What stands out for investors is the ecosystem effect. Hardware demand translated into higher services revenue, a growing active installed base, and operating leverage that reinforced margins rather than diluted them. This combination reframes the quarter from a one-off peak to a potential reset point. The implicit question is not whether Apple can repeat such results every quarter, but whether this breadth of performance restores long-term confidence in the growth engine itself.

What was the last quarter like?

Apple $AAPL reported fiscal Q1 2026 revenue of $143.8 billion, up 16% year-over-year. This is an all-time record quarterly revenue for the company. Products were the main driver, with sales growing from $98.0 billion to $113.7 billion, up more than 16% YoY, while the services segment continued its steady double-digit growth rate, reaching $30.0 billion, up +14% YoY.

Profitability remained exceptionally strong. Gross profit rose to USD 69.2bn compared to USD 58.3bn a year ago, while gross margin remained at a very high level despite rising manufacturing and development costs. Operating profit reached USD 50.9 billion, up almost 19%, and net profit rose to USD 42.1 billion, up 16% year-on-year.

Earnings per share underlined the quality of these results. Diluted EPS came in at $2.84, up 19% year-over-year, despite an already very high comparative base from last year. The positive impact was not only from the growth in operating profit, but also from the continued reduction in the number of shares outstanding as a result of massive share buybacks.

Looking at the individual product categories in more detail, iPhone in particular stands out, with sales jumping from USD 69.1 billion to USD 85.3 billion, up more than 23% YoY. iPhone had its best quarter ever, across all geographic segments. At the same time, services maintained its role as a stable pillar with high margins and increasing revenue predictability.

• Full presentation with results.

CEO commentary

CEO Tim Cook called the quarter a record one and highlighted that results significantly exceeded internal expectations. He said iPhone's growth was driven by unprecedented demand across all regions, while also seeing another all-time high in services. Also of critical note was that Apple's installed base now exceeds 2.5 billion active devices, further reinforcing the long-term monetization potential of the ecosystem.

CFO Kevan Parekh added that the combination of record revenue and high margins led to an all-time high EPS for a single quarter. He said Apple generated nearly $54 billion of operating cash flow during the quarter, which allowed it to return nearly $32 billion to shareholders through dividends and buybacks.

Long-term results

A look at Apple' s long-term results shows that the company has regained a path to sustainable growth after a weaker 2022-2023 period, thanks largely to a combination of pricing power, service expansion and disciplined cost management. Revenues in fiscal 2025 reached $416.2 billion, up 6.4% year-over-year after a virtually flat 2024. This return to growth came in an environment where global demand for consumer electronics remained subdued, underscoring Apple's relative resilience to cyclical market swings.

2022 was still a reverberation of the exceptionally strong demand for electronics from the pandemic years. Revenues reached $394.3 billion, but even then there was a noticeable slowdown - particularly for iPhone and Mac. Operating profit was USD 119.4 billion and net profit was USD 99.8 billion. Margins remained high, but Apple faced pressure from rising costs, disrupted supply chains and a strong dollar. EPS was around $6.15, with the positive effect of buybacks no longer able to fully offset slowing revenue growth.

2023 marked the first full year of decline. Revenues fell 2.8% to USD 383.3 billion, operating profit declined to USD 114.3 billion and net profit to USD 97.0 billion. This was not due to a loss of market position, but to normalising consumer demand, weaker Mac and iPad sales and more conservative consumer behaviour in a high interest rate environment. However, Apple maintained an exceptionally high operating margin and continued to aggressively repurchase shares, which kept EPS virtually stable around $6.16. This was a key signal that the business was structurally resilient.

The year 2024 brought stability. Revenue increased slightly to USD 391.0bn (+2.0%), operating profit rose to USD 123.2bn and net profit reached USD 93.7bn. Growth was driven primarily by the services segment, which increased its share of total revenue and improved margin quality. Cost discipline improved and Apple began to benefit from operating leverage again. EPS may have stagnated around $6.11 year-over-year, but looking at the structure of the results, it was clear that the company was setting the stage for a return to more dynamic growth.

News

The most significant operating news is the crossing of the 2.5 billion active devices mark, further increasing the value of the Apple ecosystem. This milestone reinforces the long-term story of services benefiting from high user loyalty. At the same time, the company announced another dividend payout and continued massive returns on capital that make Apple one of the most attractive companies in terms of the combination of growth and stability.

Apple's results come at a time when the company is significantly accelerating its strides in artificial intelligence. Shortly before the earnings release, news emerged that Apple was buying the startup Q.AI for about $2 billion. The company's technology focuses on reading the subtle micro-movements of facial expressions, which may pave the way for Apple to create a new type of interaction between the user and the AI assistant. In practice, this is a move towards "non-verbal communication", where the device could respond not only to voice or text but also to subtle visual cues, which fits into Apple's long-term strategy of combining hardware, software and user experience.

Even more fundamental from an investment perspective is the strategic collaboration with Google. Apple and Google have jointly confirmed that Apple will leverage Gemini models and Google's cloud infrastructure to bolster its AI capabilities, including a heavily personalized version of Siri that is due to arrive later this year. The move shows Apple's pragmatic approach: instead of trying to develop the entire AI stack entirely in-house, the company is combining its own ecosystem with the best available third-party technology. This can significantly shorten the time it takes to bring competitive AI features to market and reduce the risk of Apple falling behind competitors in this area.

Shareholding structure

Apple's shares are heavily represented by institutional investors, who hold approximately 65% of the outstanding shares. The largest shareholders include Vanguard Group, BlackRock and State Street, confirming the perception of Apple as a key long-term pillar of the portfolios of large global asset managers.

Analyst expectations

The analyst consensus continues to improve following these results. In particular, the market is pricing in a return to double-digit revenue growth, record iPhone performance and exceptionally strong cash generation. Apple continues to be viewed as a combination growth and defensive stock that can generate stable earnings, high cash flow and attractive returns on capital at various stages of the cycle.

Fair Price

The reaction highlights a familiar tension for mature compounders. With expectations already set at an unusually high level, the market is no longer rewarding consistency alone. Investors are scanning for signs of renewed acceleration, either through faster volume growth or incremental margin expansion. The quarter delivered strength, but not surprise, and that distinction matters when valuation reflects near-perfection.

What was the last quarter like?

Visa $V reported net sales of $10.9 billion in Q1 FY2026, up 15% year-on-year, or 13% after adjusting for currency effects. Growth was primarily driven by higher payment volumes, continued recovery in cross-border transactions and solid processed payments momentum.

GAAP net income was $5.9 billion, up 14% year-over-year, while GAAP earnings per share increased 17% to $3.03. Adjusted for one-time items, non-GAAP earnings were $6.1 billion and EPS was $3.17, up 15% year-over-year. Even on a constant currency basis, the EPS growth rate remains around 14-16%, which is still a very robust performance for a company of this size.

At the operating level, the numbers were also consistent. Payment volume was up 8%, total cross-border volume up 12% and cross-border volume outside Europe up 11%, confirming that international travel and online transactions remain strong structural drivers of growth. The number of transactions processed reached 69.4 billion, an increase of 9% year-on-year.

The revenue structure shows a healthy mix. Service revenue grew by 13% to $4.8 billion, data processing revenue by 17% to $5.5 billion and other revenue by an even 33% to $1.2 billion. The weakest point remains the relatively slower growth in international transaction revenues, which added "only" 6%, one area where the market was expecting more acceleration.

On the expense side, there was a visible increase. GAAP operating expenses were up 27%, primarily due to higher legal reserves related to ongoing litigation. Adjusted for these items, cost growth was 16%, still faster than revenue growth. This is one of the factors that have cooled investors in the short term.

• Full presentation with results.

CEO commentary

CEO Ryan McInerney called the quarter very strong and highlighted that Visa benefited from a combination of resilient consumer demand, a strong holiday season and continued expansion in value-added services, commercial payments and money movement solutions. A key strategic message is that Visa is systematically shifting from a pure transaction infrastructure to a broader payments hyperscaler platform that can serve increasingly complex client needs.

It is clear from his comments that the company has long been betting on scalability, technological depth and extending services beyond just payment processing. It is this strategy that is set to be a major source of sustainable growth in an environment where the core payments business is gradually approaching maturity.

Long-term results

A look at recent years confirms the extraordinary consistency of the business. Visa's revenues have grown from approximately $29.3 billion in 2022 to $40 billion in 2025, an average annual growth rate of more than 11%. Each year has delivered double-digit revenue growth, even in a slowing global economy.

Net income has increased from just under $15 billion to over $20 billion over the same period, while EPS has grown from around $7 to over $10. Not only did earnings growth play a significant role, but the systematic decline in share count through aggressive buybacks also boosted earnings per share even in an environment of slightly lower sales growth.

Operating profit and EBITDA have also shown steady growth, although the pace has slowed over the past year. This suggests that Visa is entering a phase where growth will be more dependent on monetization of added services than on transaction volume alone. Fundamentals remain extremely strong, but the scope for margin expansion is less than a few years ago.

News

Legal disputes around interchange fees remain a significant theme of the quarter, with Visa entering into an updated settlement agreement in November, but this is still subject to court approval. The company also deposited $500 million into an escrow account, de facto reducing the number of shares in a similar fashion to the buyback.

Continued discipline is evident in the capital allocation. During the quarter, Visa repurchased approximately 11 million shares for $3.8 billion and still has more than $21 billion authorized for additional buybacks. At the same time, regular dividend growth was confirmed.

Analysts' expectations

The market reaction suggests that analysts and investors were very well prepared for this quarter. The consensus had already anticipated double-digit growth in sales and earnings, and therefore meeting or slightly beating expectations was not enough on its own to positively revalue the stock. The main question for the coming quarters remains whether Visa will be able to re-accelerate its cross-border revenue growth while maintaining cost discipline.

Fair Price

Microsoft is one of the biggest beneficiaries of the AI boom thanks to its early investments in OpenAI, the developer of ChatGPT, which in July pushed its market capitalization past the $4 trillion mark.

Microsoft beat Wall Street estimates on both the top and bottom lines, with cloud revenue topping $50 billion for the first time. Basically nothing wrong — it’s just that the market wants more.

Microsoft is one of the biggest beneficiaries of the AI boom thanks to its early investments in ChatGPT developer OpenAI — in July that helped push Microsoft’s market capitalization above $4 trillion.

Microsoft beat Wall Street estimates on both the top and bottom lines, with cloud revenue topping $50 billion for the first time. Fundamentally nothing wrong — the market just wants more.

AI Spending and Cloud Growth Disappoint Investors

At the center of the sell-off are investor worries over Microsoft’s record capital expenditures to support AI expansion and data center capacity. Even as total revenue climbed and cloud units delivered solid results, the intensity of capital spending raised questions about near-term margins and return on investment. Azure, Microsoft’s flagship cloud platform, was a key driver of growth, but its pace of expansion slightly lagged expectations, underlining a narrative that even durable demand for cloud services may not be enough to offset investor impatience with rising costs.

These concerns were heightened by the sheer scale of Microsoft’s AI and cloud investments, which in the latest quarter reached record levels. While strategic in building future capacity, these commitments have also made near-term profit forecasts harder to model and have accentuated market sensitivity to cost discipline amidst slowing growth rates.

Broader Market Reaction and Mixed Tech Leadership

Microsoft’s weakness did not occur in isolation. Shares of the company have experienced pressure globally, with declines recorded in both U.S. and Frankfurt trading as investors digest the implications of slower cloud growth and aggressive AI spending. The stock’s decline contributed to broader weakness in major indices as markets weighed Big Tech earnings results and spending strategies across the sector. In contrast, other tech firms with more upbeat forecasts or clearer near-term profitability such as Meta saw their shares rally, highlighting diverging investor appetites within the industry.

Market participants have also pointed to increased competition in the AI and cloud landscape as a pressure point. Rivals such as Google and Amazon have made notable gains in cloud services and AI development, intensifying questions about whether Microsoft’s heavy investment will translate into market share growth and long-term returns.

Sentiment Shifts and Valuation Sensitivity

The reaction to Microsoft’s earnings illustrates how valuation sensitivity has intensified, particularly for companies associated with AI leadership. Investors are no longer content with earnings beats if those results are accompanied by rising costs or mixed signals about future growth trajectories. Analysts have noted that even slight miss on cloud momentum or larger-than-expected capital expenditure plans can trigger disproportionate stock reactions in the current market environment.

This emphasis on cost efficiency and growth quality reflects broader investor sentiment that has become increasingly selective after years of premium valuations in the technology sector. Microsoft’s stock, trading below recent highs, now faces technical and psychological hurdles, with renewed focus on whether future earnings and cloud expansion can justify historic multiples.

What Investors Should Watch Next

Looking ahead, investors will be monitoring several key variables that could shape Microsoft’s near-term trajectory:

Cloud and AI monetization: Sustained or accelerated growth in Azure revenue and artificial intelligence services could reassure markets that Microsoft’s investment strategy is achieving traction.
Capital expenditure trends: Guidance on future spending levels and margin impact will be critical, as investors seek clarity on when AI-related costs will stabilize or generate returns.
Competitive dynamics: Performance relative to peers in cloud services and AI innovation particularly against fast-growing rivals will be scrutinized as a barometer of Microsoft’s market positioning.
Macro and sector trends: Broader shifts in tech valuation, interest rates, and investor risk appetite will influence how Microsoft’s stock is priced relative to growth expectations.

Ultimately, Microsoft’s recent slide reflects a broader recalibration of how the market values growth, execution and cost efficiency in a world increasingly shaped by AI innovation. For long-term investors, the company’s strategic investments position it well for future opportunities, but in the near term, the stock’s performance will hinge on demonstrating tangible returns from those investments in an environment that demands both growth and profitability.

But at the same time, the results and outlook for 2026 show the limits of this model. Profitability growth remains in the low single-digit percentages, quarterly sales figures are rather weaker, and the main positive impulses come from cost optimisation, tax factors and share buybacks, not from business expansion. The market thus sees Altria primarily as a defensive dividend title, not a growth stock.

How was the last quarter?

The fourth quarter of 2025 presented a mixed picture. Net sales came in at $5.85 billion, down 2.1% year-over-year. Adjusted for excise taxes, revenue net of excise taxes was $5.08 billion, -0.5% YoY. Thus, revenues continue the long-term trend of slight decline, which is the structural nature of the US tobacco market.

GAAP profitability was impacted by the comparative base. Reported diluted EPS in Q4 was $0.66, down 63% YoY, but this decline is primarily due to one-time items in the prior year. More relevant from an operating performance perspective is adjusted diluted EPS, which came in at $1.30, indicating year-over-year stability.

The tax rate declined significantly in the quarter. The adjusted tax rate was 22.8%, compared to a significantly higher rate in Q4 2024, which positively supported net income. Again, however, it should be stressed that this is a factor that cannot be automatically extrapolated into the future.

Q4 2025 summary in points:

• Net revenues: USD 5.85 billion(-2.1% YoY)

• Revenues net of excise taxes: USD 5.08 billion(-0.5% YoY)

• Adjusted diluted EPS: USD 1.30 (stable YoY)

• Reported diluted EPS: USD 0.66(-63% YoY, impact of one-off items)

• Adjusted tax rate: 22.8%

Thus, the quarter reaffirmed that short-term fluctuations in GAAP earnings levels are not key for Altria $MO; the ability to steadily generate adjusted earnings and cash is critical.

Full year 2025: stability despite earnings pressure

For the full year 2025, Altria reported net revenues of $23.28 billion, down 3.1% year-over-year. Adjusted for excise taxes, revenue net of excise taxes was USD 20.14bn, -1.5% YoY. Thus, the decline in volumes of traditional tobacco products continues but is partly offset by price increases and product mix.

Profitability remained very strong. Adjusted diluted EPS for 2025 was $5.42, up 4.4% YoY. This is the key number of the entire report, as it shows that Altria is able to grow earnings per share even in a declining revenue environment thanks to pricing power, cost discipline, and share repurchases.

• Full presentation with results.

CEO commentary

CEO Billy Gifford called 2025 a year of continued momentum. His comments highlighted a combination of strong financial performance, advances in smokeless products and strong returns of capital to shareholders. Management openly asserts that near-term growth will not be driven by volumes, but by efficiency and strategic portfolio realignment.

The comments indicate that Altria's management is focused on the long-term transition to "smoke-free" products, particularly in the oral nicotine space, while being cognizant of the regulatory and competitive risks in the e-vaping segment. Management's tone is realistic and conservative, which is key for this type of company.

Outlook for 2026

The outlook for 2026 is one of the most important points of the entire report. Altria expects adjusted diluted EPS in the range of $5.56-$5.72, which corresponds to 2.5%-5.5% year-over-year growth from a base of $5.42 in 2025. Management also notes that earnings growth will be weighted more heavily into the second half of the year due to, among other things, a gradual increase in cigarette import and export activity.

Guidance further assumes:

• Adjusted effective tax rate: 22.5-23.5%

• Capex: EUR 300-375 million. USD 30000

• Depreciation and amortisation: approximately USD 225 million. USD 250 USD

Outlook assumes continued investment in contract manufacturing, smokeless product development and regulatory preparation. It also explicitly includes the assumption that NJOY ACE will not return to the market in 2026, limiting the potential for faster expansion in e-vaping.

Long-term performance

The long-term numbers illustrate the essence of Altria's investment story very well. Revenue declined slightly between 2021 and 2024, from US$21.1bn to US$20.4bn, confirming the structural pressure on volumes. At the same time, however, gross profit remained stable at around US$14.3bn, reflecting the firm's exceptional pricing power.

Operating income stood at USD 11.2 billion in 2024, only slightly below the previous years. In contrast, net income grew significantly, from US$2.5bn in 2021 to US$11.3bn in 2024, driven by a combination of cost optimisation, tax factors and financial structure.

EPS grew from US$1.34 in 2021 to US$6.54 in 2024, with a significant role played by a decline in the number of shares outstanding as a result of systematic share buybacks. EBITDA also grew over the long term, reaching US$15.1bn in 2024, confirming an exceptionally high operating margin.

Cash flow and return on capital

Return of capital to shareholders remains a key pillar of the strategy. In 2025 Altria:

• paid dividends of USD 7.0 billion

• Repurchased shares for USD 1.0 billion

• In total, it returned approximately USD 8 billion to shareholders

In Q4, the company repurchased 4.8 million shares at an average price of USD 59.56. It still has USD 1bn available until the end of 2026 under the approved buyback program.

Shareholder structure

The shareholder structure is predominantly institutional, with the institution holding approximately 63% of the shares. The largest shareholders are Vanguard (9.5%), BlackRock (7.5%), and State Street (4.3%). Insider ownership is minimal, which has been the long-term standard for Altria.

Analyst expectations

Analyst consensus remains moderately positive. Altria is viewed as a highly predictable dividend title with low growth but very strong cash flow. Analysts appreciate the company's ability to grow adjusted EPS even in an environment of declining revenues, but also note regulatory risks, uncertainty around e-vaping, and limited long-term growth potential.

Fair Price

What do you expect from the results of $SOFI?

What matters now is not whether expectations were exceeded last quarter, but how the next phase is constructed. Investors are parsing guidance for signals on AI monetization, pricing power, and the balance between organic momentum and acquisition-led acceleration. The underlying tension is subtle but decisive: is the current ambition an incremental extension of an already mature platform, or the early stage of a longer structural expansion where AI meaningfully raises the ceiling?

