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The Department of Justice is requesting that Alphabet divest itself of Chrome.
In this episode of the podcast, Motley Fool analyst Jason Moser sits down with host Ricky Mulvey to discuss:
- Why Apple might forfeit a substantial $20 billion amid potential changes to Alphabet’s structure.
- General Motors‘ commitment to electric vehicles and its implications.
- Bill Ackman’s hedge fund, Pershing Square, acquiring a significant 20% stake in Hertz.
Following this, Motley Fool personal finance specialist Robert Brokamp addresses listener inquiries regarding tariffs, capital accumulation plans, and 401(k) options.
You can find full episodes of all The Motley Fool’s free podcasts at our podcast center. And if you’re looking to invest, consider checking this curated list of top 10 recommended stocks.
A complete transcript follows.
This video was recorded on April 22, 2025.
Ricky Mulvey: Is Google becoming too powerful? You are tuned into Motley Fool Money. I’m Ricky Mulvey, and today I’m joined by a sharply dressed Jason Moser, who is unusually attired for the occasion. Thanks for being here, Jason.
Jason Moser: Thanks for having me, Ricky. I had another media appearance earlier, so I needed to look somewhat professional—representing the company, as they say.
Ricky Mulvey: I assumed you were finally taking your job seriously. It seems like you dressed for an important occasion. Speaking of important matters, Google’s antitrust trial is entering a new phase. Last year, a US district judge determined that Google held an illegitimate monopoly over online search. The DOJ is now contemplating action against Google because of its hefty payments to Apple to remain the default search option on its devices. This is seen as a significant factor contributing to Google’s monopolistic status. So, what’s next? The DOJ has put forth a couple of demands: first, sell Chrome; second, end default search agreements with companies like Apple; and third, share data with competitors. This is quite a lot to unpack, Jason. What implications might these requests have for Alphabet if the DOJ’s demands are met?
Jason Moser: Thankfully, I’m not preparing for court any time soon. Considering these remedies, they range significantly. Selling Chrome would undoubtedly be a significant move, as it commands around 66% of the global browser market share across desktop and mobile. That would be a substantial hit to Google. However, I suspect that a sale isn’t likely to happen. Terminating the default agreements seems like a more plausible option. User habits favor Google, and many choose it out of routine. While Google does offer valuable services, sharing that data might not guarantee a win for competitors. It’s akin to handing someone a vast fortune and expecting them to easily replicate your success—creating a competitor is more complex than merely having resources.
Ricky Mulvey: This case traces back to the Trump administration, and since then, developments have shifted, notably with AI tools like ChatGPT impacting Google’s market. Google’s legal team argues that if competitors gained access to Google’s search technology and data, it might enable them to develop alternative products while Google is restricted in shaping its own competitive advantages. Do you think their concern holds weight? If you were the judge, how would you approach this situation?
Jason Moser: They certainly have legitimate concerns. Making data accessible to competitors can invite intense competition. You mentioned ChatGPT—a notable example of advancement in this field. Google is also progressing in AI through its Gemini initiative. If I were presiding over this case—thankfully, I’m not—I would focus on acquisitions as a key issue moving forward. Examining past acquisitions could be vital since many firms have thrived through them. The data-sharing and default agreements may also warrant scrutiny. As for separating Chrome, I find that scenario hard to envision.
Ricky Mulvey: Observing the evolution of this case, one potential fallout is Apple’s risk of losing a straightforward $20 billion from Google’s payments to them for default search settings. Many tech industry analysts are closely monitoring this situation. What broader impacts do you foresee?
Jason Moser: That $20 billion to Apple is significant, as it represents a sizable percentage of their pre-tax earnings. It’s a lucrative arrangement, and losing that might indeed raise concerns for Apple shareholders, especially as the company’s growth narrative has been facing challenges. However, this money is a small fraction of Apple’s overall revenue. The ongoing scrutiny of major tech firms like Google and Meta will be particularly interesting to follow, as they aren’t operating in a vacuum; numerous firms engage in similar practices, albeit not at the same scale.
Ricky Mulvey: You make a valid point. The financial implications of losing that payment from Google could resonate deeply within Apple’s operations. Shifting gears to General Motors, there’s an intriguing article in BusinessWeek that discusses CEO Mary Barra’s challenge of making a $35 billion bet on electric vehicles in a challenging political climate. There are several angles to consider here: GM’s growing EV sales, the political landscape affecting their strategy, and the fact that they are still struggling with profitability on these electric vehicles. What stood out to you from the article?
