TIP835: Intuit (INTU): The S&P 500's Biggest Loser w/ Shawn O’Malley & Kyle Grieve

**SPEAKER_1** (0:00)
You're listening to TIP.

**Kyle Grieve** (0:03)
Hey, folks. Welcome back to The Investor's Podcast. We're on episode 835 here. And well, we have a lot to talk about here, Shawn. Let me just start by asking, is this the most compelling opportunity in large caps that we've come across all year?

**Shawn O'Malley** (0:15)
You know, I've been thinking about that a lot and it might just be. Adobe has looked pretty interesting at times, to be fair, but we originally pitched that idea last year and we were pretty early on it. But I'm not sure I can think of any setups more compelling than looking at the company that is the worst performer in the S&P 500 for 2026, when that same company was the textbook example of a quality compounder, what just 18 months ago?

**Kyle Grieve** (0:42)
AI eats software. It seems like AI just eats everything, I guess. But you know, if that AI eats software narrative just collapses, I think there's going to be a lot of money to be made investing specifically in companies like Intuit at current prices. So I'm really excited for today's episode. Should we do it?

**SPEAKER_1** (1:00)
Since 2014, with more than 200 million downloads, we have interviewed the world's best investors, studied deeply the principles of value investing, and uncovered many compelling investment opportunities.
We focus on understanding businesses and intrinsic value, investing accordingly, and sharing everything we learn with you. This show is not investment advice. It's intended for informational and entertainment purposes only. All opinions expressed by hosts and guests are solely their own, and they may have investments in the securities discussed. Now, for your hosts, Shawn O'Malley and Kyle Grieve.

**Kyle Grieve** (1:46)
Today, we're covering a company that I suspect most North American listeners have probably interacted with whether they realize it or not, and that company is Intuit, ticker INTU.
This is the company behind businesses like TurboTax, QuickBooks, Credit Karma and Mailchimp. So if you filed your own taxes, run a small business, checked your credit scores for free, signed up for a recommended credit card, or even sent a marketing email at scale, there's a pretty good chance that you've touched some sort of Intuit product. And the reason that I think this episode is going to be a fun one is that it sits right at the intersection of two themes that we just seem to keep circling back to this year. The first is high-quality SaaS compounders, dominant mission-critical software and data businesses like an Adobe or a CoStar. And then the second theme is just the great AI disruption debate, which is the single biggest question that seems to be hanging over technology investing right now, which is which incumbents are going to be supercharged by AI, and which ones will have their business models completely hollowed out by it.

**Shawn O'Malley** (2:39)
The narratives are changing very quickly here by the day. A year ago, Alphabet was seen as one of the biggest potential losers from chat GBT disrupting search. To now, Sentiment has completely 180 and Alphabet is very much seen to be an AI winner. With Gemini and cloud computing and the stock has doubled, and we're just talking before the call, Buffett and Berkshire have invested billions of dollars into Alphabet too.

**Kyle Grieve** (3:04)
That's right. As the market has manically reacted to advances in LLMs, we've looked for great businesses that were just thrown out with the bathwater. With Adobe and CoStar, these are companies that were seen as the epitome of quality in the five modes just not that long ago. And yet both have just been beaten down badly this year, which is what caught our attention when we added them to the Intrinsic Value portfolio.
Intuit though, is maybe the purest illustration of this debate that I've seen so far. Because the market has very loudly voted that it's a loser. And Shawn, you know, you're going to argue the opposite. It's a business that compounded its stock at nearly 24% a year for a decade from 2015 through 2025, but has now sold off 60% and is actually the first performer in the S&P 500 this year. So that's the setup. And before we really jump in, I want to just quickly plug that we'll be hosting our second Intrinsic Value Conference in Midtown Manhattan this September on Saturday the 19th. And if you want to join us and network with a great group of investors, please head out to intrinsicvalueconference.com to purchase your ticket before they sell out. All right, Shawn, you've been buried in Intuit's filings for the last couple of weeks. So where do you want to start?

**Shawn O'Malley** (4:09)