Top points of the analysis

• ServiceNow is targeting sustainable ~20% subscription revenue growth, an above-normal pace given its size

• Key growth driver is not acquisition, but expanding the platform with existing customers

• AI here is not a standalone product, but an accelerator for monetizing existing workflows

• High RPO and nearly 98% renewal rate confirm the long-term visibility of the business

• Partnerships with Microsoft, NVIDIA and global consultants support the platform nature of the business

• If ServiceNow establishes itself as an enterprise AI control layer, 20% growth may not be the peak, but an intermediate step

What is ServiceNow and what does it do?

ServiceNow $NOW is an American software company focused on automating business processes and managing work in organizations. The company was founded in 2004 and has gradually evolved from an IT requirements management tool to one of the most important platforms used by large enterprises worldwide. Its goal is not to replace individual applications, but to connect people, data and processes across the enterprise into a single management system.

The core product is the ServiceNow platform, which runs a number of modules designed for different areas of operation. Initially, the company focused on IT Service Management - that is, the management of IT incidents, requests and changes. Over time, however, it has significantly expanded its offering to include areas such as enterprise workflow management, HR processes, customer support, security, asset management, facility services and internal reporting. Everything operates on the principle of a single platform, which means that data and processes are not enclosed in separate systems, but interconnected.

Typical ServiceNow customers are large and highly complex organizations - multinational corporations, financial institutions, technology companies, industrial enterprises and government. Tens of thousands of organizations use the platform, including a significant portion of Fortune 500 companies. For these customers, ServiceNow is critical infrastructure because it runs key internal processes whose failure would directly impact the entire organization. This is why the company has a very high long-term contract renewal rate.

20% in 2026 is not just a number, but a test of the quality of growth

Guidance of $15.53-15.57 billion in subscription revenue for 2026 is important, mainly because it comes at a time when ServiceNow $NOW has long since ceased to be a "smaller SaaS growth company". For large enterprise platforms, growth rates usually break down over time - not because the product deteriorates in quality, but because it's harder to continue to accelerate on a high base. In this report, ServiceNow tries to convince the market that this point hasn't yet arrived and that growth remains underpinned by real demand, not one-off effects.

Crucially, the company also maintains ambitious parameters for profitable growth. For 2026, management is talking about a subscription gross margin of around 82%, an operating margin of around 32% and an FCF margin of around 36%. In other words, the message is "growth + return of operating leverage", not "growth at any cost". This is crucial in an investment story, because it is the combination of pace and quality of margins that usually determines whether the market will grant a company a premium valuation even in a more challenging macro.

And one more detail that often gets lost in the headlines but is important in investment terms: a $5bn buyback with an immediate $2bn ASR is not just a "reward to shareholders". In the context of high cash flow, it's also a signal that management wants to show conviction in the long-term story while dampening any concerns about acquisition momentum.

Where specifically the company can grow next

Now Assist is the first of the visible AI monetization engines because it can already be measured in money. When the company talks about an ACV (annual contract value) of over $600 million, it's talking about a $600 million ACV (annual contract value). USD, it is saying that AI is no longer a powerpoint, but a product that can sell within an existing platform. Importantly, this type of AI functionality is not sold into the void - it sticks to workflows that customers are already using. And that typically means higher conversion, a shorter sales cycle, and a greater chance of AI becoming a "normal part of the contract."

The second engine is the AI Control Tower and generally the governance layer for agent AI. In practice, it's not just about "having AI agents" but managing them: who has what permissions, how decisions are audited, how exceptions are handled, how unwanted actions are shut down. This is exactly the area where enterprise clients often hit the brakes - and where a platform that is already sitting on processes anyway can naturally expand its role.

The third element is the Workflow Data Fabric, and in general the data layer for workflow across the organization. What this means substantively is that the company is pushing to unify data silos and events so that workflow can be automated across departments, not just in one isolated domain.

Why it's not just "AI hype": signals from contracts and RPOs

There are a few indicators in the results that investors typically watch as a reality check. RPOs and current RPOs are one of them, as they reflect contracted future work (contracted and committed). ServiceNow puts RPO at around $28.2 billion and Current RPO at $12.85 billion, with year-over-year increases in the low to mid-20s. This is important because it suggests that pipeline and contract visibility are keeping pace with growth ambitions through 2026.

Another signal is the mix of large deals and expansion with existing customers. When management talks about high renewal rates and strong large contracts at the same time, it is typically a sign that the platform is not a nice-to-have, but an infrastructure. Even if the macro gets worse, companies are more likely to cut peripheral tools than the central workflow layer.

And the third signal is cash flow. The $4.6 billion FCF for 2025 isn't just a nice number - it's a reason why a company can invest aggressively in AI while funding a buyback without breaking the balance sheet.

Why there's any room at all for continued double-digit momentum

It's important to set the story in the macro of IT spending. Global IT spending is expected to exceed $6 trillion in 2026 and grow nearly 10% year-over-year. This is an environment in which enterprise platforms typically sell better, especially if they can defend ROI through automation and productivity improvements.

When we look at the segments directly related to ServiceNow, we get several growth areas:

• Workflow automation tends to be described in estimates as a high-growth market (in some projections up to around low 20 percent CAGR by the end of the decade).

• Intelligent process automation (combination of automation + AI) is cited in some reports with a CAGR of around ~22% to 2030.

• IT service management as a core domain is slower growing than AI/automation, but still has a double-digit CAGR to 2030 according to some sources.

It's not that ServiceNow "owns" the entire market. The bottom line is that the company sits at the intersection of multiple trends: process automation, governance, AI orchestration, security and enterprise productivity. That increases the chances that it can grow even when some sub-pockets temporarily slow down.

Strategic partnerships: why Aston Martin?

At first glance,the partnership between ServiceNow and the Aston Martin Formula One Team may seem like a classic branding collaboration from the world of Formula One. But on closer inspection, it is a practical demonstration of where ServiceNow is looking for further growth and how it wants to monetise its platform.

The deal is not just about the brand's visibility on the monoposts from the Las Vegas Grand Prix, but more importantly the deployment of the ServiceNow platform in real-world, highly complex operations. Aston Martin F1 plans to use ServiceNow to automate IT and facility requirements, unify the employee experience on a single platform and improve reporting and dashboards across the team's technology campus. In other words, the very areas where ServiceNow has long claimed it can act as a central workflow layer.

Why the F1 environment is an ideal reference for enterprise customers

Formula 1 is an extremely demanding operating environment. Teams operate under constant pressure for speed, accuracy and coordination across hundreds of employees, technology systems and external suppliers. Every delay, poorly escalated request or inconsistent data has a direct impact on performance - and therefore on results on the track.

That's why deploying ServiceNow in such an environment is a powerful reference for large enterprise customers. If the platform can handle the complexity of an F1 team, it's exactly the type of story that management can use when dealing with corporations in industry, finance, energy or the public sector. It's not about the media effect, it's a testament to the scalability of the platform.

Other strategic partnerships

Microsoft $MSFT

One of the most important ServiceNow partnerships ever. Integrations with Azure, Microsoft Teams and Copilot make it possible to embed workflow and AI assistance directly into the tools enterprise customers use every day.

This brings ServiceNow closer to the user without having to "replace" the Microsoft ecosystem. Instead, it becomes an extension of it, significantly lowering barriers to adoption and encouraging expansion with existing customers.

NVIDIA $NVDA

Partnerships in generative AI and inference, particularly around AI workflow optimization and model deployment in enterprise environments. Collaboration with NVIDIA reinforces the thesis that the company wants to be a control layer on top of AI infrastructure, not a competitor to hyperscalers.

Google Cloud $GOOG

Integration of ServiceNow platform with Google Cloud, including data and AI services. Expands addressable market and validates "cloud-agnostic" platform strategy. This is important for large enterprise clients who don't want vendor lock-in.

Accenture $ACN

Accenture is one of ServiceNow's largest global implementation partners.
Investment Significance: Enables ServiceNow to scale large enterprise projects without massive growth of its own headcount. It also increases the likelihood that ServiceNow will be recommended as the standard platform in digital transformations.

Investment scenarios

Optimistic scenario: enterprise AI platform becomes the standard

In the optimistic scenario, ServiceNow will indeed establish itself as the central control layer for enterprise AI. AI products like Now Assist, AI Control Tower, and a security and governance layer around AI agents will become a natural part of most new and renewal contracts. Attach rate of AI modules will grow faster than management suggests today, and the consumer component of revenue will begin to make up a more significant portion of growth.

Subscription sales in this scenario would not only deliver the projected 19.5-20% in 2026, but the pace would remain near the upper end of the range in 2027-2028, despite the high absolute base. RPO and current RPO would continue to grow at rates above 20%, confirming the long-term visibility of the business. With operating leverage and cost discipline, operating margin could surpass the target 32% and free cash flow margin would move towards the upper 30s.

In this case, the market would be willing to sustain a premium valuation as ServiceNow would cease to be perceived as "just another SaaS leader" and become a long-life infrastructure platform. The stock would benefit not only from earnings growth, but also from continued buybacks that would support EPS growth.

Realistic scenario: 20% as a peak, but still very high quality growth

The realistic scenario assumes ServiceNow meets 2026 guidance, but the growth rate gradually starts to normalize. Subscription revenues will grow around 19-20% in 2026 and then more towards the mid to high teens in the following years. AI products will remain a significant driver, but monetization will be more gradual and more tied to contract renewals than aggressive new upsells.

RPO and current RPO will continue to grow, but the pace may slow slightly as expansion slows for some customers in a more conservative macro environment. Margins will remain strong, although gross margins may face near-term pressure due to greater hyperscaler and AI infrastructure involvement. However, operating margins of around 32% and FCF margins of around 35-36% would confirm that the company is still generating exceptionally good cash flow.

In this scenario, the stock would likely not see a dramatic expansion in valuation, but would remain an attractive combination of growth and stability. The return to the investor would be driven primarily by earnings growth and buybacks, not a significant revaluation of the multiple.

Pessimistic scenario: AI hype crashes into the reality of enterprise budgets

The pessimistic scenario is based on the assumption that AI adoption in the enterprise environment will be slower and more cautious than management and the market expect today. Customers may defer greater adoption of AI modules, the consumer component of revenue will not meet expectations, and subscription revenue growth will gradually slide below 18%.

At the same time, gross margin pressures could intensify if cloud infrastructure and AI inference costs grow faster than revenue. The integration of the Veza and Armis acquisitions could be more challenging than expected and weigh on operating margins and management focus in the short term. RPO would remain high, but its growth rate would signal deteriorating visibility.

In such an environment, the market would likely reassess the premium valuation that ServiceNow has long held. The stock could come under pressure even though the company would remain profitable and cash flow positive. Thus, a negative scenario would not be about the collapse of the business, but a transition to a phase of slower, less attractive growth from a valuation perspective.

What to take away from the article

• ServiceNow today is not addressing the question of whether it can grow, but how long it can sustain a pace of around 20%

• The key to the investment thesis is the company's shift to a role as a central platform for enterprise AI, not quarterly results alone

• AI products are already generating measurable business and expanding the addressable market beyond IT workflow

• Strong RPO, high renewal rates and robust cash flow support visibility of growth and return on capital

• Margin pressure, pace of AI adoption and integration complexity of acquisitions remain the biggest risks

• If platform strategy proves out, 20% growth in 2026 may not be the end-station, but just the next phase of a long-term story

For years, the U.S. healthcare sector has been seen as a defensive anchor for many portfolios. It has been defined by stable demand, demographic trends, high levels of regulation (which, ironically, often protect established players) and relatively predictable cash flow. But regulation is also the biggest systemic risk of the industry, as it can change the economics of entire business models in a matter of weeks. And that is exactly what is happening now. The plunge in healthcare stocks is not just a reaction to sentiment, but to a particular set of political and regulatory signals in the US that have lit a warning light. Margins may tighten, growth may slow, and some profits may shift away from middlemen and toward consumers or the government. What's to blame?

For insurers (and the conglomerates that own them), the key driver of growth today is the Medicare Advantage program (private plans for seniors funded with public money). Therefore, each year, the so-called rate notice from the Centers for Medicare & Medicaid Services (CMS), which determines the expected payment dynamics and calculation methodology, is extremely important. In recent days, the markets reacted strongly to the 2027 proposal, which was significantly weaker than Wall Street expected, triggering a sell-off in the stock markets.

Source.

For giant portfolios and the plans of large corporations, even a small shift in outlook means billions of dollars in expected revenue, and more importantly, may change whether companies can grow at the same pace as they have been. In addition, CMS is simultaneously addressing methodological interventions that may limit the ability of insurers to extract higher payments from patient databases.

Another issue involves PBMs (pharmacy benefit managers) - the middlemen who negotiate drug prices, manage formularies and the flow of money between manufacturers, insurers and pharmacies.

Federal authorities and some policymakers argue that this structure can drive up costs (incentivizing intermediaries to charge higher prices that increase their profits).

And here we come right down to the two companies that experienced the biggest declines this week:

• CVS, through Caremark (the PBM part of the company), is one of the largest PBM players and also owns a pharmacy chain and insurer Aetna

• UnitedHealth has huge exposure through Optum (the same division as Caremark at CVS) and is also the largest player in insurance

In other words, if the pressure is on for middlemen and vertically integrated models, CVS and UNH are right at the epicenter.

The Medicare segment is gaining the ability to negotiate prices for select high-cost drugs (called Maximum Fair Price), and the first negotiated prices are scheduled to begin in 2026, with extensions for subsequent years.
For the sector, this means several things at once:

• The pressure on drug manufacturers is obvious, but the impacts spill over to insurers and PBMs as they change the negotiating dynamics and price ranges in the system.

• The market is starting to realize that the U.S. healthcare industry is entering a period where the government is more actively intervening in pricing and rules - and that's exactly the type of uncertainty that stocks are pricing in at a lower multiple.

When you add it all up, it creates an environment where investors stop seeing the sector as completely risk-free and start to value it as a sector with higher regulatory risk. And because $CVS and $UNH have exposure to all segments of this cycle, they are more sensitive to such changes than firms that focus only on, say, drug manufacturing.

CVS Health $CVS

CVS Health is a typical example of a vertically integrated (that is, it doesn't just buy key parts of its business from outside firms, but owns and controls multiple steps of the entire chain itself) healthcare giant. The company does not stand on one leg alone, but links an insurance company, a pharmacy benefit management (PBM) and its own distribution network (pharmacies, clinics). In practice, this means that CVS capitalizes on several layers of the system simultaneously:

• Health Care Benefits (Aetna) - health insurance, including significant exposure to Medicare Advantage

• Health Services (CVS Caremark + Health Services) - PBM business (drug plan administration, negotiations with manufacturers), specialty drug distribution and related services

• Pharmacy & Consumer Wellness - network of brick-and-mortar pharmacies, ancillary services, and the consumer portion. CVS details these segments in its annual report (10-K)

One thing is important for investors to understand: CVS is not just a pharmacy or just an insurance company. It's a complex infrastructure that links care, medical reimbursement and drug sales in the U.S.

CVS vs. the current situation

In this report, CMS (Centers for Medicare & Medicaid Services) outlines a setup to improve payment accuracy and sustainability of the system, which the market typically reads as a higher likelihood of pressure on insurers' margins.

CVS Caremark is one of the largest players, and the PBM segment has long been criticized for the opacity of cash flow, profitability, and incentives in the system. The FTC has published multiple interim reports in recent years warning that the practices of dominant PBMs may be driving up costs for select (even life-saving) drugs and harming competition in the pharmacy market.

Why this is so critical for CVS: if regulation forces the PBM model to move toward greater transparency (e.g., limiting certain types of rebates, adjusting spreads, etc.), it could change the distribution of margins in a part of the business that has historically been among the most profitable.

From a fundamental perspective, CVS has long stood on extremely high turnover (typically hundreds of billions of USD per year) and relatively stable cash flow, but the market today is looking mainly at the profitability of the health insurance segment (Aetna) and sensitivity to public programs. In Q3 2025, management commented on, among other things, the evolution of the Medical Benefit Ratio (MBR) - a key metric that shows how much of the premium is spent on healthcare.

In response to all of this recent news and concern, $CVS stock has fallen nearly 16% this past Tuesday. As a result, the price per share is back to where it was trading in early September. You can still buy one share of CVS on the market for under $75. That's not a bad level, according to the Fair Price Index, as the stock is currently 23.8% below its fair intrinsic value.

UnitedHealth $UNH

UnitedHealth Group is the largest and most influential player in the health insurance and services space in the U.S. i.e. a company that combines health insurance with a large ecosystem of health services and medication management. For an investor, it is crucial to understand that $UNH is not just an insurance company: the group today stands on two pillars that reinforce each other, but can also carry cumulative risk in an environment of legislative intervention:

• UnitedHealthcare - the insurance business itself

• Optum - the healthcare platform comprising care delivery and clinics, IT and administrative services (Optum Insight) and pharmacy benefits management (Optum Rx, i.e. PBM). An overview of the segments is explained in detail here.

This structure is why the market has long valued UNH at a premium: the company is not dependent on a single source of growth, but can offer a broader package of services to insurers. But it's also why UNH is twice as sensitive to the current regulatory situation today. Through both Medicare Advantage (UnitedHealthcare) and a PBM (Optum Rx).

In terms of size and financial performance, UnitedHealth is in a completely different league than most of its competitors. The company has crossed the $370 billion revenue mark in 2024 and has a long track record of double-digit earnings per share growth. Crucially, much of this growth has been coming not just from insurance for several years, but from Optum, which has structurally higher margins and is less cyclical. The shift in weight towards services and data infrastructure is one of the reasons why UnitedHealth has historically been valued by the market at a premium multiple to the rest of the sector. The company also generates very strong operating cash flow, which allows it to fund acquisitions, increase its dividend and steadily repurchase its own stock.

But the stock's performance over the past year shows that even such a colossus is not immune to changes in the environment. After a strong period when the title hovered near all-time highs, the stock began to gradually lose ground during 2025. Over the course of 2025, UnitedHealth stock fell 35%. The market gradually overestimated expectations for the pace of earnings growth and the long-term sustainability of margins in the insurance business. The result was a sharp decline from highs that at one stage took the stock to its lowest levels in more than 5 years. From a valuation perspective, this meant a significant squeeze on the multiples at which UnitedHealth has historically traded, showing how sensitive the market is today even for the biggest and most stable names. As a result, however, it is trading today, according to the Fair Price Index on Bulios, which is based on DCF and a relative valuation of 44.7% below its intrinsic value.

How is the current situation affecting UNH?

The immediate trigger for the sell-off in $UNH stock this week is the proposed Medicare Advantage payments for 2027 from CMS. The market has reacted sharply as the proposal implies significantly weaker than expected payment growth for a program that is a major driver of volume growth for large insurers. Shares wrote down as much as 20.13% on Tuesday and closed the day down 19.55%.

[For investors who don't move in this segment as much: the key to Medicare Advantage isn't just how much percentage the government adds to it. What matters is whether the combination of payment methodology, risk models and bonuses will allow companies to remain profitable, or whether they will have to:

• cut benefits,

• increase co-payments,

• or accept lower margins to sustain customer growth].

And this is what the market has begun to re-price.

UnitedHealth's Optum Rx is one of the Big Three PBMs in the U.S. and one of the reasons UNH is more than just an insurance company.

The Federal Trade Commission (FTC) has repeatedly argued in recent reports that the practices of dominant models of this type can drive up costs for a wide range of drugs, squeeze independent pharmacies, and create opaque incentives in the system.

