younger brand than Nike. I'm not certain that Nike can spend their way into being cool again, as Matt said, very possible. That was definitely what they did in the 80s and the 90s. But you look at one company that's bucking these tough trends that both Lululemon and Nike have holding or on running, take the symbols O-N. They had 38% a constant currency growth in the most recent quarter. They've got partnerships with runners that, I've never necessarily heard of, but it has translated to, hey, we're this premium brand. We can charge $250 for a pair of shoes, and people are paying it. They don't seem to be impacted by both the economic, malice that we may be entering. They've said tariffs. Hey, if there's tariffs, we're going to raise our prices. Lou, is this something where maybe this is an example of your fear with brands in general, it's fleeting, and it goes back and forth, and Lululemon and Nike are on the bad side of the vibes right now.

Lou Whiteman: I'll tell you, I'll go a step further on, I have a distance runner or a competitive runner in the house. On for all their deals with runners, the running snobs want Hokas not Ons. On success is the, for lack of better want to be runners or the lifestyle, which is a much bigger audience than the hardcore runners. They are they're the flavor of the month. They are one of these examples of a brand that can break through just like without a trillion marketing campaign the way we had to do in the 80s. Travis, to your point, it will last as long as it's going to last. It'll last until something else comes out and we'll see. As an investor, I'm not dying to jump in at these levels. My they long succeed, but history shows that these things don't last forever.

Travis Hoium: Matt, final word on these brands, are you betting on a comeback for legacy brands like Lululemon or Nike, or is somebody else, on, like maybe Hoka, like maybe somebody else going to come in? Alo is another brand that I our local Lululemon store was replaced by Alo.

Travis Hoium: It just seems like there's more and more brands, given the direct to consumer nature, and anybody can start up a brand and become really big really quickly.

Matt Frankel: Yeah, on is they are really cool and they didn't have to pay for it, like you said. I do strength training classes at a local gym and honor, they're the weightlifting shoe of choice. I didn't even know weightlifting shoes were a thing, and honest are dominating that market if you walk in there. If I had to buy one of the three today, I would probably go with Nike. Like I said, I'm seeing at firsthand how they're getting back to their roots. I don't know if they're going to recapture the 80s Air Jordan vibes again, but they're definitely heading in the right direction, and it's such a cheap stock at the current price that if I had to buy one, it would be Nike.

Travis Hoium: I would love it if they split off that Jordan brand because I think that would get a premium in the market that is still a very popular brand among the kids.

Matt Frankel: That's staying power.

Travis Hoium: Absolutely. That's maybe a better brand today for Nike than the Nike brand itself. Let's move to artificial intelligence. One of the things that I'm curious from you to is AI has been driving the market, but it seems like the story is changing over the past few months. I want to start with a company that's been a little bit controversial came public not too long ago, but CoreWeave was one of the hottest companies in the market now down over 50% from its peak. Lou, is this just bad vibes? Is there something that's going on with CoreWeave's business in particular that we need to question? What are you taking from the huge moves in CoreWeave's stock?

Lou Whiteman: I'm kind of a bad one to ask because I was a skeptic from Day 1, so I'm sort of just going to talk my book here, but I don't understand how something that depreciates as quickly as these NVIDIA chips, where NVIDIA is literally racing to make the current generation obsolete as fast as they can. I don't know.

Travis Hoium: They talked about that- I want to touch on that. Jensen Wong in their recent conference call, talked about the incredibly high ROI from these new chips like Blackwell. What he didn't mention is these high returns that they say that they have are pretty fleeting because the price per token is dropping about 90% per year right now.

Lou Whiteman: I don't know what to make of the CoreWeave business. I do think and we'll maybe talk about this with another one, too. A lot of the stock movement is there's so much pent up demand for IPOs right now, and there are so many companies that we became familiar with because they stayed private for so long. I do think that it's just euphoria fading to business realities. So I don't really want to make too much of, like, CoreWeave is doomed because of the decline. I think, if anything, it was just the artificial euphoria that was incorrect. But I don't consider this a buying opportunity in CoreWeave, too, because I just worry about just the core business and how those chips they age.

Matt Frankel: It's a capital intensive business that's growing. It's tripled its revenue year over year. But at the same time, it's also tripled its cost of revenue. It's more than tripled its marketing expenses and things like that. It's going to be a very sensitive stock to profitability and whether it can keep that growth rate alive. It's a highly capital intensive business. It's going to get more capital intensive over time, I believe. I'm staying on the sidelines with this one. It's a really interesting business, for sure, but not for me.

Travis Hoium: Lou, you mentioned an IPO that we wanted to talk about. That is Figma. Figma just absolutely skyrocketed when the IPOed. This is a little over a month ago now is all. I believe the IPO price that people could get pre market was $33 per share, skyrocketed to over $120 per share. We're now down to 52 as we're recording, so more than a 50% drop in shares. Is this just the IPO ups and downs and the vibes, if you will, of traders trying to get in early and then figuring out that the day trade just didn't quite work? Or what's going on here? Because it seems like this is a theme among these once hot companies that they're just falling and the business hasn't changed in the past month.

Lou Whiteman: Let's just blame this on Adobe, because we all knew Figma's name because Adobe tried to buy them, and I do think that, I'm being sarcastic here, but there is just that sort of, like, pent up demand for unicorns. Again, for these big companies that we felt there was FOMO that we couldn't get, and then finally you can get it. Look, Figma, I'm worried about Figma in a way because Figma, I think, is caught in a weird place between they aren't Adobe. They don't have all those corporate accounts paying. So I think on the high end, it's hard to grow into that. You really have to have a better product to replace Adobe, and on the bottom end, AI is making everything free. So I think it's an awkward middle. The nice thing about it is, this is a company that is they want optionality. They own Bitcoin. They said they're going to try different things, so there's a lot of ways it could go and work out. But I don't know if that core business right now, given the competitive challenges, is anything to get too excited about, if I'm honest.

