From Nasdaq: 2025-03-31 09:29:00

In this podcast, analysts discuss Trump administration’s tariffs on imported cars and auto parts, Google’s response to the future of search, and Robinhood’s goal to be an all-finance app. Analyst Anthony Schiavone talks about the office market and a REIT for investors to consider. Stay informed with Breakfast news.

Auto manufacturers face challenges due to 25% tariffs on cars entering the US. GM and Ford stocks drop, while Tesla rises. Tariffs aim to boost domestic manufacturing but could raise production costs and consumer prices. Uncertainty and potential negative impacts create frustration for investors and auto businesses.

Amid tariff uncertainty, businesses impacted should consider withdrawing guidance due to unpredictable outcomes. Management teams must communicate truth and uncertainty to investors, acknowledging the challenges in projecting numbers. Investors are on edge for tariff Liberation Day on April 2nd. Stay updated with Motley Fool Money podcasts. Google has a new challenge with ChatGPT taking away search traffic. Google reassigned 1,000 engineers to work on generative AI efforts. They are focusing on voice and visual search to adapt. Google’s core business is advertising, so they need to pivot to keep up with changing user behavior and preferences. In 2023, 75% of Google’s revenue came from online advertising, down from over 90% a decade ago. With the addition of subscriptions and Cloud services, they plan to monetize Gemini through subscriptions. The future of Google’s consumer perspective is uncertain, but they are constantly evolving.

Robinhood launched Robinhood banking, offering private banking features and investment analysis. They are collapsing fees, charging a management fee of 0.25% capped at $250 a year, threatening registered investment advisors. The potential impact on RIAs depends on the quality of Robinhood’s services and products.

Robinhood also introduced cash delivery to your doorstep, citing the rise of ATM attacks. The convenience comes at a cost, with a $7 tip and a $5 delivery fee for a $200 withdrawal. The need for cash delivery raises concerns about safety and the high fees involved, making it a risky proposition.

The trend of tipping for various services, including cash delivery, raises concerns about the increasing costs for consumers. With the rise of a tipping economy, paying additional fees for services like cash delivery may not be worth the convenience. Robinhood aims to become an all-encompassing finance app, offering a wide range of services to users. Robinhood is expanding its services to include money transfers, banking, investing, and more. Stocks have more than doubled in the past year, pleasing shareholders. The company’s strategy of offering a wide range of services seems to be working, unlike other companies that have tried the same approach.

Experts believe that Robinhood’s success lies in focusing on services that complement each other rather than straying too far from their core competency. By delivering what customers want and attracting new ones, the company maintains a balance. However, offering unnecessary services or taking on too much could pose a risk to their success.

Investors may be overly pessimistic about the future of office space, with vacancy rates currently around 20%. While prime office assets may have bottomed out, other office spaces face challenges due to the rise of remote work. Delinquency rates for office assets remain high, but distress in the market has not matched expectations. Many office landlords have extended and modified loans in hopes of a future recovery. Capital markets are cooperating with lower interest rates and private equity capital ready to invest in distressed assets or lend to landlords. Delinquency rates may be controlled, not collapsing.

Class A office spaces like BXP and Alexandria Real Estate Equities remain over 80% leased with high demand due to quality and amenities. Renters receive concessions like free rent and tenant improvement allowances as landlords invest in updating and modernizing properties to attract tenants.

Investing in office real estate may be better suited for institutional investors due to challenges such as cyclicality, capital intensity, and leverage. Office REITs have historically underperformed, making other real estate sectors like industrial or mall REITs more appealing. The risk-reward opportunity for office real estate is uncertain and may not be as attractive as other sectors.

When considering office REITs like Alexandria Real Estate and BXP, it’s important to note that their earnings multiples are around 10 times funds from operation per share price. The demand for office spaces remains uncertain, making it a challenging asset class for potential investors. In a recent interview, Anthony Schiavone recommended Alexandria Real Estate Equities as a top office rate due to their premier lab space and strong tenant quality. Despite work-from-home risks, life science tenants still require office space, providing stability. With a solid balance sheet and long-term debt maturities, Alexandria appears undervalued.

Ricky Mulvey ended the discussion by thanking Schiavone for his insights on Alexandria Real Estate Equities, emphasizing the importance of not making stock decisions based solely on discussions. The Motley Fool’s editorial standards prioritize recommending products they would personally endorse. Schiavone, Moser, and Mulvey all have positions in various stocks mentioned in the interview. The Motley Fool recommends specific options and has positions in companies like Alphabet, PayPal, and Tesla.



Read more at Nasdaq: The Future of Google Search