Walmart’s announcement that CEO Doug McMillon will retire in early 2026 marks the end of one of the most influential leadership eras in modern retail. McMillon wasn’t just an operator — he was the architect of the company’s digital rebirth, taking a traditional brick-and-mortar powerhouse and turning it into a hybrid retail ecosystem able to stand toe-to-toe with Amazon. What began as a defensive push into e-commerce became a transformation worth hundreds of billions in market value.

Yet the market reacted cautiously. Shares slipped despite the company presenting a clean succession plan with John Furner stepping in, an executive credited with revitalizing Walmart’s U.S. division. Now comes the real question: can Walmart sustain McMillon’s momentum, or does his departure expose a gap no strategy can quickly fill?

The McMillon Era: From traditional retailer to tech empire

When Doug McMillon became CEO, Walmart was valued at roughly $250 billion and faced a wave of fears that Amazon would gradually overtake it. Under his leadership, the opposite happened. Walmart learned to compete with Amazon in e-commerce, created a robust logistics network, massively digitized operations, and invested in technology that brought the company closer to the modern age.

The result is today's market capitalization exceeding $800 billion and a Walmart that is no longer just "the place you go to buy cheap stuff." It's a complex ecosystem with its own fintech services, advertising platform, growing online division, and ambition to become a dominant player in the retail use of AI.

That's why McMillon is leaving as a very strong, respected and successful CEO - and that's what makes his departure even more perceptive.

A successor from his own ranks

John Furner is no outsider to Walmart. He joined the company back in 1993 as an hourly employee and worked his way up through Sam's Club to head the U.S. division. He is one of those people who understand operations, culture and customer behavior well.

During his era, Walmart U.S. has significantly strengthened its ability to respond to rapid changes in demand, accelerated digital operations, streamlined omnichannel, and strengthened technology projects using data analytics and automation. It is Furner's knowledge of all layers of the business that gives management confidence that Furner can take Walmart through "the next chapter of transformation," as Chairman Greg Penner describes it.

What's more, Furner takes over the company as retail enters a new era - an era in which artificial intelligence, robotic logistics and hyper-personalised services will play a key role.

The tipping point: Why change is coming now

The announcement comes at a time when the entire US retail industry is in a state of turmoil. Consumers are more cautious, more price-sensitive and the margin for error is shrinking. Target is changing CEOs, Amazon is looking for more growth areas, and many industries are suffering from the pressures of stagnant demand.

For Walmart, this is a pivotal moment, as the company is now in a period that resembles the turning point between two generations of retail. The first one was all about price and mass sales. The second will be about AI, automation, logistical precision and the ability to hold margins in an environment where every dollar counts.

So Furner has a chance to confirm that he's coming in at the right time - or, conversely, to counter that expectations will be extremely high post-McMillan.

What to expect next?

The departure of a strong CEO is always a test for investors. McMillon may remain on the board temporarily, but the leadership transition will be a test of strategy consistency. Walmart is entering a phase where it will have to:

• Accelerate the implementation of AI in logistics and customer service.
• Seek new sources of growth outside of traditional retail.
• Maintain its lead over Target $TGT, Costco $COST and Amazon $AMZN.
• Protect margins in a price-sensitive consumer environment.

Furner has strong fundamentals but also a difficult period ahead. Walmart has had a decade of growth and transformation - the question now is whether it is entering another phase of stability or an era that will require even more predatory innovation.

And that's what the coming years will be about: whether Walmart can build on its renaissance of the last decade, or whether it will begin to move back closer to traditional retail, from where McMillon successfully pulled it out a decade ago.

In a market where tech stocks swing between hype and disappointment, a select group of companies has carved out a rare middle ground: consistent growth paired with stability. This firm is one of them. What began as a government consulting contractor has evolved into a strategic force in defense analytics, cybersecurity and artificial intelligence — and its results now mirror the surge in demand for digital capabilities across federal agencies.

Despite operating in the traditionally cautious world of government services, the company has built a growth profile that rivals - and often surpasses - faster-moving tech peers. Profits are expanding faster than revenue, margins are improving, and a strong net cash position allows for sustained shareholder returns. For investors seeking reliability with long-term dividend upside, this story is becoming increasingly compelling.

Top points of the analysis

• Revenues rose to $11.98 billion (+12%).
• Net income jumped more than 54% year-over-year and EPS jumped 58%.
• Operating margins held around 9.5%, which is above average in the government services sector.
• ROE is hitting 75% thanks to high capital efficiency.
• Dividend yield around 3% with plenty of room for long-term upside.
• Robust demand growth in AI projects for defense and cybersecurity.

Company profile

The roots of Booz Allen Hamilton $BAH go back more than a century, but the current form is based on a very different foundation than the traditional consulting business. Today, it is the largest provider of technology analytics services to the U.S. Department of Defense, intelligence agencies and federal agencies. It specializes in complex projects in data analytics, cybersecurity, defense planning, software development and, increasingly, artificial intelligence.

The company employs over 34,000 people, a large proportion of whom work on projects with the highest classification. Its engineers and analysts tackle everything from security operations centers to advanced AI models for predictive military logistics or cyber threat detection.

In addition to its data-driven teams, it has a strong systems integration division that helps U.S. agencies migrate to the cloud, automate risk management and modernize communications systems. This mix allows it to operate at the boundary between consulting and technology - a segment where margins and demand are growing.

With long-standing relationships with the Pentagon, CIA and NSA, the firm has exceptionally stable revenue and a contract portfolio with a long lifecycle. It has been a strategic partner with some key agencies for decades. This is an important competitive advantage: new players are extremely difficult to let into projects that require top-level security clearances.

Financial performance and key metrics

Recent results confirm that the company's growth is on a solid footing. Revenues are close to the $12 billion mark, representing solid year-on-year growth. However, the profitability dynamics are much more interesting: net income grew by more than half and EPS even grew by 58%, one of the highest growth rates in the entire defense services sector.

Operating profit reached $1.37 billion, confirming that the expansion of AI and cybersegment is helping margins significantly. ROIC moved above 17%, demonstrating efficient capital allocation as well as disciplined cost management.

Liquidity is among the strongest in the government contractor group - cash position is robust and short-term liabilities are easily covered. However, a major shift has been brought about by a sharp reduction in debt: total debt has fallen from more than $3.6 billion to about $300 million, bringing the company virtually to net cash. This radically reduces risk and increases the security of the dividend.

Valuation-wise, the title trades around a P/E of 13×, which is a relatively low valuation in the context of EPS growth. The P/S of 0.93 is also below the sector and suggests that a portion of the market has not yet fully realized the change in margin structure.

Dividend policy and sustainability

This title is one of the conservative dividend players - the divi is not extremely high but is stable and growing. The current dividend yield is around 3%, and it has been able to increase the payout ratio at a healthy pace over the long term.

The payout is covered by more than three times free cash flow, a safe cushion for a company with very low debt. The payout ratio of around 30-35% remains well below levels where dividend growth could be threatened.

The following in particular contribute to long-term sustainability:

• an extremely stable structure of revenues from government contracts
• growth in margin segments (AI, cybersecurity, cloud services)
• minimal debt and cheap financing
• increasing efficiency and high return on capital

Based on the current trajectory and EPS growth, the dividend can be expected to increase at a rate of 8-12% per annum. In an optimistic scenario, if the AI segment grows faster, the pace could be even higher.

There is an extremely high degree of specialization in the federal technology sector, and few players can succeed in projects combining AI, cyber, data analytics, and US government security requirements. The company is in a very specific position in this ecosystem - it is not the largest, but it is the most profitable and efficient relative to its size. This is a critical difference from its competitors, who often grow at the expense of margins.

Comparison with competitors

Leidos $LDOS, the largest player by revenue, works with a much broader range of services - from healthcare systems to IT integration to defense logistics. Because of its scale, it wins the largest contracts, but its projects tend to have lower margins and higher capital intensity. While Leidos struggles with high debt and margins of around 7-8%, here it has repeatedly managed to hold double-digit profitability, which is exceptional for the sector. The gap widens in AI, where the firm has a significantly higher proportion of projects with higher returns on capital.

CACI $CACI is a typical "pure-tech" federal contractor that invests heavily in R&D. This allows it to grow in innovative segments, but because it does not pay a dividend and reinvests much of its cash flow, it is not as attractive to income investors. In addition, its projects often face greater volatility - when a new system is developed or a multi-year cost-plus contract is in place, margins can fluctuate significantly. In contrast, the firm's analysis relies more on fee-based contracts, which give better stability of results.

SAIC $SAIC represents a defensive player with very stable revenues but virtually zero growth profile. The company relies on long-term maintenance and outsourcing contracts where there is little room for margin expansion. In comparison, our title has a higher technology "mix", fewer legacy systems and more exposure to modern areas such as AI governance and cyber.

Parsons $PSN is growing the fastest, mainly through acquisitions, but is still too small to win large intelligence or military contracts. Plus, it combines defense projects with civilian infrastructure (transportation, bridges, rail), which dilutes the margins of the entire portfolio. In contrast, the company analysed has a much clearer profile - almost all of its revenues come from highly specialised services.

Overall, the company thus occupies a unique position: It is not the largest, but it best combines the stability of federal contracts, high margins, low debt and a growing dividend policywhich is a unique combination in the industry. Investors thus get a defensive federal title that also moves toward a higher-growth technology company.

Opportunities

The biggest structural opportunity is the continued digitization of the federal government - the largest IT modernization wave ever, involving over 100 federal agencies. Investment is primarily in cloud platforms, predictive analytics, AI decisioning systems, and Zero Trust security standards. The company is among the key players in most of these areas, positioning it well for steady growth over the next 10 years.

The second opportunity is the massive demand for cybersecurity. Attacks are growing at double-digit rates year-over-year, and U.S. agencies are adopting more aggressive defense strategies that require comprehensive solutions, not just one-off projects. This means a multi-year, predictable revenue stream. Given that the company is already a major contractor to the NSA and DoD, its position is strategic.

The third strong trend is AI in defense - Autonomous systems, threat detection, satellite data analysis, intelligence flow automation. Congress is increasing budgets for "AI-enabled defense systems" by more than 10% a year, and the firm is among the top-ranked contractors here because of its experience with projects that require a combination of AI, security clearances, and work with classified data. Entering this area is extremely difficult - the barriers to entry are huge, which brings long-term margin protection.

Risks

The biggest risk is the cyclicality of the federal budget. If Congress were to approve reductions in IT and defense spending, growth could slow - although historically these segments are the least constrained. Another risk is delays in approving multi-year budgets, which could delay the implementation of some projects in the short term.

The second risk relates to competitive pressures. Leidos, CACI, or SAIC may compete aggressively in tenders and offer lower prices, which would squeeze margins. However, the firm's specialization in AI and cyber enables it to maintain a position in projects where price pressure is not the main criterion - safety, quality, and expertise are primary.

The third risk is the staffing market - Lack of specialists with security clearance. If the company fails to hire enough specialists, it could run into capacity limits for growth. However, the management team has significantly expanded its collaboration with universities in recent years, which eases the pressure.

Investment scenarios

Optimistic scenario - growth acceleration and dividend expansion

In the optimistic scenario, the company gains a larger stake in AI, cyber and cloud migration projects. If DoD and federal agency budgets grow at current rates, the company can expand margins through high-margin contracts that feature long durations and low capital requirements. In such an environment, EBITDA could grow double digits and free cash flow would break new records.

With virtually zero debt, management could accelerate dividend and buyback growth. While the dividend yield would remain low, payouts would grow at a double-digit rate, which is unusual in the federal sector. The stock could grow through a combination of multiple expansion, higher margins and consistent EPS growth, at a rate of 15-20% per year.

Realistic scenario - steady growth, long-term contracts and predictable cash flow

The base case assumes continued revenue growth of 6-9% per annum and modest margin expansion due to improving project efficiencies. The company will continue to win new contracts and maintain a high level of recurring revenue. As most contracts are multi-year in nature, results will be stable and predictable.

Dividend growth in this scenario is in the range of 8-12% per annum, funded by strong cash flow from a conservative fee model. Buybacks will continue, but at a slightly slower pace. Total annual return to shareholders would be between 8-12%, which is attractive in the context of a defensive sector.

Pessimistic scenario - pressure on budgets, lower growth, stable dividend

The pessimistic scenario takes into account the possibility of federal budgets undergoing consolidation or delays in their approval. In such an environment, revenue growth would slow to 2-4% per year and margins would stabilize or decline slightly due to competition. Even in this scenario, however, the company would remain profitable due to low debt and a high proportion of recurring revenue.

Dividend policy would remain stable - the company could slow the pace of raises, but the payout would likely never be compromised. Share repurchases would be limited to preserve liquidity. The stock could stagnate or decline slightly, but would still provide a defensive character suitable for long-term investors focused on stability.

Conclusion and investment considerations

In an environment where investors often alternate between excitement and panic, this title acts as a reminder that there are companies that can grow over the long term in almost any economic weather. Its strength is not in dramatic jumps, but in its solid fundamentals: multi-year contracts with the feds, low capital intensity, and direct connections to areas that will grow regardless of cycles - cyber, defense systems, and artificial intelligence.

This creates a unique combination: a stable business with high revenue visibility on the one hand and technological dynamism on the other. It is therefore not a classic "government contractor" that survives mainly by maintaining old systems. This company is right at the center of the digital transformation of federal agencies - and because of that, it can afford to do what many competitors can't: Increasing the dividend gradually while increasing profits and margins..

The dividend itself may not look dazzling at first glance, but something else is essential. The payout ratio is well within a conservative range, cash flow stable and volatility minimal. The dividend is therefore not an "extra reward" but a solid part of a capital strategy that has withstood the turbulent periods of recent years. In the context of the sector as a whole, it is one of the best covered and most predictable payouts.

What is important for the investor with a longer horizon is the nature of the business. Most of the income is contracted for years ahead, and in forms where a proportion of the fees are linked to performance - meaning the business thrives even when the market is in a slowdown. AI projects, cyber systems and intelligence are not fads, but long-term priorities for the US government. Their budgets don't fall even in recessions, which brings exactly the kind of stability a dividend investor seeks.

As global stock markets navigate increased volatility and investor sentiment wavers, the Federal Reserve is signaling a cautious shift away from an anticipated rate cut at the December meeting. With inflation remaining stubbornly above target and economic data clouded by recent disruptions, the uncertainty around U.S. monetary policy has become a key risk factor for equities. Investors must now weigh whether the Fed’s reluctance to ease is a prudent guardrail against overheating—or a misstep that could stifle growth and trigger a broader sell-off.

Chart of US interest rates since 2006

Think of the stock market as a big ship on a rough (economic) sea, with the Fed as captain, steering the course with interest rates. Lower rates mean cheaper borrowing, which encourages corporate growth and consumption, while higher rates put the brakes on inflation and overheating of the economy.

The heated debate within the Fed over a possible December interest rate cut brings up a fundamental question for investors. Is the end of restrictive monetary policy near, or will the Fed instead remain cautious and hold rates high despite signs of a slowing economy?

Current forecasts

In recent weeks, there have been increasing signs that the Fed is no longer sure whether a December rate cut will actually happen. According to market data, the likelihood of a key rate cut by the end of the year has fallen by about half. This is mainly due to a growing number of Fed members warning against easing policy too soon. Inflation has slowed significantly compared to last year, but remains above the 2% target. Moreover, new inflationary pressures are emerging in the service sector, which forms the backbone of the US economy. Some central bankers have also warned that economic data has been incomplete in recent weeks, which is why the Fed prefers a more cautious approach.

What has really happened? Investors have lowered their estimates for a December rate cut to just 50%, a significant drop from earlier expectations. This has had a direct impact on stocks. The S&P 500 index wrote off 1.66% yesterday and futures are also down ahead of today's market open.

The main trigger for doubt is comments from Fed officials. Minneapolis Fed President Neel Kashkari said he did not support the latest cut and is undecided about the December one because the data shows more resilience in economic activity than he expected. Similarly, San Francisco Fed President Mary Daly expressed uncertainty. Steady hawks (more advocating tight monetary policy) like Susan Collins of the Boston Fed are highlighting the risks of inflation still exceeding the 2% target.

Trump's tariffs and tax cuts are not helping the Fed either. In fact, they could raise inflation by 0.5-1% in the coming months, limiting the scope for rate cuts. Investors now expect only one, at most two cuts in 2026, instead of the original three, which would keep rates around 3.5-4%.