Jason Moser: It emphasizes GM’s significant investment in developing their own battery technology, named Ultium. This is crucial for reducing costs and improving production efficiency. Their efforts to enhance battery technology are commendable, but it’s a complex and challenging endeavor that takes substantial time and capital.
Ricky Mulvey: What struck me is the intricate lobbying strategies at play. GM is critical of how incentive structures for EV leases favor foreign competitors. If certain tax credits are eliminated, it would not only impact GM adversely but significantly disadvantage its rivals. There are many complex dynamics in this market; I recently benefited from a remarkably low-cost EV lease, which raises questions about the sustainability of that pricing. There’s clearly a lot happening behind the scenes.
Jason Moser: You’re correct. These early losses in EV sales represent a standard practice for companies launching new products—it’s about generating initial interest and demand. The idea is to eventually build brand value and customer loyalty which, over time, could lead to improved margins.
Ricky Mulvey: Given GM’s long history with EVs, why are they still needing to sell these vehicles at a loss?
Jason Moser: Ultimately, the goal is to transition away from losses, but that requires overcoming various barriers. Significant expenses go into R&D, including manufacturing adjustments needed for different vehicle types and battery technology investments. These upfront costs are foundational, and while battery prices are decreasing, achieving sufficient market share and establishing a credible brand in the EV space takes time.
Ricky Mulvey: Not to mention Tesla, which continues to profit from its electric vehicle sales. Factors affecting Tesla, including Elon Musk’s controversial political stance, have caused fluctuations in consumer interest. On the other hand, GM recently increased its EV market share from 6% to 12% in the U.S. What is driving this market dynamic? Is it the result of Tesla’s declining appeal, or credit must also go to Barra’s leadership?
Jason Moser: It seems to be a combination of both. Recent polling indicates a growing negative perception of Tesla among Americans. Musk’s actions contribute to this shift; leading a company with political involvement comes with risks. Nevertheless, it’s essential to recognize Barra’s effective strategic direction in growing GM’s market share in the EV sector. She envisions electric vehicles as the future of automotive transport, focusing on a broader array of options for customers.
Ricky Mulvey: You noted recently that around 27% of respondents maintain a neutral stance on Tesla. Those seem like some easy-going folks to chat with.
Jason Moser: That’s my crowd too!
Ricky Mulvey: Following your insights on innovation in GM’s electric vehicle sector, would you consider investing in GM stock?
Jason Moser: Not particularly, but that’s more reflective of my investment preferences as opposed to GM itself. The automotive sector doesn’t excite me, although I appreciate my car. Historically, auto stocks have seemed too volatile for my investment style.
Ricky Mulvey: Moving on, let’s turn to Hertz, which has recently surged by approximately 150% amid Bill Ackman’s hedge fund acquiring a 20% stake. With several adversities facing the company, such as decreased travel demand and a significant debt load, what does Ackman see that has driven his investment?
Jason Moser: Ackman likely identifies Hertz as an undervalued opportunity. The company previously made substantial investments in Tesla, an attempt that didn’t pan out as planned. He believes that the company can bounce back, especially as rational consumer behavior returns. New leadership under CEO Gil West provides a fresh perspective. While Hertz’s debt is considerable, it’s structured in a manageable way that allows flexibility.
Ricky Mulvey: Ackman has a knack for presenting his investment rationale publicly. He suggests that if the value of used cars increases, it could greatly benefit Hertz’s financial standing, given their substantial fleet. Also, in anticipating a shift toward autonomous driving, could Hertz play a pivotal role in providing fleets for services like Uber? Ackman asserts that Hertz has the potential to be valued at $30 per share while trading around $9. What should retail investors consider before following Ackman’s lead with this turnaround story?
Jason Moser: It’s essential for investors to conduct their diligence rather than solely rely on another’s insight. The recent surge in Hertz’s stock suggests that much of the potential upside may already be priced in. Ackman might view it as a short-term value opportunity rather than a long-term hold.
Ricky Mulvey: Thank you, Jason Moser, for sharing your expert insights today.
Jason Moser: Thank you for having me.
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Ricky Mulvey: Coming up, Robert Brokamp will answer your questions about tariffs, 401(k) plans, and backdoor Roths. If you have inquiries for the show, please send an email to [email protected]. That’s podcasts with an S at Fool.com.
Our first audience question comes from Fool Up North, who is curious about the mechanics of tariffs. Let’s say a U.S. company, labeled A, procures widgets from an overseas supplier B, costing $100. If a 10% tariff is imposed, company A would pay $110. Who receives the additional $10, and what happens to it? What branch of government collects this revenue, and how is it allocated in the budget?