Additionally, UnitedHealth has seen another level of scrutiny in recent months in the form of an expanded investigation by the Department of Justice (DoJ ) into Optum Rx.

Conclusion

The current sell-off in healthcare stocks is a signal that the entire US healthcare industry is moving into a new phase. The combination of pressure on public budgets, the drive to reduce the cost of care and drugs, and a growing political willingness to interfere with the system is gradually changing the environment in which the sector has operated for the past decade. What has long been perceived as a stable, defensive and relatively predictable industry is now starting to behave more like a regulated, policy-dependent sector, where valuations and expectations increasingly depend on congressional decisions.

More broadly, this is not just one particular bill or methodology, but a longer-term trend. The US state is seeking greater control over the flow of money in healthcare, over pricing and over the role of intermediaries in the system. This brings increased volatility, greater uncertainty about margins and the need to reassess existing investment theses. Nevertheless, there are interesting opportunities to be found. You can filter them out for yourself right now on Bulios.

The focus has moved decisively from earnings generation to capital allocation. Meta’s ambition to build the next phase of AI-driven platforms introduces a new layer of uncertainty, not about execution capability, but about cost and timing. With infrastructure spending set to rise sharply, the central tension is whether profitability growth can keep pace with the scale of investment. The business looks strong, but the valuation debate increasingly lives in the future rather than the present.

How was the last quarter?

Meta $META ended 2025 with a very strong quarter. Q4 revenue reached $59.9 billion, up 24% year-over-year, confirming the continued recovery of the advertising market as well as Meta's ability to increase the monetization of its platform. The growth was not only driven by volumes, but also by price - ad impressions grew 18% YoY, while average cost per ad increased by 6%, which together creates a very healthy mix.

On an operating level, the company reported operating income of $24.7 billion, up +24% YoY, and an operating margin of 41%, among the highest in the technology sector. Net income came in at $22.8 billion, +30% YoY, and EPS rose to $8.88 (+9% YoY). The lower EPS growth rate versus net income is related to tax items and the comparative base.

For clarity, the key Q4 highlights can be summarized as follows:

• Revenue: USD 59.9 billion, +24% YoY

• Operating income: USD 24.7 billion, +24% YoY

• Operating margin: 41%

• Net profit: USD 22.8 billion, +30% YoY

• EPS: USD 8.88, +9% YoY

• Ad impressions: +18% YoY

• Average price per ad: +6% YoY

• Family DAP: $3.58 billion, +7% YoY

From a cash flow perspective, the quarter was also very strong. Operating cash flow was USD 36.2bn, while free cash flow was USD 14.1bn, despite high investments. Capex in Q4 was USD 22.1 billion, which clearly shows that Meta is already in the full phase of a massive AI infrastructure build-out.

• Full presentation with results.

CEO commentary

In his comments, Mark Zuckerberg called 2025 a very strong year in terms of performance, while openly defining the next strategic shift towards "personal superintelligence". It is clear from his words that Meta is no longer content with optimizing its advertising business, but wants to become one of the major global players in advanced AI.

Zuckerberg also hinted that 2026 will be a year of intense investment, not maximizing short-term profit. This tone is key to understanding the market's reaction - investors hear a clear vision, but they also know that the path to fulfilling it will be capital intensive.

Outlook

The outlook for 2026 is a major point of investor debate. Meta expects Q1 2026 revenues in the range of US$53.5-56.5bn, with currency rates expected to be roughly 4% positive for year-on-year growth. At the same time, however, the firm is announcing total costs for the full year 2026 of US$162-169bn, a significant increase from 2025.

More importantly, the capex outlook of USD 115-135bn signals a massive acceleration in investments in AI infrastructure, data centres and Meta Superintelligence Labs. While management expects operating profit in 2026 to be higher than in 2025, the market is concerned that the pace of profitability growth may not match the pace of investment growth in the short term.

Long-term results

A long-term view of Meta's results shows an exceptionally strong transformation of the company over the past four years. Revenues have grown from US$116.6bn in 2022 to US$201.0bn in 2025, equivalent to more than 70% cumulative growth. Meanwhile, the growth rate remains steadily above 20% even for a company this large, which is exceptional in the advertising business.

Gross profit grew at a similar rate, reaching USD 164.8 billion, while cost of sales increased in a relatively controlled manner. However, the key factor was operating expenses, which jumped 25% YoY to US$81.5bn in 2025. This increase is largely driven by investments in AI, R&D and infrastructure and represents a fundamental change from the extremely disciplined post-2022 period.

Despite this, operating income grew to US$83.3bn (+20% YoY) and EBITDA reached US$104.5bn, confirming that the core advertising business is generating huge amounts of cash. However, there is a notable break at the net income level - net income is down slightly by 3% in 2025, and EPS is also down by around 2%, although operating performance remains strong. This is mainly due to tax changes and high investment, not a deterioration in the core business.

The long-term numbers thus show a company that is extremely profitable, but also entering a new investment phase where some short-term profitability is being sacrificed in favor of a strategic position in AI.

News

Meta continued to expand AI capabilities across its platforms during the quarter and is preparing to launch additional versions of less personalised advertising in Europe in response to regulatory pressure. At the same time, the firm highlighted ongoing legal and regulatory risks in the EU and US, including litigation relating to the protection of minors, which may have extreme financial implications.

Shareholding structure

The shareholding structure remains strongly institutional, with the institution holding approximately 79% of the shares. The largest shareholders include Vanguard (8.9%), BlackRock (7.7%), FMR (6.0%) and JPMorgan (5.0%). A low insider stake has been the long-standing standard at Meta, offset by the founder's controlling role.

Analyst expectations

Analyst reaction following the results has been mixed. Most appreciate the continued strength of the advertising business, the growth of the user base and the high operating margin. At the same time, however, there is growing caution due to the extremely high capex in 2026 and the uncertain return on investment in superintelligence. So consensus remains positive in the long term, but in the short term the market is reacting nervously - not because of what Meta has earned, but because of how much it will have to invest to maintain that position.

Fair Price

The market today is not looking to Microsoft for confirmation that AI works - that is already taken as a given. Investors want to see clear signals of further growth acceleration or at least a concrete improvement in the outlook to justify the current valuation. Thus, the quarter confirmed a stable, high-quality growth story rather than taking it to a new level, and it is this lack of "new positive momentum" that explains the stock's cool reaction despite solid results.

How was the last quarter?

Microsoft $MSFT reported $81.3 billion in revenue in its fiscal second quarter, up 17% year-over-year (15% at constant currency). Not only is the growth rate well above the megacap tech sector average, but it is accelerating in the highest value-added segments. The development was even stronger at the operating profit level - operating income reached USD 38.3 billion, +21% YoY, a clear return of operating leverage.

On the bottom line, the quarter was also exceptionally strong thanks to the impact of the OpenAI investment. GAAP net income rose to USD 38.5bn (+60% YoY) and GAAP EPS reached USD 5.16 (+60% YoY). Adjusted for this impact, non-GAAP net income was USD 30.9 billion (+23% YoY) and non-GAAP EPS was USD 4.14 (+24% YoY), still very robust growth and a clear outperformance of last year.

To make the picture clear, the highlights of the quarter can be summarized as follows:

• Revenue: USD 81.3 billion, +17% YoY

• Operating income: USD 38.3 billion, +21% YoY

• GAAP EPS: $5.16, +60% YoY

• Non-GAAP EPS: $4.14, +24% YoY

• Microsoft Cloud revenue: $51.5 billion, +26% YoY

• Commercial RPO: $625 billion, +110% YoY

Segmentally, the quarter was clearly driven by cloud and AI. Intelligent Cloud achieved revenues of USD 32.9bn (+29% YoY), with Azure and other cloud services accelerating to +39% YoY, confirming that demand for AI infrastructure remains extremely strong. Productivity and Business Processes grew to $34.1 billion (+16% YoY), with Microsoft 365, Dynamics and LinkedIn all posting solid double-digit growth. The only weak spot remains More Personal Computing, where revenues were down 3% YoY, mainly due to Xbox, but this does not have a material impact on the overall picture.

• Full presentation with results.

CEO commentary

In his comments,Satya Nadella highlighted that Microsoft is still only at the beginning of the AI adoption curve. According to him, Microsoft's AI business is already reaching a size that would be equivalent to one of the company's traditional core segments on its own. He emphasized that Microsoft controls the entire AI stack - from data centers to its own software to the application layer - allowing it to scale faster than competitors.

Nadella's words make clear that the strategy is clearly long-term: the goal is not short-term margin maximization, but building a platform that will become the standard for enterprise AI. It is this tone - a combination of confidence and discipline - that the market has long appreciated.

Outlook

Microsoft traditionally does not provide a detailed numerical outlook in a press release, but several signals are very strong. The most prominent is the commercial remaining performance obligation of $625 billion, which represents 110% year-over-year growth and gives high predictability of future revenues. This is a key figure for investors as it confirms that the current growth is not a one-off.

The firm also suggests that cloud and AI will continue to grow significantly faster than the rest of the portfolio, while more traditional segments remain stable. Investment in data center and AI infrastructure will continue, but management reiterates its emphasis on return on capital and maintaining high operating margins.

Long-term results

Microsoft's long-term evolution confirms that the company has transformed in recent years from a high-quality software conglomerate into a global digital infrastructure company whose growth is now increasingly driven by cloud and AI. Between fiscal years 2022 and 2025, total revenue grew from $198.3 billion to $281.7 billion, corresponding to average annual growth of around the mid-teens percent. Crucially, the growth rate has not only slowed in the last two years, but has instead stabilized in the high double digits, which is exceptional for a company of this size.

In terms of revenue structure, there is a marked shift towards recurring and highly visible revenue. Cloud services, particularly Azure, are gradually increasing their share of total sales while improving the predictability of future results. This is reflected in the sharp growth in the commercial residual performance obligation, which reached USD 625 billion at the end of Q2 FY2026, creating a strong 'backlog' of future revenues and reducing the cyclical volatility of the business.

At the profitability level, Microsoft has maintained exceptionally strong operating leverage over the long term. Gross profit grew from US$135.6bn to US$193.9bn between FY2022 and FY2025, while cost of sales grew faster than in the past, mainly due to massive investments in data centres and AI infrastructure. Despite this, the company has managed to maintain very high gross margins, which is a testament to the strength of its pricing and scalability of its software model.

Operating costs are one of the key issues in the current investor debate. Operating expenses rose to $65.4 billion, an increase of more than $13 billion from FY2022. This growth is deliberate and reflects investments in developing AI models, expanding cloud infrastructure, and strengthening security and enterprise solutions. At the same time, it is clear that the rate of cost growth is now significantly lower than the rate of revenue growth, allowing for further expansion in operating margin.

As a result, operating income has been steady and gradually increasing, reaching $128.5 billion, nearly $45 billion more than in 2022. Operating margin has been at exceptionally high levels for a long time, confirming that Microsoft can generate huge profits even with massive investments in future growth. This effect is also evident at EBIT and EBITDA levels, which remain robust and provide the company with considerable financial flexibility.

Net income and earnings per share have followed this trend over the long term. Net income rose from US$72.7bn in 2022 to US$101.8bn in FY2025, while EPS increased from US$9.70 to US$13.70. The key factor here is the virtually stable number of shares outstanding, which means that earnings growth is being passed on to shareholders very effectively. This is one of the main reasons why Microsoft has long been seen as a high-quality compounder.

News

During the quarter, Microsoft continued to expand its AI feature offerings across Azure, Microsoft 365 and Dynamics, with an emphasis on enterprise deployment and security. The company also continued to integrate Copilot into key products and expanded collaboration with strategic customers across industries. These moves reinforce Microsoft's long-term position as a leading provider of AI infrastructure for the enterprise sector.

Shareholder Structure

The shareholder structure remains strongly institutional. Institutions hold approximately 76% of the shares, with Vanguard (9.4%), BlackRock (8.0%), JPMorgan (4.3%) and State Street (4.0%) being the largest shareholders. Low insider ownership is a long-standing standard at Microsoft and does not imply poor alignment of interests, as management stock compensation plays a key role.

Analyst expectations

The analyst consensus after earnings remains strongly positive. Wall Street particularly appreciates Azure's acceleration, record contract levels and the return of operating leverage. Although Microsoft's valuation is well above the historical average, analysts defend it with a combination of visible growth, strong cash flow and a dominant position in the AI ecosystem. Thus, for many investors, Microsoft continues to represent a "safe way" to participate in the AI megatrend without extreme risk.

Fair Price

Why Microsoft stock is down after earnings:

1. Extremely high expectations were already priced in - While the results showed strong double-digit growth in both revenue and profitability, the market expects not just "strong numbers" from Microsoft at this stage, but acceleration. Azure growth of 39% and cloud growth of 26% were very good, but did not represent a significant acceleration from the previous quarter, which at current valuations is not enough to move the stock up further.

2. Cost and ROI concerns on AI investments - Microsoft is investing massively in AI infrastructure, data centers and development, which while supporting the long-term story, increases uncertainty around margins and free cash flow in the short term. Some investors are choosing caution after the results and realizing gains until it is clear how quickly AI investments will translate into further earnings acceleration.

3. Valuation sensitivity in the late-cycle megacap - Microsoft is now perceived as a "safe AI play," which has put the stock at high multiples relative to its historical average. In such an environment, even a slightly cautious tone to the outlook or the absence of a significant positive surprise leads to an immediate downward market reaction, not because the story has broken, but because the room for error is minimal.

That shift is becoming visible beneath the surface. While the automotive segment is adjusting to a more normalized margin environment, other pillars of the business are absorbing a growing share of strategic attention. Energy storage is scaling at a pace that reshapes cash generation, while autonomy, AI, and robotics increasingly define long-term optionality rather than near-term earnings. The tension for investors is clear: the short-term profit profile looks constrained, but the business model itself is becoming broader, more resilient, and harder to value through traditional automotive lenses.

How was the last quarter?

Q4 2025 at Tesla delivered a combination of weaker volumes and sales, but significantly improved gross margins, exactly the type of quarter that looks "worse" on the surface, but in the details shows that the company can drive efficiencies even in a price-tight environment. Total revenue in Q4 was $24.9 billion, -3% YoY vs Q4 2024 ($25.7 billion) and also -11% QoQ vs Q3 2025 ($28.1 billion). The biggest drag was the automotive sector: automotive sales of USD 17.7bn, -11% YoY and -16.6% QoQ, while the Energy sector, on the other hand, continued to grow, partially cushioning the decline in autos - energy generation & storage of USD 3.84bn, +25% YoY and +12.4% QoQ. Services & Other was USD 3.37bn, +18% YoY but slightly -3% QoQ, so the Energy segment was almost exclusively the driver of the quarter in terms of revenue growth.

At the profitability level, the most important signal is in gross margin. Total gross profit was $5.01bn, +20% YoY but -0.9% QoQ. However, the key takeaway is that Tesla was able to increase GAAP gross margin to 20.1%, +386 bp YoY (from 16.3%) and +210 bp QoQ (from 18.0%). In other words, even though it sold less and earned less than in Q3, there is improvement on unit economics and mix. However, the operating level is not so optimistic anymore, as the cost base growth continued: operating expenses of $3.60bn were +39% YoY and +5% QoQ, which put the brakes on operating leverage. The result was income from operations of USD 1.41bn, -11% YoY and -13% QoQ, while the operating margin of 5.7% was -50bp YoY and slightly -10bp QoQ. At the EBITDA level, the picture is more stable: Adjusted EBITDA of USD 4.15bn is -4% YoY and -1.7% QoQ, but Adjusted EBITDA margin of 16.7% is holding solid at just -17 bp YoY, even +170 bp QoQ vs Q3.

Cash flow is the biggest "twist" of the quarter and the reason why the market often reacts better than net income would suggest. Operating cash flow of $3.813bn was -21% YoY and also -39% QoQ (Q3 was $6.238bn). Yet Tesla remained FCF positive: free cash flow of $1.42bn is -30% YoY and significantly -64% QoQ (Q3 $3.99bn). Capex was USD 2.393bn, -14% YoY but up slightly from Q3 (c. +6% QoQ), so part of the FCF weakness is simply attributable to weaker OCF in the quarter. At the same time, the balance sheet remains extremely strong: cash, cash equivalents & investments of USD 44.1bn, +21% YoY and +5.8% QoQ.

Operationally, Q4 was weaker in autos but record in energy. Total deliveries of 418,227 were -16% YoY and -15.9% QoQ, while production was 434,358, -5% YoY and roughly -2.9% QoQ. Inventories increased: days of supply 15 is +25% YoY and +50% QoQ (up from 10 in Q3), suggesting a less "tight" balance between production and demand at the end of the year. Against this stands energy: storage deployed of 14.2 GWh was +29% YoY and +13.6% QoQ, a record quarter even with a clear acceleration. And software monetization continues: Active FSD subscriptions of 1.1m is +38% YoY and +10% QoQ. Infrastructure continues to grow at a pace that confirms the long-term "moat": supercharger stations +17% YoY and connectors +19% YoY.

• Full presentation with results.

Operational metrics and ecosystem scaling

Tesla produced 1.65 million vehicles in 2025 (-7% YoY) and delivered 1.64 million vehicles (-9% YoY). The decline was primarily in other models outside of Model 3/Y, where deliveries fell 40% YoY. In contrast, the APAC region recorded record deliveries, confirming the geographic shift in demand.

The power sector saw record deployment of 46.7 GWh (+49% YoY), a fifth consecutive record quarter at the gross profit level, and a rapidly growing network of Virtual Power Plants, which already includes more than 1 million installed Powerwall units.

The infrastructure continues to expand, with Tesla operating 1,553 sites, 8,182 Supercharger stations and nearly 78,000 plugs, representing YoY growth of around 17-19%.

Outlook and strategic priorities

Tesla clearly declares that 2026 will not primarily be about maximizing automotive margins, but about building the infrastructure for the next wave of growth. The company plans to roll out six new production lines across vehicles, energy, batteries and robotics, including the launch of Cybercab and Tesla Semi production in the first half of 2026.

In autonomy, Tesla continues to iterate rapidly in FSD (Supervised), with active subscribers growing to 1.1 million (+38% YoY). The Robotaxi service launched in Austin in January 2026 with the phasing out of safety oversight, a key step toward monetizing autonomous software. In parallel, the company is investing in its own AI stack - the goal is to more than double AI training capacity in Texas during 1H 2026.

The energy segment is expected to be one of the main growth drivers. Tesla plans to start production of Megapack 3 and Megablock in Houston, while storage demand remains extremely strong due to growth in electricity consumption, data centers and AI infrastructure.

CEO commentary

In his comments, Elon Musk reiterated that short-term financial results are not the main measure of Tesla's value. Management, he said, is purposefully sacrificing a portion of automotive margins in favor of long-term volume growth, data collection, and building infrastructure for autonomous driving and AI. Musk has repeatedly stressed that Tesla's key asset is not the cars themselves, but the software, data and ability to scale the autonomous system globally.

At the same time, however, he struck a more realistic tone than in previous years. Executives acknowledged that the environment of price competition remains challenging and that a return to historic levels of automotive margins will not be quick. The focus was on cost control, more efficient production and a gradual increase in the proportion of revenue from higher value-added areas, particularly Full Self-Driving, energy solutions and future AI applications.

