Tim Beyers

WTH at AWS, we need to talk about computing in the cloud pools.

You're listening to Motley Fool Money.

Welcome, Fools!

I'm your host, Tim Beyers.

With me, our longtime Fools, David Beyer and Tom King.

It's great to have you both here.

So, guys, just a few hours ago, recording on Monday morning, Amazon Web Services suffered a pretty catastrophic outage in one of the eastern U.S.

regions.

and businesses that offer essential digital services have taken a hit here.

This isn't the first time we've seen AWS go down, and it's not going to be the last, especially with the scale of the AI build-out of which AWS plays a pretty big part.

So quick reactions here first, and Tom, I'll start with you.

Are you at all surprised by this news?

Why or why not?

Yeah.

I mean, that's a fair point.

I mean, these, these things are made up of like those, you know, we've seen these commercials before Dave, where you have the dominoes all lined up and you hit one of those dominoes and they all start falling.

Like what's your reaction to this?

I don't know if there is a Jeff Bezos shakes head approvingly meme, but I think you'd be getting that right now, Dave.

I mean, it is interesting.

So let's talk about this.

AWS going dark again.

This has happened many times.

Here's what we know.

AWS, like you said, Dave, went offline around 3 a.m.

Eastern time for what appears to have been a couple of hours.

The rolling effects could continue, and we are recording this on a platform called Riverside.

And as soon as I logged in, we got a nice little notice from Riverside saying, hey, AWS went down and services may be affected.

I'm paraphrasing there.

So lots of companies have been affected here.

At issue were some errors in the company's DynamoDB database.

So let me just briefly explain what this is.

Amazon's primary database is DynamoDB.

It's a transactional database.

And it's most famous for being the homegrown Amazon database that they use really to process transactions.

So this is meant to be a highly resilient, highly replicated database throughout the Amazon and the Amazon Web Services ecosystem.

This is what they've built their business on.

And what it was subject to, we don't know if it was an attack or just an

error, it was subject to an outage in the DNS system, the domain name server system.

When that happens, when the DNS goes out, and you probably have heard of this, a distributed denial of service attack, that's meant to attack the DNS.

If you do that, if you take down the DNS, it's like you having your phone and suddenly all your contacts, you can't

pressed to call anybody because your contacts are frozen.

The phone book in your phone just no longer works.

You can't call anybody.

When the DNS is down, that's what happens.

The DNS determines when you say google.com, there's an underlying IP address that's a series of numbers, and it translates google.com to those numbers.

And when that's down, you can't do that, which means the internet just stops functioning.

So, this appears to be what happened here.

I'm kind of curious, because the affected companies include Coinbase, Robinhood, Roblox, a bunch of others.

Two questions from me, and I'll start with you this time, Dave.

You said, effectively, you're surprised this isn't happening more, but I'd like to gauge your concerns.

Are you at all concerned with how much influence AWS has over modern compute?

And are we creating any kind of single point of failure here?

Yeah.

Tom, I'm curious how you think about this, because this is an issue.

Digital businesses need to have that digital infrastructure to do business, and that infrastructure is now largely outsourced.

How do you think about this?

I love that you called server rooms, cold rooms.

I love that you called it that, because you go into a server room, and yes, it's intending to be cold.

Get too close to a server, you stop being cold real fast.

They run really hot.

But I love that you called them that.

Let's talk about risk here, though, Tom, because I think you're both right.

Let's call this the cost of doing business.

But how would you assess risk?

AI is here, the AI build-out is going to continue, and it's going to largely depend on these cloud infrastructure companies, quite a lot of them.

They are going to be the ones that are going to do the most, let's call it GPU hoarding.

They're going to do the most GPU hoarding.

They are going to provide the infrastructure.

And when

The digital assistance you need is housed someplace else that we can't see, and it's controlled by somebody else.

How should we think about companies like Coinbase, Robinhood, and Roblox?

Do they need to be valued with a higher risk premium because of their dependence on something like AWS?

Tom, I'll go to you first on this.

There are companies that are switching.

Up next,

We're gonna talk about some fakers and some breakers.

It's the faker breaker game.