Why cut rates

However, there are certainly arguments for reducing rates. While the US economy remains relatively strong, some indicators point to a gradual cooling. The pace of job growth is slowing, unemployment is rising slightly and consumer confidence is gradually retreating from this year's highs. In some industries, firms are starting to cut back on hiring and investment. The Fed has already cut rates twice this year, but part of the market is hoping to add one more pre-emptive cut to insure the economy against a possible downturn in the first half of next year.

A cut could also help stabilize financial conditions. For example, the market for mortgages or corporate loans - which are still relatively tight. If the Fed were to give a clear signal of its willingness to continue to support the economy, it could bring about a significant rise in equities, especially in the technology and growth sectors.

Why not cut rates

On the other side, however, are Fed members who argue that easing monetary policy is premature. Inflation may have fallen, but the core component remains near three percent. Some economists warn that if the Fed starts cutting rates too soon, it risks a resurgence of inflationary pressures. This group of so-called hawks fears that easing too soon could undo the success so far in fighting inflation and force another rate hike later. This would be even more painful for financial markets.

What about equities

So the end of this year could be very different from the one we saw last year. After the 2024 election, markets exploded. In total, the S&P 500 index rose 21 per cent by the end of 2024, the Nasdaq 26 per cent. But doubts about the Fed's next decision now bring a correction.

Sectorally, the situation is different. Banks like JPMorgan $JPM benefit from higher rates (higher loan margins), while debt-sensitive tech firms (e.g. Amazon $AMZN) suffer higher costs. Energy and industrials can grow thanks to tariffs protecting domestic producers, while export-intensive firms like Boeing $BA face risks from trade wars.

Outlook

Economists expect the Fed to cut rates slowly. Perhaps only by 25-50bp in 2026 based on current forecasts. If Trump implements more tariffs, inflation could rise to 3-4%, which would force the Fed to pause in cutting interest rates and could potentially cause a recession. Conversely, if growth is sustained, markets could continue to rise.

Markets are now closely watching every Fed officials' speech and every new statistic. The probability of a December rate cut has been hovering around 47% in recent days. In response, stock indices have headed lower. In short, investors are reassessing a scenario they considered a certainty just a few weeks ago. Sector-wise, we can see that growth stocks are suffering the most. Especially technology titles with high valuations. Conversely, defensive sectors such as energy or healthcare are seeing smaller declines or even modest growth as investors move into more defensive assets.

Verizon entered the third quarter of 2025 with a singular mission: break out of years of sluggish growth and reposition itself as a true competitor in a rapidly evolving telecom landscape. Under the early leadership of CEO Dan Schulman, the shift is already visible — from customer experience and pricing strategy to operational discipline. Management describes the moment as a “critical inflection point,” one that demands a reset of how Verizon serves, competes, and expands.

The Q3 2025 results offer the first concrete glimpse of that transition. Key business segments are regaining momentum, profitability is improving, and service performance is showing signs of renewed strength. While parts of the portfolio still lag and the pressure from T-Mobile and AT&T remains intense, Verizon is entering the strongest financial footing it has seen in recent quarters. For investors, 2025 is clearly becoming both a rebuilding year and the opening chapter of an ambitious strategic reboot.

How was the last quarter?

The third quarter delivered solid, well-balanced performance across the business. Total revenue rose to $33.8 billion, holding to 1.5% year-over-year growth, which, while not a dramatic shift, shows stabilization after previous weaker years. More fundamental, however, is the growth in profitability - net income jumped to $5.1 billion compared to $3.4 billion last year and EPS increased to $1.17. Operating performance was also stronger, translating into adjusted EBITDA of $12.8 billion.

The most important metric is traditionally the wireless segment. Wireless service revenue was $21 billion and grew 2.1% year-over-year, a pace above the competition and also above internal expectations. This was compounded by solid equipment growth (5.2%) and rapid growth in the broader customer base. Verizon $VZ was able to add 306k new broadband users and the fixed wireless access area, with 261k additions, still looks like a strategic move that is starting to deliver dimensional benefits to the company.

The Consumer segment reported revenue growth of 2.9% and a very strong ARPA that exceeded $147. The Business segment is stagnant but still delivered higher operating profit due to better margins and lower acquisition cost burden. Overall, Verizon confirms that the operating side of the business has solid fundamentals and can grow even in a slower telecom cycle.

CEO comment

Dan Schulman laid out a clear trajectory in announcing the results: Verizon is facing a transformation that will not be a cosmetic adjustment, but a fundamental realignment of its entire structure. The new leadership is building on a customer-centric culture and plans to radically simplify the organization, digitally modernize processes and significantly reduce costs. Schulman stressed that the company must first regain its position as a leader and only then build space for further expansion. The key is to restore growth in core services, strengthen customer loyalty and optimise costs in detail across the company.

His tone is direct and ambitious: he says Verizon is at a point where decisive action must be taken without compromise. By all accounts, this marks the beginning of an era in which the telecom giant will once again seek the speed, aggressiveness and innovation that have waned in recent years. The first signs of change are already visible this quarter - and more will follow.

Outlook

Management confirmed the full-year outlook is unchanged, which the market sees as a signal of confidence in the coming quarters. Verizon expects wireless service revenue growth in the range of 2.0-2.8%, adjusted EBITDA growth of 2.5-3.5%, and adjusted EPS growth of 1-3%. At the same time, robust cash flow generation is a key element of 2025 - operating cash flow is expected to be between $37-39 billion and free cash flow between $19.5-20.5 billion. The company also confirmed an investment plan to help turn improved margins into real growth.

Long-term results

Verizon's long-term performance shows both the resilience and some cyclicality of the telecom industry. Revenues remain stable at around USD134-136 billion per year, with 2024 delivering only modest growth of 0.6%. The more fundamental story, however, is at the profitability level. Gross profit is steadily increasing, but the operating part is crucial, where the company increased operating income by more than 25% in 2024 despite modest revenue growth, offsetting previous weaker years.

Net income is up more than 50% to US$17.5 billion in 2024, mainly due to cost stabilisation and robust wireless performance. EBITDA has been in the US$40-50 billion range for a long time, showing the structural strength of the company to generate cash even in a period of increased investment. As a result, Verizon enters 2026 with healthy operating cash flow, a strong market position, and an improved ability to fund transformation.

News

• CEO Schulman launches major transformation aimed at improving customer experience and reducing costs.
• Broadband segment, including FWA, saw record growth, surpassing 13.2 million users for the first time.
• Fixed wireless services are growing rapidly, approaching 5.4 million active users.
• Verizon continues to reduce debt, which fell from $126.4 billion to $119.7 billion year-over-year.
• The company confirmed capital expenditures in the range of USD 17.5-18.5 billion and continues to optimize its investment cycle.

Shareholder structure

Verizon's ownership structure is typical of a large telecom operator with extensive institutional presence. Insiders hold only about 0.04% of the stock, while institutions control 68.6% of the free float. This creates a stable demand base and supports the stock's low volatility. The largest investors include Vanguard Group with 8.9%, followed by BlackRock with 8.6% and State Street with nearly 5%. These large funds act as long-term price stabilizers and confirm the market's high confidence in Verizon's future strategy.

Fair Price

US SHUTDOWN

Stock markets are sliding today as investors watch the potential impacts of a paralysis of the U.S. federal government. The S&P 500 and Nasdaq Composite indices are falling, with the Nasdaq down nearly 1.8% and the S&P 500 down around 1.2%. The Dow Jones Industrial Average is also weakening as markets adjust for risks tied to political uncertainty. The threat of a partial government shutdown could affect fiscal stimulus and the regular release of economic data, raising concerns not only about the domestic political situation but also about the implications for businesses and consumers. In an environment of heightened uncertainty, investors tend to be less willing to hold risky assets—such as technology and growth stocks—and increased volatility is expected if the government situation is not resolved quickly.

The automotive world is entering a phase where code matters more than horsepower, and software architecture shapes product value more than steel or aluminum ever could. In this pivotal moment, Volkswagen and Rivian have struck one of the most consequential alliances of the decade. VW is injecting $5.8 billion into the American EV maker and forming a joint venture, RV Tech, to build a unified software and electronics platform for future vehicles. The deal gives Rivian the capital it desperately needs — and Volkswagen the technological acceleration it has long lacked.

The motivation is clear: without a modern, cohesive software stack, Volkswagen cannot hope to keep pace with Tesla or the rapidly rising Chinese automakers. Its Cariad initiative has lagged for years, bogged down by delays, rewrites, and internal upheaval. While rivals like Mercedes, Renault, and Volvo embraced advanced, upgrade-friendly architectures, VW fell behind. Rivian now offers a shortcut — a chance for Volkswagen to reboot its digital roadmap and re-enter the software race with renewed urgency.

What is Volkswagen $VWA.BR actually buying?

The RV Tech joint venture is to develop a scalable software and electronic architecture that Volkswagen will use across the group. It's a so-called zonal architecture, in which the car is driven not by dozens of individual controllers but by a few central power modules. This results in lower complexity, lower weight, significantly better upgrade options and, above all, faster development.

Interestingly, Volkswagen is not considering using this platform only for electric cars. Although the primary focus is on the BEV segment, which is supposed to be the future of the entire group, VW representatives suggest that the architecture is flexible enough to be deployed in internal combustion engine vehicles as well. It's not a plan for a year or two, but a possibility that could fundamentally affect what the last generation of cars with traditional engines will look like.

The first production model will be the ID.Every1, a compact car planned for 2027 that is set to introduce a whole new generation of Volkswagens. At the same time, it will be implemented in selected Audi and Scout models. Winter testing of the new software systems will begin later this year, on test mules that will use Volkswagen hardware but Rivian software.

Why does Volkswagen need a partner so badly?

The current VW group structure includes dozens of models, several platforms and millions of lines of code written by different teams. Software inconsistency has become a hindrance to development and one of the main strategic risks. Customers have become accustomed to Tesla's quick $TSLAupdates and demand the same convenience from traditional brands.

Volkswagen is in a situation where it has to respond not only to Tesla but also to increasingly strong Chinese players like BYD $BY6.F, NIO $NIO, XPeng $XPEV and Geely $GELYY. China is the biggest car market in the world today, and Volkswagen is losing share there at a rate unimaginable just five years ago. Plus, EV sales growth will slow in the US due to the expiration of the federal tax credit, so automakers will be fighting for every customer.

Add to this the fact that global automakers need to prepare for the era of "software-defined vehicles" where most of the value is created in the electronic architecture. Volkswagen therefore needs a system that can scale across the group - from Skoda to Porsche.

Rivian $RIVN: The young man who knows software better than traditional car companies

Rivian may still be losing money and has had some very challenging quarters, but it is doing one thing exceptionally well: software. Its architecture is modern, flexible and built to be unified from the start.

Volkswagen entered Rivian not because of its production volume, but because of its technology. It enables fast updates, efficient communication between systems and easy scaling across models. If the integration is successful, it could bring Rivian additional revenue - not only from VW, but also from other automakers that could become customers of the RV Tech joint venture.

Overall impact on the market and investors

If the collaboration is successful, Volkswagen could leapfrog most European and US competitors technologically within a few years. The software platform could be used not only in BEVs but also in hybrid or ICE models in the future. At the same time, it opens up the possibility that RV Tech will license the technology to other automakers - much like Tesla has made its charging standards available.

For investors, this is a major strategic move that could determine the future of the entire Volkswagen Group over the next five years. The success of the partnership could reduce development costs, speed up the launch of new models, improve software (which is crucial for many customers) and restore VW's competitiveness in China and Europe.

Finally, Volkswagen admits that software has become a key factor in the future of the automotive industry. And Rivian, in turn, gains a global manufacturing partner that can enable it to survive and grow. Together, they can define a new architecture for what we call the car.

When the Simandou project in the Guinean mountains inaugurated its mining operations, it was no ordinary start-up of a new mine. It was a moment that could fundamentally redraw the map of the global iron ore market in the years to come - a raw material that no economy in the world can do without. Guinea, long considered poor and politically unstable, has now positioned itself as a player that can influence the price of steel from Shanghai to Rotterdam.

The Simandou project, worth more than $23 billion, is the result of three decades of planning, litigation, international agreements and strategic changes. At its core is one of the richest iron ore resources in the world - with an average purity of around 65%, significantly higher than its Australian or Brazilian competitors. It is this quality that may be the key to the transition to 'green steel' that the world's industrial economy desperately needs to reduce its carbon footprint.

The project involves a Chinese consortium, Winning Group, together with steel giant Baowu Steeland, on the other hand. Rio Tinto a Chinalco. Together, they form an unusual alliance between the West and China - yet with a clear subtext: China is gaining control of another key resourcethat could substantially reduce its dependence on Australian and Brazilian supplies.

The strategic importance of the project

Today, Simandou is more than just a mining complex - it is a geopolitical investment. Once fully operational, production is expected to reach up to 120 million tonnes of iron ore per year, representing roughly 7% of the world's exported volume. This volume is sufficient to to shift the balance of power in a global market now dominated by four giants: BHP, Rio Tinto, Vale and Fortescue..

For China, which consumes over 60% of the world's iron ore production, this is a major shift. Simandou means not only securing long-term supply for its steel industry, but also reducing vulnerability to geopolitical tensions with Australia. In the context of the trade disputes of recent years, this may be one of the most important raw materials projects of the decade.

At the same time, Guinea finds itself in an entirely new position. A poor country with a predominance of bauxite may become the fifth largest exporter of iron ore in the world. The government has described the project as an "engine of national transformation" - and in economic terms this is no exaggeration. Simandou will bring new rail lines, ports, electrification and thousands of jobs.

Impacts on key players

Rio Tinto $RIO:

For the British-Australian miner, Simandou is both a strategic insurance policy and a risk. On the one hand, it gains access to exceptional quality ore that can improve its margins and boost its image in the sustainable supply sector. On the other, it has to share control with Chinese partners, which reduces its independence. The success of the project will also depend on whether Rio can manage costs effectively and avoid political upheaval in Guinea.

China (Baowu Steel, Chinalco):

Chinese firms are getting exactly what Beijing has long pursued - raw materials sovereignty.. Simandou will allow them to double their share of global seaborne iron ore exports from 8% today to more than 15% within five years. In addition to the direct economic benefits, this means strategic influence on pricing on global markets.

Australia and Brazil:

The region suffers the biggest loss Pilbara in Western Australia. The ore there has a lower iron content (around 58%) and is increasingly expensive to mine. Simandou, with a purity of 65%, will better meet the requirements of modern steel mills, which are moving towards decarbonising production. The result may be a gradual erosion of Australia's price and quality dominance.

Risks and challenges

Even such an ambitious project is not without significant risks - from technical to political.

• Political stability in Guinea: The country has a long history of coups and government changes. While Rio Tinto claims not to be concerned about political risks, investors know that in Africa, continuity is always conditional.
• Infrastructure: To get ore to the ocean, it must be built a 650-kilometre rail network and a new deep-sea port. Delays or cost increases can significantly affect the project's return.
• Environmental pressures: Mining in rainforest areas poses environmental challenges, including deforestation and soil erosion. International institutions may push for stricter standards, which will increase costs.
• Market risk: With the current iron ore price around USD 100 per tonne the project looks attractive. But if the price falls below USD 80as some analysts expect, the return on investment will be extended by several years.
• Chinese dominance: The growing influence of Chinese companies may lead to a concentration of power over a key raw materials segment, which will be a geopolitically sensitive issue, especially for the West.

Potential and opportunities

From a macroeconomic perspective, Simandou is the largest development project in Africa since the Aswan Dam. It has the potential to change not only the iron ore balance but also the the status of West Africa as a whole. on the world trade map.

• The Green Transition: Simandou's higher iron content and lower impurities make it an ideal source for the production of so-called "iron ore". Green steel - steel produced with a lower carbon footprint.
• Diversification of global supply: Both Europe and India may be interested in an alternative source outside Australia and Brazil, reducing their dependence on geopolitically tense regions.
• African industrial effect: Infrastructure development will bring not only revenue, but also know-how and an industrial base to Guinea, which can be a model for other commodity economies on the continent.
• Impacts on commodity markets: If fully operational, the project could reduce world iron ore prices by up to 15 %., which would have an impact on the cost of steel production and construction.

Green steel and the ESG dimension: a new standard for global production

While most traditional mines mine lower purity ore with a higher carbon footprint, Simandou comes with potential that goes beyond conventional mining economics. Its ore with an iron content of around 65% allows steelmakers to produce more steel with less energy and with significantly lower CO₂ emissions. This is crucial for producers seeking to meet decarbonisation targets by 2035.