Long-term results

The long-term trend in Tesla's $TSLA results shows a very sharp contrast between the better phase of 2021-2022 and the significantly more challenging period of the last two years, when the company had to deal with demand normalization, the EV price war, and a sharp increase in its cost base. While Tesla will have spent $53.8 billion in 2021 and $81.5 billion in 2022, a year-on-year growth of over 50%, the momentum has gradually run out. The year 2023 still brought solid revenue growth to USD 96.8 billion (+18.8%), but 2024 marked a virtual stagnation, with sales reaching USD 97.7 billion, equivalent to a growth of less than 1%. This development clearly shows that Tesla has hit the limits of rapid volume expansion and that further growth will no longer be automatic, but will have to be 'earned' either by pricing or new segments.

An even more pronounced change is evident at the level of margins. Gross profit peaked in 2022 at USD 20.9 billion, but has been systematically declining since then - to USD 17.7 billion in 2023 and to USD 17.45 billion in 2024. The main problem is not just revenue stagnation, but the cost structure. Cost of revenue has risen from USD 40.2 billion in 2021 to USD 60.6 billion in 2022 and further to USD 80.2 billion in 2024, with the rate of cost growth outpacing the rate of revenue growth in recent years. This is the exact opposite of the operating leverage that has allowed Tesla to grow profitability explosively in the past. As a result, gross margins have moved significantly lower from levels above 25% in 2021-2022, and the company now operates in a much thinner unit margin environment.

At the operating level, the break even more clearly. Net profit reached a record $13.7 billion in 2022, but fell to $8.9 billion in 2023 and to just $7.1 billion in 2024, a drop of more than 48% from the peak. Operating costs play a major role in this. Operating expenses rose from USD 7.1 billion to USD 10.4 billion between 2021 and 2024, an increase of almost 50%, with growth continuing at over 18% in 2024. Thus, Tesla today carries the cost structure of a company that is still investing as a growth title but generating revenue more in the style of a mature cyclical business. This mismatch is the main explanation why operating margins have fallen from 16.8% in 2022 to around 7% in 2024.

Shareholding structure

Tesla's stock is heavily institutionally owned. Institutions hold approximately 50% of the stock, with Vanguard (7.6%), BlackRock (6.2%), and State Street (3.4%) remaining the largest investors. Insider ownership of around 12.6% continues to ensure management's strong interdependence with the company's long-term performance.

Fair Price

The main reasons why Tesla stock is rising after earnings, even though most metrics are down year-over-year:

1. Significant margin improvement despite weaker sales - The market is overlooking the decline in sales and earnings and focusing on the fact that Tesla was able to increase its overall gross margin to 20.1% in Q4, up 386bp YoY and over 200bp QoQ. This is a clear signal that the automotive price war is not leading to the destruction of unit economics and that the company has room to re-scale profitability gradually.

2. Record and accelerating business in Energy & Software - Energy generation & storage achieved record shipments and revenues with 25% YoY and 12% QoQ growth, while the number of active FSD subscribers grew to 1.1m (+38% YoY). It is these segments that have significantly higher long-term margin potential than car sales and reinforce the thesis that Tesla is no longer a pure car company.

3. Strong Balance Sheet and No Negative Surprises in Outlook - Cash and investments rose to $44.1 billion (+21% YoY) and the company remains FCF positive even in a weaker quarter. The outlook does not contain any shocks in the form of deteriorating liquidity, the need for external funding or a sharp increase in capex, which combined with low market expectations was enough for the stock to react positively.

I’d like to describe my position in $AMZN, which I entered a year ago at $211 per share. It now represents 2.2% of my portfolio, and the stock currently trades around $245.

Three main reasons why I consider AMZN a good investment:

1. Dominant position in e-commerce: Amazon continues to hold a significant share of the global online retail market, benefiting from network effects, extensive logistics infrastructure and recurring Prime subscriptions that support customer loyalty and steady revenue growth.

2. AWS as a high-margin growth engine: Amazon Web Services remains the market leader in cloud computing, generates significant free cash flow (FCF) and is expanding into areas like artificial intelligence and machine learning, which positions it for sustained high growth in an increasingly digital economy.

3. Diversified revenue streams: Beyond retail and cloud, Amazon also earns revenue from advertising, streaming (Prime Video) and new ventures like healthcare (Amazon Pharmacy) and robotics, which is positive for further innovation and revenue diversification.

Two key risks that could affect the investment:

1. Intense competition: Competitors such as Walmart, Alibaba and Shopify are strengthening in e-commerce and cloud services, which could reduce Amazon's market share and pressure margins through price wars or competitive innovations.

2. Regulatory scrutiny: Ongoing antitrust investigations and potential regulations in the US and EU could lead to fines, forced divestitures or restrictions on business practices. This can increase operating costs and uncertainty.

Why I believe long-term holding of AMZN makes sense:

Amazon has a successful track record of innovation under strong leadership and continuously reinvests in high-growth areas like AI and logistics. Its ecosystem creates durable competitive advantages, and with accelerating globalization the company is well positioned to face challenges in the coming decade. That makes it a key growth position in my portfolio despite short-term volatility.

I plan to add more if the stock drops to around $215, which I see as an attractive entry point for dollar-cost averaging.

Do you hold AMZN? What is your target price or view on its long-term potential versus regulatory risks?

Market reaction was severe, with Fiserv experiencing some of its worst trading sessions on record after the results and outlook revision were disclosed. The combination of weaker revenue growth, a sharp cut in adjusted earnings expectations, and sweeping leadership changes created a heightened sense of uncertainty among shareholders and Wall Street alike.

What Went Wrong at Fiserv

The core of the sell-off stemmed from disappointing operational performance and an unexpected guidance reset. $FI reported third-quarter adjusted earnings per share well below what analysts had forecast, and organic revenue growth decelerated sharply, reflecting weakness in key segments. Management’s revision of the full-year outlook saw earnings expectations trimmed from roughly $10.15 to $10.30 per share down to about $8.50 to $8.60, while expected revenue growth was slashed to just 3.5 percent–4 percent after previously being positioned near double-digit levels.

These results were interpreted by the market as a sign that Fiserv’s recent growth narrative was losing momentum, particularly as competitive and macroeconomic headwinds emerged. For an industry leader in payment processing and financial infrastructure technology, such a sharp recalibration caught many investors off guard and ignited a broader reevaluation of the company’s strategic trajectory.

Leadership Shake-Up and Strategic Response

In response to the downturn, Fiserv’s leadership initiated a sweeping overhaul of its executive team and corporate structure. The company announced high-profile appointments to the leadership team, including new co-presidents and a chief financial officer, as part of what it has termed the “One Fiserv” action plan, aimed at revitalizing growth, tightening operational execution, and enhancing client focus.

This strategic reset is intended to address structural issues identified by management, including overly optimistic past assumptions, gaps in product execution and investment timing, and competitive pressures in the payments ecosystem. However, the market’s initial reaction suggests that confidence in the company’s ability to execute a turnaround remains tentative at best.

Analyst Views and Valuation Considerations

The sell-off has prompted a flurry of analyst activity, with many firms adjusting price targets and revising expectations for Fiserv’s longer-term prospects. While some have lowered targets significantly following the guidance cut, a number of analysts still view the share price decline as creating potential valuation opportunities, noting that Fiserv currently trades at historically low multiples relative to expected earnings.

The divergence in views highlights the tension between short-term performance concerns and longer-term structural strengths. Fiserv’s core business units including merchant solutions, financial technology platforms for banks and credit unions, and payment network services remain significant competitive assets, even as near-term growth pressures persist.

What Investors Should Watch Next

Looking ahead, investors will be focused on several key indicators that could signal stabilization or renewed momentum:

Execution on Strategic Plan: Progress under the One Fiserv initiative, particularly around client retention, product innovation and operational efficiency, will be critical to restoring confidence.
Revenue and Earnings Trajectory: Upcoming quarterly results and updated guidance will be scrutinized for signs that Fiserv can arrest the recent slowdown and begin to deliver consistent growth.
Margin Trends: With guidance reflecting compressed growth and profitability expectations, improvements in operating margins would be viewed as a positive development.
Competitive Positioning: How Fiserv navigates competition from other fintech firms and adapts to shifting client needs will influence long-term positioning.

For now, the sell-off in Fiserv represents more than a temporary setback — it underscores how swiftly investor sentiment can shift when growth expectations are reevaluated. At the same time, the reset may afford long term investors an opportunity to assess the company’s fundamentals, valuation and capacity for execution as it navigates what could be a defining phase in its evolution.

This is where the current phase becomes more interesting. After a cautious investment pause in 2023–2024, leading chipmakers are once again committing to long-term capacity plans. The difference this time is not scale, but precision. Growth is shifting toward fewer, far more complex systems with disproportionately high economic value. The rising weight of EUV and the early commercial rollout of next-generation lithography are changing the revenue mix, the margin profile, and ultimately the predictability of future cash flows. The underlying question is no longer whether spending returns, but whether technological exclusivity turns volatility into durability.

How was the last quarter?

The fourth quarter of 2025 was one of the strongest quarters in the company's history for$ASML Holding $ASML and a key validation of the turnaround of the investment cycle in the semiconductor sector. Revenues of €9.7bn marked quarter-on-quarter growth of around 29% compared to Q3, when ASML reported €7.5bn. This was a significant acceleration year-on-year, driven mainly by higher shipment volumes of EUV systems and the first recognition of sales from two High NA EUV systems, which have a fundamentally higher unit value than standard EUV machines.

Gross profit in Q4 reached €5.07 billion, corresponding to a gross margin of 52.2%, close to the company's historical highs. The margin was supported by the product mix - a higher proportion of EUVs, rising service sales and improving operational efficiency in production. Installed Base Management, i.e. servicing and upgrades of already installed systems, generated €2.13 billion in the quarter, representing approximately 22% of quarterly revenues and confirming ASML's strategic shift towards more stable, recurring revenues with above average margins.

Net profit for Q4 was €2.84bn, while EPS rose to €7.35, a sequential increase of over 33%. In terms of cash position, there was a significant strengthening, with cash and short-term investments reaching €13.3bn at the end of the year, up from €5.1bn at the end of Q3, reflecting both strong profitability and the collection of high volumes of advances for new systems.

A key indicator was net new bookings, which reached €13.2 billion in Q4, one of the highest quarterly figures in the company's history. Of this amount, €7.4 billion was attributable to EUV systems, which clearly shows that investments in the most advanced manufacturing technologies are accelerating, especially in the context of AI, data centers and advanced logic chips. Total backlog grew to €38.8 billion, a level exceeding the entire year's revenue, providing exceptionally strong visibility of future earnings.

On a full-year basis, 2025 revenues reached €32.7 billion, accelerating from 2024 and confirming the return of the growth trajectory. For the full year, gross margin was 52.8%, net profit €9.6bn and EPS €24.73. Despite the lower number of systems shipped compared to 2024, the overall financial result was better thanks to a significantly higher average price of equipment sold.

• Full presentation with results.

Full-year results 2025

For the full year 2025, ASML reported revenues of €32.7bn, up approximately 16% year-on-year compared to 2024. Gross profit reached €17.3bn and gross margin reached 52.8%, confirming the company's ability to maintain pricing power even with high investment in development. Net profit of €9.6bn represents a slight decline from an extremely strong 2023, but remains well above 2021-2022 levels.

In terms of volumes, 300 new lithography systems were sold in 2025, fewer than in 2024, but their average value increased significantly. This confirms the strategic shift towards more technology-intensive and expensive solutions, where ASML has a virtual monopoly.

CEO comment

CEO Christophe Fouquet described 2025 as another record milestone and highlighted that the medium-term outlook for customers has visibly improved in recent months. A key factor, he said, is the sustainability of AI demand, which is leading to increased capacity plans across the industry. This shift has been directly reflected in record order intake and backlog growth.

The CEO also pointed out that ASML continues to invest heavily in people, development and manufacturing infrastructure to be able to support growth not only in 2026 but also in the years to come. In particular, the focus is on EUV and High NA technologies, which will be key for the next generation of chips.

Outlook

ASML's outlook for 2026 is one of the strongest signals that the current demand is not a short-term cyclical blip, but a structural shift in the semiconductor industry. For Q1 2026, the company expects revenues in the range of €8.2-8.9bn, which even at the low end would represent a very solid start to the year after an extremely strong Q4. Gross margin is expected to remain in the 51-53% range, suggesting that the cost pressure associated with the ramp-up of new technologies is fully offset by pricing power and product mix.

On a full year 2026 basis, management expects revenue between €34bn and €39bn, a potential year-on-year growth range of approximately 4-19% compared to 2025. The upper end of the outlook implicitly assumes a significant acceleration in EUV system shipments, further commercial expansion of High NA EUV and continued growth in Installed Base Management, which should benefit from a record installed base.

The company also anticipates high R&D investment - R&D costs of around €1.2bn per quarter- confirming that ASML is sacrificing short-term cost optimisation for long-term technology leadership. Management repeatedly emphasizes that demand for advanced lithography is increasingly driven by AI workloads that require the most advanced manufacturing nodes and high yields, where ASML has a virtual monopoly.

News and capital allocation

ASML announced a new share buyback program of up to €12 billion to be implemented by the end of 2028. The majority of the repurchased shares will be cancelled, which increases the long-term value per share. The company is also planning a total dividend for 2025 of €7.50 per share, representing 17% year-on-year growth.

In addition, management announced a reorganization of the technology and IT teams to streamline development processes and accelerate innovation in key areas. This is a move designed to foster long-term competitiveness in an environment of increasing technological complexity.

Long-term results

ASML's long-term financial development clearly shows that the company has undergone a transformation from a cyclical equipment supplier to a structural winner in the technology megatrend. Between 2021 and 2025, revenues grew from €18.6 billion to €32.7 billion, representing a cumulative growth of more than 75%. Gross profit increased from €9.8bn to €14.5bn over the same period, with gross margins holding steady above 50%, which is exceptional in a capital-intensive industry.

Operating profit has long been around €9bn per annum, even in years when there has been a slowdown in semiconductor capacity investment. Net profit has fluctuated between €5.6bn and €9.6bn, with declines in some years driven primarily by the timing of shipments rather than deteriorating fundamentals. EBITDA rose from around €7.2bn in 2021 to over €10.1bn in 2025, confirming a strong ability to generate cash even with high investment.

An important structural trend is the gradual decline in the number of shares outstanding due to share buybacks, which supports long-term EPS growth, even in periods when net income is stagnant. Installed Base Management has gone from being a complementary segment to a key stabilising element in the results, significantly reducing cash flow volatility over the cycle.

Analyst expectations and target prices

Following the release of the Q4 2025 results and updated 2026 outlook, analyst consensus remains clearly positive towards ASML, although the emphasis on valuation and high market expectations is more prevalent in commentary. Most large investment banks view ASML as a key structural winner in the AI investment cycle, with exceptional revenue visibility due to its record backlog and dominant position in EUV lithography.

Goldman Sachs

Goldman Sachs ranks ASML among its top picks in the European technology sector. Goldman is working with a target price of €1,050-1,100 per share and notes that if the upper end of its 2026 revenue guidance (€39bn) is met, ASML can generate EPS well above €30 in the coming years without margin pressure.

Morgan Stanley

Morgan Stanley also remains at an Overweight recommendation, but the tone is slightly more cautious compared to Goldman. In particular, the bank highlights the EUV mix and the ramp-up of High-NA systems, which raise the technology barrier to entry and long-term customer ROI. Morgan Stanley's target price is around €980-1,020, with analysts cautioning that the stock's near-term performance will be sensitive to the pace of backlog execution and any shifts in Foundry customers' investment plans, particularly in Asia.

Fair Price

After being forced to rebuild its traffic model and prove independence from search algorithms, the company is now producing margins more typical of software monopolies than consumer fintech. The real investment debate is no longer about demand. It is about durability: can a platform built on comparison and intent remain structurally profitable when distribution rules change again?

Top points of the analysis

• Gross margin of over 90% confirms exceptionally good unit economics

• Transition from deep operating losses to net profit within two years

• Significant operating leverage finally translating into results

• Low debt and high liquidity reduce cyclical risks

• Valuations still reflect past risks, not current business realities

• Distribution stability and credit cycle remain key factors

Company profile and sources of value

NerdWallet $NRDS operates as a digital financial advisor and comparator whose core value is its ability to connect consumers with specific financial products at the point when their demand is highest. The firm does not bear credit risk itself, does not provide capital, and does not expose itself to the regulatory demands of the banking industry. Its assets are the user's attention, trust and ability to convert.

Revenue is generated primarily through commissions from financial institutions. These commissions are either fixed per client acquired or variable according to the value and quality of the contract. This means that one "good" user is often worth significantly more than dozens of passive visitors. It is this asymmetry that is behind the extremely high gross margin, which was around 91.6% in 2024.

Historically, the company's greatest strength has been its ability to generate huge amounts of organic growth through search engines. This model has enabled growth without the need for massive marketing budgets, but has also created structural vulnerabilities. As algorithms changed and competition intensified, it became apparent that some of the growth was not built on a sufficiently robust foundation. This led to a rethinking of the entire strategy and a shift from a pure "traffic-first" model to user economics and return on capital.

Core products and services - where is the growth and where is the stability

Credit cards remain the most important segment. These represent the highest unit value for the business, as banks are willing to pay high commissions to acquire creditworthy clients. This segment is highly cyclical, but has the potential to return to double-digit growth in an environment of stabilizing or declining rates. This is where the eventual recovery in consumer credit will be most rapid.

Personal loans and refinancing form the second pillar. This segment is more volatile but also very sensitive to macroeconomic impulses. It was significantly subdued in the years of high interest rates, but once credit conditions ease, it could again represent a strong growth engine. Importantly for NerdWallet, it does not invest capital here, but only brokers demand, which significantly reduces risk.

Insurance is a stabilizing component of the portfolio. It grows more slowly but provides relatively stable income across the cycle. Over the long term, it helps smooth out fluctuations and increases the predictability of cash flow.

Competitive environment - with whom the company competes

The main competitor is Credit Karma, which has the advantage of deeper data work and strong integration into the broader technology ecosystem. This allows it to personalise very precisely, but also makes it less flexible and more dependent on the strategy of the parent platform. NerdWallet, by contrast, is independent and can optimize offerings across partners without conflicts of interest.

Bankrate benefits from long-term brand building and strong media reach, but its model is more costly and less scalable. Most of the value is created at the content level, not conversion optimization.

NerdWallet profiles itself as a lower volume but higher quality platform. This is clearly reflected in asset efficiency - asset turnover of 1.61 is among the highest in the sector.

Management

CEO Tim Chen has been with the company for a long time, and his biggest test has not been the growth phase, but a period of slowdown and pressure. It was here that management demonstrated its ability to adapt its strategy to the realities of the market. The decision to slow growth, reduce cost experimentation and focus on return on capital was not popular, but it proved to be the right one.

The way management has approached cost optimisation without damaging gross margin or product quality adds credibility to future plans. Capital is not allocated to risky acquisitions or expansion. Instead, it is invested in technology, content and monetization tools that add value to the existing user base.

For the investor, it is key that management has demonstrated a willingness to protect the economics of the business, even at the cost of a temporary slowdown in growth. This significantly reduces the likelihood of value destruction in future cycles.

Financial performance

The company's revenue increased from £379.6m to £3.6m. USD 538.9 million in 2021. USD 538.4 million in 2022, further to USD 599.4 million in 2013. USD 687.6 million in 2023 and USD 687.6 million in 2023. Growth has gradually slowed, but it is crucial to interpret this correctly. This was not a loss of relevance, but a conscious redirection of strategy from growth to profitability.

