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In this episode of Motley Fool Hidden Gems Investing, Motley Fool contributors Tyler Crowe, Matt Frankel, and Lou Whiteman discuss recent market jitters tied to OpenAI’s growth outlook, General Motors’ latest earnings, and a mailbag question on how individual investors should think about proxy voting.
The discussion begins with a Wall Street Journal report stating that OpenAI is not meeting certain user-revenue goals. The contributors said the news adds pressure to the narrative around the company’s heavy spending on compute and infrastructure.
They noted that shares of companies closely tied to OpenAI have fallen on the news, citing Oracle and CoreWeave as examples.
Tyler Crowe highlighted what he viewed as a potential inconsistency: OpenAI’s reported push toward an IPO while having raised $122 billion less than a month earlier. He questioned why a company that recently raised such a large amount would be preparing for an IPO so soon.
Matt Frankel said the report should be taken with caution, adding that OpenAI missed internal growth projections but did not specify by how much. He referenced management’s claim of $280 billion in revenue by 2030, describing it as a figure that exceeds Nvidia’s revenue by a wide margin.
Lou Whiteman argued that the key question is whether the AI ecosystem can generate meaningful profits while sustaining the spending required for advanced models. He outlined three broad possibilities: (1) models that dramatically reduce compute demand, (2) pricing power from hyperscalers despite competition, or (3) the possibility that current valuations are not sustainable.
Tyler Crowe added that AI model performance can shift quickly over time, comparing the cycle to earlier internet-era platforms. He also pointed to DeepSeek, describing it as an open-sourced Chinese AI model that, after updates, reportedly met or surpassed some specifications of OpenAI and Anthropic models while using about one-fifth the compute cost.
Frankel said the DeepSeek claim sounds more reasonable than earlier figures, but he cautioned against placing too much weight on it. He emphasized that while revenue from OpenAI should be high-margin as it scales, competitive pricing pressure from alternatives could complicate the path to profitability.
He also said that if he were a creditor in the AI ecosystem, he would be “nervous,” citing uncertainty around how quickly growth can outpace infrastructure buildout.
The conversation then shifts to General Motors. The contributors said GM shares were down about 1.9% at the time of recording despite the company posting better-than-expected earnings.
They cited adjusted earnings per share of about $2.82, down from $3.35 a year earlier. They also referenced items affecting results: an expected tariff refund of about $500 million and one-time costs of about $1 billion related to GM’s pivot in electric vehicle strategy.
Matt Frankel said the quarter was “solid” beyond headline numbers, pointing to strong margins despite a challenging consumer environment. He said GM’s buyer incentives appear relatively strong compared with peers, and that GM maintained the No. 1 U.S. market share for total sales.
He also said GM is the clear No. 2 in EVs, with Cadillac EV sales up 20% year over year. Frankel cited GM’s EV market share at 13%, up sequentially from 10%, behind Tesla.
Because of the results and reduced tariff impact, GM raised guidance. The company is calling for $12.50 per share in earnings at the midpoint, which the discussion said implies GM is trading at 6.4 times full-year earnings.
Frankel also emphasized GM’s software and services segment. He cited Super Cruise paid subscriptions up 70% year over year, with GM expecting 850,000 by the end of the year. He described Super Cruise as a high-margin revenue stream and said OnStar has 13 million paid subscribers.
Lou Whiteman questioned how durable GM’s software pricing power may be, noting that auto features often start as premium and later move downstream to standard equipment. He said he is not sure whether GM can maintain margins long term, even if software becomes a meaningful revenue driver.
The episode’s mailbag question asks: as part owners of individual companies, how should investors think about proxy voting, and does an individual vote really count?
Matt Frankel said he does not view voting as a personal duty comparable to voting in presidential elections. He said his focus is more on how companies structure voting rights—for example, he referenced Alphabet’s Class B shares having 10 votes per share versus one vote for publicly traded voting shares, which he said can affect an investment thesis.
Lou Whiteman said he does not usually vote, citing that his brokerage process is “clunky” and that he owns about 80 stocks, making voting feel time-consuming. He acknowledged that governance matters but said it has not factored into his investment decisions.
Tyler Crowe argued that investors should vote their shares. He said proxy filings and votes on items such as board directors and executive compensation are part of the responsibility of owning individual stocks. He also said voting can provide a sense of accountability and empowerment when investors disagree with compensation packages.
Whiteman agreed that investors should at least read the proxies, even if they do not vote.
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