Robert Brokamp: [laughs] This is a great question. When goods enter the U.S.—whether through land, air, or sea—the Department of Homeland Security’s division, Customs and Border Protection (CBP), is responsible for classifying and assessing tariffs. Typically, importers may enlist customs brokers to assist with this process, especially given the complexity of product classification and compliance.
The additional tariff is assessed on the importing company, meaning that company A, in this example, pays the tariff, not the foreign supplier. The money collected is sent to the Treasury Department, entering what is known as the general fund. It can be utilized for numerous purposes, such as infrastructure funding or addressing economic impacts, akin to how funds were allocated during previous administrations in response to trade disruptions.
Ricky Mulvey: Our next question comes from an anonymous listener who enjoys the podcast daily during their commute. After a recent job change, they are contemplating rolling over their 401(k). They also ask about backdoor Roth IRA contributions since their new income exceeds the limit for direct contributions. Can you enlighten us about backdoor Roth IRAs and any considerations they should bear in mind concerning taxes? Additionally, they were informed that having a traditional 401(k) balance prevents them from pursuing a backdoor Roth IRA. Is that correct?
Robert Brokamp: That’s a valid concern. Congratulations on the new job! First, it’s worth noting that you can contribute to a Roth 401(k) without income restrictions. Now, regarding the backdoor Roth; this process involves contributing to a nondeductible traditional IRA and then converting it to a Roth IRA afterward. If this is your only traditional IRA, tax implications will be minimal since the contributions have been taxed already. However, the process becomes complicated if you have other pre-tax IRA balances due to the pro rata rule, which could make a portion of your conversion taxable. A potential solution involves rolling those traditional IRA assets into your 401(k) before executing the backdoor Roth strategy, as funds in a 401(k) do not factor into the pro rata calculations.
Ricky Mulvey: A complicated but informative answer, Bro. The next inquiry is from V, who wonders if a parent can open Roth IRAs for grandparents with their grandson as the beneficiary and then use those funds for college expenses. This sounds intricate!
Robert Brokamp: Quite intricate indeed. Grandparents can open Roth IRAs if they have earned income from a job, but they must complete the necessary paperwork themselves. The account can receive contributions from anyone, not just the grandparents. Importantly, contributions to Roth IRAs can be withdrawn tax-free at any time. Additionally, the funds can be used for qualified education expenses, but there are caveats to be mindful of. Alternatives like 529 college savings plans might be more sensible for this purpose, given their favorable tax treatment and lower restrictions.
Ricky Mulvey: Are there benefits for grandparents contributing to a grandchild’s 529 plan versus the parents doing so?
Robert Brokamp: Yes, particularly in the context of financial aid applications, where grandparents’ resources are not factored into the assessment of the child’s financial standing. This can allow for advantageous positioning during financial evaluations.
Ricky Mulvey: Moving on to our next question from Karen, who inquires if there’s literature regarding the history of the 401(k) and its evolution from traditional pensions. Why have pensions become less common?
Robert Brokamp: While there are resources available, I recommend a specific podcast episode: the December 7, 2021, episode of Motley Fool Answers. In this episode, I had the privilege to interview Ted Benna, the individual credited with creating the first 401(k). He essentially identified an opportunity in a tax law passage from 1979 that inadvertently allowed for pre-tax contributions to retirement accounts. Over time, this led to the popular adoption of 401(k) plans, transitioning away from traditional pensions primarily due to factors such as cost and administrative complexity.
Companies have found defined contribution plans easier to manage, allowing for fixed employer contributions rather than continually assessing pension liabilities, leading many to phase out traditional pensions entirely.
Ricky Mulvey: Lastly, we have a question from Jonathan, who is uncertain about a potential employer’s capital accumulation plan that includes an 8% pay contribution after the first year. Do these plans function similarly to a retirement account? Would he be able to roll it over to an IRA or 401(k) if necessary?
Robert Brokamp: Capital accumulation plans are less common, but they are analogous to 401(k) arrangements, with employer contributions linked to profitability. Importantly, many plans have vesting requirements, meaning if you leave the company prematurely, some funds may not be accessible to you. In terms of tax implications, if managed correctly, it can behave similarly to a typical retirement account concerning contributions, withdrawals, and rollovers.
Ricky Mulvey: Any tips on securing a longer career in the NFL, Bro?
Robert Brokamp: I might reach out to my friend Tom Brady for insights on that one!
Ricky Mulvey: Thanks for the insights, Bro. Remember, opinions expressed in this program may not reflect those of all participants, and listeners should conduct their research before making investment decisions. Tune in tomorrow for more discussions and insights.
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