Simandou can thus be at the heart of "green steel from Africa" - a new category of raw materials that will be favoured not only economically but also reputationally. Large European and Japanese steel mills (e.g. ArcelorMittal, Nippon Steel) have already declared their interest in long-term contracts for higher iron content and lower carbon footprint supplies.

This also puts the project in the spotlight ESG funds and environmental investorsseeking sustainable alternatives in the mining sector. While most miners struggle with how to reduce emissions from transport and processing, Simandou offers a solution right in the ore grade itself - less waste, more iron, less CO₂.

Financing and returns: a giant bet on quality

The Simandou project is one of Africa's largest industrial investments of all time. The cost exceeds $23 billionwith financing spread across Rio Tinto, Chinese partners (Baowu Steel, Chinalco) and the Guinean government, which holds a minority but strategic stake.

According to commodity sector analysts, the economics of the project will be highly sensitive to the evolution of iron ore prices.

• At a price of around USD 100 per tonne the project could generate up to $3 billion of cash flow annually, which means a payback period of around eight years.
• However, if prices fall below $80as some estimate after 2027, the payback will extend to more than a decade.
• But the key advantage remains the premium quality of the raw materialwhich ensures stable demand even in times of market downturns.

The financing structure is also interesting: Chinese banks provide most of the credit lines, while Rio Tinto concentrates on technical and logistical execution. This model is typical of the 'new era of commodity alliances', where the West brings the know-how and China the capital.

Long-term implications for Africa: the industrial birth of a continent

Simandou is not just about mining, but about it's about the complete transformation of West Africa..
The project involves the construction of 650 km of railway...upgrading ports and creating a supply chain that will link Guinea to the Atlantic coast. Such a vast infrastructure creates a backbone along which other commodities such as bauxite, manganese and phosphates can later flow.

In the long term, Simanda could be the starting point for "spillover effect": smaller logistics and industrial hubs will emerge around mining, diversifying the Guinean economy. International development institutions see this project as a test of whether Africa can manage mega-investments on its ownwithout becoming a mere exporter of raw materials.

If successful, the project could inspire similar initiatives in Sierra Leone, Liberia or Senegalwhich have their own untapped reserves of iron and bauxite. This could create within 15 years a new African raw materials corridorto compete with the traditional mining regions of Australia and South America.

Investment scenarios

Optimistic scenario:

The project is implemented as planned, production ramps up to full capacity by 2029 and the market absorbs high quality ore without a dramatic drop in prices. Rio Tinto and Baowu both increase market share, while Guinea sees GDP growth surge and export revenues triple. Rio Tinto's share price could then reflect the higher cash flow expectations from this project and the higher ESG attractiveness.

Realistic scenario:

Production picks up gradually, but with typical African delays. Logistics costs are rising, but the quality of the ore ensures strong demand. The project starts to contribute more significantly to the bottom line around 2030, with a gradual impact on the global market. Guinea will stabilise as a new producer, but the benefits will be shared mainly by China.

Pessimistic scenario:

Political tensions, delays in infrastructure construction, or a slump in iron ore prices could jeopardize the return on investment. In this case, Simandou will become a geopolitical symbol rather than an economic success. Rio Tinto would suffer reputational and financial losses, while Chinese companies would take full control of part of the project.

Final consideration

Simandou is not just a mining project. It is a mirror of the transformation of the world economythat seeks to reduce its carbon footprint, break the monopoly of supply and redistribute resource power. For investors, it represents a fascinating combination of high potential and extraordinary risks - from political to market.

But if the project succeeds, Guinea could become the "Saudi Arabia of iron" and Rio Tinto one of the major winners of the new commodities era. And the world will see that even a place that has long been a symbol of instability can produce one of the great industrial stories of the 21st century.

The Japanese yen’s dramatic slide to its weakest levels in decades is not just a local phenomenon—it ripples through global markets and may be setting the stage for a fresh leg in the U.S. equity bull run. With trade flows, multinational supply chains and capital patterns shifting under the weight of a weak yen and a strong dollar, U.S. investors should pay attention: what happens in Tokyo can quickly echo on Wall Street. This article takes you through the mechanics of yen weakness, the intervention debate, and why that matters for key U.S. sectors such as semiconductors, autos and export-driven tech.

The evolution of the JPY/USD currency pair from 1 May 2025

The chart of real effective exchange rates shows the sharp decline of the yen in the recent period. The cause is mainly due to a clash of central bank policies. The US Fed continues to keep interest rates higher due to inflation (although there have already been two cuts this year), while the Bank of Japan maintains an extremely loose monetary policy. The newly installed Japanese cabinet under Prime Minister Sanae Takaichi promises massive government spending to revive the economy, which only further weakens the currency (the market is pricing in a fiscal stimulus of around $100 billion). As a result, the yield differential between Japanese and U.S. bonds has climbed to record levels (more than 300 basis points), which is attracting capital into assets that can be bought with dollars, which only pushes the yield down.

Orange line - the yield on the 10-year US Treasury bond from 2021

Black line - the yield on the 10-year Japanese government bond from 2021

A weaker yen obviously has implications for the Japanese economy. On the one hand, a cheaper currency strengthens export competitiveness. Japanese companies (automotive, electronics, engineering) are thus gaining a larger market share abroad. On the other hand, however, imports of raw materials and goods are becoming more expensive, and domestic consumers and firms owing foreign currency are falling victim. Higher import prices are pushing inflation in Japan above the Bank of Japan's target of 2%. Japanese inflation is currently around 3%. Each percentage point of yen depreciation is estimated to increase core inflation by 0.05 percentage points. If the dollar were to strengthen to, say, ¥160, this would mean a noticeable increase in costs in household and corporate budgets and could hurt consumer confidence and economic growth.

This situation raises the debate about possible currency intervention.

What is currency intervention?

It is a situation where government authorities, typically the Treasury or the central bank, buy or sell their currency in an attempt to influence its value. In practice, Japanese intervention would mean that Japan would start selling dollars from its reserves while buying yen, thereby increasing the value of the yen.

Japan has already carried out similar operations on several occasions. For example, in September and October 2022, the government entered the market and spent around $60 billion buying yen. Similarly, in the spring of 2024, the authorities in turn sold dollars and spent nearly 10 trillion yen ($62 billion) to support the yen.

Despite these interventions, however, the currency remained weak. Therefore, the Japanese authorities warn today that intervention would only be effective in exceptional cases and that they are monitoring the situation without direct action for the time being. Nevertheless, Finance Minister Satsuki Katayama has publicly warned that she is watching the yen's movements with great attention. Analysts at foreign banks suggest that real intervention would occur if the exchange rate breaks the ¥157-160 per dollar circle or if the depreciation accelerates more dramatically.

The yen has already fallen nearly 10% against the US dollar in the past six months, taking it to its lowest levels since not only the beginning of the year. In fact, the current value of the exchange rate is the same as it was in 1990. For example, when the yen fell sharply against the dollar around 2000, the exchange rate was still 6.4% higher than it is today. And when the yen fell 39% against the dollar between 2012 and 2015, the yen was 24% stronger than today.

Chart of the evolution of the JPY/USD currency pair since 1988

Impact on stock markets

The weakening yen is also having an impact on global equity markets. The strong dollar and low rates in Japan are creating a carry trade. This is where investors borrow yen and buy higher yielding assets in the US and elsewhere. This flow of capital is pushing up stocks in the United States. For example, at the beginning of November 2025, when talk of an end to the long government shutdown, which officially ended today and made history as the longest-lasting in the US, began, the major US indices rose sharply. The S&P 500 index added 1.5%, and the Nasdaq 2.3%. At the same time, the yen continued to weaken in the market, hovering around ¥154-155 per dollar. Thus, in an atmosphere of rising equities (so-called risk-on sentiment), investors were waiting for a return of dollar yields rather than conservative Japanese bonds.

This was similar to October, when the yen weakened by 4%. Japanese equities rose sharply. The Nikkei index added 16.6%, the index's best performance in more than three decades. By contrast, it only appreciated slightly during periods of market jitters, when demand for safe assets increased. For example, it was the Japanese currency that was sought as a safe haven during the weakening US economy.

International implications

In terms of international trade, Japan is a key link in the global economy. For example, the Japanese automotive industry has extensive supply chains. The auto parts manufacturing sector alone employs over 600,000 people in Japan in more than 20,000 firms. Finished cars and parts from Japan go mainly to the US. The United States is the largest foreign buyer of Japanese cars and components.

A weaker yen lowers the price of these products for U.S. (and global) buyers, which helps Japanese exporters, but also increases pressures for competing Western manufacturers. Similarly, Japan is key in the electronics and semiconductor industries. It is a major supplier of silicon wafers and basic components for chip production.

The importance of these interlinked value chains means that fluctuations in the yen can indirectly affect, for example, the prices of cars, electronics or engineering products, which can lead to profits for firms themselves and further to their share price.

Conclusion

In conclusion, the evolution of the yen is crucial for investors even if most investors overlook it. The market is now betting that the economic cycle will turn with the end of the US government shutdown. The Japanese government, meanwhile, argues that intervention should only come when the shock of a single sentence or sharp swing is greater than the tolerance level.

In the weeks ahead, the key to watch will be whether Japan actually enters the markets (and whether it is successful) or whether the divergence in monetary policy between the US and Japanese central banks continues to determine the direction of the yen and, therefore, indirectly, the broader course of global equities.

In a category defined by intensity and constant reinvention, Monster Beverage has reclaimed its position as the brand that sets the pace. This quarter showed that the company hasn’t lost an ounce of momentum — it’s innovating aggressively, expanding globally, and regaining the operating discipline that once made it the envy of the beverage industry. The cultural icon of the energy drink world is evolving, not aging.

Revenue growth surged into the double digits, international markets strengthened their role as the company’s primary growth engines, and margins climbed back to pre-pandemic highs. After a few uneven years, investors now see a company returning to peak form — bold, profitable, and once again leading the global energy drink race.

How was the last quarter?

Monster Beverage $MNST confirmed that its brand and business model still have tremendous strength. The third quarter brought another record and, most importantly, a return to the form that investors have come to expect from this company. The company benefited from a combination of growing demand for premium energy drinks, thoughtful pricing and expansion in foreign markets. Moreover, the growth momentum was accompanied by a marked improvement in margins, indicating that management is successfully managing not only to generate higher revenues but also to streamline the operating structure.

Driving the results remained the flagship Monster Energy range and its derivatives Reign Total Body Fuel, Reign Storm and Bang, which together form the heart of the portfolio. The company recorded double-digit growth across segments and regions, with key markets in Europe and Asia continuing to increase their share of total revenue. This is proof that the strategy of globalisation and expanding distribution channels is delivering tangible results. Gross margins improved thanks to lower production costs and more efficient inventory management, while operating profit grew at a significantly faster rate than revenue itself. As a result, Monster is achieving one of the best profit to sales growth ratios in its history this year.

• Revenues: USD 2.20 billion → +16.8% year-on-year (USD 1.88 billion in Q3 2024).
• Gross margin: 55.7% → improvement from 53.2% a year ago.
• Operating Income: USD 675.4 million → +40.7% year-on-year.
• Net Income: USD 524.5 million → +41.4% year-on-year.
• Earnings per share (EPS): USD 0.53 → +41.1% vs. USD 0.38 last year.
• Operating expenses: USD 549.1 million → 25% of sales (down from 27.6% last year).
• Foreign sales: USD 937.1 million → +23.3% yoy, accounting for 43% of sales.

While the core energy portfolio is pulling results up, the alcohol division is struggling with a decline in demand. This segment remains complementary for the company and recent developments show that management's focus remains on the key soft energy drink market where Monster has the greatest margin potential. Overall, however, the quarter sent a very strong signal to investors - Monster was able to improve performance, strengthen financial stability and expand its international reach without negatively impacting efficiency.

CEO comment

In particular, management highlighted the strength of the core business and Monster's ability to respond to changing consumer preferences. CEO Rodney Sacks spoke of the combination of "disciplined growth" and "long-term thinking" that protects the company from market fluctuations. He said the focus remains on strengthening the brand while investing in innovation in areas that add value for customers. These include new formats, healthier product variants and locally adapted flavours that can appeal to a wide range of customers.

Sacks also stressed that Monster sees competition not only in the energy drink world, but also in the broader context of functional beverages that combine energy, health and performance. Management's goal is to maintain the growth trend without exaggerated fluctuations, which is to be ensured by a combination of a strong brand, research and tight cost controls.

Outlook

Although the company did not provide specific numerical guidance for the next quarter, signals from management and the market point to a continued growth trend. Key segments, notably Monster Energy and Reign, continue to have strong traction, while expansion in emerging markets provides scope for further volume increases. The evolution of aluminium and other input prices, which have historically impacted margins, will also be an important factor for the period ahead. However, the company is in a favourable position due to its volumes and bargaining power.

In terms of long-term strategy, investments in product innovation and marketing activities are expected to continue, with an emphasis on digital channels and partnerships with major sports brands. Monster thus continues to build on its combination of authenticity, performance and global recognition, which is a key competitive factor in its segment.

Long-term results

Historically, Monster remains one of the few players that has been able to grow consistently even in an environment of volatile commodities and changing trends. Since 2021, revenues have increased by more than a third and the company is approaching the $7.5 billion annual sales mark. Gross and operating margins have remained exceptionally high over the long term, confirming the strength of the brand and management's ability to manage costs.

While 2024 brought a short-term decline in net profit, current results show a return to the original momentum. EBITDA and operating cash flow remain stable, allowing the company to finance expansion from its own resources without significant debt. From an investor's perspective, Monster represents a typical growth company with a healthy balance between expansion and profitability - a combination that competitors have been unable to replicate over the long term.

News

• Monster achieved all-time high sales, driven primarily by its core energy drink portfolio.
• International sales exceeded 40% of total sales for the first time.
• Gross margin increased due to more efficient production and a stronger pricing position.
• The company strengthened its cooperation with Coca-Cola in distribution and logistics.
• The alcohol division remains a weaker link, but management confirmed that its contribution to the group will be re-analysed.

Shareholding structure

Monster Beverage has an extremely strong and stable ownership base. Insiders, i.e. the management and founders of the company, own approximately 28.6% of all shareswhich ensures a high degree of control over strategic direction and continuity of leadership. The remaining majority of shares are held by institutional investorswho hold approximately 69% of all shares and more than 96% of the free float.

The largest shareholders include:

• Vanguard Group Inc. with a 6.9% stake (67.5 million shares)
• BlackRock Inc. with 5.9% (57.4 million shares)
• State Street Corporation with 3,6 % (34,9 million shares)
• AllianceBernstein L.P. with 3,6 % (34,8 million shares)

This mix of founder clout and strong institutional backing provides Monster stock with stability, low volatility and high long-term investor confidence.

Analysts' expectations

The market views the results as confirmation that Monster is returning to a steady growth trajectory after a challenging period. Analysts expect double-digit growth rates to continue through at least the first half of 2026, with the ability to maintain gross margins above 55% remaining a key factor in further valuation appreciation.

Increasing geographic diversification, which reduces dependence on the US market, is also a positive factor. While competitive pressure in the premium energy drink segment and the eventual normalisation of pricing power in the retail sector remain risks, Monster has so far confirmed that its brand has the strength to stand up in an environment of increased competition and changing consumer sentiment.

Fair Price

Artificial intelligence is redefining the structure of the global economy — and AMD wants to be at its very core. At its Financial Analyst Day in New York, CEO Lisa Su unveiled an ambitious roadmap to boost data center revenue by 60% within the next three to five years, from $16 billion in 2025 to more than $25 billion. The message was clear: AMD intends to take meaningful market share from Nvidia’s long-standing dominance.

Su projects the total addressable market for AI data centers will reach a staggering $1 trillion within five years, spanning GPUs, CPUs, networking, memory, and the software stacks that power “AI factories of the future.” With its expanding lineup — from CPUs and GPUs to rack-scale Helios systems and integrated AI software — AMD is positioning itself not just as a chipmaker, but as an infrastructure company for the next industrial revolution.