Gross profit grew in absolute terms at almost the same rate as sales, confirming the stability of the unit economics. The gross margin remained above 90% even during the slowdown, proving that the pressure was not on the product side but solely on the cost side. This is where the biggest change has occurred.

Operating costs, which in the past grew faster than sales, have stabilised. As a result, the transition from an operating loss of -€19 million to an operating loss of -€1.5 million was achieved. USD 9.4 million in 2022 to an operating profit of USD 9.4 million. This shift of almost USD 30 million in 2024 will result in a net profit of USD 2.5 million. USD in two years clearly shows that the company is now operating at a completely different level of efficiency.

Net profit reached 30.4 million. EBITDA of USD 54.1 million was achieved in 2024, corresponding to a net margin of 9.22%. The EBITDA of USD 54.5 million confirms the ability to generate cash even without further expansion. Return on equity is exceptional - ROIC 19.49%, ROE 19.19% and ROA 14.87% show that NerdWallet is one of the most efficient players in the financial services sector today.

Balance sheet, cash flow and financial stability

One of the most underrated aspects of NerdWallet is its balance sheet. While many digital platforms in finance are dependent on external funding, debt, or constant access to capital markets, here we see quite the opposite picture. The company operates with virtually zero debt, which fundamentally changes the risk profile of the entire investment.

Total assets amount to approximately EUR 438 million. USD 433 million, with liabilities of only around USD 73 million. USD 73 MILLION. Equity is around EUR 364 million. This implies a very high equity ratio of around 82 %. In other words, the vast majority of assets are financed by equity, not debt. Both debt-to-equity and debt-to-assets are effectively zero.

Net cash position of around EUR 57 million. USD 57 means that the company has more cash than debt. Working capital in excess of $200 million. USD 200 provides a comfortable cushion for operations and any short-term fluctuations in earnings. Liquidity ratios - current ratio of 3.7 and quick ratio of 3.26 - are well above the sector average and indicate very low risk of tight liquidity.

From a cash flow perspective, it is key that the company has reached a stage where operating cash flow exceeds net profit. An operating cash flow ratio of around 1.38 confirms that profits are not just an accounting construct, but are actually translating into cash. EBITDA of over 54 million. USD 54.5 million creates a sufficient internal funding source for further development without the need to reach for debt or shareholder dilution.

An Altman Z-Score of 8.4 virtually eliminates the risk of financial distress. In the context of the cyclical business of personal finance, this is a critical element of the investment thesis - the firm is able to survive a significantly worse macroeconomic scenario without having to sacrifice strategy or shareholder value.

Valuation

Current market capitalization of around $964 million. USD and an enterprise value of around USD 843 million. USD 844 million puts NerdWallet in a position that is very interesting from an investment perspective. At first glance, the company may not appear to be "extremely cheap", but a deeper look at the multiples and their implications shows a significant disconnect between the quality of the business and the valuation.

The stock is trading at about 13.4 times earnings, 1.21 times sales and about 10.4 times operating cash flow. These multiples are more typical of stagnant or highly cyclical companies with low returns on capital. Here, however, we have a business with a gross margin of over 90%, ROIC of nearly 20%, and double-digit sales growth.

A price-to-book of 2.4 may seem higher at first glance, but it makes sense in the context of a capital-light model and high ROE. The company is generating significantly higher returns on capital than the book value of assets would imply. A price-to-sales of 1.21 is extremely conservative in a digital platform environment, especially considering that a significant portion of sales is already reflected in net income today.

The market today implicitly assumes that profitability is fragile, cyclical and potentially temporary. This is where the investment contradiction lies. If the current level of margins is sustainable and revenue growth stabilizes in the low double digits at least, the current valuation does not make economic sense.

5 reasons why NerdWallet could grow in the coming years

1) Diversification beyond credit cards: insurance and banking products as a more stable pillar

NerdWallet has long been heavily dependent on credit card commissions, a segment sensitive to the economic cycle. But the company is gradually strengthening the insurance, personal loan and bank account areas, which tend to be more stable and more scalable. This reduces dependence on one category and increases the predictability of revenue.

Where it can grow: especially in the US, where it has a strong brand and high traffic.

2) Mortgages as a long-term growth bet

The acquisition of Next Door Lending allowed NerdWallet to go deeper into mortgages and participate not only in acquiring leads, but also in the actual brokerage. The mortgage market may be cyclical, but with future rate declines, there could be a strong wave of refinancing and new home purchases. This would open up a significant source of growth for the company.

Where it can grow: the US mortgage market and housing finance.

3) Development of investment and advisory services (wealth management)

NerdWallet is starting to build its own financial advisory and wealth management platform. This is strategically important because it can earn long-term, recurring revenue instead of one-time commissions. In addition, the firm can offer these services to users who come to the site for basic financial products.

Where it can grow: the US, particularly among retail investors and the middle class.

4) International expansion in English-speaking countries

NerdWallet's model is based on content and comparisons of financial products, which is relatively easy to transfer to other countries. The company already operates in the US, UK and Canada and is gradually expanding its product offering and partnerships with banks and insurance companies there.

Where it can grow: the UK, Canada and eventually other Anglo-Saxon markets.

5) Better monetisation of existing users

NerdWallet has millions of visitors per month. If it can better personalise its offer, link products together and increase conversion rates, it can significantly increase revenue per user even without a surge in traffic.

Where it can grow: across all major markets, especially the US.

Growth projections for specific markets

• FinTech market (globally):

  • Size in 2024: approximately USD 220-395 billion

  • Expected growth: roughly 15-20% CAGR

  • Projection: more than 1.5 billion. USD 1.5 billion by 2033-2035

• Personal Finance Software:

  • Size in 2024: approximately USD 1.4 billion

  • Expected growth: approximately 7-12% CAGR

  • Projection: approximately USD 2.5-4.2 billion by 2032

• AI solutions for personal finance:

  • Market size in 2025: approximately USD 1.1 billion

  • Expected growth: around 22% CAGR

  • Projection: roughly USD 3 billion by 2030

Investment scenarios

Optimistic scenario - return to growth phase

In the upside scenario, there is a combination of several factors that reinforce each other. The credit cycle in the US gradually normalizes, banks and card providers increase marketing budgets and refocus on acquiring quality clients. With its position at the top of the "tables", NerdWallet is a natural beneficiary of this trend without having to change its business model or increase risk.

At the business level, this means a return to double-digit revenue growth, particularly in the credit card and personal loan segments. Thanks to the cost optimisation already carried out, this growth is translating into profit significantly faster than in the past. The operating margin is moving from around 7% today towards 10-12%, while the net margin is stabilising around 10%.

In terms of financial results, this would imply:

• Revenue growth towards the 850-900 million mark. USD 850 million within a few years

• net profit in the order of EUR 70-90 million. USD

• continued strong operating cash flow without the need for external capital

Realistic scenario - stable profitable business with gradual revaluation

The base case scenario assumes that the macroeconomic environment remains mixed. The credit cycle does not deteriorate, but neither does it improve significantly. In this environment, NerdWallet continues to grow gradually based on better monetization of its existing user base and a more stable product mix.

Revenues are growing at high single-digit to low double-digit rates, with most of the benefit coming from conversion optimization, not aggressive traffic growth. Operating margins are improving slightly due to operating leverage, but without dramatic jumps.

Financially, this would mean:

• Revenue of around 750-800m. USD

• net profit of 40-60 million. USD

• stable and predictable cash flow

Valuation remains relatively conservative, but the market is gradually recognizing that profitability is not temporary. The share price rises in this scenario primarily due to earnings growth.

Pessimistic scenario

The negative scenario assumes that the consumer credit cycle remains subdued for an extended period of time or that further changes in online distribution occur that reduce the quality of traffic. In this environment, NerdWallet faces stagnant sales and pressure to grow.

Crucially, the restructuring has meant that the company is not falling back into deep losses. The cost base is set to maintain profitability even with lower growth. Margins are narrowing but remain positive.

Financially, this would mean:

• stagnant sales around current levels

• lower but still positive net profit

• maintaining a strong balance sheet and cash position

In this scenario, share price growth is limited, but the downside is relatively protected by a debt-free balance sheet and the ability to generate cash. The investment turns into a "wait and see" position rather than a loss story.

Risks - what would have to fail

• Further structural changes to online distribution that would permanently reduce the quality of traffic

• Extended credit cycle with low willingness of banks to spend on customer acquisition

• Competitive pressure on commissions and monetization

• Risk of management sacrificing profitability again in favour of growth

What to watch next - specific signals for the investor

• Revenue growth in the credit card and loan segments

• Operating and net margin development

• Operating cash flow and its ratio to net profit

• Stability and traffic structure

• Cost discipline of management

What to take away from the article

• A high-margin, capital-light business

• The transition to structural profitability is supported by data

• Balance sheet significantly limits downside

• Valuation does not reflect return on capital

• Credit cycle is a key catalyst

The semiconductor sector has had a period that is outside of normal cycles. While previously sentiment around chips typically revolved primarily around consumer electronics and supply cycles, recent years have shifted the center of gravity of demand toward infrastructure, thus:

• data centers,

• accelerated computing (AI/HPC),

• network elements,

• high value-added memories.

The result is a combination of rapid growth in AI revenues and a massive investment race across the supply chain. From foundry capacity(the production capacity of chip factories - i.e. how many chips or silicon wafers a company can realistically produce in a given period) to high-end end products.

This is well illustrated by the latest sector outlooks. In its updated outlook, World Semiconductor Trade Statistics (WSTS) envisages a global semiconductor market close to USD 1 trillion (approx. USD 975 billion) for 2026 and growth of over 25% year-on-year, driven in particular by the memory market, which should see annual growth of up to around 30%. Similarly, a January 2026 study by Gartner, for example, pointed out that global semiconductor industry revenues grew by 21% (to ~US$793bn) in 2025, highlighting that AI chips already represent an extremely significant part of the overall market.

AI as a new capital cycle

The main difference from the past is that the demand is not just from end-customers making end products (phones/PCs), but capital. IT companies are investing in computing capacity and network as infrastructure. Nvidia $NVDA in their fiscal year 2026 results repeatedly shows how quickly their data center area has become the dominant driver. In Q3 of fiscal 2026, they reported revenue of $57 billion (+62% YoY) and an outlook for the next quarter of around $65 billion.

The other piece of the puzzle is on the supply side. High-end manufacturing is capacity and technology constrained and requires extreme CAPEX. TSMC confirmed the investment pace in January 2026 and talked about a capital budget of $52-56 billion, a signal that the pressure to expand the most advanced nodes (and related capabilities) is not ending. This has once again boosted technology stocks.

Another important element is that the boom is not just happening at chipmakers, but also at key suppliers of manufacturing technology. Reuters describes how AI demand is also pulling in $ASML - a firm that dominates EUV lithography (critical for cutting-edge processes), becoming an indirect barometer of the investment cycle for the entire industry. This is where a structural tension arises: when the entire sector increases CAPEX(a firm's capital expenditure on fixed assets - this is money that the firm spends not on day-to-day operations, but on building or expanding its manufacturing and technology base).

Why do valuations differ for $NVDA, $TSM and $AMD?

While these three stocks are often lumped together, the market values them for different reasons:

• Nvidia: monetization of AI infrastructure (accelerators + network + software ecosystem) and ability to translate growth into margins and cash flow

• TSMC: critical semiconductor manufacturer

• AMD: greatest leverage for AI/data center expansion (CPU/GPU), but at the same time more sensitive valuation to whether it can deliver expected growth rates as well as margin growth

Important caveat: expensive or overvalued doesn't necessarily mean that the stock will start to fall/sell off and that companies with these valuations can't continue to grow.

Nvidia $NVDA

Nvidia is no longer just a graphics card manufacturer. It has transformed into an AI computing platform that connects hardware, software and an ecosystem of partner technologies. This is essential to understanding why its valuation is reaching its current extreme levels. The market today is valuing the future revenue stream generated by continued dominance in AI, not just the current results, even if those are also very good for Nvidia right now.

In fiscal year 2026, Nvidia reported sales of $57.0 billion in 3Q, representing year-over-year growth of over 60%. However, this growth is not evenly distributed across segments. Data centers are pulling the numbers up, while traditional gaming GPUs are growing less. The result is exceptionally high margins (up to 55%) and free cash flow, which, if sustained, may justify a higher valuation in a few years.

However, the market is not only pricing hardware. The key is what NVDA monetizes from the entire AI ecosystem: software (e.g. CUDA), optimizations for hyperscalers, and networking technologies that complement custom acceleration in data centers.

Nvidia is often valued by Forward P/E and EV/EBITDA (total enterprise value/operating profit), which are higher than other high-tech companies. For example, Forward EV/EBITDA can be above 30, while the historical median for technology titles is significantly lower. The reason? The market discounts very high rates of profitable growth in prices for several years ahead.

There are two key factors to this:

• Measurable cash flow - while many technology growth companies are based on the promise of future profits, Nvidia actually generates high operating profits.

• A strong position in all key AI segments from GPUs to software layers and complementary technologies.

However, what justifies the high valuations is the market leadership and relentless margin growth in the years ahead. Without maintaining these key parameters, high valuations would be vulnerable. But already, looking at the chart, it may appear that the stock has run out of breath. Since the growth of the first half of last year and the years before, the stock has barely moved in the last 6 months. They are currently trading at the same prices as they were in November and are up only 4% since August, having been down several percent last week.

Nvidia's valuation is extremely sensitive to three key variables:

• Data center revenue growth rate: if demand for AI accelerators slows, the market would quickly reassess growth expectations

• Margins and product mix: a shift to lower margins (e.g. a greater proportion of price sensitive products) could significantly reduce free cash flow

• Competitive pressure: the arrival of strong alternatives (e.g. proprietary AI chip hyperscalers) may limit the growth space

TSMC $TSM

Taiwan Semiconductor Manufacturing Company is the largest manufacturer of state-of-the-art processors on the planet, providing technology and capacity to other manufacturers (e.g. Nvidia, AMD or Apple). The company's business model is therefore structurally different from companies that only design their chips.

TSMC controls a significant majority of the market for the most advanced manufacturing nodes (e.g. 3nm and now 2nm technologies) that are required for high-end AI chips. Its ability to be the first to introduce advanced processes and the use of EUV lithography is one of the key competitive advantages that keep the company's margins high and demand from high-end chip designers. This technological dominance is also the reason why TSMC is achieving higher growth than other manufacturing companies.

According to surveys, TSMC holds over 70% of the global market for advanced chip manufacturing, and its technologies are key to growth industries. This share also means that the supply of capacity for the most advanced processes is highly inelastic: building new factories requires huge investments and several years of construction, which limits rapid response to fluctuations in demand.

Unlike traditional semiconductor manufacturers, who are considered cyclical by short-term supply shocks, the market values TSMC as part of an "AI super-cycle" where investment in computing infrastructure drives long-term growth. Investing in new factories is a kind of subscription to future revenues, as the new factories will supply the market with high value-added after years of construction.

TSMC's capex this year is estimated at $52-56 billion - a huge sum even in the context of technology companies - and reflects a strategy to secure demand not just this year but over the long term. Building a new processor factory often costs tens of billions of dollars and 2-3 years of time, which amplifies barriers to entry for competitors.

According to current analysis, the market does not value TSMC as a classic cyclical business, but rather as a monopoly supplier of critical infrastructure for the AI ecosystem. This is reflected in valuations. The stock has appreciated hundreds of percent over the past few years, and even given the current outlook, it is trading above its fair price. This is confirmed by the Fair Price Index on Bulios.

The biggest sensitivity in TSMC's valuation comes from the geopolitical factor. Although the business model itself looks like an innocent manufacturer on the surface, most of its current production takes place in Taiwan, which exposes it to geopolitical risks, export regulations, and pressures to diversify production. Therefore, TSMC is also investing in factories in the US and Japan, which increases cost and time to commercial production, but also partially reduces concentration risk.

This may also have an impact on valuation. While corporate fundamentals remain strong, the risk premium associated with geopolitical threats and the cost of geographic diversification may leave valuations lower than purely stable Western tech giants even with the same growth.

Fundamental to TSM's growth drivers

• Dominant market share in cutting-edge hubs and role as a key part of AI infrastructure

• Massive capex as a subscription to future revenues with a long payback time horizon

• Technology dominance and massive margins (above 50%)

AMD $AMD

Advanced Micro Devices stands as the second major platform in the chip world, benefiting from the growth of AI and data centers, but with a unique blend of risk and opportunity that differentiates it from both Nvidia and TSMC. AMD's valuation today is driven by investor-appreciated revenue growth, particularly in data centers.

AMD today generates revenue across three major segments:

• Data Centers

• PC processors

• Gaming

Data centers are now the most important growth driver due to growing demand for server CPUs(EPYC) and AI accelerators(Instinct), while the traditional PC and gaming segments are relatively smaller and more cyclical.

In addition, the company is looking to diversify its technology base. The acquisition of Xilinx and other startups has allowed AMD to better integrate AI acceleration and new architectures, which is reflected in its AI hardware development.

According to company plans and analyst estimates, AMD is targeting a 35% CAGR(compound annual average growth rate over a given period, including compound interest) in total revenue and a 60% CAGR in data center revenue in the coming years, with a goal of reaching $100 billion in data center revenue by 2030.

With this outlook, AMD is valued as a growth stock with a valuation that strongly reflects expectations for future AI and datacenter revenues. The stock is already up 20.3% year-to-date and is 38% above its intrinsic value, according to the Fair Price Index, which is based on DCF and relative valuations. Investor optimism is thus very high and shows that the stock is selling in the market today with the prospect of great future value added.

The biggest competitive challenge for AMD is two things:

• The dominance of competitors in key markets - Nvidia still has a large dominance in AI accelerators and a strong ecosystem around software. Even though AMD has been gradually increasing the performance of its Instinct GPUs, the company's position is still rather challenger to $NVDA.

• Intense margin pressure - AMD's margin trajectory is more volatile than some other players due to price competition, high spending and new architecture development.

This combination means that AMD's valuation may be more volatile. When the market assesses that growth will continue, valuations will remain high; but at the first sign of slowing growth or loss of share in key segments, prices may be sensitively revised.

For example, several analysts have recently raised price targets for AMD stock, citing the expected impact of AI products and growth trajectory, while some forecasts are more cautious given competitive pressures and weaker margins.

Conclusion

The current extreme valuations in the semiconductor sector should not be viewed solely as the result of a cyclical recovery or short-term enthusiasm around AI. Valuations primarily reflect a structural shift in the role of chips in the global economy. Semiconductors are becoming an absolutely key product needed to enter the data center, automation, cloud, defense systems and industrial applications markets. The market is therefore increasingly pricing in not only current profitability, but more importantly the sector's expected long-term position in investment flows related to computing capacity, connectivity and digitalization.

At the same time, the entire industry is entering an environment where supply is extremely limited in terms of technology and capital. The development of the most advanced production nodes requires tens of billions of dollars per year, cutting-edge know-how and a narrow ecosystem of suppliers, which significantly increases barriers to entry and reduces the flexibility of supply. The combination of structurally increasing demand and slowly scalable production creates the basis for consistently higher valuations across the sector.

Do you have $ASML in your portfolio? Do you think the stock could reach $2,500 this year?