Matt Frankel: Twenty-six times sales, even after this move, it's an expensive stock. It's growing really fast. I think it was 41% growth year every year in the quarter. It's still strong, but it was priced really for perfection right after the IPO. Now it's starting to trade in line with the IPO price. It's gravitating in that direction. They price IPOs like they do for a reason, and maybe in Figma's case, that was the correct price.

Travis Hoium: Yeah, as I'm looking right now, $25 billion market cap, their buyout from Adobe was supposed to be 20 billion so kind of going sideways over the past four or five years for Adobe. When we come back, we're going to touch on Elon Musk's potential trillion dollar pay package and get to stocks on our radar. You're listening to Motley Fool Money.

Welcome back to Motley Fool Money. 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 stocks based solely on what you hear. All personal finance content follows Motley Pool Editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. Of course, Elon Musk made his way into the news this week as if he doesn't have enough money or motivation to grow Tesla. The Board of Directors is looking at a potentially trillion dollar pay package. Lou, what did you think when you saw this?

Lou Whiteman: So look at first glance, it's ridiculous. A trillion dollars. So why aren't shareholders outraged? They're not outraged because for a while now, a bet on Tesla is a bet on Elon Musk. So keeping Elon happy matters. I like that these milestones, it's performance. They have to get the robots out there. They have robo taxis out there. It's ridiculous. Sure, but if Elon does grow Tesla to an $8.5 trillion market cap, investors will do just fine on the deal. So, hey, why not?

Matt Frankel: It's based on 12 different milestones that are each a combination of hitting a market cap goal and hitting an operational milestone like Lou mentioned. They're not all stock related. The most ambitious of them, I would say is the $400 billion of annual adjusted EBITDA. That's a lofty goal. So if he can hit that target, I think an $8.5 trillion valuation is not that unreasonable. If I'm a Tesla shareholder, I'm happy. I don't really care what they're paying Elon if my investment 8Xs.

Travis Hoium: It's crazy. We talk about CEO pay and how much they're making with every other company except Tesla and it seems like Elon Musk can just squeeze more out of a company that he already has a huge stake in. But that is the way things work with Tesla. Let's get two stocks on our radar. Lou, what are you bring in today?

Lou Whiteman: I'm looking at a company called Redwire ticker RDW. Travis, I've been pretty skeptical about this new generation of space companies that all came public via the SAC boom. Redwire was one of them, and neither the stock nor the business has done much for a while. But Redwire I think is evolving into something that could be intriguing. They're planning to do for space what a company I really like Transdem has done for Aerospace, which is to use M&A to collect high margin, proprietary or patented components and make money selling them. They did a deal in May to acquire something called Edge autonomy and expands them into drones. It's the first of what I think is many moves to build out the portfolio. Look, there's a ton of risk here, and I'm not sure the current valuation accounts for that risk. So this is only a radar stock for me right now, but I really like the management team. I really like the idea, so it's one I'm watching closely.

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

Dan Boyd: When I think about red wire, think about the old trope of diffusing a bomb. Cutting the red wire, which, as far as aerospace goes, that it implies explosions. So maybe not the best thing to think about when you think of Redwire.

Lou Whiteman: Well, let's not cut this because I don't need a bomb on my hands, Dan. Matt, what are you looking at?

Matt Frankel: Well, now that retail earnings are mostly done. We got a bunch of bargains, but Target is a company in particular that I'm looking at right now. They're down big after, honestly, a so so quarter and really an unexpected leadership change. They're taking some steps to get back on track. It's a roughly 5% yielding dividend stock right now. The dividend is well covered by its profits. It trades for a PE of about 11 right now so even if its earnings get hit a little bit in this restructuring process, it's still fairly valued. Of course, there is the risk that Target becomes the next Kmart, which no one wants, but the company does have a strong history of differentiating itself from Walmart and the others and coexisting, and I'm confident in the turnaround.

Travis Hoium: Dan, what do you think of Target?

Dan Boyd: Target, listen, gang, I don't like shopping. I have a limited time on this earth, and I don't want to spend it in a store and so for me, Target is completely vestigial, totally useless. As long as something like Amazon exists and I need cheap crap, I can just go there instead of Target. So, Matt, I don't know if Target's ever going on my watch list.

Lou Whiteman: Can Target just open their self checkout lanes? Every time I go in there, they're closed. What's the point of putting them in anyway?

Travis Hoium: You get to live closer to Target headquarters where I'm at. They apparently run the stores a little bit more efficiently. Dan, you don't get your groceries delivered from Target, like we do?

Dan Boyd: No, I go to the grocery store. I'm fine with that. But yeah, store is OK. Like I said, I don't think Target's ever making it. Explosions are no. We're going to go Redwire today. We'll see what happens.

Travis Hoium: Lou takes this one with Redwire. Interesting story, and you've got some history with some companies with a pretty similar business model, so I got to check that one out, too. For Lou Whiteman, Matt Frankel, our engineer Dan Boyd, and the entire Motley Fool team, I am Travis Hoium. Thanks for listening to Motley Fool Money. We'll see you here tomorrow.

Lou Whiteman has positions in Nike. Matt Frankel has positions in Figma. Travis Hoium has positions in Alphabet and On Holding. The Motley Fool has positions in and recommends Adobe, Alphabet, Apple, Costco Wholesale, Lululemon Athletica Inc., Meta Platforms, Nike, Nvidia, and Tesla. The Motley Fool recommends On Holding and Under Armour. The Motley Fool has a disclosure policy.