New strategy: chips, partners and AI factories

AMD $AMD is building its expansion on several pillars:

• The powerful MI450 and MI500 accelerators - next-generation chips for AI and HPC that will power projects by hyperscalers, AI-native companies and sovereign states building their own infrastructure.
• Big contracts - In recent months, AMD has announced shipments for OpenAI (6 GW of computing power) and Oracle (Both projects will ramp up in 2026.
• Server share growth - The company expects to acquire within three years More than 50% share of server market revenues, up from the current 40%.
• Growth beyond AI - In the client chip segment (PC, gaming), the company expects more than 10% growth and plans to take over the part of the market that Intel (INTC) is losing.

CFO Jean Hu also predicts that AMD's total sales will grow by 35% to around $46 billion by 2030, with datacenters remaining the main growth driver. Gross margins are expected to remain in the range of 55-58 % and operating margins above 35%.

Lisa Su: "AI is a unique moment, we must not be short-sighted"

In response to questions about funding AI projects, Su dismissed doubts about whether companies like OpenAI can pay for massive GPU deployments. "This is a unique moment in the history of AI. Those who look only a few quarters ahead will not understand the scale of the opportunity. If AI usage grows as we expect, funding will not be a problem," she said.

According to Su, AMD is at a stage where it is moving from the role of "technology challenger" to a position of an infrastructure playerthat can offer a complete AI stack - from chips to system solutions. In doing so, the company is targeting Long-term partnerships with hyperscalers such as Microsoft, Amazon Web Services or Google Cloud.

Nvidia stays on the throne, but AMD accelerates

Nvidia $NVDA continues to dominate the majority of the AI market - with a market capitalization of $4.7 trillion and a dominant share of GPU sales. AMD is smaller (approximately $396 billion), but its growth is significantly faster:

• Shares AMD up 111 % YTD.
• Shares of Nvidia have appreciated by 40% YTD.

Lisa Su is betting on a combination of technical leadership in the CPU segment, diversification of the customer portfolio and capacity expansion. If the company manages to stabilize supply and the launch of the MI500 series is delayed, AMD can get to double-digit share in AI datacenters by 2028.

Risks and opportunities for investors

📊 Risks:

• The market is extremely capital intensive and the return on investment may take longer than investors expect.
• Increasing competitive pressure - Nvidia, Intel, Broadcom, Qualcomm and state AI projects.
• Dependence on TSMC's manufacturing capabilities and associated geopolitical vulnerabilities.

🚀 Opportunities:

• Growing global demand for AI computing power.
• Expansion into sovereign and national AI projects.
• Opportunity to gain strategic position in the ecosystem of "AI factories".

New competition for datacenters

While Nvidia continues to profile itself as a leader in high-end accelerators, AMD is targeting the broader datacenter ecosystem. Lisa Su in New York concluded her presentation with a simple message:

"We have all the pieces of the puzzle to build AI factories. And that's our goal - at every layer of the stack, from chip to system."

It's a statement that confirms that AMD has long been "the other" company behind Nvidia. It's a company that wants to be the foundation of a new era of computing infrastructure - one that will power the trillion-dollar datacenter market and AI economy of 2030.

Artificial intelligence has officially entered its most transformative phase — not in Big Tech, but in finance. The combination of data analytics, real-time algorithms, and scalable AI infrastructure is reshaping how banks assess risk, approve loans, and manage capital. The latest quarterly results from one fast-rising fintech prove that the fusion of AI and finance isn’t theory anymore — it’s a business model built for profitability.

With EBITDA up 91% year over year and management raising full-year guidance, the company has gone from high-risk experiment to sustainable growth story. Investors who once questioned its viability now see a fintech firm turning into a predictable cash-generating engine — and a symbol of how AI is redefining financial efficiency worldwide.

Analysis highlights

• Record EBITDA of $107 million In 3Q 2025 (+91% year-on-year).
• Revenue growth of 36 % At USD 350 millionabove analysts' estimates.
• Full-year guidance raised to USD 372-382 million EBITDA (from previous guidance of 345-370).
• GAAP net income USD 23 million - vs. expectations of $10-20 million. USD.
• Q4 profit expected USD 25-35 million, further margin improvement.
• Shares gained +15% after the results, market capitalization rose to USD 1.8bn.

Company profile and business model

Pagaya $PGY was founded in 2016 with a vision to harness the power of data and algorithms to revolutionize credit decisioning. Its platform connects lenders with investors through AI infrastructure that processes billions of data points about consumer behavior. The result is more accurate risk assessment, lower loan defaults and more efficient capital allocation.

Today, over 25 banks and financial institutions use the company's network. Each new partner added to the system improves the quality of the data model - the more data the network processes, the more accurately it can predict ability to repay. This self-reinforcing logic is the company's main competitive advantage.

The company does not operate as a traditional bank or fintech lender. It does not issue loans itself, but supplies technology infrastructure and decision enginethus remaining asset-light and able to grow without having to raise capital.

Other interesting facts:

• Founding team consists of Gal Krubiner (CEO), Avital Pardo (CTO) and Yahav Golan (CFO), who met while working in the Israeli fintech sector.
• The company entered the market through an alliance with the Gov. Nasdaq in 2021 through a SPAC merger with EJF Acquisition Corp. that valued it at approximately 9 billion USD - It was one of Israel's largest SPAC transactions.
• In 2024, Pagaya processed more than 1.5 million loan applications through its AI network, most of which came from the consumer lending and auto-finance sectors.
• Among its key partners include SoFi, Ally Financial, Klarna, Avant and several smaller peer-to-peer lenders in the US.
• Its core product is Pagaya AI Networkbuilt on neural networks and advanced predictive models that take into account up to 16,000 variables when evaluating each client.
• The company uses the so-called. federated learning modelwhere the AI trains on client data without having to share it, thereby maintaining privacy and meeting regulatory requirements.
• In 2023, Pagaya opened a research centre in Tel Aviv focused on the application of generative AI in credit scoring and risk modelling.
• The company manages more than USD 20 billion in credit assets through its partner network, enabling it to track portfolio developments and optimize models in real time.

Financial performance and key metrics

Pagaya has undergone a period of dramatic transformation. A fintech that was still generating losses of over $290 million in 2022 has become a business with growing profitability and positive cash flow in just two years. The year 2024 confirmed that the transition to operational efficiency has become a reality.

Revenues reached USD 1.03 billion, representing 33.6% year-on-year growth This growth was mainly driven by higher loan processing fees and growth in the number of active partners in the Pagaya AI Network. Cost of revenue, while up 17%, remained under control thanks to platform scaling - gross margin improved by more than 65% to $434 million.

Operating profit was USD 66.8 milliona dramatic improvement from a loss of $24 million a year earlier. Operating margin came in at 14 %while it was still negative in 2022. EBITDA then rose to US$68 million, up 378% year-on-year. These results confirm that the asset-light model, where Pagaya earns on infrastructure fees instead of capital-intensive lending, is starting to work.

Capital efficiency is another indicator that suggests a structural turnaround. ROIC reached 12.15%which is more than four times the fintech sector average. Although the return on equity (ROE) remains negative (-75%) due to earlier accumulated losses, the trend is clear - operating profitability is growing faster than the cost of capital. Altman Z-Score 1.58 indicates that the company is moving out of the risk zone and towards stability.

Debt remains higher but fully serviceable. Debt/Assets ratio is 0,55, which is an acceptable level in the fintech segment, especially with rapidly growing operating profit. Interest cover is now at 5.3x, meaning that EBITDA covers interest costs more than five times - a major improvement on the situation two years ago, when coverage was virtually zero.

In terms of liquidity, the company maintains a solid buffer. Quick ratio of 1.42 a Current ratio 1.42 show that current liabilities are fully covered by current assets. Cash ratio 0,72 means that almost three quarters of the company's liabilities can be paid directly from cash - a superior position in the context of a dynamic fintech.

At a value level, Pagaya remains attractive. P/S 1.63 is well below the sector average (3.2), suggesting that the market is not yet fully appreciating the potential for revenue and margin growth. P/E -6.69 while reflecting historical loss-making, may turn positive over the next year at the current rate of improvement. Operating metrics such as Asset Turnover 0.80 a Gross Margin 40.8% confirm that the company is using its assets more efficiently than most of its direct competitors.

Management and strategy

The company is led by Gal Krubinerco-founder and CEO, who has led the company since its inception. His strategy is based on a progressive expansion of Pagaya AI Network across asset classes - from consumer credit to leasing to mortgages and insurance.

Krubiner emphasizes long-term partnerships with banks, not direct competition. This model allows the company to maintain stable returns while protecting the business from cyclical market fluctuations. CTO Avital Pardo oversees the development of machine learning models, while CFO Yahav Golan is responsible for financial discipline and improving operational cash flow.

Management declares a goal of becoming a key infrastructure platform for financial AI services by 2026 - similar to "AWS for the banking industry".

AI infrastructure and market potential

The global market for artificial intelligence in financial services is set to Allied Market Research to reach a value USD 135 billion by 2030, with annual growth of over 30 %. Key areas: decision automation, risk management and predictive modelling.

Pagaya is one of the few players that are truly monetizing this market - not by selling licenses, but by it collects a fee from each transaction processedwhich generates stable and recurring revenue. Its network works much like a payment infrastructure: the more participants, the higher the revenue per unit of data.

This model also protects the firm from seasonal fluctuations in credit demand. Even in periods of lower activity, the volume of transactions in the system remains high due to its spread among more segments of the financial market.

Comparison with competitors

Pagaya is often compared to US fintech player Upstart Holdings $UPST, as both use artificial intelligence to assess credit risk. On the surface, they are similar companies, but their economics and strategic positioning are fundamentally different.

Upstart operates as a loan broker - using AI to evaluate applicants and forward approved loans to banking partners. However, its model is dependent on credit cycles and carries a higher risk of revenue shortfalls if banks tighten terms. Pagaya on the other hand, operates as a AI infrastructure. It does not arrange or own the loans itself, but provides the data processing and decision-making across a network of financial institutions. This gives it more stable fee income and lower capital risk.

In terms of numbers, the difference is even more pronounced:

• Pagaya reported in 2024 revenue growth of 33.6%while Upstart saw a decline of more than 30%.
• Pagaya's EBITDA reached USD 107 millionwhile Upstart remains deeply in the red (EBITDA margin -20%).
• Ratio P/S 1.6 for Pagaya remains half that of Upstart, suggesting a lower valuation due to higher efficiency.
• In addition, Pagaya has a gross margin of 41 % a an operating margin of 14%while Upstart operates with a gross margin of around 30% and the operating margin is still negative.

Another interesting comparison is the Israeli company nSure.ai or the American Zest AIwhich also focus on scoring models based on machine learning. However, these companies remain B2B software vendorswithout the infrastructure and network effect. Pagaya, on the other hand, is building its own ecosystem - Pagaya Network - which grows with each new partner and data source. This network effect ensures that the value of the platform grows geometrically, not linearly.

In terms of financial stability, Pagaya stands out even against more traditional fintech players such as Affirm Holdings $AFRM or LendingClub $LC. While Affirm has a similar market capitalization (around $2 billion), it operates on the BNPL (Buy Now, Pay Later) lending principle - with high capital risk and rate sensitivity. Pagaya, by contrast, remains capital-light, with zero exposure to interest rates and minimal cost of equity.

Risks and opportunities

Opportunities:

• Rapid adoption of AI in banking and regulated sectors.
• Expansion into insurance and asset management.
• Network effect - more partners means more accurate models and higher returns.
• AI scoring market growing at more than 30% per year.

Risks:

• Leverage (Debt/Assets 0.55) and slower decline in historical losses.
• Dependence on partnerships - failure of a key client can impact returns.
• Regulatory pressure on AI decision making in finance (especially EU).
• Potential slowdown in lending activity in a recession.

Investment scenarios

Optimistic scenario

In the optimistic scenario, Pagaya becomes one of the key infrastructure players in the financial world. Lenders, banks and fintechs are gradually moving from traditional credit models to AI-driven systems - and Pagaya in particular has a 2-3 year head start on the competition thanks to its network and technology. Management expects the number of connected institutions to grow from 25 today to more than 40 in the next 18 months, which would increase the volume of loans processed by more than 50%.

At the current rate of growth, the company could reach revenues of over USD 1.4 billion a EBITDA between USD 420-450 million. Net income could approach the 150 million USD, which would mark a transition to a stable profit phase with an operating margin of around 18-20 %. Such a development could move the valuation (EV/EBITDA) into the 7-8x range, i.e. to a target price of around USD 35-40 per share - roughly 40-50% upside potential from current levels.

Another catalyst would be to extend the model beyond consumer credit - particularly into insurance, leasing and asset managementwhere AI scoring is beginning to gain rapid traction. Pagaya is already testing the use of its models to predict risk in insurance portfolios and is running pilots with several institutions in Europe. The success of these pilots could open up a new market potentially worth over $10 billion a year.

In this scenario, the company could be seen as similar to Palantir in the data infrastructure space - i.e. a stable, high-margin platform with strategic relevance.

A realistic scenario

The baseline scenario assumes a continuation of the current trend: double-digit revenue growth (approx. 25-30% per annum) and a gradual increase in profitability. EBITDA would grow by 15-20% per year in this model, with margins stable around 15 %. The company would thus reach EBITDA of USD 380 million as early as next year and net income in the range of USD 80-100 million.

In this scenario, the stock would likely find a fair valuation in the range of USD 25-30, which implies 20-30% upside potential over a 12-18 month horizon. The key assumption would be sustained confidence from peers and a stable macro environment that would support credit expansion.

Pagaya would continue to benefit from expanding its partner network and growing demand for automated decisioning systems, but the pace of expansion would be balanced by pressure on regulatory compliance and data protection. This development would be consistent with the gradual stabilisation of the fintech market, where investors are more focused on profitability than rapid growth at any cost.

At the same time, the power of the "network effect" would be fully manifested - each new partner increases the accuracy of models, which attracts more players. This organic growth with minimal marketing expenditure ensures a high return on investment even without a significant increase in costs.

Pessimistic scenario

The negative scenario assumes a combination of three adverse factors: continued tightening of credit conditions, regulatory intervention in AI decision models, and slower adoption among banks. In such an environment, revenue growth would slow below 10% per annumwhile margins could fall back to 8-10 %.

Profitability would fall, EBITDA would hover around 250-280 million USD and net income could remain below $50 million. In this case, valuations could stagnate or fall slightly, with a price target of around USD 18-20 per share.

Even in this scenario, however, Pagaya would remain a viable company in the long term due to its infrastructure nature. Unlike fintechs with high credit risk, its revenue is not based on interest margins, but on fees. This means that it would be able to maintain positive cash flow and continue to innovate even in worse times.

In the event of a sharper downturn in demand, management could respond by reducing investment in expansion, optimising costs and maintaining key partnerships. This scenario would be more short-term - Pagaya has sufficient cash reserves and a stable base to return to growth once external pressures subside.

Conclusion and investment considerations

This story proves that AI has long been about business, not just models. The company has managed to turn AI into an infrastructure platform that connects the financial world. With rising margins, an improving balance sheet and a record EBITDA outlook, it's becoming a contender for AI fintech infrastructure leader.

For investors, it represents a rare combination: Technology growth, operational profitability and real product impact.. And if it maintains its momentum, it could become one of the most important AI solution providers for the global financial sector within a few years - with the potential for above-average returns over the long term.

With tech stocks still leading the way, the AI-powered rally on Wall Street shows signs of continued strength—not just a flash in the pan. Investors should keep both enthusiasm and fundamentals in view.

According to an ECB survey, businesses in the eurozone are investing heavily in digital infrastructure and AI. Strong growth in demand for software, databases, and especially cloud solutions is mainly seen in the financial and public sectors. This is according to the latest ECB survey, which highlights soaring investment in AI in Europe. But the trend is global, with the US leading the way. NVIDIA's $NVDA, since the launch of ChatGPT in 2022, has increased in market value approximately twelvefold.

Morgan Stanley Outlook

According to a Morgan Stanley $MSanalysis , full adoption of AI could deliver approximately $920 billion in annual net economic benefits to S&P 500 companies. This amount is equivalent to about 28% of expected S&P 500 earnings (pre-tax) in 2026, with roughly half of the total benefits attributable to operational cost reduction (automating tasks) and half to new revenue and higher margins. In other words, AI is expected to generate hundreds of billions of dollars in additional annual revenue for S&P 500 companies (and similarly boost their profits), while significantly improving productivity and efficiency.

