In this episode of Motley Fool Hidden Gems Investing , Motley Fool contributors Jon Quast, Jason Hall, and Matt Frankel discuss:

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A full transcript is below.

This podcast was recorded on Aug. 28, 2026.

Jon Quast: Nvidia ’s CEO just startled investors. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing . I'm your host today, Jon Quast, and I'm joined by guests Jason Hall and Matt Frankel, all subbing in for the regulars today. But we want to go ahead and quickly get to the biggest news of the week, and that was Nvidia, a more than $5 trillion company reporting its financial results on Wednesday afternoon. For me, this was as much of a macroeconomic pulse check as much as anything, Nvidia CEO Jensen Huang coming out and saying that capex spending for AI is expected to continue to go up. If you look at 2025, the top 5 hyperscalers. These are big businesses such as Google and Meta . These companies spending roughly 500 billion in capex in 2025. For this year, looking at around 800 billion, and some of these companies are starting to go free cash flow negative. You start to think, maybe we're reaching a peak with AI capex, but Jensen Huang saying 1.3 trillion is what he expects to be spent next year, just by the Top 5. That's a 60% year-over-year jump if we take these assumptions. Matt, you're pointing out here that Nvidia, if anyone has a pulse on what is happening, it's really coordinating everything.

Matt Frankel: Jensen Huang, one of my favorite things about him as a CEO is he's not trying to deliver the best quarterly results. They are delivering the best quarterly results, but that's not his primary focus. He wants to shepherd the AI build-out. What I mean by that is think of all, and we've talked on other shows about the circular deals and things like that going on in AI. Nvidia is really at the center of it all. They're investing in all the frontier AI labs. They have financing partnerships with Apollo , BlackRock , Blackstone , Brookfield , Goldman , KKR , to raise over $500 billion of third-party capital to really just invest in all of the little bits and pieces of what's going on. There is some circular financing, and I have an issue with how that's being reported as sales growth, if I pay Jason $100 to teach me something and he gives me the $100 to teach him something, did we each really make $100? No.

Jason Hall: According to GAAP accounting, that would be $200 in revenue by those combined entities, even though it was just $100 getting passed back and forth.

Matt Frankel: That's what we're seeing in the AI space right now. But at the same time, that does help both of us establish our business, do the research we need, and there is some tangible benefit to that. Nvidia is really leading all that, and it's a really interesting dynamic, but it's not just about this quarter. They're really driving that $1.3 trillion build-out not all by themselves, but they're helping to drive that.

Jason Hall: I think it's important to note that even somebody like Jensen Huang probably doesn't really know exactly how this cycle is going to play out. They're going to get information sooner. They know what their sales rates are. They know what the orders looking like are coming in, and they know how quickly their partners like Taiwan Semi can actually do the manufacturing. But I think Huang is really leaning into the optimism, and the numbers back it up. Even if there is a certain degree of hype. But the part of the story that may not be getting enough attention isn't that Alphabet and Meta recently and Oracle before that have flipped over to generating negative free cash. It's that they're doing it even as their core businesses just continue to pump out gobs and gobs of positive operating cash. Here's a crazy number. Over the past four quarters, Meta, Alphabet, Amazon , Microsoft , and Oracle, those are the Top 5 hyperscalers. They've generated almost $700 billion in operating cash flow. Maybe with that context, that big capex number we're talking about, isn't really as scary as it seems.

Jon Quast: Of course, the difference between the operating cash flow and the free cash flow. The operating cash flow is what the business is producing, and the free cash flow reflects what it is investing in infrastructure, what we're talking about right here. That's really the delta that we're highlighting. But I just want to talk a little bit here. It seems like investors have lowered expectations here because you look at a business of Nvidia’s scale growing 100% year over year, trading at only 24 times its forward earnings. Matt, what are investors a little bit pessimistic about here, perhaps?

Matt Frankel: Well, it's not that they're pessimistic. It's at some point, the numbers just get too big. It's the same reason why, Warren Buffett said Berkshire Hathaway 's next 50 years aren't going to be as good as its first 50 years. It's because the math just doesn't work for 20% annualized returns for that long from a $1 trillion base. The same thing applies here. Either growth, pricing power or both will have to give at some point, 106% growth year over year in this latest quarter. They're projecting 70% growth next year. That was a big positive surprise, but 70% from 106 is still a deceleration. It's worth pointing out. The market is pricing that in. It's not going to grow by 70% next year, then another 70% next year, and so on. At some point, it would exceed US GDP within a few years at that rate. It can't happen forever, and that's what the market's really pricing in. It's really tough to evaluate Nvidia on traditional metrics like forward PE ratios because at some point, it's going to have to hit a threshold.