You're listening to Motley Fool Money.

All right, Fools, we're back.

Thank you for listening to Motley Fool Money.

We have a wide range of companies that were affected by the AWS outage today.

Let's talk about three guys.

We're gonna talk about three and let's get your take on them.

Are these AWS-dependent businesses fakers or are they breakers?

And as a reminder, a faker is a company that shows outstanding growth for a brief but unsustainable period of time.

They look good enough.

They look enough like breakers to small-f fool some investors.

So, Tom, coming to you first here.

Faker or breaker, Coinbase?

This is an interesting one because the crypto markets are getting more and more real, more and more interesting.

There is more real dollars flowing in particular into Bitcoin.

However,

this is probably one of the most rampant areas for fraud.

With that, I'm going to give you No.

2 here, Dave, because it's a related company, Robinhood, which has made a lot of money on orchestrating crypto.

Faker Breaker, Robinhood.

I like that you're qualifying already, but keep going.

Okay.

I'm going to bring up the third one, and I'm going to ask you both for a super quick take on this, because I think it's a company, some of us, maybe two of us, I know I'm going to be using this company later this week in order to go to Fool Fest in D.C., and that is Lyft.

So, faker or breaker, Tom, Lyft, the not Uber, Uber lookalike.

This is what you're saying.

It passes the COLA test.

It is the Pepsi to Uber.

So does that make it a breaker for you or is it still not enough?

Last word, Dave, faker or breaker?

I don't know.

It's just a game, Dave.

All right.

Fair enough.

Up next, we preview tomorrow.

There's some interesting stuff happening.

Speaking of prediction markets, there's your hint.

You're listening to Motley Fool Money.

All right.

Back with a preview for tomorrow.

You will have Emily Flippen, Stan Miteo, and Jason Hall talking about prediction markets.

What are they?

How are they approved with regulators?

How much money is flowing through them now?

And how can you invest with them?

So, if prediction markets are a legitimate market opportunity,

Are they based on skill?

Is it just another form of gambling?

This is everything you're going to hear from Emily Sandmeet and Jason tomorrow.

But for today, I think we've concluded here, guys, that AWS, massive, down today for a little period of time, probably going to be down again in the future.

doesn't mean that this is one that we should get too over-hyped about, but a little bit annoying.

But that's it for today.

Thanks to David Meyer and Tom King for joining me today, guys.

As always, people on the program may have interests 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 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.

That's it for Motley Fool Money today.

Again, please be sure you tune in for Emily Sandmeet and Jason tomorrow.

for Dave Meyer and Tom King, for our engineer, Dan Boyd, and our producer, Anand Chakbalu.

I'm Tim Beyers.

You've been listening to Motley Fool Money.

Thanks.

See you soon, Fools.

Fool on!

When are broken breakers worth buying?

We break it down.

You're listening to Motley Fool Money.

Welcome, Fools.

I'm your host, Tim Byers.

And with me, our longtime Rule Breakers teammates and old friends, Rick Benares and Carl Thiel.

It's a Gen X Power Half Hour.

Today, we're talking about our favorite broken breakers, innovators that have yet to convince the market of their long-term potential.

Carl, Rick, we've got a lot to talk about.

But first, Carl, since we've got you here, I'd love to take just a couple of minutes to talk about the

federal layoffs and any potential consequences you see for the biotech industry.

And for those who haven't been following along, this relates to federal cuts having to do with CDC and related health and human services agencies.

Carl, what do you see in here and what should we pay attention to as biotech investors?

Just a quick follow-up on this, and then we'll move on.

I think what I'm hearing from you is that there are some short-term disruptions here, but we like early-stage biotechs in Rule Breakers.

You're the one that brings us most of these.

This does not sound like something that over the long term should dissuade us from getting interested in emergent science in biotech.

There's going to be maybe some short-term disruptions.

There will be possibly some approval delays.

But over the long term, we still should like emergent science biotechs because those are still necessary and will come to market.

Got it.

Okay.

We'll keep our eyes on this.

Fools, let us know what you think and what emerging biotechs you're investing in.

Up next, three broken breakers we still believe in.