Sectors with the greatest potential

Morgan Stanley identifies the most AI-dependent sectors as consumer goods with wholesale and retail, real estate management and development, and transportation. These industries can benefit from, for example, better delivery planning, intelligent goods tracking, personalised pricing or autonomous logistics and transportation systems. In contrast, traditional industries such as hardware or semiconductor manufacturing would benefit relatively less from AI, according to MS. Among the sectors with high potential is healthcare.

Impact on the market capitalisation of the S&P 500

The expected benefits will have a significant impact on the market value of the S&P 500 index. Morgan Stanley estimates that the increase in corporate earnings and savings associated with AI could add $13-16 trillion to corporate market capitalisation over the long term, an increase of 24-29% from current values. According to the same analysis, this means that AI could add roughly a quarter of the market cap value of the S&P 500 by 2026.

Key assumptions of the growth scenario

Morgan Stanley cautions, however, that fulfilling such an optimistic scenario requires a number of assumptions. To realise an annual profit of US$920 billion, the analysts say, would require a long-term and gradual global adoption of AI - which will take many years - as well as significant investment in AI technology and infrastructure. It is important to stress that these estimates are conservative. They are based on workforce automation only and do not include any future breakthroughs in AI or new products. If AI capabilities continue to improve rapidly, the real benefits could far exceed these conservative forecasts. Continued technical advances in AI are therefore a key factor. The Bank reports that AI performance has been accelerating steadily in recent years. Computing power doubles roughly every 7 months. If developments continue at a similar pace, the benefits for businesses could be much higher.

Performance of companies with high AI engagement

AI-benefiting firms are a major contributor to the performance of the major indices. Stocks of companies closely associated with AI have seen several times higher growth compared to the mainstream market segments. While the Nasdaq (heavily technology-oriented) is up 22% since the beginning of the year, the S&P 500 is up 17% and the Dow Jones Industrial "only" 13%.

Overheating risks and speculative bubble

Although the AI boom deserves attention, experts warn of an overheated market. Many indicators are already urging caution.

• Extreme valuations: the S&P 500 is now trading around 22 times of expected earnings, well above the 30-year average of 17 and close to the level of the dot-com bubble. Back then, it was around 25 times. Some smaller AI firms have literally exorbitant valuations. Palantir $PLTR, which has a forward P/E of 265 , has the most of the S&P 500 . Then there's Snowflake $SNOW 190 and CrowdStrike $CRWD 135. Such valuations are only sustainable when huge gains come quickly. Once their pace slows, these stocks would be highly susceptible to sharp declines. We could have seen this just with Palantir earlier this month, for example. The company reported good numbers, but the outlook for future quarters was slightly lower and the stock fell 18% in the next four days.
• Euphoria: Financial analyst Ted Mortonson recalls the analogy of the dot-com bubble: He warns that "the market is a casino" and many investments are just hype at the expense of fundamentals. He says investors are overly enthusiastic and forget basic financial indicators.

Expected long-term impact and sustainability

Long-term forecasts show that the impact of AI on the economy and markets can be enormous, but it takes time and patience. Morgan Stanley analysts estimate that AI could generate around $920 billion in annual economic benefits for S&P 500 companies. At current market valuations, they say, this could add as much as $13-16 trillion to the market capitalization of the S&P 500.

On the other hand, this effort to integrate AI into businesses has taken years. Already, analysts mention that US tech stocks have risen as fast as they did during the dot-com bubble and point to this as a warning sign. As for the economy, AI could boost corporate productivity, create new industries and jobs, and accelerate growth overall. However, it will only have a real impact in the long term and requires massive investment, for example, to build data centres. This is one of the main reasons why Nvidia's stock is rising so much. It is able to equip these new datacentres, in which billions of dollars are being invested, with its AI processors.

All in all, AI has triggered a wave of growth in the markets that has never been seen before, which is gradually moving from the phase of expectation to the phase of confirmation by real results. Whether this growth is sustainable depends on how quickly and efficiently companies can turn AI investments into sales and profits. If the promises are not fulfilled, there is a risk of a noticeable correction. For now, however, the outlook remains promising, and experts warn that if strong fundamentals and productivity growth are sustained, AI could be a real breakthrough for the economy and markets.

Few companies embody the concept of “steady growth through sustainability” like Waste Management. The U.S. waste giant delivered record quarterly revenue and cash flow, proving that even traditional industries can thrive in the age of decarbonization. Its core business — waste collection, landfills, and disposal services — remains highly profitable, while strategic bets on recycling and renewable natural gas are now paying off.

The company’s acquisition of WM Healthcare Solutions expanded its reach into medical waste, a lower-margin segment for now but one that opens a new growth frontier. As commodity recycling prices fell sharply, WM still managed double-digit gains in revenue and cash flow. It’s becoming less a garbage collector and more a circular-economy powerhouse built on operational excellence and green innovation.

How was the last quarter?

In the third quarter of 2025 $WMreached $6.44 billion in revenue, a year-over-year growth of roughly fifteen percent. The majority is still made up of the so-called legacy business - that is, traditional collection, landfill and recycling - which has grown to $5.8 billion. The rest was accounted for by WM Healthcare Solutions' new medical waste division, which added another roughly 0.6 billion.

Profitability held at a very solid level. Operating EBITDA was about $1.72 billion, about $1.97 billion on an adjusted basis. That equates to an adjusted margin of over 30%, with the legacy business alone around 32% on an adjusted basis. Even more attractive is the core business - waste collection and disposal - where the adjusted EBITDA margin came in at around 38%, demonstrating the strong pricing power and operating efficiencies the company has in this segment.

The healthcare segment is weaker in terms of margins so far, but it is growing. WM Healthcare Solutions brought in sales of about $628 million and EBITDA of about $89 million in the quarter, and on an adjusted basis, $110 million, a lower but gradually improving margin. Management openly says there is integration and optimization work underway, so the current numbers are more floor than ceiling.

From a cost perspective, we can see a shift in the right direction. In the legacy business, adjusted operating expenses have declined relative to revenue by about 1.6 percentage points. Better driver retention, a targeted move away from low-margin municipal contracts and higher utilization in landfill and industrial hauling are helping. SG&A costs in the legacy division remain disciplined at around nine per cent of revenue, a very reasonable level for such a capital-intensive business.

On the net profit front, the company is down year-on-year, with reported profit falling to around $603 million compared to $760 million a year ago. But after adjusting for one-time items, the picture is reversed: adjusted net income rose to roughly $801 million, and adjusted earnings per share rose from $1.96 to $1.98.

Management Commentary

Commenting on the results, CEO Jim Fish highlighted three key drivers: discipline in growth, cost optimization and expansion of sustainable operations. Collections and landfill, he said, is going through a "record margin period", which is evident in the numbers - margins in this segment are historically very high, despite weaker prices for recycled materials.

At the same time, management notes that the recycling and energy segments have also managed to increase operating EBITDA year-on-year despite a roughly one-third drop in commodity prices. This is a direct result of heavy investment in sorting automation and in the production of renewable natural gas from waste. In other words, the business can now extract more value from a tonne of waste than it used to.

WM Healthcare Solutions is more of an investment phase at the moment - integrating people, processes and IT running across 16 geographies. But management stresses that it wants to be selective in its approach to clients and is pushing for long-term contract longevity, not quick volumes at any cost. In the short term, this also means deferred price increases for some customers, but in the long term, more stability in revenues.

From a cash flow perspective, management remains very confident. In the first nine months of the year, the company generated more than $4.3 billion of operating cash flow, up roughly 12 percent from last year, and free cash flow of about $2.1 billion has picked up even faster. At the same time, the company has been steadily reducing debt and is heading toward a target leverage ratio of 2.5-3.0× EBITDA by mid-2026.

Outlook

For 2025, WM confirms that it is targeting adjusted operating EBITDA in the range of approximately $7.5 billion to $7.6 billion. This would imply further year-on-year growth and an EBITDA margin of roughly 29.5 percent to slightly above 30 percent, with the upper end of the range raised slightly by the company. Free cash flow should be between $2.8 billion and $2.9 billion, even after taking into account the fact that the company is gradually moving from the investment phase to the "harvest" phase for its sustainable projects.

At the revenue level, management is more cautious. Full-year revenue is now expected to be around $25.3 billion, more near the lower end of the original range. Structurally, however, the outlook remains positive. The core business still has room for moderate growth driven by price, moderate volume growth and efficiency. Sustainable energy and recycling are adding higher percentage growth, albeit from a smaller base, and medical waste is expanding its service offering to clients. Together, these three directions should keep WM in a stable revenue growth and free cash flow mode over the long term.

Long-term results

A look at the last four years shows an extremely consistent growth profile. WM's revenues have grown from roughly $17.9 billion in 2021 to $22.1 billion in 2024. While the rate of growth has fluctuated slightly - from roughly ten percent just after covide to three to eight percent in subsequent years - the direction is clear: a steady expansion of the business within a relatively unpretentious but regulated industry.

Even more interesting is the evolution of profitability. Gross profit grew from roughly 6.8 billion in 2021 to 8.7 billion in 2024, growing faster than sales alone. That means the company is either pricing services better or gaining operational efficiencies - and probably both. Meanwhile, the cost of output sold is rising, but more slowly than would be consistent with pure volume growth - and in an environment where wages, fuel and equipment maintenance are all going up over the long term.

At the level of operating profit, the story repeats itself. Operating profit has risen from just under three billion dollars in 2021 to over four billion in 2024. EBITDA has risen from around 5 billion to around 6.4 billion. That means not only the ability to grow, but more importantly, the ability to grow profitably, which is certainly not a given in a capital-intensive industry that requires constant investment in fleets, landfills, recycling lines and now energy facilities.

Net income rose from about $1.8 billion to $2.7 billion over the same period, and earnings per share from about $4.3 to $6.8. At the same time, the company is gradually reducing the number of shares outstanding, so EPS growth is still a bit faster than overall earnings growth. Thus, WM is able to combine business growth, margin expansion, stable dividends, and a buyback on top of that, which is a very attractive mix for long-term investors.

What's also interesting is that WM delivers these numbers over a cycle. Even in years when the economy slowed and some industrial volumes or prices of recycled commodities went down, the company was able to maintain revenue growth and profitability. Waste is simply generated in good times and bad, and WM has been able to add more and more technological and sustainable layers to this "boring" nature of the business, increasing the value of every ton that passes through the system.

Shareholder structure

WM is a typical "institutional darling". Only about a quarter of a percent of the shares are in the hands of insiders, while the institution holds about 85 percent of all shares and free float. As a result, the title is a fixture in large index and actively managed portfolios, adding to liquidity while ensuring a relatively stable shareholder base.

The largest shareholder is the Vanguard Group with a stake of around 9.5 percent. The Gates Foundation Trust also has a strong position with around eight per cent, which is an interesting signal in terms of the perceived sustainability and long-term nature of the business. Other large holders include BlackRock with around 7.5 per cent and State Street with just under five per cent. In total, WM is held by over two and a half thousand institutional investors.

This ownership structure means that management is under constant scrutiny by long-term, often conservative investors who emphasize stable cash flow, reasonable debt, discipline in capital spending, and a consistent dividend policy. This fits well with how WM's business actually operates.

News

• Launched four new growth projects: two renewable natural gas facilities in Texas and California and two recycling projects (a new plant in Texas and an automation facility in California).
• In total, 10 of the originally planned 20 RNG projects and 31 of the 39 recycling projects are already in operation, meaning the investment wave will gradually tip into the "harvest" phase of higher margins.
• Continued integration of WM Healthcare Solutions across 16 geographies, including the alignment of sales and back-office processes and pricing alignment.
• Improving debt leverage through rising EBITDA and debt repayments; the company targets a leverage ratio of 2.5-3.0x EBITDA around mid-2026.
• Confirmation of full-year guidance for adjusted EBITDA and free cash flow, despite weaker recyclable commodity prices and slower ramp-up of the healthcare segment.

Analysts' expectations

WM has long been viewed as a defensive growth title - it is not a "rocket" company, but one where the market typically expects a combination of moderate revenue growth and stable to moderately expanding margins, supported by predictable free cash flow. The third quarter rather reinforced this perception - the core business did not disappoint with its performance and the sustainable segments showed that they can grow even in an environment of unfavorable commodity prices.

As a result, analysts typically focus on three questions at WM: how fast cash flows will grow in the coming years, what will be the return on capital for large sustainable projects, and how smoothly WM Healthcare Solutions will be integrated and profitable. If the company meets its own guidance of an EBITDA margin of around thirty percent and free cash flow near three billion dollars per year, it should easily defend its place among the "core" long-term positions in the portfolios of large investors.

Fair Price

After more than six decades at the helm of Berkshire Hathaway, Warren Buffett is stepping away from the spotlight. The 95-year-old investor announced he will no longer write his legendary annual letters to shareholders or appear at Berkshire’s famed annual meetings. “As the British say — I’m going quiet,” Buffett wrote in what will be remembered as his final farewell to the investing world.

The decision marks the close of one of the longest and most influential chapters in financial history. Greg Abel, Buffett’s long-time lieutenant, will officially assume the CEO role in January 2026, taking charge of a conglomerate worth more than $800 billion. For investors, it’s the end of an era — and the beginning of a new test for Berkshire’s ability to thrive without its legendary founder’s steady hand.

A symbolic end to an investment era

Buffett's last letter means the end of an investment era. He wrote his first letter to shareholders in 1965, when Berkshire Hathaway was a loss-making textile company. Since then, the firm has grown into a global conglomerate encompassing insurance, railroads, energy, consumer brands and its own stock portfolio worth more than $350 billion. Over the years, Buffett's letters have become required reading not only for investors but also for academics and economists around the world - combining common sense with the uncompromising logic of capitalism.

In it, he also announced that to accelerate the transfer of Berkshire shares to family foundations. Most of his fortune will thus be transferred in the coming years to four philanthropic institutions - the Susan Thompson Buffett Foundation and three separate funds managed by his children. "The acceleration of my gifts in no way reflects a change of heart about Berkshire's prospects," Buffett said.

Healthy company, uncertain legacy

Berkshire Hathaway has become synonymous with conservative investing and financial discipline during his era. The firm regularly outperformed the S&P 500, yet since Buffett's announcement of his departure, the stock BRK-B have lost approximately 5 %while the index has risen more than 20%. Thus, the market appears to be beginning to consider the question, what comes after Buffett - and whether it's possible to maintain the same performance without his personal influence.

Investors view Greg Abel as a competent manager with deep knowledge of the energy business, but his ability to lead the entire conglomerate in Buffett's spirit remains a matter of debate. "Abel is a great operations manager, but Buffett was a philosopher and communicator. That's not easily replaced," Edward Jones analyst James Shanahan commented to CNBC.

A philanthropist who stays true to his simplicity

In his letter, Buffett recalled with typical humility that he became the longest living member of his familyand adds that even in "silent mode" he plans to publish an annual Thanksgiving message. This is to keep in touch with shareholders even though he will no longer be writing full-fledged annual letters.

However, his philosophy remains unchanged: a long-term horizon, minimal debt, discipline and confidence in American capitalism. "Thank America for maximizing your opportunities," he wrote. "But remember that it is sometimes fickle and unfair in how it distributes rewards."

End of letters, not end of legacy

Buffett is thus symbolically closing a chapter that has shaped generations of investors. His name will remain associated with the greatest investment consistency in modern history - from Coca-Cola $KO to American Express $AXP to Apple $AAPL.

As the world watches the dawning of a new era at Berkshire, Warren Buffett has already sealed his place in history. His letters will continue to be read as a manual of sound investing, his decisions will be studied - and his quiet departure confirms that an investor's greatest strength is not in emotion, but in time..

Gene therapy is moving from the lab bench to the front lines of modern medicine — and Eli Lilly is wasting no time securing its position. The pharmaceutical giant has struck a deal with biotech firm MeiraGTx, gaining access to breakthrough technologies for treating rare genetic vision disorders. The agreement includes $75 million upfront and up to $400 million in milestone payments, signaling Lilly’s intent to lead in one of medicine’s most transformative fields.

Beyond the financials, this move reflects a broader shift in healthcare: from treating symptoms to repairing the root cause of disease. With the gene therapy market projected to exceed $8 billion within a decade, Lilly isn’t just chasing revenue — it’s positioning itself at the forefront of a paradigm where a single treatment could mean a lifetime cure.

A new horizon in medicine: gene therapy for vision

Gene therapy is considered one of the most promising directions in modern medicine. Unlike traditional medicines, it does not just try to control symptoms, but it corrects the cause of the disease itself - a flaw in the genetic information. In eye disorders, where the problem tends to be a single defective gene, this approach is particularly effective.

