Wish I could post a video for audio, but fired up my fiero this morning and the exhaust is making a burbling noise and what seemed to be water was sputtering out. I could see the water sitting in the exhaust tip and bubbling as the air was pushing through. What could this be? Condensation or something worse?

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My Fiero: 1986 Pontiac Fiero GT, V6, 4-speed manual

What color is the water?
Does it have an antifreeze smell?
How long has the car been sitting? garaged?
All exhausts with a cat will emit moisture.
I believe the mufflers have a small hole in the bottom of the case to let moisture escape.
Could be it is blocked and then holding more that it should.
Determining the origin of the water is another issue.
Worst case,,,,,,, blown head gasket, cracked block

Water coming out of the tailpipe is normal for any car that is equipped with a catalytic converter .Once the cat is up to operating temperature , you don't notice it because it comes out as a vapour that is almost clear .Nothing to worry about unless it smells like anti freeze , then you have a head gasket problem .

I couldn't detect an antifreeze smell so probably just lots of moisture. It has been sitting in a carport for a while as it is not a daily driver (and likely has an exhaust crack as well so is awaiting that repair also).

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My Fiero: 1986 Pontiac Fiero GT, V6, 4-speed manual

Could this be the cause?

The 2.8 tends to 'burble' a bit without an outboard motor.... But the sound is similar. Maybe it has to do with a leaking injector, or carbon on the valves...etc... but usually is not a performance issue. It is heard mostly when you are shifting gears.... I think the moisture in the exhaust system is a separate issue.

I see you also live in Florida. I've had a 1971 Cutlass Ragtop since it was New, from day 1 it ALWAYS pumped "droplets of water "out the tailpipe at start up. 44 years later it still does the same thing. it has NO catalytic conv. The humidity here" is what it is", as long as your car is not overheating, don't worry about it.