The fourth-quarter results reflect that transition. LVMH remains highly profitable and cash generative, yet the group is facing its first broad-based revenue decline in years alongside mounting pressure on key segment margins. The market reaction is therefore cautious—not because the business is broken, but because the era of effortless luxury growth is over.

What was the last quarter and full year of 2025 like?

LVMH $MC.PA achieved sales of €80.8 billion in 2025, down five per cent year-on-year, with an organic decline of one per cent. The fourth quarter alone delivered organic growth of one percent, a stabilization from the third quarter but not a return to previous momentum.

Operating profit from ordinary activities came in at €17.8 billion, down nine percent, and operating margin declined to 22 percent. Currency movements and weaker volumes in the segments with the highest historical profitability had a significant impact here. Net profit attributable to the Group was €10.9 billion, down thirteen percent from 2024.

The positive side of the results is cash flow. Operating free cash flow rose eight percent to €11.3 billion, while net financial debt fell 26 percent to €6.9 billion. This confirms that LVMH can generate cash and strengthen its balance sheet quickly even in a worse cycle.

• Full presentation with results.

Performance of individual segments

The Fashion & Leather Goods segment, which has long been the Group's main source of profitability, recorded sales of €37.8 billion, down five percent organically. Operating profit decreased by thirteen percent to €13.2 billion, yet the segment maintained an exceptionally high operating margin of 35 percent. The weaker performance was mainly related to the normalisation of demand after an extremely strong 2024, particularly in Japan, where the weak yen helped at the time.

Wines & Spirits was the weakest link in the portfolio. Sales fell organically by five percent and operating profit fell 25 percent to €1.0 billion. The biggest pressure came from the cognac category, where trade barriers and weaker demand in China and the US had a negative impact.

In contrast, Selective Retailing was one of the clear winners of the year. Revenues there grew organically by four percent and operating profit jumped 28 percent to €1.78 billion, mainly due to the continued expansion of Sephora. The segment's margin increased to 9.7 percent, a significant structural shift.

Perfumes & Cosmetics remained stable at the sales level but managed to increase operating profit by eight percent thanks to product innovation, while Watches & Jewelry posted organic growth of three percent but a slight decline in profitability due to higher network development costs.

Management comment

In his comments, Bernard Arnault stressed that 2025 was all about resilience and long-term strategy, not about maximising short-term growth. He said the group was sustained by local customer loyalty, brand strength and the ability to create unique retail and cultural experiences.

At the same time, management openly acknowledges that the environment remains uncertain and that 2026 will not be about aggressive expansion, but about tight cost control, margin protection and further strengthening brand exclusivity. This is a clear shift in tone from 2021-2023.

Long-term results: a return from the peak of the cycle

Looking at the last four years, it is clear that LVMH has entered a normalisation phase after extremely strong growth. Revenues rose from €64.2 billion in 2021 to €86.2 billion in 2023 before falling slightly to €84.7 billion in 2024.

Operating profit peaked at €22.6 billion in 2023, while it fell to €18.9 billion in 2024, corresponding to a decline in margins from around 26 percent to around 22 percent. EBITDA followed a similar trend, declining from €28.6 billion in 2023 to €22.3 billion in 2024.

Net profit increased from €12.0 billion to €15.2 billion between 2021 and 2023, but fell to €12.6 billion in 2024. Earnings per share decreased from €30.3 in 2023 to €25.1 in 2024, confirming that profitability, while normalizing, remains at very high historical levels.

Shareholding structure

LVMH remains a strongly family-controlled group, with almost 50 percent of the shares held by insider structures linked to the Arnault family. Institutional investors hold approximately 18 percent of the shares, with the free float amounting to approximately 36 percent. This implies high management stability, but also lower sensitivity to short-term market pressure.

Outlook for 2026

Management remains cautiously optimistic. It does not expect a return to double-digit growth, but relies on improving trends in Asia, the continued strength of Sephora and the stabilization of Fashion & Leather Goods. Margin protection, selective expansion and further brand strengthening remain priorities.

Dividend policy remains generous, with a dividend of €13 per share to be paid for 2025, confirming management's confidence in its long-term ability to generate cash.

Analyst expectations and target prices

Analyst reaction following the 2025 results has been cautious and significantly less clear-cut than in previous years. The consensus view is that LVMH remains the best-performing asset in the luxury sector, but there is also a growing view that 2026 will be a transitional year and that a return to higher growth may take longer than the market initially expects.

Morgan Stanley maintained its Overweight recommendation following the results, but lowered expectations for near-term momentum. In its commentary, it highlights that while the core Fashion & Leather Goods segment is still generating an operating margin of around 35%, volume growth remains weak and primarily dependent on local demand in the US. The target price, according to their latest estimate, is in the €820-850 range, implying medium-term rather than rapid growth potential.

Goldman Sachs is more conservative and points to a structural change in consumer behaviour in China. According to the bank, Chinese demand is unlikely to return to the pace of 2021-2023 and the luxury sector is entering a longer phase of normalisation. Goldman Sachs maintains aNeutral stance with a target price of around €780, citing margin pressure and weaker operating leverage with low organic growth as the main risks.

Fair Price

Earnings Shortfalls and Shifting Guidance Shake Confidence

Investors were also unsettled by UnitedHealth’s fourth-quarter results, which revealed softer revenue and a cautious outlook that fell short of Wall Street expectations. Although adjusted earnings per share ticked slightly above consensus, the forecast for full-year revenue came in below projections and included substantial restructuring and cyberattack charges. Analysts noted that the combination of muted top-line performance and a conservative outlook triggered margin concerns that extend across the group of major health insurers.

This earnings shock followed broader sector dynamics earlier in the year, including firms revising guidance due to rising medical costs and higher utilization of healthcare services in Medicare Advantage plans. Those headwinds have eroded confidence and contributed to outsized price swings relative to more defensive sectors.

Policy Developments Compound Sell-Off

Healthcare insurers also faced additional pressure from proposed changes to federal reimbursement policies. The Centers for Medicare and Medicaid Services (CMS) announced a nearly flat rate increase for 2027 Medicare Advantage payments far lower than expected by analysts which disappointed markets reliant on robust reimbursement growth to support future earnings . This proposed adjustment, which included revisions to diagnostic coding rules, translates into roughly $700 million in projected industry revenue versus the much larger gains seen in prior years, exacerbating uncertainty about future profitability.

This policy surprise also weighed on stocks beyond UnitedHealth. Peers including Humana, CVS Health and Elevance Health experienced double-digit declines as investors reassessed valuations in light of changing payment dynamics. The market response illustrates how sensitive healthcare insurers are to federal policy adjustments that influence reimbursement rates and risk scoring formulas.

Sectorwide Ripples and Broader Market Impact

The weakness in major insurance stocks has not been isolated. Market indexes such as the Dow Jones Industrial Average saw significant downward pressure due to UnitedHealth’s weighting and sharp declines in its share price, which concluded one session down nearly 20 percent. Other parts of the healthcare sector including pharmacy benefit managers and healthcare providers have also felt the knock-on effects, with defensive ETF exposures to healthcare stocks falling as investors reduce risk.

Dates earlier in the sell-off also saw major moves. UnitedHealth shares experienced some of their worst performance in decades after guidance revisions, triggering sharp drawdowns not only in the company but in associated ETFs and sector indexes. This divergence between healthcare stocks and broader equity benchmarks highlights the sector’s unique challenges amid rising costs and regulatory scrutiny.

Drivers of the Decline and Structural Headwinds

Several structural issues are contributing to this downturn. Analysts have cited rising medical costs, especially within Medicare Advantage plans, which are more expensive to administer than expected, squeezing margins and pressuring projected growth. Regulatory scrutiny, including investigations into billing practices and billing risk adjustment methodologies, has added to uncertainty. Leadership changes and large restructuring charges have also unsettled investors looking for consistency at the top of major insurers.

What Investors Should Watch Next

Looking ahead, investors will monitor key factors that could influence a turnaround or further declines in healthcare equities. These include clarity on Medicare Advantage rate setting and reimbursement rules, updated guidance from insurers on cost trends, and signals from policy makers regarding healthcare spending and regulation. Should reimbursement rates improve or trend back toward prior expectations, sentiment could stabilize, easing some of the downward pressure.

However, if medical cost inflation remains high and political scrutiny intensifies, healthcare stocks could continue to lag broader markets. For now, the sell-off in UnitedHealth and its peers serves as a reminder that even historically defensive sectors are vulnerable to concentrated policy and operational risk.

The fourth-quarter results confirm operational strength and a long runway of projects, yet they also underline the core challenge for the stock. At today’s valuation, investors are less focused on quarterly beats and more on flawless execution—balancing capital intensity, project timing, and shareholder returns over the coming years.

How was the last quarter?

In the fourth quarter of 2025, NextEra Energy $NEE reported GAAP net income of $1.535 billion, equivalent to earnings of $0.73 per share. Compared to the same period in 2024, this is a significant improvement from $1.203 billion and $0.58 per share. On an adjusted basis, earnings were $1.133 billion and $0.54 per share, respectively, representing modest but steady year-over-year growth.

For the full year 2025, the company reported GAAP earnings of $6.835 billion, or $3.30 per share, while on an adjusted basis, earnings were $7.683 billion and $3.71 per share. Thus, adjusted EPS grew approximately 8.2% year-over-year, which is above the high end of the previously announced range. This confirms that the growth story is not driven by accounting effects, but by actual operating performance.

Structurally, the distribution of performance between the main segments is important. Florida Power & Light increased net income to $958 million in the fourth quarter and for the full year reached $5.012 billion, an increase of approximately 10% year-over-year. Growth was driven primarily by expansion of the regulatory base, which increased 8.1% year-over-year, and continued investment in infrastructure. NextEra Energy Resources, on the other hand, showed significant improvement on a GAAP basis, with quarterly results swinging from a deep loss to a $545 million profit, while on an adjusted basis, results remained slightly weaker year-over-year. However, this does not change the fact that the segment continues to generate record new project volume.

• Full presentation with results.

CEO commentary

CEO John Ketchum particularly emphasized the company's long-term visibility of growth and unique position in the energy transition. In his words, NextEra Energy has not only surpassed the high end of its own outlook in 2025, but has also set the stage for another decade of expansion. Crucially, growth is spread between FPL's regulated business and long-term contracted projects within Energy Resources, reducing volatility in results.

At the same time, Ketchum has been outspoken about the role of growing demand for electricity - particularly from data centers and hyperscalers - and the company's ability to meet that demand quickly and at a scale that competitors often don't have. In this context, he also mentioned the plan to bring the Duane Arnold nuclear power plant back on line through a long-term $GOOG contract, underscoring the company's strategic flexibility.

Outlook

The outlook remains one of the strongest pillars of NextEra Energy's investment story. Management expects adjusted earnings per share to reach $3.92 to $4.02 in 2026. At the same time, the company reaffirms its goal of growing adjusted EPS at a rate of at least 8% per year through 2032 and at the same rate thereafter from a 2032-2035 base year.

Dividend policy remains consistent with the growth profile - the company is targeting roughly 10% annual dividend growth through 2026 and then a rate of approximately 6% through 2028. Importantly for investors, this growth is backed by long-term contracts, a record backlog of projects and a stable regulatory base in Florida.

Long-term results

Looking at NextEra Energy' s performance over the past four years, it is evident that the company went through a growth phase from 2022-2023, but this was followed by a significant cooling in 2024 across virtually the entire income statement. After strong growth in 2023, when revenues jumped 34% year-on-year to $28.1 billion, they fell 11.9% to $24.8 billion in 2024. This decline is not cosmetic - it is a return to below 2022 levels and a clear signal that the pace of expansion has broken in the short term.

Gross profit has followed this trend even more closely. After a particularly strong year in 2023, when it grew 77% to $18 billion, there was a sharp 17% drop to $14.9 billion in 2024. This suggests that the slowdown was not just about volumes, but also about a worse mix, timing of projects and returns on some investments. Still, it is important to add that absolute gross profit levels remain well above 2021-2022, confirming the firm's structural shift.

At an operational level, the break is even more clear. Operating profit exploded by 151% to $10.2 billion in 2023, but was followed by a 27% decline to $7.5 billion in 2024. Although operating expenses fell 4.5% to $7.4 billion in 2024, it was not enough to offset weaker revenues. This shows that operating leverage has turned against the company in the short term, and investors are rightly watching to see when the effect will turn positive again.

Net income confirms the same story. After a jump in 2023, when it rose 76% year-on-year to $7.31 billion, came a decline of less than 5% to $6.95 billion in 2024.

Earnings per share only confirms this trend. EPS jumped more than 70% to $3.61 in 2023, while it fell about 6% to $3.38 in 2024. Moreover, the decline in EPS was compounded by modest growth in the number of shares outstanding, with the average number of shares rising to about 2.06 billion. That said, some of the pressure per share was not just operational, but also capital.

Shareholding structure

The shareholder structure is typical of a high-quality utility. Institutional investors hold over 83% of the stock and the largest owners include Vanguard, JPMorgan, BlackRock and State Street. The presence of long-term institutional investors supports the stability of the stock, but also increases sensitivity to changes in the outlook and interest rate expectations.

Analyst expectations

Analysts view NextEra Energy as one of the clear winners in the long-term trend of electrification and decarbonization. The consensus expects continued earnings growth in line with management's targets, with the pace of backlog execution and the ability to sustain returns on capital at high levels of investment remaining key themes. The prevailing recommendation is between 'hold' and 'buy', with an emphasis on the long-term horizon and dividend growth rather than short-term price upside.

Fair Price

At the same time, the market today no longer judges AMD as an underdog. Valuations, analyst consensus, and media attention suggest that investors are counting on the datacenter strategy to be a significant success. So the question is not whether AMD will grow, but whether it can meet the bar it and the market have set for itself. And this is where the investment story begins to break.

Top points of the investment thesis

• AMD is targeting more than 60% CAGR in data center revenue through 2030, even above 80% for Instinct AI accelerators.

• Contracts with OpenAI and Oracle significantly increase demand visibility.

• The MI450 generation manufactured at TSMC on a 2nm process may provide a near-term technology advantage.

• Margins remain the biggest structural weakness, significantly lower than Nvidia.

• Valuations already reflect high expectations, limiting the market's margin for error.

Data centres as the backbone of the growth story

The datacenter segment is to $AMD today what the server business was years ago - the point where the company's long-term trajectory breaks. Management openly declares that data centers are set to be the main source of growth over the next five to seven years. The company is targeting a CAGR of over 60% through 2030 - an extreme number that in itself signals that AMD doesn't want to be just a complementary player alongside Nvidia $NVDA, but a full-fledged alternative to hyperscalers.

It's important to point out that this growth is not driven by traditional cloud, but primarily by AI workloads. Model training, inference, multi-modal applications and enterprise AI systems require many times more computing power than traditional server jobs. This is where AMD is trying to convince customers that its accelerators and CPUs can offer a better balance of performance, price and energy efficiency.

From an investor perspective, the key is that AMD is growing from a relatively small base. This allows for a fast percentage rate, but also increases the volatility of results. Once adoption slows or hyperscaler investment shifts, the growth curve could quickly break. The datacenter story is therefore extremely strong, but fragile at the same time.

Contracts and demand visibility

One of the main arguments of the bulls is the fact that AMD is no longer just selling "promises" today. The long-term agreement with OpenAI, which envisages the supply of up to 6 gigawatts of GPU capacity by 2030, gives the company an exceptional level of visibility. For investors, this is a major difference from companies investing billions in capacity without clear customers.

The deployment of roughly 50,000 MI450 chips in Oracle's $ORCL infrastructure then serves as an important reference point. Oracle is one of the key players in the cloud market and its decision signals that AMD is technically and operationally ready to serve large AI clusters. If these projects prove successful, they may act as a catalyst for additional orders from other hyperscalers.

In the long run, however, it is important that AMD is able to repeat and expand these contracts. One-off deployments alone are not enough. The real breakthrough will come when AMD becomes a standard part of AI architectures across the cloud and enterprise segments.

MI450 technology and the competitive battle

MI450 is a key point in the entire roadmap. Manufacturing on a 2nm process at $TSM gives AMD a chance to gain a short-term process edge, which is extremely valuable in the AI world. Higher transistor density and better power efficiency can directly impact customers, one of the few parameters where Nvidia can realistically compete.

But at the same time, hardware is only part of the equation. Nvidia has more than a decade of building the CUDA software ecosystem. AMD is trying to get around this barrier with more open standards and collaboration with the community, but transitioning customers is always a slow and expensive process.

Moreover, Nvidia's competing Ruby generation, planned for roughly the same timeframe, is reported to offer multiple performance improvements over the current generation. This means that AMD may not only have to "catch up", but in some respects even overtake to justify the high market expectations.

Margin as a key valuation threshold

Margins remain AMD's biggest structural issue. Gross margins of around 48% and net margins of around 10% clearly show that the company cannot yet monetise the AI boom as effectively as Nvidia. The difference in margins is not cosmetic, but systemic - based on pricing power, software and market position.

While management is targeting gross margin growth in the 55-58% range and a significant improvement in operating profitability, even partially meeting these goals will require disciplined execution and steady demand. Should margins improve more slowly than the market expects, share price appreciation may be significantly limited even with strong revenue growth.

Conversely, in an optimistic scenario where AMD is able to narrow the margin gap by roughly 10 percentage points, the investment story would be fundamentally rewritten. This is where the math behind the 300%+ appreciation scenario is born.

Valuation and Wall Street's attitude

The current valuation of around 33 times forward P/E clearly shows that the market already trusts AMD today. This multiple implicitly assumes that the datacenter strategy will succeed and that margins will improve over time. The room for error is therefore limited - any disappointment can quickly be reflected in the share price.

This explains the difference between media headlines and the official analyst consensus. Average target prices of around USD 280 imply a moderate growth rather than an exponential scenario. In addition, some investment banks point out that 2026 may be the midpoint of a long AI investment cycle rather than its peak, increasing the market's sensitivity to capital returns.

Capital discipline, cash flow and AI ROI

When looking at AMD's investment thesis, it is key to separate the rate of growth from the quality of growth. It is cash flow that indicates whether a company can fund a massive expansion in AI infrastructure internally or whether it is "buying" future growth at the cost of a deteriorating return on capital. The data for 2021-2024 shows Advanced Micro Devices entering the most challenging phase of the cycle from a relatively solid position, but with increasing demands for discipline.

In 2024, operating cash flow has grown to $3.0 billion, an increase of more than 80% year-over-year. This jump is important as it comes after a weaker 2023, when OCF declined significantly. In other words, AMD is already showing that it can translate increasing sales volume back into operating cash. This is a crucial signal to investors who fear that AI growth will only be "paper" in the long run.

From a free cash flow perspective, the picture is even more interesting. FCF in 2024 reached $2.4 billion, more than double that of 2023. But at the same time, it is still below 2021-2022 levels, when AMD generated over $3 billion per year. This suggests that the company is capable of strong cash generation, but at the same time sacrifices some of its potential in favor of investments and strategic priorities.

AI capex: manageable for now

AMD's capex so far appears relatively moderate. Capex in 2024 was roughly €636 million. This is an increase from previous years, but still not the aggressive investment profile typical of pure datacenter players. This has two interpretations. On the one hand, AMD is benefiting from a fabless model and not taking on the full investment burden of production. On the other, it means that the real pressure on cash flow may only come if the company starts to massively ramp up development, software and system solutions around AI.