MeiraGTx has developed an experimental therapy AAV-AIPL1that targets Leber congenital amaurosis type 4 (LCA4) - one of the most serious congenital diseases leading to blindness. Using a single injection under the retina, it delivers a functional copy of the gene into the cells of the eye AIPL1allowing the production of a key protein essential for proper photoreceptor function to be restored.

This approach is in line with the global trend: "single treatment instead of lifelong therapy".. If confirmed in clinical trials, this technology could change not only patients' lives but also the economic model of the pharmaceutical industry. Indeed, the cost of a single successful gene therapy is typically in the order of hundreds of thousands to millions of dollarsmaking it an extremely attractive market.

Strategic logic: why Lilly is heading here

Eli Lilly $LLY has reshaped its identity in recent years. From a company focused on insulins and antidepressants, it has become a global pharmaceutical star thanks to the success of its obesity (Mounjaro, Zepbound) and diabetes drugs. But the market for GLP-1 agents, while huge, will not grow indefinitely. So the company is actively looking for other pillars of growth - and gene therapies represent an ideal direction.

In terms of strategy, several key themes are intertwined here:

• Diversification beyond metabolic disorders. Eye disease, neurology and oncology are becoming new priorities for Lilly.
• Synergies with research infrastructure. Lilly already has extensive experience in biologics, protein and gene vector production - an advantage that smaller biotech firms often lack.
• Limited competition. The vision gene therapy segment is still relatively narrow, dominated by a few players (Roche/Spark Therapeutics, Novartis, Regenxbio).
• Regulatory breakthrough. The approval of the first gene therapy Luxturna (for a different type of Leber's amaurosis) has opened the way for other similar projects.

With this move, Lilly is clearly signalling that it wants to be part of the second generation of gene medicine - the phase where experimental therapies become commercially viable products.

Risks and challenges along the way

Gene therapy brings extraordinary potential, but also challenges that cannot be underestimated.

• Clinical risks: AAV therapies still face issues with immune response and durability of effect. A small sample of patients means limited safety data.
• Manufacturing complexity: Each batch requires a precise laboratory process - manufacturing is extremely expensive and capacity is limited.
• Regulatory barriers: Both the FDA and EMA are tightening requirements for preclinical studies after several incidents in the past.
• Market uncertainty: Although the cost per treatment can be high, the number of patients is very small in rare diseases - therefore the return on investment is sensitive to any complication.
• Ethical and societal issues: Gene manipulation and one-off DNA interventions are still a debated topic in the biomedical and legislative fields.

Billion-dollar opportunity in ophthalmology

According to analysts' estimates, the the global market for gene therapies for eye diseases by 2030 will exceed $7 billion, with annual growth of 25-30%. Congenital forms of blindness (LCA, RP, Stargardt's disease) alone represent a potential of over 100,000 patients across the US and Europe.

The acquisition of MeiraGTx therefore represents a ticket into a market that is small in volume but huge in valuefor Lilly . Each successful treatment in this area has the character of a so-called orphan blockbuster - a product for a small group of patients, but which generates high sales due to its price and exclusivity.

In addition, Lilly is gaining technological know-how in the field of riboswitchesa unique mechanism for controlling gene expression directly inside cells. This could have implications for other projects outside ophthalmology - for example in neuroscience or cardiology.

Market potential: How big is the game of gene vision

Gene therapy is one of the fastest growing segments of biotechnology. Whereas a decade ago it was a purely experimental field, today it has already seen its first commercial successes - and concrete price tags that illustrate how much financial space is opening up.

• Luxturna (Roche/Spark Therapeutics) - The first approved gene therapy for vision that targets a different type of Leber's congenital amaurosis (RPE65). The cost per dose is approximately 850 000 USD, with the patient typically needing only one application.
• Year 2024 brought global sales of Luxturna to over USD 450 million, demonstrating that even an "orphan" product (for a few thousand patients) can generate a stable and high-margin business.
• Market estimates: Evaluate Pharma analysts assume that the global market for gene therapies will exceed USD 40 billion by 2030of which alone ophthalmic indications will account for 7-9 billion.
• Growth rate: The expected CAGR (average annual growth rate) is between 25-30 %, which is well above the average for the pharmaceutical sector.

If the project is successful AAV-AIPL1 Lilly would enter a market where there are only a handful of approved therapies and an extremely high barrier to entry. The combination of a unique mechanism, few competitors and the potential to achieve a premium price means that even the success of one product can add billions of dollars to a company's annual sales.

Market reaction and analyst outlook

News of the deal between Eli Lilly and MeiraGTx immediately caught the attention of investors and biotech analysts. Although it is a relatively small amount of money compared to acquisitions in the billions of dollars, the market evaluated it as a strategic move with a long-term impact.

• MeiraGTx shares jumped after the deal was announced by more than 12 %signaling high confidence in the commercial potential of the technology.
• Eli Lilly has responded steadily, with its shares posting modest gains, but the main effect has been to reinforce the company's reputation as an innovator, not just a producer of 'mainstream' drugs.
• JPMorgan called the move a "logical complement" to Lilly's biologics strategy and highlighted the potential to expand the gene platform into other areas, such as neurodegenerative diseases.
• Morgan Stanley pointed out that by licensing the riboswitch technology, Lilly also gains a research multiplier - know-how that could reduce development time for other programmes by 12-18 months.
• UBS in a note, stressed that "Lilly is buying not just a therapy, but a ticket into a gene ecosystem" that they believe will be a up to 10% of all biotechnology spending.

For investors, this means that even in the short term, the impact on the bottom line will be negligible, the strategic return is extremely high. The market is now watching, above all, whether Lilly can develop its own pipeline in gene medicine over the next two years - confirming that this acquisition is not an isolated experiment but part of the company's broader shift towards the treatments of the future.

Investment scenarios: Between revolution and patience

In the short term, the deal is primarily a symbolic step - The market will appreciate Lilly's efforts to diversify, but the results will only be seen over a few years.

In an optimistic scenario, AAV-AIPL1 proves to be a safe and effective therapy, gains status Breakthrough Therapy This would give Lilly the first commercial gene therapy in its portfolio and enter a segment where margins are well above 70%. The success of this project could pave the way for additional ophthalmic applications and boost the company's valuation by tens of billions of dollars.

A realistic scenario envisages that the project will remain in the clinical testing phase for several years, with the main benefit being the strengthening of the research base. Lilly will use MeiraGTx to develop other gene programs and expand its know-how in riboswitches and viral vectors. The impact on sales will be limited, but the strategic value will be enormous.

V pessimistic scenario the clinical testing phase could fail or regulators could tighten the conditions of approval. In that case, Lilly would lose time and capital, but not reputation - investors see such moves as a necessary part of a long-term innovation strategy.

Conclusion: Patience that can pay off

With this move, Eli Lilly confirms that it does not want to rely solely on the commercial success of its existing drugs. The company is building a portfolio bridge to the futurelinking metabolic disorders, neurology and now genetic ophthalmology. The MeiraGTx deal, while not financially material on a group-wide scale, is symbolically the beginning of a new erawhere disease treatment is replaced by gene repair.

For investors, it is a signal that Lilly is not only responding to the present, but already betting on the medicine of the next decade. And in biotechnology, there is one rule - those who are not afraid to take risks with a long horizon reap the greatest rewards.

A new 50-year mortgage proposal is stirring the U.S. housing market and sending ripples through global equities. Long-term debt, slower capital build-up and sector-shifting risks are now in focus for investors.

United States Case Shiller Home Price Index (1M)

What the proposal means and why it comes now

After years of extreme home price growth, which has increased by more than 40% since the pandemic according to Case-Shiller Index data, the U.S. population is facing a housing affordability crisis. The average 30-year mortgage rate is hovering around 6-7% in 2025, the highest in two decades. This is despite the fact that the US Federal Reserve has already cut interest rates twice this year. The main idea behind Trump's proposal is to put lower-income households in a better position to buy a new house.

From a political marketing perspective, this is a smart move. It lowers the monthly payment and gives the illusion of greater affordability. But from an economic perspective, it extends the period of debt for half a century, meaning that the total amount paid can be almost double that of a conventional 30-year mortgage.

In practical terms, this means that, for example, on a $400,000 house at 6% interest, the borrower would pay approximately $830,000 on a 30-year mortgage. For a 50-year mortgage, it could be over $1.2 million. That's a huge difference that, while it will reduce the monthly payment, will significantly worsen the household's financial health in the long run.

Impact on the economy: short-term relief, long-term slowdown

On the face of it, longer mortgages could stimulate the housing market. More Americans could qualify for the loan, demand for homes would increase, and the construction sector would experience a surge in growth. Shares of companies like Home Depot $HD and other key US developers could benefit from the expected recovery in demand.

Home Depot shares are down 13% in the past 2 months, continuing the sideways trend that has dominated its stock since 2021. A new boom in demand for its products and services could "liberate" the stock price.

Similarly, financial institutions specializing in mortgages, such as Wells Fargo $WFC, and JPMorgan Chase $JPMwould benefit . Increased activity would lift loan volumes and improve fee income in the short term.

But longer maturities mean higher systemic risk. U.S. households are already carrying a record amount of debt that is over $17 trillionA 50-year mortgage would exacerbate the problem and could limit future consumption. Money that would otherwise go into the economy would be tied up in credit for decades. This means less room for purchases, investment and productivity growth.

Possible winners and losers

Positive effect - short-term recovery

• Real estate developers and builders: longer mortgages could boost demand for real estate and new project starts. Firms like could benefit from renewed demand for single-family homes.
• REIT sector (Real Estate Investment Trusts): Higher activity in the real estate market could also support residential REITs.
• Mortgage and Financial Sector: More lending would boost interest margins. Banks could see profits rise in the short term.

Negative effects - long-term risks

• Risk of credit instability: If house prices fall, long-term mortgages could leave millions of people with more debt than the value of their home. Similarity to 2008.
• Decline in consumption: longer loan repayments limit households' ability to spend. This could hit the stocks of consumer giants like Walmart $WMT or Target $TGT, which benefit from growth in real incomes and consumer activity.
• Interest rate sensitivity: 50-year mortgages could be extremely sensitive to long-term yield trends. If 10-year and 30-year yields start to rise, the values of these mortgages could plummet, affecting the banks and investors holding them in their portfolios.

Impact on stock markets and sentiment

In the short term, the proposal may encourage optimism. If adopted, we could see growth in the housing, construction and finance sectors. Indexes like the S&P Homebuilders ETF $XHB or the iShares U.S. Real Estate ETF $IYR could see capital inflows.

Longer-term, however, systemic risk is increasing. Higher household debt means less flexibility for the economy in the future. If there were an economic slowdown or a rise in rates, the housing market would be the first place it would show up. And the real estate cycle tends to be one of the most reliable indicators of a recession.

From an investment perspective, 50-year mortgages could lock up capital in low-yielding assets for decades. This could reduce the turnover of money in the economy and potentially dampen the momentum of corporate earnings growth, which would be reflected in index valuations.

Wider economic impact

Economists warn that such an experiment would have fiscal and monetary implications. Long credit creates the illusion of affordability but also increases the economy's dependence on low rates. No wonder, then, that Trump has been pushing the Fed to cut rates faster since his election. If rates were to rise in the future, a large number of households could be trapped, that is, unable to refinance but also unable to pay off their mortgages.

This could have a direct impact on the US banking sector and the mortgage-backed securities markets. These form a substantial part of the portfolios of the big banks, pension funds and the Fed itself. An increase in long-term risks could lead to an increase in volatility and a repricing of these assets.

Short-term win, long-term gamble

The 50-year mortgage is a politically appealing but economically dangerous concept. It would bring short-term relief, an increase in demand for real estate and temporary profits for construction and financial firms. In the long term, however, it could deepen inequality, indebt households and reduce the consumer potential of the US economy.

Ford’s latest results show that even century-old automakers can still surprise the market. The company posted the highest quarterly revenue in its history, proving that its core strength — a balanced mix of combustion and commercial vehicles — remains resilient. Yet behind the record numbers lies a more complicated reality: the costly transformation toward electric mobility and software-driven manufacturing.

As tariffs, logistics constraints, and rising costs weigh on the industry, Ford $F finds itself financing its EV ambitions through the profits of its traditional business. The transition won’t be easy, but leadership argues it’s essential to building a leaner, more technology-focused company. For investors, Ford is no longer just a carmaker — it’s becoming a test case for how legacy industries reinvent themselves in the digital age.

How was the last quarter?

Ford presented results that show its traditional business engine is running at full speed, while the transformation toward electric vehicles remains a costly but necessary journey. The company reported sales of $50.5 billion, up 9% year-over-year. Despite continued pressure from tariffs and higher production costs, Ford was able to maintain a steady operating profit. Net profit was $2.4 billion, while adjusted EBIT was $2.6 billion - both figures already including the negative impact of tariffs of approximately $700 million.

Operating margin narrowed slightly to 5.1%, down four-tenths of a percentage point from the previous year. At the earnings per share level, Ford earned $0.60, with adjusted earnings per share of $0.45. Strong cash flow was a major positive, with operating cash flow of $7.4 billion and free cash flow of $4.3 billion. The company has approximately $33 billion in cash on hand and total liquidity approaching $54 billion, providing ample room for investments, dividends and covering unexpected fluctuations.

The performance of each division reveals the typical contrast between traditional business and new projects. Ford Pro, focused on corporate and fleet customers, remained a key driver. Revenues grew 11% to $17.4 billion and EBIT was $2 billion with a margin of 11.4%. The segment is also expanding its software business, with the number of paid Ford Pro subscriptions up 8% to 818,000, indicating a growing emphasis on higher-margin services.

Ford Blue's Classic division generated $28 billion in revenue and earned $1.5 billion in EBIT, equivalent to a margin of 5.5%. While revenue growth outpaced volume growth, higher inputs and price competition limited margin expansion. In contrast, Ford Model e, the electric vehicle division, remains loss-making. Sales jumped 52% to $1.8 billion, but EBIT remained deep in the red - a loss of $1.4 billion with a margin of nearly -80%. Still, this is progress - a year ago the loss was relatively deeper.

Ford Credit continues to perform a stabilizing function - it earned $631 million pre-tax, up 16% year-over-year. Overall, Ford ended the quarter in solid shape, though the pressure from tariffs and the shift to electric mobility is clearly reflected in the cost structure.

CEO comment

Company boss Jim Farley described the quarter as a testament to the resilience of the traditional business and Ford's ability to respond to market changes. He highlighted that sales exceeded the $50 billion mark, mainly due to the strong performance of Ford Pro and a quality product portfolio. Farley said the company is moving into a new phase - it wants to be faster, more agile and more capital efficient. Getting the timing of investments in next-generation powertrains, partnerships and technology innovation right remains a key direction.

CFO Sherry House added that after adjusting for the impact of tariffs, year-on-year operating profit would even increase. She noted that the goal is to build a higher growth, higher margin and better capital utilisation business over the long term. Ford's transformation, she said, would be based on a combination of great products, software services and a strong brand that bridges traditional and new mobility segments.

Outlook

Ford confirmed that its core business is at the high end of this year's outlook, despite absorbing significant pressure from tariffs and exceptional costs related to the Novelis aluminium plant outage. For the full year 2025, the company expects adjusted EBIT in the range of $6.0 billion to $6.5 billion and free cash flow between $2 billion and $3 billion. Capital expenditures are expected to be approximately 9 billion.

Management believes the Novelis plant fire will be approximately a $1.5 billion to $2.2 billion negative impact on EBIT and $2 billion to $3 billion negative impact on cash flow, primarily in the fourth quarter. However, management also said that it already sees a way to mitigate the impact by at least 1 billion in 2026 through replacement suppliers and restarting some production.

Overall, Ford plans to continue improving efficiency, expanding its electrified model offerings and developing software platforms. The goal is for the Model e to gradually move from the investment phase to the monetization phase and for Ford Pro to become a key source of stable cash flow and margins.

Long-term results

In the long term, Ford shows that the core business has stabilized and sales are gradually increasing. It reached a record $185 billion in 2024, up 5% from the year before. Meanwhile, gross profit jumped more than 64% to 26.6 billion, confirming that the company has managed to improve its product mix and better manage costs after a challenging period of post-covet inflation and intermittent supply.