Jon Quast: Well, let's turn a little bit now to another semiconductor company that, by the way, speaking of Jensen Huang, he's spoken very highly about this company called Marvell , ticker symbol MRVL. This is a roughly $200 billion company. Huang says it could be worth a trillion someday. The big thing here is not that it reported 37% growth for the quarter, even though it did, for next year, it's looking to grow. It raised its guidance from 45% growth to 50% growth. An acceleration into the rest of this year and into next year, that would seem to corroborate a little bit here what Jensen Huang is saying that capex spending is going to pick up even more, but the market doesn't seem to like this because Marvell stock is down a little bit today.

Jason Hall: I've spent actually most of the early part of this week doing a deep dive into Marvell's business, and it's stunning how this seemingly niche company, and it is relatively niche has just positioned itself for a massive opportunity. Matt Murphy is the CEO. He's done an extraordinary job over the past decade of turning the company around and just pointing it right at this sweet spot of both what it's really good at. Making it indispensable for some of its most important customers, which happened to be these hyperscalers, and maybe most importantly, either developing or acquiring really critical technology that can keep up with the insanely fast pace of data volume and speed growth in the data center.

Now, let's zoom out here. If Nvidia’s server clusters are the brains or other CPUs and GPUs are the brains, Marvell's technology is like the central nervous system of the data center. That means it connects the brain to every part of the body, no matter how near or far from the brain that it is, also interconnects distributed sites together. You have data centers that are hundreds of miles apart. Their technology is important there. But as to the specifics of the opportunity, last year, they did an investor day around AI. The short version of what they think is attainable is about a $220 billion market for accelerated compute by 2028. They think they can get 25% of that. That's a $55.4 billion revenue number.

For context, this year, the company's saying they're probably going to do about 12 billion. I think they're going to do more than that, but let's just say they do that. We're talking about increasing revenue fourfold in about three years. Now, if it can maintain operating margins of 35%, I think they can probably do better than that, but let's just go with a baseline of 35%. What's the math look like? A trillion-dollar valuation would mean about 50 times operating income. Now, that's rich, but if growth does keep accelerating from there, it's really not outlandish, especially the stock right now trades for more than double that same multiple.

Matt Frankel: Jensen Huang did not give a time frame when he thinks it's going to hit $1 trillion valuation. That's one thing to definitely point out. I wanted to point out that we mentioned the circular deals just a minute ago. Marvell has one with Google, where they pledged to give Google warrants to buy up to $12 billion of the company's stock, making them one of the largest shareholders. But only if Google is spending money with them. For all of those warrants to vest, Google has to spend $120 billion cumulatively through 2033. If that is the first of several deals, then $55 billion in revenue could just be a starting point, honestly. If they get deals like that with the other hyperscalers, they're cutting into Broadcom 's chip business there; there could be a lot more. It's not an outlandish prediction. I don't know how long we're going to see these giant valuation multiples because in 2033, I have to imagine the AI build-out is going slower than it is now. Like I said, the numbers are just going to get too big. We're going to have some margin compression in the overall industry between now and 5, 6 years from now. But it's still a pretty amazing business, as you said, for essentially a niche company to be making these deals, and they're putting their money where their mouth is when it comes to that market opportunity.

Jon Quast: With AI, infrastructure spending continuing to go up by tens of billions of dollars a year, even if it's a decelerating rate, you better believe we're going to be talking about it on Motley Fool Hidden Gems Investing . But when we come back, we're going to be talking about something else. It's going to be called the Mythos moment in cybersecurity. This is Motley Fool Hidden Gems Investing .

Welcome back to Motley Fool Hidden Gems Investing . Anthropic, this is one of the leading AI application companies for consumers and businesses. In April, it released something called the Mythos AI model. The thing about this was it could quickly find and exploit vulnerabilities in software, and it could exploit them faster than humans could respond. A few months later, actually, the U.S. government asked it to pause Mythos for a little while. This was a big deal, and it caused cybersecurity investors to panic, thinking, no, the threats are getting much worse. But for CrowdStrike 's, it was saying that Mythos was actually great for its business. Accordingly, this week it reported numbers, and Jason, this was actually a really great quarter for CrowdStrike.

