Data Centers, Housing, and the Hidden Real Estate Play in the AI Boom

**SPEAKER_1** (0:01)
This is InvestTalk from KPP Financial, helping investors make sense of the markets one day at a time. And now here are Justin Klein and Luke Guerrero.

**Justin Klein** (0:15)
Good afternoon, fellow investors, and welcome back to InvestTalk. This is our Monday, August 10th, 2026 edition of InvestTalk, and we have a special show. We have Luke with me. I know you guys like when we go to it together. We have a double trouble, I guess you can call it.

**Luke Guerrero** (0:35)
I don't want to call us that.

**Dave** (0:36)
We have to come up with something better. It's too cliched.

**Justin Klein** (0:38)
Oh yeah. That is very cliche. Well, let's throw in the robot and see what they give us.
We'll do that. We'll figure it out, but nonetheless, we are here to help you become better investors, give you some perspectives, some data, answer your investment questions, do that whole thing that we do each and every weekday. In just a bit, we'll talk about today's Mark performance and run down the show topics for the hour. But as usual, we'll tackle this first caller question right now.

**Melissa** (1:06)
Hi, Justin and Luke. This is Melissa from Oregon. I love your show.
Thank you so much. My question today is if you can give your assessment of the company Medtronic, ticker symbol, MDT.
Thank you so much and I'll listen on the show. Take care.

**Justin Klein** (1:24)
Looking at Medtronic, MDT is the symbol, a name that we actually own for clients. Earnings are expected to be up 8 percent this year, 7 percent next year. It had a rough start to the year of a bouncing back as of late. It's rallied pretty nicely and it's a consistent business, a very good business, 115, roughly a billion dollar market cap, return on equity right around 10 percent, good free cash flow, about five and a half billion dollars. Overall, a good balance sheet and the dividend yield is about 3.3 percent. I think they just raised it, if I remember correctly, raised that dividend. So there's a lot to like about the business.
Do you have anything to add, Luke?
Yeah.

**Luke Guerrero** (2:13)
From an earnings perspective, it looks like they had their highest annual revenue growth in 10 years. You mentioned that it has really had a rough start to the year and it certainly did. It's up 17 percent over the past three months though. I think something that's important to note here is that healthcare broadly had had a rough start to the year. Definitely. When you think about this AI trade, money has to come from somewhere and there was a bit of a rotation out of healthcare into some of those tech and tech-focused names. When you're looking at Medtronic and how it performs, you look at it within the context of the industry.
With it still being down 7 percent this year, it's still outperforming its industry by 1.6 percent this year, 14 percent last year. That to me signals it's more of a broader trend within the sector rather than something that is systematic or rather symptomatic of something within the individual company itself.

**Justin Klein** (3:07)
Yeah, that's underappreciated is that capital is finite.
When investors are chasing a hot sector, that money either comes from off the sidelines or oftentimes, it comes from other sectors that get hurt in the process. And I think healthcare was certainly one of those because there's a lot of uncertainty with what's going on with RFK and the Health and Human Services and whether or not that's going to change everything that goes on within the healthcare space. So it certainly was an overhang. I think that's a bit behind us in a way. And also money is rotating in this market towards safer names and back out of some of those bigger AI plays. So I think that's a recent trend and you're seeing that in Medtronic stock with a recent rally. Right now, I still think it's very, very undervalued, one of the largest medical device companies in the world. I don't think that's changing anytime soon. And certainly there's a lot of boomers getting older, retiring, and they're going to naturally, as you get older, demand more of their devices. So we like Medtronics. Now let's pivot and actually let's talk about what we're going to discuss today. Actually, let's talk about Friday. Friday, we had a great show. I talked about workers dropping out of the labor force. And what was that reason? Kind of what I just said, which was about the boomer generation and the fact that they are getting more and more into retirement. So I talk about that and much more on Friday's show. We looked also at HubSpot. We answered a question about that. If you happen to miss it, go check it out. Yeah, we did answer a question about HubSpot.