Welcome back to Motley Fool Money.

We like dark clouds we can see through.

If you don't know what that principle means, I'd like to introduce you to David Gardner's new book on Rule Breaker Investing.

Dark clouds we can see through means, and it's a long-held principle of David's in Rule Breakers,

We aren't trying to buy the low, but we love it when a company that we really believe in that has significant Rule Breaker traits gets punished for reasons that maybe are temporary or maybe are unfair.

We like these companies as Rule Breakers that may have taken a backward step

for reasons that are partially their own fault, but maybe not completely.

There are dark clouds.

We can see through them, and we're willing to stick it out and wait until the sunny skies return.

We're going to talk about three of them.

Rick, I'm going to start with you.

We're going to start with the trade desk, because boy, is it just raining on their boardroom?

What's going on here?

So, cracks in the price, but not cracks in the business.

Fair enough.

I mean, look, I think connected TV has changed everything, and logged-in experiences for all entertainment is a big boon for companies like the Trade Desk.

But let's go back to healthcare.

I mean, Carl, Bristol-Myers Squibb.

Bristol-Myers Squibb is one of these companies, by the way, that does not seem like it's been around.

I think people would be shocked about how long it has been around.

Tell me what you think here.

Why is this one a broken breaker?

Is it possible that that multiple expands once we start to see?

Because if I heard you correctly, and I think I did, the idea is that they, I mean, look, they're facing a giant patent cliff, but it's not like they've stopped innovating and they are building a backlog of drugs.

This is the old dog that's cooking up new drugs.

Sorry, I made it sound way too much like Walter White there.

I didn't mean to do that, but you know what I mean.

There's a big backlog here, and if that backlog starts to show promise, that multiple could expand quite quickly.

All right.

So, not just dark clouds, storm clouds.

Fair enough.

I'm going to take Progeny and Progeny ticker PGNY.

I've talked about this before.

I own it.

Ever since our Fool 24 interview with CEO Pete Inefsky, I've been interested in this company.

And part of the reason is that it has gotten so destroyed.

On the Rule Breaker scorecard, down 41% as of yesterday.

hour taping down 99% versus the market.

It is broken in terms of the price here since the IPO.

But that does not mean that these are unnecessary services.

In fact, I think they are growing

in importance.

They're not getting enough credit because I think the healthcare market is ... Carl, I'll be curious if you have a thought about this, but this is my view of it.

Because the healthcare market is so Byzantine, there's so much debate about it, there's so much worry about prices, this kind of

business and product, which is essentially aimed at those who self-insure, which is not a lot of companies.

I mean, it's a growing number of companies that do self-insure.

They kind of manage a bucket of money.

They use an insurer on the front end, and then they pay benefits on the back end, and they get like discounted versions.

And then they kind of build a menu.

The Motley Fool is like this.

As full-time employees, this is what we have.

We are a self-insured company.

We have good benefits, and the company works within a structure in order to do this.

It has been very successful at it for a lot of years, and we offer progeny as a benefit.

And you know what?

I mean, I think we are going to see a lot more of this.

Now, revenue was only up 9.5%.

in the most recent quarter.

But I will say this, gross profit increased 16%, so there's more efficiency here.

It's a profitable company generating cash flow, and this is what I like the most.

that despite all of this uncertainty around healthcare, the client base, so again, self-insured companies expanded to 542 in the most recent quarter, and that was just about 6.75 million members.

So these are covered individuals under progeny.

That's up year over year from 473 clients, which again, self-insured companies, that's a lot.

That's fairly big growth.

The number of covered people underneath that was, again, grew to 6.75 million, up from 6.47 million.

There's clearly a whole bunch of companies that are interested in progeny services because they do have some better indicators and results

for helping those who are having trouble building a family, starting a family.

They're well-known, their principal product is for infertility, and they tend to help those couples who are trying to have a child.

They tend to show clinically better results, and that does show up.

They get chosen more often.

And so this is another piece of this.

They do have other things they're doing.

One of them is they've introduced menopause support and there's strong initial reception for this.

20% of existing clients and 40% of new clients are considering taking up progeny on that menopause support.

