Scott Galloway

So all of these assets should be able to create an asset or a series of assets that create revenue that is greater than the inputs to produce that revenue.

That's profits.

And then

your growth or the multiple you get on those earnings, the PE ratio is a function usually of how fast that is growing or how stable and durable those cash flows are.

The reason why SpaceX and Anthropic and OpenAI are going out at anywhere from 30 or 40 times revenues,

to 100 times revenues is that if people look at the addressable market and think, wow, if this company continues to grow in fairly short order, it could be the most valuable company in the world.

And right now, if you are buying into any of these three companies, there is your betting in the non-zero probability that this could, in fact, be the most valuable company in the world because these companies are going out at anywhere between $1 and $2 trillion, the most valuable company in the world.

I think it's around $5 or $5.5.

I can't remember if it's NVIDIA or Apple.

So you do end up with companies that are low growth, not exciting, not in software, don't have the margins of technology.

You know, the adjustable market for Walmart is pretty big.

I think it has a 9 or 11 percent share of retail.

It's probably never going to get above 20 because consumers like at some point differentiation and want to shop at different places or regional friction, whatever it might be.

But let's talk about TAM.

I think Anthropic is 5 or 10x-ing every year.

So people look at that and think, wow, that could be an enormous company at some point.

And because it is, in fact, software at some point, when it hits breakeven, a lot of those additional revenues are going to flow to the bottom line.

So what's the takeaway here?

Let's look at the numbers.

Fiscal 2025 net sales of $675 million at Walmart, adjusted operating income of $30 billion, operating margin of 4.4%.