Operating costs, however, rose significantly, almost doubling to 21.3 billion. This is related to rising spending on research, EV development, software and restructuring. As a result, operating profit fell slightly to $5.2 billion. Still, net profit for 2024 came in at 5.9 billion, up 35% year-on-year, and the company continued its return to profit mode after a loss-making 2022.

Earnings per share were $1.48, while EBITDA topped $14 billion, showing the ability to generate cash despite high capital expenditures. Thus, Ford remains financially stable, with a relatively strong balance sheet and ample room for continued investment in transformation.

News

• The company confirmed the payment of a quarterly dividend of 15 cents per share, payable on December 1.
• Ford Pro continues to expand software - commercial subscriptions grew to 818k accounts.
• Model e launched new electric vehicles for the European market to support volume growth in 2026.
• Ford continues to work on restoring production at aluminum supplier Novelis following a fire at the Oswego plant.
• The company highlighted continued investment in AI, predictive maintenance and fleet digitisation.

Shareholding structure

Ford remains a strongly institutionally owned company. Insiders hold just 0.29% of the shares, while institutional investors control nearly two-thirds of the total capital. Vanguard Group is the largest shareholder with nearly 12%, followed by BlackRock (8.7%), State Street (4.8%) and Charles Schwab (3.7%).

This structure provides high stability, but also pressure for a consistent dividend policy, disciplined management and a clear strategic direction in electrification and software. Ford thus remains under the scrutiny of long-term funds, which are particularly looking at return on investment and the company's ability to monetise the transition to new technologies.

Analysts' expectations

Analysts expect Ford to close 2025 near the high end of their projections, with adjusted EBIT of around $6.5 billion. For 2026, the market is pricing in a return to higher margins due to the unwinding of extraordinary effects and higher volumes for electric models. Net income estimates are around $5.5 billion to $6 billion and the dividend yield is expected to remain above 5%.

Key drivers for next year will be the ability to maintain margins in an environment of rate pressures, the speed of recovery from the Novelis issues, and the pace of Model e's transition toward profitability. The market rates Ford as a stable title with defensive qualities and incremental growth potential - if it can turn EV investments into a profitable reality.

Fair Price

Which sector besides technology do you find most interesting right now and see potential in?

In my opinion, the healthcare sector certainly has a lot of strength; it has been growing significantly in recent years, and we can clearly see that in companies such as $NVO or $LLY.

As my second choice I would pick fintech, because not only young people today dislike traditional banks. Companies such as $SOFI or $NU.

After nearly two years of non-stop enthusiasm, cracks are beginning to appear in the AI narrative that has fueled global markets. Taiwan Semiconductor Manufacturing Co. (TSMC) — the chipmaker powering Nvidia, AMD, and Apple — reported a 16.9% revenue increase in October, its slowest pace since early 2024. Still solid on paper, but under the weight of sky-high expectations, investors read it as a warning sign.

For months, Wall Street treated AI demand as limitless. Now, monthly data from TSMC is tempering that optimism. The slowdown doesn’t signal collapse, but it does remind the market that even the most transformative tech cycles move in waves — and this one may be entering its first lull.

Figures that raise questions

• Revenue growth (Oct) +16.9% yoy - Slowest pace in eight months.
• Q3 2025 +30% revenue, +39% net profit - Record results, but market reaction has been very cautious.
• USD 40 billion annual capex - highest ever investment.
• Two-thirds of revenue already comes from AI and HPC chips.

These are all strong numbers. And numbers that prove that growth is starting to become a test of patience.

Between optimism and reality

Nvidia CEO Jensen Huang personally flew to Taiwan to discuss the supply increase with TSMC's C.C. Wei. "We are growing month by month, stronger and faster," he said. He's not lacking in optimism - but there's a murmur of doubt in the background.

Indeed, Asian tech indices have been falling in recent weeks, partly on fears that the AI boom has reached its short-term peak. And even as analysts like Qualcomm's Cristiano Amon say the world still underestimates the size of the AI market, investors are starting to look elsewhere - at margins, returns and the pace of production.

A market that switches from euphoria to rationality

TSMC $TSM is becoming a victim of its own success. Demand for chips is still huge, but capacity is hitting limits. Manufacturing at 3nm and 2nm nodes is extremely expensive and at some point stops delivering further efficiencies.

Meanwhile, on the customer side Meta, Alphabet, Amazon and Microsoft are planning to spend collectively for 2026 over USD 400 billion on AI infrastructure by 2026. Yet some of them are already reporting that costs are rising faster than revenues - and that's exactly when the market starts to wonder if the hype has gone too far.

"TSMC's slowdown is not a crash, but a reminder that no tree grows to the sky," write analysts at Bloomberg Intelligence.

What investors are watching

🔹 Tension between supply and demand - TSMC's production lines are full, but both Nvidia and AMD want more.
🔹 Margins and costs - Shift to advanced nodes increases investment pressure.
🔹 Diversification of manufacturing - Plants in Japan, US and Germany will test whether TSMC can reduce geopolitical risk.
🔹 Sector valuation - After a year of extreme growth, investors are coming back to the question of how much is a fair price for the "AI dream".

Long-term key player

Despite short-term volatility, TSMC has an advantage that competitors don't - technological dominance and long-term contracts with the biggest players. Apple, Nvidia, AMD and Qualcomm all remain dependent on its lines, and until a true competitor emerges, TSMC will remain the backbone of the ecosystem.

So the slowdown is not a harbinger of a crash, but rather a moment when the market is learning to live with reality. AI is no longer a fad, but a capital-intensive industrythat will have to start generating results - not just promises. And TSMC stands right in the middle of this transition.

Summary for investors:

• TSMC remains a key indicator of the health of the AI sector.
• Growth has slowed, but is not at risk - rather, the market is moving into a consolidation phase.
• Capital expenditures and production expansions indicate that the company continues to believe in the structural growth of the AI economy.
• The risk remains "overheated" valuations and reliance on a few customers.

Which sector, besides technology, do you find most interesting right now and see potential in?

In my opinion, the healthcare sector is definitely very strong; it has grown significantly in recent years, and we can clearly see that in companies such as $NVO or $LLY.

As a second choice, I would pick fintech, because not only young people today dislike traditional banks. Companies like $SOFI or $NU.

With the U.S. government shutdown finally showing signs of a resolution, equity markets are recovering from weeks of uncertainty. Investors are refocusing on earnings, economic data and the policy backdrop rather than the political impasse.

What is a government shutdown and why is it happening

Government shutdown occurs when the U.S. Congress fails to pass a timely budget or temporary funding bill for federal agencies. As a result, the government loses the authority to spend on necessary activities and must shut down a large number of offices and services. Civil servants go on unpaid leave, federal agencies cease operations and some public services are interrupted.

Only essential services such as the military, security forces, aviation and emergency health care are fully operational. Everything else, from national parks to research institutions, finds itself in a restricted mode of operation. Politically, this is always the result of a dispute between Republicans and Democrats over budget priorities.

Economically, the shutdown has immediate but short-term effects. Loss of income for employees and suppliers, postponement of statistics (such as inflation or unemployment figures) and increased uncertainty in the markets. Over the long term, however, the US economy has always been able to recover quickly from these situations.

The current situation

The United States is currently experiencing its longest-ever government shutdown. The federal government has been partially shut down, so far, for a record 39 days. The current budget impasse was broken in the Senate, which passed a procedural vote on the night of November 10 to further adjust funding. The new proposal extends government funding through January 30 of next year and includes three full budget packages. President Donald Trump commented that we appear to be nearing the end of the shutdown.

Although the deal would, among other things, allow the government to reopen by January 30, it does not include any immediate vote on extending health care subsidies, which Democrats had previously demanded.

This political settlement reassured the markets. Already on the eve of the vote, futures on major US indices were rising. S&P 500 futures jumped 0.8% and the Nasdaq 100 even gained 1.3%. European and Asian shares rose similarly. Futures on the Euro Stoxx 50 and the German DAX rose around 1.5%.

The rise follows a turbulent week on Wall Street, which saw the worst sell-off in technology stocks since April. Nvidia $NVDA fell 7% last week.

The impact on stock markets from a historical perspective

History shows that U.S. shutdowns typically have only a short-term and limited impact on equity markets. Government shutdowns tend to be relatively short (around eight days on average) and once they end, markets quickly catch up with any losses. According to analysts, shutdowns themselves do not cause significant volatility in equities. Morgan Stanley $MS, for example, notes that the S&P 500 has risen an average of 4.4% during shutdowns. A study by investment advisers notes that during 21 shutdowns, twelve of them ended in the black and the average return of the S&P 500 was around +0.1%.

It is also important to know that the shutdowns themselves did not trigger the markets into a collapse or recession. On the contrary, many data points show that stocks typically rose modestly during and immediately after the shutdowns. In the months following the longest shutdown to date, which occurred in 2018 and lasted 35 days, which coincidentally was also when Trump was president, the S&P 500 index gained about 26%. After the 16-day shutdown in 2013, the stock index's annual return was about 20%. Investors thus often used the downturns triggered by political paralysis as a buying opportunity.

Key previous shutdowns and market reactions

• September-October 2013 (17 days): partial shutdown under the Obama administration. The S&P 500 index rose +2.4% and reached new all-time highs at that time.
• December 2018-January 2019 (35 days): This is the longest shutdown yet, as the current one is still not fully over. Even so, the S&P 500 index rose +10.3% during these 35 days (although this increase was partly due to the previous market decline due to the Fed rate hikes). In the six months since the shutdown ended, the index has added another 14%.
• November-December 1995 and December 1995-January 1996: Two shutdowns during the Bill Clinton administration (5 and 21 days). In the first, the S&P index moved virtually unchanged. It added only 0.1%. In the second, it gained 3.3%.

What does this imply?

It's important not to lose your cool even through intense political news. After all, historically, shutdowns do not create a new fundamental problem that permanently shakes markets. In fact, after they end, there is usually a return and growth. As already mentioned, a year after the last major shutdown, stock prices have tended to rise.

But in the short term, riskier assets may be more prone to fluctuations. Here again, historical data is no guarantee of the future and should be taken into account. The ongoing shutdown, for example, has caused key macroeconomic data to fall short and consumer confidence to multi-year lows.

Source.

However, now that there are signs of a political solution (Senate approval of the budget), markets are quickly buying this correction. The easing of tensions is usually good news for markets. Tax receipts will resume, government workers will get their paychecks, and the data the Fed needs will be released.

All of this can support equity gains in the days ahead. Even though we are still in the midst of earnings season and there will be more data coming from companies this week, it is very important to be on the lookout for developments around the shutdown. This is because if news of any rejection or extension comes, the markets could very quickly return to Friday's lows. But if all goes well, we could see more upside.

Amid a slowing travel cycle, one hospitality powerhouse continues to defy gravity. With its dividend up 14% and record free cash flow, the company has proven that disciplined capital allocation can turn a volatile industry into a reliable income machine. The post-pandemic chaos has given way to a calmer, more profitable era — and this operator is leading the way with an asset-light model that keeps margins wide and shareholders happy.

As global travel spending shifts toward premium and international destinations, luxury hotels have become the crown jewels of profitability. Higher room rates, stronger loyalty programs, and recurring management fees are driving a steady stream of cash back to investors. In a world where many firms are cutting buybacks, this company is doing the opposite — rewarding patience with growing, predictable returns.

Top points of analysis

• The luxury segment remains a key driver of margin and fee growth.
• Profit after tax reached $2.4bn, despite mixed macro conditions.
• The company expects to return (dividends, buybacks) to shareholders in 2025 via USD 4 billion.
• Buybacks make up the dominant portion of the return - it has repurchased over 20% of shares over the past 3 years.
• Current P/E 23× is below the historical average for the luxury services sector.
• Record development pipeline: more than 3,900 new hotels (596,000 rooms) under construction or in the pipeline.
• Dividend payout ratio of just 29 %which creates a lot of room for further growth.

Company profile

Founded in 1927, Marriott International $MAR has transformed itself from a family-owned motel into the world's largest hotel chain in less than a century. It operates more than 8,800 hotels in 139 countries and encompasses more than 30 brands - from luxury resorts such as Ritz-Carlton, St. Regis and W Hotels to affordable brands such as Courtyard and Fairfield. Its asset-light strategy means that it does not own most of its hotels, but operates them as franchises or management companies - thus earning fixed and performance fees from each room, which form a stable source of income even in bad times.

The loyalty programme also plays a crucial role Marriott Bonvoywhich brings together over 195 million members and creates strong ties between the Group's brands. Bonvoy generates not only recurring fee and credit card revenue, but also a data base for targeted marketing and pricing optimization.
In recent years, the group has focused on the luxury segment, which now accounts for almost 15% of the portfoliobut up to a quarter of profits. Luxury hotels bring higher fees and less sensitivity to economic cycles.

Other highlights:

• Via 80% of revenues comes from fees - not from the hotels' own operations.
• Roughly 60% of profits is the US market, with the rest coming from Asia and Europe.
• The average duration of franchise agreements exceeds 20 yearswhich ensures stable cash flow.
• The credit card program (together with American Express) generates hundreds of millions of USD in fees annually.

Financial performance and dividend strength

The company earned $25.1 billion in 2024, a 6% growth from the previous year. Net income reached $2.38 billion, and despite a decline from the record year of 2023, profitability remains exceptionally strong. EBITDA of USD 4.3 billion and operating margins in excess of 20% confirm the effectiveness of the asset-light model.

Meanwhile, the dividend policy is increasingly ambitious. The company reinstated the payout after the 2022 pandemic and has since increased every year since. Today's quarterly dividend USD 0.67 represents 14% year-over-year growth and is well above the 2019 level of $0.48. With a payout ratio of around 29%, Marriott has exceptional room for further increases.

Alongside the dividend is a second pillar of return - a massive share buyback program. In 2025 alone, the company plans to return a total of USD 4 billionof which approximately three-quarters are buybacks. As a result, the number of shares outstanding is declining and earnings per share are growing faster than net income over the long term.

Key Metrics

Looking at the key metrics, it is clear that the company is performing at a very different level than the sector average. With market capitalization 78 billion dollars and an enterprise value (EV) of over $94 billion it is the dominant player in the global hotel industry. Although the valuation as measured by the P/E OF 30 TIMES looks higher than the sector average (17.8×) at first glance, it is consistent with its revenue stability, earnings growth and brand strength. Similarly, Price to Sales 3.0× reflects the premium nature and high return on capital.

The largest deviation is due to the negative book value of equity (P/B -31×), which is not a sign of financial weakness - but the result of aggressive share buybacksthat have reduced book equity. This effect is common in firms with high cash flow and capital discipline because instead of capital accumulation they increase returns to shareholders.

In terms of profitability, the firm is among the top performers in the sector. ROIC 21.8% is almost five times the sector average (4.4%) and confirms the exceptional efficiency of its asset-light model. Also ROA OF 15.9% demonstrates that it is able to extract a significantly higher profit from each dollar of assets than its competitors. Although ROE comes out negative because of the negative book value of equity, in economic terms the return to shareholders is one of the highest in the entire consumer sector.

Operating margin 15,9 % is more than three times the hotel industry average (only 5%), while the net margin 10,1 % reflects an efficient cost structure and a high proportion of recurring charges. Despite the lower liquidity ratios (quick ratio of 0,87, current ratio 0,87), the company has sufficient operating cash flow to cover short-term liabilities. Ratio interest cover ratio of 5,3× shows a solid ability to repay debts representing approximately 100% of assets - a typical feature of companies with a high volume of share buybacks.

Sustainability and dividend potential

A company's dividend strength is not based on a high yield, but on its dividend capacity to reliably increase dividends. A key factor is a stable income structure - more than 80% comes from fixed and performance fees from hotel partners, not from direct operations. This means that even in a weaker travel cycle, the majority of cash flow remains intact. The payout ratio of around 29 % has been in a conservative range for a long time, so the company pays out less than a third of its profits. This leaves room for both dividend growth and aggressive buybacks. Free cash flow more than triples dividends, indicating high sustainability.

Meanwhile, dividend growth is directly linked to the expansion of the hotel portfolio. Each new hotel opened under the Group's brand brings an additional source of fees, which translates into steady profit growth. With a pipeline of 596,000 rooms the company can add 5% annual growth in fee income over the next few years, which corresponds to a potential dividend increase of 8-10% per annum even without dramatic RevPAR growth. Analysts at both Morgan Stanley and CFRA estimate that the pace of dividend increases will remain in double digits through 2026-2028, supported by a combination of rising margins and share buybacks.