Jason Hall: It was extraordinary. The thing is, the quarter was a good quarter, beat expectations, but it's really the guidance of the reacceleration of growth in the business. It's another example, too, of a stock that is widely considered extremely overvalued, can still go higher when the business reports great results that beat even those highest of expectations. As we're recording this, shares have given back some of those gains are down a good bit late in the morning of the 28th, but CrowdStrike shares are still up 10% for the week, and they're up 81% for the year. The big driver is again, those expectations for accelerating growth. The company is calling for annual recurring revenue, so that's ARR to grow about 41% from where it was a year ago, by the end of next quarter and then keep growing from there. This is a dominant business, keeps expanding its share of the market and also signing its customers up for more and more tools. At last count, more than half of its customers use six or more of the almost three dozen modules that the company offers. It now does trade for around a 140 times my estimates for what their full-year free cash flow is going to be. But if growth keeps accelerating, I think free cash flow margin will explode higher and it's a stock that could get a lot cheaper really quickly without the stock price falling just based on the operating leverage that they would get and their profits exploding.

Matt Frankel: CrowdStrike's earnings were a blowout, even in the context of all the beaten raises that we've seen from the industry this quarter. The big number that I focused on net new annual recurring revenue. That growth rate was 51%, meaning that the new annual recurring revenue they added this quarter was 51% greater than what they added in this quarter last year. They've never done that before, even when they were in the really early stages of their growth. That's the highest net new growth rate ever. But I'm going to push back on Jason a little bit because if the 2020-2021 time frame taught me anything, and Jason and I were very active in investing in that time, it's that valuation always matters at least a little. Based on CrowdStrike's own internal goals for the long-term growth rate they feel they can sustain, the stock's trading about seven times the sales it will produce in a decade from now. Revenue acceleration is impressive, but I still have a really tough time wrapping my head around this one valuation wise.

Jason Hall: There's no pushback or argument for me on that. It is extremely richly valued. As long as it keeps delivering, that's going to be the case. But we all learned with the outage a couple of summers ago, one speed bump, and a lot of value gets washed out.

Jon Quast: I want to circle back to this Mythos moment because as Matt pointed out, this record net new annualized recurring revenue for CrowdStrike, but it doesn't seem to be a tailwind for all cybersecurity companies equally. We got reports this week from SentinelOne, Okta, Rubrik , and specifically with SentinelOne, looking at 21% growth and only about 20% growth for the year, so slightly decelerating, especially compared to 22% growth last year. I guess as I zoom out, I'm just asking myself, why is this a tailwind for CrowdStrike? But SentinelOne doesn't seem to be seeing the same uplift here, Matt.

Matt Frankel: The winners like CrowdStrike, they're already profitable. They're already funding their AI build-out through their expanding free cash flow. SentinelOne, one of the things that stood out to me is that they recently cut 8% of their workforce, if you remember that news. They specifically said they were going to get the cost savings from that to invest in their AI security. It's like CrowdStrike's at a position of strength here compared to SentinelOne, first of all. CrowdStrike's newer products like FalconFlex is helping them win bigger longer-term deals than competitors, and their customers want better outcomes at lower cost, and CrowdStrike's delivering that better. The ARR coming from FalconFlex grew by 101% year over year in the latest quarter, talking about a blowout number. They have a position of strength. They had a first-mover advantage. They're an AI native platform. They were part of the original Mythos team that got early access. They've done a great job of capitalizing on that.

Jon Quast: Jason, is there any reason to hope here beneath the surface that SentinelOne is actually doing a little bit better than it looks on the headline number?

Jason Hall: A couple of things. The stocks up 42% this year. The business is growing very well. The thing is that the context of comparing it to CrowdStrike, which you should because they're competitors, like direct competitors over the same customers, makes it hard. It's a giant shadow CrowdStrike cast. That net new ARR number that we're talking about from CrowdStrike that is an incredible number, it's bigger than SentinelOne's entire business. Just the new business they're acquiring every quarter is bigger than SentinelOne's entire business. That should really contextualize it.

But I think the thing that matters a lot is if you peel back the layers, pop open the hood for SentinelOne, where it's growing is really compelling. CEO founder Tomer Weingarten sat down with me and fellow Fool Tim Beyers about a year and a half ago, and he told us, he's like, look, guys, AI is the most important, biggest threat to the enterprise and the biggest opportunity that we have in front of us by far. You look at where they're growing, non-endpoint. Again, thinking about endpoint, that's a core offering for their business and for CrowdStrike. Non-endpoint offerings now make up more than half of SentinelOne's ARR. Even as CrowdStrike is dominating there, SentinelOne's growth is accelerating. It's AI security business grew by triple digits. Cloud and data are accelerating growth. I've been saying for a while that I believe broadly there's going to be a lot of winners in cybersecurity, and I do think that the space is big enough for companies like SentinelOne and, to a lesser degree, Okta in a different business because there's different needs to win share in this massive tailwind of opportunity.

Jon Quast: When it comes to trends to pay attention to, I can think of few as important as cybersecurity. When we come back, Dick's Sporting Goods is headed to its worst trading day in years; you're listening to Motley Fool Hidden Gems Investing .