And this is not the only extra service that they're working on.

Last point on this.

So Inefsky and a lot of his leadership team

Back when the stock was a little lower than it is today, it was still in the teens, but they were active buyers on the open market.

They're not selling shares.

They've been, if anything, accumulators of shares.

And that's another thing I like about this.

But I don't know, Carl, I'll ask you to tell me I'm wrong if you think I'm wrong.

Is just the generalized confusion and concern about the healthcare market something that is a dark cloud that weighs over a service like Progeny, especially since it's

for those companies that are self-insured.

Yeah, it could be.

The other piece of it, though, is that as they introduce more services and the existing clients use progeny for more things, you would think that offsets.

Rick, do you have a thing you want to add here?

Oh, yeah.

Yeah, I think that's right.

So let us know what you think.

What's your favorite broken breaker?

Give us a comment wherever you consume your podcast.

Just leave us a comment and let us know.

We'd love to hear it.

Up next.

Play the Yes And game again.

Stay tuned.

You're listening to Motley Fool Money.

All right.

It's time for Yes And, which is our improv-style game that Rick brought to us a while back.

If you like this game, write me a note, tbyers at fool.com.

Let us know because we'll keep bringing this back.

If you want something else...

I'm going to keep playing Faker Breakers, Faker Breaker, and we're going to keep doing Yes And.

As a reminder, the Yes And game is pretty simple.

We start with a bullish statement about a stock, followed by another, and then followed by a concern.

We go around the horn with three stocks taken from our Rule Breakers database.

And we just make a statement about stock, and then it's yes and, yes and, yes but.

We raise a concern.

And then we end the scene.

We're going to do this for three stocks.

So, when you are ready, Carl, we're going to start with you and your pick, which is Arginix.

Yes.

And it appears that Vivecart is positioning the capture.

Do I have this right, Carl?

50% market share in CIDP.

That is an extraordinary number.

Yes, but it does look like in Q1, there was a bit of seasonal insurance re-verification delays and increased Medicare Part D utilization leading to higher discounts, missing investor expectations.

So, the regulators aren't always friendly with this one.

Excellent.

Carl, you did it.

There's your first.

There's your first.

Now, we're going to go to the expert here.

Rick, Celsius, let's do it.

Yes, and I see this every day, Rick.

Every time I get on a bus or a train to commute into the office, I see at least one Celsius drink, not only on the way, but in the office where I end up going to work.

Celsius, no matter what we say about its growth rates, it is everywhere.

Yes, and the company's international division grew by 37% to 18.6 million.

That's including expansion into Canada, U.K., Ireland, Australia, New Zealand, and France.

So, successful global market penetration is happening.

Yes, but U.S.

revenue did plunge 33% year-over-year to $247 million.

So, good foreign revenue, not as great on domestic shores.

And seen.

All right, let's talk Salesforce.

Salesforce has closed over 12,500 agent-forced deals since launch, and more than 6,000 of those are being paid deals.

Salesforce is really ramping up its AI.

Yes, but Salesforce is now trading for a premium that is going to be hard to justify as the AI hype starts to die down, even with all that free cash flow.

And scene.

All right, fools, that's yes and.

Let us know what you think about the yes and game.

Let us know what you think about our broken breakers and which broken breakers make the most sense for you.

Do check out when you want to hear more, if you want to hear more about dark clouds you can see through and all of the various Rule Breaker trades.

Please check out David Gardner's new book, Rule Breaker Investing, for those who want

want to learn the long-term benefits of compounding in high-growth, high-quality companies, it's a great place to start.

Thanks to Rick and Carl for joining me today.

As always, people on the program may have interests 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 and its rules.

standards and is not approved by advertisers.

Advertisements are sponsored content and provided for information purposes only.

To see our full advertising disclosure, please check out our show notes.

Please also tune in tomorrow when Emily will have a bit more Rule Breakery content for you.

For Rick Munarriz, Carl Thiel, our engineer is Dan Boyd, and our producer is Anand Chakravallu.

I'm Tim Byers.

Fools!

See you again soon.

Go on, everyone.