Investing cash flow remains volatile, which is typical for the semiconductor sector. Crucially, however, AMD does not yet give the impression of a company burning cash without scrutiny. Investments are primarily funded by operating cash, not by raising debt or issuing shares. This is an important difference from many younger AI players whose growth is contingent on external capital.

Buybacks as a test of management confidence

One of the most underappreciated signals of AMD's capital discipline is share buybacks. In 2024, the company bought back roughly $1.6 billion worth of stock, which is less than the 2022 extreme, but still a significant portion of free cash flow. This sends a clear signal to management: it believes that even with high investment demands, the company has the financial capacity to return capital to shareholders.

From an investment perspective, this is important. If AMD faced a situation where it had to reinvest all its cash just to keep up with the competition, buybacks would be the first item to disappear. That's not happening yet. On the contrary, AMD is trying to balance between growth and return on capital, which adds credibility to its long-term strategy.

Where the +348% scenario comes from and why Wall Street is taking it with a grain of salt

The scenario that AMD shares could grow by around 348% by 2030 is not based on a Wall Street consensus, but a model-based growth scenario that has appeared primarily in analyst and journalist texts focused on long-term technology trends.

The logic of this scenario is simple at first sight. If AMD could maintain a more than 35% CAGR in total revenue over a few years, with the datacenter segment growing at a rate of more than 60% per year, then the stock could appreciate multiples while maintaining a relatively stable valuation multiple. From today's levels of around $230, the price could theoretically approach the $900-1,000 per share mark. It is important to stress that this calculation does not work with a re-rating of valuation, but with the assumption that the market will be willing to pay similar multiples for AMD as today.

But this is where the first major problem begins. This approach implicitly assumes that sales growth will be of sufficient quality, i.e. that it will be reflected in profitability and cash flow. Once it became apparent that AMD was growing rapidly but margins remained structurally low, the market would very likely react by compressing the valuation multiple, which would invalidate the entire 348% scenario.

Investment scenarios to 2030

Optimistic scenario

• AMD successfully launches MI450 and subsequent generations by matching or surpassing the competition in key AI workloads.

• Datacenter revenues will indeed grow at 55-60% CAGR for most of the decade, AI accelerators will remain the main driver.

• Gross margins will gradually move into the 55-58% range, with operating margins exceeding 30%, significantly improving the monetization of growth.

• AMD will become the standard second AI infrastructure vendor for hyperscalers, not just a complementary alternative.

Realistic scenario (strong growth but with limits)

• AMD will meet most of its volume plans, but the technology lead will remain limited and competitive pressure will persist.

• The datacenter business will grow very fast, but the pace will gradually slow towards a 35-45% CAGR.

• Margins will improve but remain well below the market leader; gross margins will stabilise around 50-52%.

• The market will value AMD as a strong growth player, but not as a dominant leader.

• The stock will offer above-average valuations in the tens to lower hundreds of percentages, not the extreme +348% scenario.

Pessimistic scenario

• Competitive solutions will remain ahead technologically and AMD adoption will prove slower than the market expects.

• AI capex cycle will slow or become more selective, reducing the pace of data center orders.

• Margins will improve only marginally, high R&D and manufacturing investments will weigh on profitability.

• Valuations will compress because current pricing already implicitly assumes the success of the datacenter strategy.

What to take away from the article

• AMD has one of the strongest growth stories in AI infrastructure outside of the absolute market leader.

• The +348% by 2030 scenario is possible, but represents an upper bound on results, not a baseline expectation.

• The key is not just revenue, but the ability to significantly improve margins and monetize the AI boom.

• Current valuations already reflect some of the optimism, reducing the market's tolerance for execution error.

• For the investor, it is a highly asymmetric bet: potentially extraordinary returns in exchange for higher risk and volatility.

In early 2026, financial markets came under intense pressure in response to a policy proposal aimed at capping credit card interest rates in the US. President Donald Trump unveiled a plan to cap annual credit card interest rates at 10%, which in practice would radically curtail the traditional model on which card issuers and banks have long built their profit margins and cash flow.

The current average annual percentage rate (APR) for credit cards in the US is typically above 20%, and in some segments over 30%. This gap between the market and the proposed cap was immediately reflected in the pricing of financial assets ranging from bank titles to consumer finance to the large Visa $V and Mastercard $MA payment networks, which are not direct lenders but whose business depends heavily on transaction volume and the fees associated with processing.

The market has reacted sharply. Shares of key players in the payments industry posted significant losses during the first days of regulatory pressure, while volatility also increased in indices that include these sectors.

It is important to stress that no legislative framework with such a cap has yet passed Congress, which means that this is a political move rather than a legally binding regulation. Nevertheless, markets react to expectations, and in this case those expectations and concerns are significant enough to reshape the valuation patterns of firms across the payments and banking sectors.

Source: Bulios stock detail

This context is extremely important for understanding what is happening to the stocks of Visa and Mastercard, companies that do not issue credit per se, but whose business model is closely linked to transaction fees, payment volumes and credit card activity. The absence of clear caps on interest rates allowed card issuers to generate high revenues, which in turn led to higher transaction volumes from which both companies benefited through fees.

In this situation, it is crucial to understand which parts of these companies' business could be threatened by the potential reality of the proposed changes and which parts would remain immune.

Visa $V

Visa is one of the most significant players in the global payments ecosystem. It operates as a network platform for transactional payment card processing and thus does not primarily act as a lender that issues credit to consumers. Its business model is largely based on transaction processing fees, authorization services and other associated payment service revenues in more than 220 countries.

Visa's financial results show relatively stable growth despite macroeconomic uncertainty. Year-over-year growth in payment services and transaction processing revenue contributed to more than 8% growth in payment volume . Visa also increased its dividend and share repurchase program, reflecting strong free cash flow and an emphasis on returning capital to shareholders.

In terms of market value, Visa has long been one of the largest financial technology titles. According to the most recent data, the stock had a market capitalization of about $628 billion.

Although Visa does not charge interest directly to consumers and is not a credit card issuer like banks, its market valuation has been hit by political pressure to limit credit interest rates. In the financial markets, Visa's stock initially came under pressure on concerns about the broader regulatory implications. The price fell 6.7% in two days and has basically gone nowhere in the last eight trading days. Thanks to this move, one share of $V can be had on the exchange for the same price as last January.

This reaction is consistent with the general trend of investors penalizing payment and financial system-related titles in the short term in anticipation of regulatory intervention, even though that intervention primarily targets the credit business of card issuers, not the transaction processing business of the Visa network itself.

In the long term, however, it is important to see the broader context of the payments market. Visa and Mastercard have agreed with US retailers to reduce transaction fees in 2025. They have reduced them from the previous rate of 2-2.5% of the value of payments. This agreement, which has yet to be judicially approved, may impact future revenues from payment networks, particularly in the retailer segment.

At the same time, payment networks face long-standing antitrust practices that may reduce some margins in the medium term if litigation and settlements continue.

Visa's short-term share price declines due to political pressure highlight the market's sensitivity to disruptions in the consumer credit environment. However, it is important to consider that Visa's network fundamentals are based primarily on transaction fees and payment processing, not credit card interest income. This means that the proposal to limit interest rates may not fundamentally disrupt the firm's long-term business model unless it is accompanied by broader interventions in fee policy or transaction volumes.

Longer term, the key drivers of growth for Visa in the expansion of cashless payments remain positive, with increasing adoption of digital payment methods continuing. This makes it one of the most important technology players in the global financial system also in 2026.

Still, it's important to note that the stock's growth ahead of 2025 has pushed the price to a level that is high, according to the Fair Price Index on Bulios. Indeed, $V stock is currently trading nearly 33% above its fair price.

Mastercard $MA

Mastercard is a company with one of the largest global payment networks, operating as an infrastructure for processing payment transactions between merchants, banks and end customers. Unlike banks, it does not charge interest on consumers' credit balances, but earns primarily on transaction processing fees, network access fees, and "value-added services," i.e., value-added security, data analytics, and digital solutions.

Mastercard reported robust revenue and earnings growth in 2025, with its operating results exceeding market expectations. In Q3 2025 , net sales grew 17% year-on-year, while the higher value-added services segment achieved growth of over 25%. This growth reflects increasing global payment transaction volumes and the proliferation of digital payment methods around the world.

The volume of switched transactions also grew, confirming the steady use of the payment network by consumers and merchants. According to external data, Mastercard continued to report year-on-year growth in processed transactions in the first months of 2025, including an 11% increase in transaction volume , supported by wider adoption of cards and contactless payments.

At the stock valuation level, Mastercard has long been among the largest technology companies in the world, with a capitalization of around several hundred billion dollars and a stable position in many investment portfolios. Wall Street also confirms a positive outlook for earnings in 2026, with forecasts for both net income and earnings per share (EPS) growth in the double-digit range. You can find out where the company stands in terms of detailed numbers right in the stock detail here on Bulios.

As with Visa, Mastercard has seen that the discussion about capping interest rates on credit cards has led to pressure on the stock price. Their price has fallen in $MA companies to where they were trading back in November 2024 after a 10.6% drop (from January 9 to today).

These declines reflect market sentiment and concerns about possible future crackdowns rather than a specific change in legislation. Again, the proposal itself has not yet passed Congress and has not been implemented as law. However, the increased risk acts as a variable that may increase the volatility of the title in the short term.

While interest rates on credit cards are not a direct source of revenue for Mastercard, any limitation on transaction or processing fees could have a deeper impact on the long-term revenue model.

Also, there are long-standing antitrust disputes related to fees that may have medium-term implications for the fee structure of the fee model, which is a separate regulatory factor, however not directly related to credit card interest rates.

Nevertheless, Mastercard continues to invest in technology and innovation, including the expansion of digital payment methods, security solutions and partnerships that enhance the addressable market. In addition to traditional transaction processing, the company is focusing on value-added services (products and services beyond the basic payment process) that contribute to margin growth and revenue diversification.

Another trend is technology integration, including biometric payment solutions and integration with global EMV standards.

The impact of the current political debate has been mainly reflected in higher stock valuation volatility and increased perception of regulatory risk. Mastercard's business model structure, based on transaction fees, payment volumes and added services, is decoupled from credit card interest income, which means that the direct impact of the proposal to limit interest should be limited. However, any intervention in fee policy or fee reductions may have a longer-term impact on the company's revenue and margin structure.

Like Visa $V shares, Mastercard $MA shares are currently trading above their fair intrinsic value. You can see this in the Fair Price Index, where the "fair price" calculation is based on DFC and relative valuation.

Conclusion

The stock market, with its reaction to Trump's proposal to cap credit card interest rates at 10%, has clearly demonstrated how much sentiment and regulatory expectations affect company valuations outside of the immediate target area of legislative change. Political pressure caused sharp declines in shares of financial titles including Visa and Mastercard, with investors significantly overestimating the risk of potential regulation before any legislation could be passed or implemented.

The controversy surrounding the interest rate cap is more of a signal of growing political and media pressure on the entire financial sector and consumer credit products than an actual effective regulatory measure.

However, if there are broader legislative changes affecting fee structures or transaction processing in the future, similar to the ongoing controversy over interchange fees, this may have a more profound effect on the long-term returns of these networks and their valuations.

And for companies whose stocks are overvalued, the declines can be very sudden and very sharp, as investors expect strong results and future growth from these companies. Once that belief is even hinted at, stocks react immediately.

I'd be interested to hear your opinion on the stock $HRZN. Does anyone have it in their portfolio?

Thank you in advance.

I’d be interested in your opinion on the stock $HRZN. Does anyone have it in their portfolio?

Thanks in advance.

The results reinforce that stability. Record earnings, strong free cash flow generation, and steady dividend growth underline a model built for durability rather than acceleration. For 2026, the message is clear: growth may be measured, but visibility and capital discipline remain the core of the investment case.

How was the last quarter?

In the fourth quarter of 2025, Kinder Morgan $KMI reported net income attributable to shareholders of $996 million, a significant improvement from $667 million in the same period last year. Adjusted for one-time items, primarily gains on asset sales, adjusted net income was $866 million, up 22% year-over-year.

Earnings per share were $0.45, up 50% year-over-year, while adjusted EPS of $0.39 was up 22%. These figures clearly demonstrate the company's strong operating leverage, which can turn relatively stable sales into ever-increasing profitability.

Adjusted EBITDA was $2.27 billion in the quarter, up 10% year-over-year, with the Natural Gas Pipelines segment being the main driver, benefiting from record gas transportation volumes towards LNG terminals and the domestic power sector. Operating cash flow was $1.7 billion and free cash flow after capital expenditures was $0.9 billion, representing year-over-year increases of 12% and 18%, respectively.

• Full presentation with results.

Management commentary

Management has repeatedly emphasized Kinder Morgan's strategic role in global energy security. According to Executive Chairman Richard Kinder, the company supplies more than 40% of the natural gas used as an input to US LNG facilities, directly contributing to US export dominance, particularly towards Europe.

CEO Kim Dang then highlighted the pipeline segment's record performance and the company's ability to internally fund growth projects without impairing its balance sheet position. Net debt to adjusted EBITDA remained at 3.8x, which is considered conservative and sustainable within the sector.

Outlook for 2026

The company's outlook for 2026 is moderate rather than expansionary, which may seem less attractive at first glance, but fits with Kinder Morgan's long-term philosophy. The firm expects adjusted net income of $3.1 billion, which implies roughly 5% growth from 2025 after adjusting for one-time items. Adjusted EPS is expected to be $1.36, also up approximately 5% from 2025.

Adjusted EBITDA is expected to reach $8.6 billion, up 2.5% year-over-year. The company also plans to pay a dividend of $1.19 per share, an additional 2% increase over 2025. Management expects to maintain debt at 3.8x EBITDA, confirming its focus on financial discipline.

The key growth driver remains structural growth in natural gas demand, which is estimated to grow 17% through 2030, primarily driven by LNG exports and data center energy demands.

Long-term results

Looking out to 2022-2024, it is evident that Kinder Morgan is a typical example of a stable infrastructure company. Revenues over this period were in the $15-19.5bn range, with a slight decline after 2022 reflecting the normalisation of energy markets rather than a structural issue in the business.

More fundamental is the evolution of profitability. Net profit rose from US$2.55 billion in 2022 to US$2.61 billion in 2024, while EPS increased from US$1.12 to US$1.17, despite a gradual decline in the number of shares outstanding. Adjusted EBITDA grew steadily from US$7.0 billion in 2022 to US$7.63 billion in 2024, confirming the gradual improvement in operating efficiency.

Margins remain very robust over the long term, driven by a high proportion of fee income and low sensitivity to commodity price fluctuations. The downside is relatively limited revenue growth, while the upside is high cash flow predictability and the ability to pay and grow the dividend over the long term.

News

At the end of 2025, the company's project backlog was approximately $10 billion, with 90% of projects related to natural gas and the remainder directly related to power generation. Excluding specific segments, the company expects the remaining USD 8.6 billion of projects to generate an average EBITDA multiple of around 5.6 times in the first full year of operations.

Shareholding structure

Kinder Morgan's shareholder structure combines significant insider participation with a dominance of long-term institutional investors. Approximately 13% of the shares are held by insiders, ensuring a strong alignment of management interests with shareholders. Institutions control roughly 69% of the shares, with Vanguard, BlackRock and State Street playing key roles.

Analyst expectations and market view

The analyst consensus for 2026 at Kinder Morgan is for stability and moderate growth, not acceleration. The market broadly accepts the firm's strong position in LNG infrastructure and high cash flow visibility, but also reflects that the pace of growth remains constrained by the capital intensity of the business and management's conservative financial policies.

Under the LSEG/Refinitivconsensus, analysts expect adjusted earnings per share of around $1.35-$1.38 for 2026, in line with the company's official guidance of $1.36. This consensus is key - neither the results nor the guidance surprised analysts to the upside. Adjusted EBITDA is expected to be around USD 8.5-8.7 billion, again very close to management's communicated target of USD 8.6 billion.

Target prices are in a relatively narrow range for most analyst houses. The median target price implies single-digit upside potential, with ratings concentrated mostly between "Hold" and "Moderate Buy". Analysts are particularly positive on the long-term LNG contracts, the high proportion of fee-based revenues and the disciplined approach to debt. In contrast, there is a more cautious stance on the pace of EPS growth beyond 2026 and the fact that a significant portion of the project backlog will be phased into results.

Fair Price

I'd like to share an update on my position in Chevron Corporation $CVX, which currently represents 4.2% of my total portfolio. The target price is set at approximately $187, offering potential capital appreciation along with an attractive dividend yield (historically around 4%).

Three main reasons I continue to hold CVX:

1. Reliable and growing dividend income: Chevron is a Dividend Aristocrat with a long history of raising its dividend annually. The current yield provides steady income that significantly boosts total returns over long-term holding.

2. Strong operational diversification and financial discipline: As a major energy company, Chevron generates robust cash flow from production, supported by a conservative balance sheet and low leverage.

3. Attractive valuation with upside potential toward the target price: With the current price below the $187 target level, there is reasonable room for capital appreciation, which, combined with a high dividend yield, creates a favorable risk-reward profile.

Two key risks that could threaten the investment:

1. Volatility in oil and natural gas prices: CVX's revenues and cash flow are highly sensitive to commodity price swings. A prolonged decline in oil prices could negatively impact profitability and the sustainability of dividends.

2. Regulatory and energy transition challenges: Increasing climate regulations, potential carbon taxes, and the global shift toward renewable energy could, over the long term, threaten the traditional business model in the oil and gas sector.

Overall, I remain bullish in the medium term, but I’m closely monitoring developments in the oil market and macroeconomic factors.

Do you hold CVX shares? What is your target price or your view on the balance between dividend yield and growth potential?

What do you think — does $CRM have a chance to make a comeback, or has AI already changed the rules of the game?

The rapid ascent in gold prices has reflected a mix of macroeconomic, geopolitical and market structure forces that are reshaping how investors think about risk and portfolio diversification. With bullion now priced at levels few predicted just months ago, the metal’s performance highlights both heightened anxiety and a reassessment of traditional safe haven assets.

Geopolitical and Policy Drivers

A core driver behind the recent surge has been rising geopolitical tension combined with domestic policy uncertainty in the United States and abroad. Analysts have pointed to several flashpoints from trade disruptions to political fracturing that have kept markets on edge, boosting demand for assets perceived as safe stores of value.

These tensions have contributed to broader concerns about economic stability, currency strength and the outlook for interest rates, reinforcing gold’s appeal as a hedge against currency debasement and systemic risk. It is against this backdrop that bullion has not only reached but exceeded psychological price thresholds that once seemed remote.

Strong Momentum and Technical Signals

The price move to above $5,000 is not merely symbolic; it represents a continuation of strong momentum that has been building for years. Current forecasts suggest this move is part of a broader pattern in precious metals, with both gold and silver hitting historic peaks as market participants shift away from traditional risk assets toward stores of value.

Silver, for example, has also climbed past key levels recently, reaching above $100 per ounce as part of the extended precious metals rally. This dual advance illustrates that the interest in hard assets is not isolated to gold alone but appears to be a wider trend among commodities that benefit from perceptions of economic stress.

What This Means for Investors

For investors, the implications are multifaceted. A sustained gold rally can signal deepening concerns about growth, inflation expectations, currency stability and global financial coherence. More traditionally, gold is seen as a hedge a counterbalance to market stress that typically gains favor during periods of uncertainty.