• RevPAR (Revenue per Available Room) - A key hotel metric that measures revenue per available room. It is calculated as the product of average rate per night (ADR) and occupancy. It shows how efficiently a hotel is profiting from its capacity and is one of the key performance indicators for the entire industry. RevPAR growth typically means higher fees and profits for hotel chains like Marriott.

Return on equity to shareholders is strategically balanced. Approximately three-quarters of the funds are directed to share repurchasesthat reduce the number of shares outstanding and increase earnings per share. The remainder is direct dividend payments. This approach has proven successful over the long term - instead of "sucking" profits in the short term, the company reinvests excess capital while rewarding shareholders with gradually increasing payouts. In contrast, competitors such as Hilton keep dividends rather symbolic and focus almost exclusively on buybacks. Thus, Marriott offers a more balanced mix that provides both stable yield and organic value growth.

What gives the current dividend exceptional stability is resilience to cycles. The fee model is partly fixed and partly linked to hotel performance, which means that even with slightly lower occupancy, the majority of revenue is maintained. Even if RevPAR were to fall by a few percentage points, the company's low capital intensity and robust liquidity position - despite USD 2 billion in cash and undrawn credit lines - it would not need to cut dividends. In the past, during both crisis and pandemic, Marriott has been able to restore payouts faster than most competitors and returned to growth sooner than the market expected.

Historically, the company's management has profiled itself as one of the most disciplined in the sector. Even after a difficult period of covidence, when dividends were temporarily suspended, payouts returned to their original level in less than three years. As a result, today's level of $0.67 per quarter already surpasses the pre-pandemic high. For investors, this is a signal that growth is not a short-term effect, but the result of consistent cash flow management and controlled expansion.

Compared to its peers, Marriott stands out not only in size but also in the rate of growth in shareholder returns. While Hilton increases its dividend by approximately 9% annually and Hyatt pays no dividend at all, Marriott shows growth of 14% per year and massive buybacks. While REITs in the hotel segment offer higher immediate yields (4-6%), they offer no guarantee of long-term growth. Marriott thus represents a different type of dividend title - less about current yield, more about compounding value through steadily growing payouts and earnings per share.

Comparison with competitors

Compared to Hilton $HLT or Hyatt $H, Marriott has a clear advantage in both scale and brand diversification. Hilton generates annual EBITDA of around $3.1 billion on a market capitalization of $60 billion, while Marriott exceeds $4.3 billion on a capitalization of $78 billion - a higher return on capital. Hyatt is more focused on hotel ownership, which increases its investment risk and cyclicality.

In terms of return on capital, Marriott achieves ROIC OF 15-17%while Hilton and Hyatt are around 12% and 9% respectively. In addition, it has the largest development pipeline in the market - almost 600,000 rooms - which ensures steady fee growth in the years to come. Thanks to this, the company has room for growth, according to analysts at Morgan Stanley and CFRA. Dividend growth of 10-12% per year over the next five years.

Risks and opportunities

Opportunities:

• Growth in the luxury segment, where margins are double those of conventional hotels.
• Expansion of the Bonvoy loyalty programme and collaboration with financial partners.
• Record construction of new hotels, especially in Asia and the Middle East.
• Asset-light model ensures high return on capital and low investment costs.

Risks:

• Cyclical nature of travel demand and potential decline in RevPAR in the US.
• Rising interest rates which may slow down development projects.
• Dependence on franchise partners and potential delays in new openings.
• Geopolitical risks in Asia and Europe that may affect international demand.

Sector outlook and potential of the sector

The global lodging market is entering a new phase of growth. After a period of post-pandemic normalisation, when travel volumes stabilised, the focus is shifting to the quality and structure of demand. The luxury and premium hotel segment, which Marriott is also targeting, remains the driver - according to data Statista Market Insights the global luxury accommodation market is set to grow at a rate 6-7% annually through 2030 and exceed the USD 160 billion. The key drivers are rising middle-class incomes in Asia, the expansion of business travel and the return of premium experiences as a consumer priority.

Similarly global tourism according to UN World Tourism Organization (UNWTO) is on track to return to full levels above 2019 levels by 2025. International arrivals will reach approximately 1.5 billion per year, and the sector as a whole will once again account for over 10% of world GDP. This means that companies with a global presence and strong brands - such as Marriott, Hilton and Accor - will be among the main beneficiaries of this trend.

A fundamental transformation is also taking place the structure of demand: a higher share of long-term stays, corporate offsite events and the growing importance of the work-from-anywhere segment are leading to greater revenue stability even in the off-peak season. The luxury segment stands out not only for its higher price elasticity, but also for its margins - while operating margins in the mid-range segment are around 6%, those of premium brands often exceed 15-20 %.

For the coming years, the sector is expected to benefit from the digitalisation of bookings, loyalty programmes and personalisation of the offer. Data from loyalty ecosystems such as Marriott Bonvoy allow targeting higher margin customers and maximizing occupancy without the need for price discounts.

Investment scenarios

Optimistic scenario - higher margins and accelerating returns

If growth in the luxury segment continues and the company maintains room expansion at around 5% per annum, earnings per share could exceed USD 11. With the payout ratio raised to 35%, this would imply a dividend of over $1 per quarter. The stock could trade above 330 USDwhich would equate to a total appreciation of over 20 % including dividends. Maintaining strong RevPAR growth in Asia and continuing to expand the Bonvoy loyalty program, which generates stable cash flow from both fees and credit cards, would be key.

At the same time, buybacks can be expected to continue to reduce share count by 3-4% per year, which naturally boosts EPS. This scenario would confirm that the company remains a "compounder" with a combination of defensive cash flow and an accelerating dividend policy.

Realistic scenario - stable returns and regular dividend growth

The base outlook assumes more moderate revenue growth of around 4-6% per year and RevPAR growth of up to 2%. Even in this environment, Marriott should be able to grow its dividend by 8-10% per year due to a growing base of managed rooms and effective cost management. EPS would be in the range of $9-9.5and the dividend would be approximately USD 3 per annum and the total return could be around 8-12% per annum. This scenario reflects the company's ability to generate stable cash flow even during a mild economic slowdown.

Pessimistic scenario - stagnation in the US and pressure on RevPAR

If North American hotel occupancy declines and business travel demand weakens, revenue could stagnate and EPS could fall below $8. However, the dividend payout would be maintained - in which case management could slow the buybacks to maintain stable cash flow. The stock could return to the range USD 250-260, with a yield of around 1.2%, but this would still imply a defensive position within the sector.

Conclusion and investment considerations

This title remains a textbook example of defensive growth - a business with low capital intensity, high return on capital and a disciplined dividend policy. For investors seeking not maximum yield but long-term stability with a combination of dividend and buyback, it represents an attractive option.

Expected dividend increases, rising royalties and record hotel construction provide a strong foundation for further growth in share value and payouts in the years ahead.

After years of shrinking revenue, collapsing margins, and strategic missteps, Intel finally seems to be showing faint signs of revival. The company that once defined the semiconductor industry is starting to rebuild its footing, reporting its first quarter of revenue growth and improving profitability in what feels like ages. It’s not a comeback yet — but it’s the first quarter that tells a coherent story about how Intel might actually earn from the AI boom rather than merely watching it happen.

The recovery rests on three fronts: defending its PC chip dominance, regaining lost ground in data centers, and transforming into a global foundry serving other chip designers. With Washington’s billions flowing into domestic chip production and global demand for compute power surging, Intel is trying to catch the right wave. The challenge now is whether a single good quarter can turn momentum into a sustainable turnaround.

How was the last quarter?

In the third quarter of 2025, Intel $INTC achieved sales of roughly $13.7 billionwhich means 3% year-over-year growth. This is important after several years of declining sales - it shows that the company is no longer in freefall. The growth comes mainly from the fact that demand for PC processors is stabilizing and that new opportunities are emerging in AI, although no significant turnaround is yet visible in data centers.

The revenue structure suggests where Intel is really making money today. Client Computing Group (CCG)which is mostly a business around computer processors, made roughly $8.5 billion and grew by about 5 %. This suggests that the PC market has stabilised after the covid boom and subsequent slump and that new generations of chips are being pushed, including platforms targeting AI functions in end devices.

In contrast, Data Center and AI (DCAI) with sales around $4.1 billion declined slightly - by about 1 % year-over-year. In an environment where hyperscale players are massively buying competitors' accelerators, that's not surprising, but it's also a reminder that in data centers Intel is still struggling more to stem erosion than growth. Still, the company's overall product revenue was up roughly 3% year-over-year.

A specific chapter is Intel Foundry. The segment formally has revenues of around $4.2 billionwhich represents a slight decline of 2 %However, it includes internal billing to other divisions, so that some of these sales are eliminated at the consolidated company level. More important than the number itself is that the foundry business is no longer just a plan, but a real, reportable part of the company - and that the big players in the ecosystem are starting to revolve around it.

The tipping point comes at profitability. GAAP gross margin has jumped to 38,2 % from just last year's 15 %which is a dramatic improvement. Adjusted for selected items, the non-GAAP gross margin even got to 40 %. This is a combination of two effects: last year's base was extremely weak due to depreciation and non-recurring costs, while at the same time costs and prices are being better managed, especially in the client business.

The picture at the operating profit level has also changed significantly. Last year in the third quarter, Intel reported operating loss with a margin of around -68 % on a GAAP basis; this year it's positive operating margin of about 5%. Adjusted for selected items, the non-GAAP operating margin up to 11.2%again after a jump from a significant negative. This was helped by a hard cut in costs: the sum of R&D and sales/administrative support expenses fell by about a fifth (GAAP) and just under 17% (non-GAAP) year-on-year, respectively.

GAAP net income in the quarter was around 4.1 billionwhich is visually a huge turnaround from last year's loss 16.6 billion. But this number is largely skewed by one-time items - so for current profitability it is more interesting non-GAAP net income of about $1 billion a earnings per share of about $0.23which means a return to the black, but certainly not a return to the levels of the best years.

In terms of cash in the company, the third quarter is solid. Intel generated roughly $2.5 billion of operating cash flowand while that's not yet an amount that alone would offset the massive investments of the last few years, it shows that the underlying business is no longer in "burn cash" mode.

Outlook

Intel's management expects to achieve a revenue between $12.8 billion and $13.8 billion. It's a range that roughly matches what the company has shown now - no big jump, but no return to decline either. More important than the absolute number is that management's commentary is significantly more confident this time around: current demand is outstripping supply, they say, and that should continue in 2026.

At the earnings level, Intel expects the fourth quarter a slight GAAP accounting loss - management forecasts a roughly -0.14 dollars per share - but after adjusting for selected items, it expects positive non-GAAP earnings of about $0.08 per share. In other words, investments and one-time effects continue to weigh on the bottom line, but the operating business is already above zero.

Strategically, Intel is betting that AI will lift demand for computing power across segments - from traditional x86 platforms in PCs, to data centers, to specialized accelerators and custom solutions. It enters this with the ambition of becoming a key manufacturing partner for third parties in the form of foundry services. A combination of government funding, capital injections from large technology investors and new products on advanced manufacturing processes is set to create the scope for both revenues and margins to improve in the years ahead.

Long-term results

Looking at Intel over the longer term of the last four years, it is very clear how deep a downturn the company has been through. In 2021, it will have lost approximately 79 billion dollarsand a year later still over 63 billionbut by 2023, revenues have fallen to about 54.2 billion and by 2024, they've dropped further to 53.1 billion. This means an overall decline of more than a third in three years. It's a combination of a weakening PC market after the covid boom, pressure from competition in data centers, and Intel having slept through several technology generations of chip production.

Even more dramatic is the evolution of gross profit. In 2021, Intel generated over $43.8 billion in gross profitand by 2022, only about 26.9 billionand a year later, about 21.7 billion and by 2024, only about 17.3 billion. This means that gross profit has virtually been cut in half in three years. The reason for this is obvious: a combination of falling sales and pricing pressure that has failed to adequately reduce costs, plus various fluctuations in the cost structure.

On the other side of the equation is operating costs. On the other side of the equation are operating costs, which in 2021 were around 21.7 billion dollarsrising to around $20 billion in 2022. 24.5 billionfalling back to just over $20 billion in 2023. 21.6 billionto jump up to 29 billion. That's an increase of more than a third in a single year. These figures reflect both increased investment in research and development and restructuring, new projects and a generally costly transformation towards foundry business and new production processes.

Together this has created extreme pressure on operating profit. While in 2021 Intel had an operating profit of nearly $19.5 billiona year later, it had fallen to about 2.3 billionand by 2023, it was teetering around 93 million and by 2024, it had fallen into a deep operating loss of over $11.6 billion. Such a steep drop in profitability in three years is exceptional for such a large company and shows well how challenging Intel's rebuild is.

We see an even starker picture at the level of net income. By 2021, Intel will have earned nearly 19.9 billion dollarsand by 2022, only about 8 billionand by 2023, about 1.7 billion and in 2024, it will report a loss of over $18.7 billion. This is not just about operating results, but also large tax and accounting items - for example, in 2024, the combination of pre-tax losses and specific tax effects resulted in a tax expense of over $7.5 billionmaking the entire accounting result even worse.

All of this has, of course, translated into earnings per share. From a level of around $4.89 per share in 2021, Intel has fallen to $1.95 in 2022, $0.40 in 2023, and ending with a loss in 2024 -4.38 dollars per share. Meanwhile, the number of shares outstanding is growing slightly - roughly from 4.06 billion in 2021 to about 4.28 billion in 2024 - so even from a "dilution" perspective, earnings per share cannot be expected to return to previous levels without a significant improvement in business.

News

In recent months, Intel has announced several major moves that complement the purely financial numbers well:

• Agreed with the U.S. government on a package of support for the development of U.S. chip manufacturing, totaling 8.9 billion dollarsof which it has already received in the third quarter 5.7 billion.
• Established strategic cooperation with NVIDIA to develop several generations of custom data center and PC products to combine Intel's x86 platforms with NVIDIA's accelerated solutions via NVLink.
• NVIDIA also announced a $5 billion investment in Intel stock, signaling that it counts Intel as a major supply chain partner.
• SoftBank Group added another capital signal of confidence with an investment $2 billion in Intel stockfocused on the future of advanced chip manufacturing in the US.
• Intel unveils client processor architecture Intel Core Ultra Series 3 ("Panther Lake") on the Intel 18A processwhich is expected to be the first major test of next-generation manufacturing technology in end devices.
• In the server area, it showed Intel Xeon 6+ ("Clearwater Forest") on 18A, highlighting the leap in performance/consumption ratio, while also outlining the details of the new inference-oriented GPU "Crescent Island".
• Deepened collaboration with Microsoftincluding around Windows ML and the integration of Intel vPro remote management with Microsoft Intune.

Shareholding structure

Intel is a typical global blue chip whose shares are dispersed among large institutions and a broad investor base. Insiders - that is, management and people within the company - hold only about 0.07% of the shareswhich is fairly common for a company this size and means that institutional investors have a decisive influence.

They own roughly 63-64% of the shares and the free float. The largest shareholders include BlackRockwhich holds approximately 8.9% of the sharesfollowed closely by Vanguard Group with a stake of around 8,8 %. It also has a strong position State Street (about 4,7 %) a Geode Capital (roughly 2,2 %). The rest is spread among thousands of other institutions around the world and retail investors.

Analysts' expectations

Intel today is primarily in the eyes of the market turnaround story. On one side is the fresh, brutal experience of a profit slump and huge loss in 2024, on the other side is the visible first sign of improvement in Q3 2025 and a series of steps that make sense: collaborations with AI leaders, big government funding, the rollout of foundry services and a new generation of products on more advanced manufacturing processes.

Analysts will be watching three things in particular in the coming quarters. First, whether the maintain and gradually increase gross and operating marginswithout making the results dependent on one-off items. Second, whether the foundry business will actually gain commercially significant contracts and begin to generate growth that is not just internal shifting of numbers between segments. And third, how quickly Intel can to get back on the AI hardware map - not just in marketing, but in real-world delivery, especially in data centers.

Q3 2025 shows that Intel is no longer in a state of free fall, but rather at the beginning of a long road back. For investors looking for a combination of potential with significant risk, it's an interesting bet that the company will manage one of the most challenging technology transformations in the history of the semiconductor industry. But only the next few quarters will tell if the current improvement is not just a short-term blip, but the beginning of a more sustained turnaround.

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