The massive price move also raises questions about positioning and market dynamics. With gold having surged dramatically over the past year and even further in recent weeks, some market watchers warn of potential volatility or price corrections if conditions change sharply. However, many strategists maintain that the fundamental drivers including geopolitical tension and policy uncertainty remain in place.

Broader Market Context

Gold’s rise is happening amid a backdrop of complex market dynamics. Equity markets, government bonds and currencies are all responding to shifts in expectations around monetary policy, risk appetites and geopolitical developments. Historically, gold has thrived when confidence in sovereign credit or fiat currencies wavers, and that pattern appears to be playing out once again as investors navigate a rapidly evolving risk landscape.

Even central banks, which once were more inclined to diversify reserves away from gold, have shown renewed interest in accumulating bullion, a theme that underscores the strategic shift in how nations manage their financial buffers.

The issue comes at a time when the United States is once again becoming a less politically and economically predictable market. While the US administration previously lured European manufacturers with generous incentives, it is now tariffs that are fundamentally changing the investment math.

From incentives to barriers: how the Audi investment story has changed in the US

Audi has been considering building a production plant in the U.S. since 2023. The motivation was obvious: local production would allow it to better compete with American and Asian brands, reduce logistics costs and partially avoid import barriers. Government incentives also played a key role in making the investment economically sensible.

But this framework changed after the administration of President Donald Trump imposed new tariffs on European carmakers. The result is a situation where Volkswagen has paid €2.1 billion in tariffs in the first nine months of 2025 alone, according to Blume, which represents a direct hit to the profitability of the entire group.

From a management perspective, this is a crucial signal: an environment that was supposed to encourage investment has become one that actively penalises it.

Why Volkswagen is saying 'no' to billions more

Blume is not sparing in his statements. In his view, it is not possible to finance large-scale new investments in a situation where the basic business conditions remain uncertain. The automotive industry is extremely capital-intensive and the return on factories is calculated over decades, not terms.

Stopping the Audi project is not a question of technology or demand, but of risk. Tariffs increase unit costs, make cars less competitive, and complicate long-term planning. Without a clear and stable trade policy, an investment of billions of dollars becomes more of a bet than a strategic decision.

Volkswagen is indirectly sending a message not only to Washington, but also to other European manufacturers: without adjustments to the terms, the entire US expansion may be rethought.

The US market remains important, but the objectives are changing

Despite the harsh criticism of the tariff policy, Volkswagen is not leaving the United States. Blume speaks of a "strategy for the future" to stabilise, not dramatically expand, American business. But the fundamental change is a rethinking of ambition.

The earlier target of a 10% share of the US market is no longer realistic, according to management. Instead, the group is focusing on gradual, incremental growth, better margins and more efficient capital allocation. This means fewer large investments and more optimization of the existing presence.

For Audi, this may mean a continuation of the import model, higher prices for end customers and slower expansion in the electric car segment, where competition from the US and Asia is growing significantly.

Wider implications: it's not just about Volkswagen

Volkswagen's $VOW3.DE situation is a symptom of a wider problem. If the tariffs remain in place, other European carmakers considering US production may do likewise. Ironically, this would undermine the original goal of tariff policy: to attract industry and jobs back to the US.

From an investment perspective, this is an important signal. While the US car market remains huge, its attractiveness to foreign capital is declining. Uncertainty around trade policy increases the discount rate at which companies assess the return on projects - and some investments simply stop paying off.

Impact on Volkswagen and Audi shares in the context of competition

For Volkswagen shares, the possible freeze of the US Audi plant is primarily a signal of a strategic slowdown, not an immediate financial shock. What the market is currently addressing is not the absence of a new factory per se, but the fact that Volkswagen is openly admitting that the US environment is no longer predictable for investment. This increases the discount that investors have been applying to VW stock for a long time - mainly because of the group's complex structure, weaker brand profitability and slower adaptation to local markets.

Audi, meanwhile, is a key premium leg of the group. If it remains without local production in the US, its price competitiveness against brands that already produce directly in the US worsens. This limits Audi's margin potential in the very market where premium cars have long been most profitable. As a result, investors may come to see Audi as more of a 'European premium brand with limited global reach', which has a negative impact on the valuation of the group as a whole.

In comparison, BMW's $BMW.DE position is significantly stronger. BMW has a long-established manufacturing presence in South Carolina, from where it exports SUVs around the world. This makes it much less vulnerable to US tariffs, with a better cost structure and greater pricing flexibility. The market rewards BMW with more stable margins and the fact that the company does not have to make investment decisions contingent on political concessions. In the eyes of investors, BMW thus confirms its status as "the best-managed German car company".

Tesla $TSLA remains the biggest competitor. It not only manufactures in the US, but also benefits structurally from US industrial and trade policy. Any tariffs on imports of European or Chinese cars improve its relative position without having to change strategy. From an investor's point of view, Tesla acts as a 'hedge against trade wars' - exactly the opposite of Volkswagen.

What to watch next

Future developments will depend on several key factors:

• whether tariffs will be adjusted or eased.

• how the next administration behaves after a possible change in political representation

• and whether Volkswagen will find alternative ways to boost US production without a new Audi plant

For investors, it's a reminder that geopolitics and trade policy play as important a role today as technology or demand. And that even a global giant like Volkswagen may be forced to take its foot off the gas if the rules of the game change too quickly.

The investment debate has therefore shifted. The key question is no longer whether eVTOL technology works, but whether it can clear regulatory hurdles, earn public trust, and deliver a cost structure that supports mass adoption. At this stage, the winners are likely to be manufacturers who can certify, scale, and sell aircraft—not operators chasing early hype.

Top points of the analysis

• eVTOLs are moving from the prototype phase to the certification and regulatory phase

• The goal is not a luxury service, but a price level close to Uber Black per seat

• The key barrier is not technology, but safety and regulatory approval

• The company is targeting the model of an aircraft manufacturer, not a transport operator

• Certification in Europe can be a competitive advantage

Company profile and sources of value

Vertical Aerospace $EVTL is a UK company focused on the development and manufacture of electric vertical take-off and landing aircraft. It is essential to understand at the outset what the company is not. Vertical does not position itself as a transport platform, airline or urban mobility operator. Its goal is not to sell tickets, but to sell aircraft - like Boeing or Airbus - and to make a long-term profit from manufacturing, servicing and supporting fleets that will be operated by experienced partners.

The company's main product is the Valo aircraft, a relatively large eVTOL machine with a wingspan of almost 15 metres and a capacity for up to six passengers, pilot and luggage. Compared to most competing concepts, it is a significantly more robust machine, designed not just as a "flying taxi for two" but as a full-fledged transport vehicle capable of serving busy routes between urban centres and airports. It is the cabin size and capacity that are key to the economics - allowing the costs to be spread over more passengers and approaching a price level that is relevant to the wider market.

The source of future revenue should not be one-off sales but a combination of aircraft deliveries, long-term service contracts, spare parts and technical support. This model is capital intensive at the outset but, if successfully certified, creates high barriers to entry and a long-term link between manufacturer and operators.

Certification as a real tipping point

The fundamental shift that distinguishes the current phase of Vertical Aerospace's development from previous years and from many competitors is that Valo is no longer just a technology demonstration. The aircraft that the company has presented to the public is, according to management, a certification aircraft, a design that is due to go through the full approval process with European aviation authorities. This is a key difference from the stage where companies are optimising the design, testing individual subsystems and tuning aerodynamics without a clear regulatory objective.

Certification in Europe, specifically under EASA oversight, is generally considered more rigorous than the process at the US FAA. It is not just the formality, but the philosophy of approval that places extreme emphasis on safety and long-term reliability. Vertical Aerospace management openly talks about the fact that this rigor is seen as a strategic advantage. If an aircraft passes European certification, it greatly enhances its credibility in other jurisdictions and facilitates international expansion.

The psychological dimension is also important. For a new form of transport, safety is not just a technical parameter, but a fundamental condition for public acceptance. Convincing passengers that eVTOL is "as safe as a Boeing 737" is not a marketing slogan, but a necessity. It is the ability to pass certification and transparently demonstrate safety that can determine who becomes the industry standard and who remains on the fringes.

The target horizon for commercial deployment is 2028. This means that the current period is both the most capital intensive and the riskiest - no revenue, high costs, but with the potential for a major breakthrough if successful.

Markets in which the company operates - from urban mobility to airport transfers

The primary target market is not long-haul flights, but short-haul routes of up to 100 miles, ideally on recurring segments between city centres and airports. A typical example is the route from Manhattan to JFK Airport (27 miles), which today can take an hour or more by car, whereas an eVTOL flight could do it in minutes. Importantly, the destination price is not set at the level of a private helicopter, but at approximately the Uber Black level for a single seat.

• The specific price of Uber Black can vary depending on the type of car and the country in question.

This dramatically changes the size of the addressable market. Helicopters have historically been the domain of a narrow group of very wealthy customers, while a price level of around $150 per person opens the service to a wider stratum of business travelers and premium tourists. If eVTOLs can offer comparable comfort, significantly lower noise levels and zero local emissions, a whole new segment of urban transport is emerging.

Moreover, Vertical Aerospace does not plan to serve this market alone. Working with established operators, such as heliport companies or specialized aviation services, allows the company to focus on production and certification while the partners handle the operational side and the customer relationship.

Management

The company is headed by Domhnal Slattery, Chairman of the Board and a key figure in the strategic management of the company. Slattery is not a technology founder with no experience in a regulated business, but a long-time veteran of the aviation industry, particularly in aircraft leasing and financing. It is this experience that is key in the case of eVTOL - it's not just about building the machine, but understanding how to certify, finance, operate and integrate it into existing infrastructure.

Slattery has previously served on the boards of large leasing structures where safety, return on capital and regulatory process were absolute priorities. The firm does not seek to promise rapid monetization or exponential growth, but repeatedly emphasizes safety, certification and collaboration with established partners in the aviation world.

From an investment perspective, it is important that management openly admits the binary nature of the project. It does not sell the illusion of incremental margin improvement, but builds the thesis on a clear milestone - successful certification.

The evolution of the eVTOL market - from an experiment to a new transport segment

The market for electric vertical take-off and landing aircraft is in a phase that is paradoxical from an investment perspective. Technologically, it is no longer at an early experimental stage, but economically it does not yet exist in the form of stable revenues. However, this does not mean that it is a marginal concept. On the contrary - most analytical projections agree that eVTOLs represent a structural shift in urban and regional transport, the impact of which will be felt after 2030 rather than in the next two to three years.

Morgan Stanley estimates that the global Urban Air Mobility (UAM) market, of which eVTOLs are a key component, could reach a value of around USD 1 trillion by 2040, with more conservative scenarios projecting a value of around USD 500-700 billion. These projections include not only the aircraft themselves, but the entire ecosystem - infrastructure, service, operations management and follow-on services. However, from the perspective of aircraft manufacturers, it is essential that the hardware itself forms a significant part of the value chain in the early stages of market development.

A shorter time horizon offers a more realistic picture. Analyst companies such as IDTechEx or SMG Consulting estimate that the global aircraft eVTOL market could reach annual revenues in the range of USD 20-30 billion by 2030, with the dominant part of demand coming from urban agglomerations in North America, Europe and Asia. This volume does not include mass adoption, but rather the first phase of commercialisation - airport transfers, premium city services and short regional services.

The key factor is unit economics. Traditional helicopters are expensive to operate, noisy and regulatory constrained. The eVTOL's electric propulsion dramatically reduces operating costs, maintenance and local emissions. If a target transportation price of $100-200 per person on a short route, equivalent to the price of Uber Black on busy urban routes, can be achieved, the size of the addressable market increases multi-fold. It is no longer a luxury service, but an alternative to premium ground transportation in congested cities.

Financial performance and trend - what the numbers really say about the state of the business

Vertical Aerospace' s financial performance cannot be evaluated through the classic lens of a growth or cyclical company. It is a pure development story, where the financial statements do not reflect market demand but the pace of technical and regulatory progress. Yet the numbers tell a very important story about the stage the company is in and how its financial profile is changing.

At the revenue level, the situation is clear: the firm is not yet generating commercial revenue. Revenues were zero between 2022 and 2024, confirming that Vertical is still in the development and certification phase, not production. The key shift must therefore be found on the cost side and its structure, not in revenue growth.

Operating costs in 2021 were an extreme £277 million. GBP 277 (GBP 1 = USD 1.36), reflecting an intensive phase of prototype development, testing and building the organisational structure. Since then, however, the company has undergone significant rationalisation. In 2022, operating costs have fallen to GBP 98 million. In 2023, it stood at around GBP 102 million. GBP 61 million in 2024. GBP 61. This represents a drop of almost 80% from the peak, which is extremely important for a deep-tech company. This is not a cosmetic adjustment, but a clear signal that the company has moved from an expansive development phase to a focused certification phase with strict cash burn control.

The same trend is evident at the EBITDA level. The EBITDA loss has decreased from approximately -244 million to -244 million. GBP -244 million in 2021 to GBP -77 million in 2021. GBP -64 million in 2022, GBP -64 million in 2022 and GBP -64 million in 2022. GBP -64 million in 2023 and approximately GBP -60 million in 2023. The pace of improvement is slowing, which is logical - the company is approaching the "hard bottom" of costs required to maintain certification. This is an important point for investors: further cost reductions will no longer be linear, but dependent on achieving milestones.

The company's balance sheet is also the biggest source of risk. Total assets have fallen from €233 million to €233 million. GBP 233 million in 2021 to just under GBP 48 million in 2021. GBP 48 million in 2024, while liabilities have exploded to more than GBP 547 million. The result is deeply negative equity of around GBP -499m. GBP and very negative working capital. The company is therefore entirely dependent on external funding and the ability to continually refinance its development.

Investment scenarios

Optimistic scenario - certification as a turning point

In a positive scenario, Vertical Aerospace will successfully pass European certification around 2028 and commence first commercial deliveries of the Valo aircraft. This will immediately move the company from a development entity to a manufacturer of a certified aerospace product, dramatically changing its investment profile. The first revenues would likely not be massive, but the market would begin to discount the long-term potential for aftermarket, service and other orders.

If it is confirmed that eVTOL can operate with Uber Black-level pricing per seat and a high daily flight rotation, there is room for fleets of tens to hundreds of machines in individual metropolitan areas. In such a case, the company's market capitalization could respond multiples before significant revenues appear on the books.

A realistic scenario - delayed but surviving

In the realistic scenario, there is a delay in certification, higher costs and the need for additional financing, probably in the form of dilution of existing shareholders. However, the company's technological lead and industrial relevance are maintained. The market would remain cautious in this case, with the stock highly volatile and heavily dependent on news of certification progress.

The share price in this scenario would likely move in a wide range without a clear trend, with any positive regulatory signal likely to trigger sharp but short-term gains.

Negative scenario - certification or funding failure

In a negative scenario, the company is unable to successfully complete the certification process or exhausts financing options before reaching key milestones. In this case, the investment thesis virtually falls apart. Without certification, the aircraft has no commercial value and the company's assets have limited liquidation value.

Projecting the share price in this scenario implies a dramatic decline, potentially to a technical low.

What to take away from the article

• eVTOLs are close to reality, but they are not yet a business

• Certification is the main obstacle and the biggest opportunity

• Vertical is betting on a manufacturing model, not an operating model

• Financially, it is a high-risk, asymmetric investment

• Success means a new transport segment, failure means almost zero

The tobacco industry has long been one of the most controversial but stable segments of the global economy. It is an industry that faces continuous regulatory pressure, declining smoking rates in developed countries, high taxation and legal challenges. Yet tobacco companies have been among the most reliable cash generators on the stock markets for decades. Their business model is based on extremely high margins, strong pricing, customer loyalty and relatively low capital requirements. The result is a combination that is rare in the stock market these days: stable earnings, predictable cash flow and the ability to pay above-average dividends over the long term .

Moreover, the tobacco sector has undergone a deeper transformation in the past decade than it may appear at first glance. While sales volumes of conventional cigarettes are indeed declining in many regions, the big players have been able to offset this trend in several ways. Firstly, by aggressively raising prices, which in practice often more than compensates for the decline in units sold, and secondly by investing massively in alternative products such as smokeless nicotine products, heated tobacco or modern nicotine sachets. Tobacco companies are thus gradually shifting from a pure cigarette business to a broader nicotine ecosystem that allows them to remain profitable in the face of structural changes in consumer behaviour.

However, from an investment perspective, the key point is that the sector has retained an extraordinary ability to generate free cash flow even during this transformation. These are not primarily reinvested in expansionary growth, but are largely returned to shareholders through dividends and share buybacks. This is why tobacco companies have long featured in the portfolios of dividend investors and pension funds. In an environment of heightened macroeconomic uncertainty, volatile rates and geopolitical risks, the tobacco sector thus offers a source of high dividend yield and relative stability.

British American Tobacco $BTI

British American Tobacco is one of the largest tobacco companies in the world and one of the most prominent dividend paying stocks in the entire stock market. The company operates in more than 170 countries, serves hundreds of millions of customers, and its portfolio includes both traditional cigarette brands and the rapidly growing "modern products" segment. These include mainly heated tobacco, vaping and smokeless products. It is this combination that makes it one of the most interesting examples of how the traditional tobacco business is adapting to structural changes in consumer behaviour without sacrificing its ability to generate massive cash flow.

From a fundamental perspective, $BTI is first and foremost an extremely strong cash generator. Despite the long-term decline in conventional cigarette volumes, the company remains able to raise prices at a pace that not only offsets lower volumes but still supports revenue and operating profit growth in many regions. Tobacco is a product with very low price elasticity. Consumers are willing to accept price increases because branding, addictiveness and regulatory barriers severely limit competition.

However, it is certainly worth noting the dramatic fall in sales and profitability in 2023, to which the share price responded with a 27% fall in that year. But it was not that the company's business lost or started to lag significantly and did not generate cash flow. The company made a large non-cash accounting provision or 'impairment charge' (an accounting impairment of assets that does not imply an actual cash loss but greatly reduces reported profit and margins) of around £27.3bn, which substantially reduced its reported profit and operating margin for 2023. This one-off accounting move meant that although the company was generating cash flow and sales relatively steadily, its net profit and marginal metrics officially fell significantly into negative territory. The chart below shows this.

A key element of British American Tobacco's current position is the transformation towards the so-called New Categories. In recent years, the company has invested massively in the development of products such as Vuse (vaping), glo (heated tobacco) or modern oral nicotine products. These segments represent the fastest growing part of the business today and management has long identified them as a major source of future stability in an environment where conventional cigarettes will gradually lose volume. Although these new categories are not yet achieving the margins of traditional tobacco, their growth is increasing revenue diversification and reducing the long-term regulatory and volume risk of the overall business model. The following table provides a clear breakdown of the segments.

Source: Tradingview

From a dividend investor's perspective, however, it is the combination of three factors that is most important:

• Robust free cash flow,

• a disciplined capital structure,

• a clearly defined return on capital policy for shareholders.

$BTI has paid out the majority of its free cash to shareholders over the long term, and the dividend yield has held steady well above the market average. The company's current dividend yield is 5%. Even after deducting investments in new products, the company has sufficient room to service debt and pay dividends, which is essential in the tobacco sector. It is the ability to combine high dividends with transformation financing that differentiates the strongest players from weaker competitors.

Above all, the regulatory environment remains a risk for British American Tobacco. The tobacco industry faces constant pressure from governments in terms of taxation, marketing restrictions and potential bans on certain product types. Any major regulatory shift can create volatility and impact results in the short term. On the other hand, the high level of regulation also protects existing players from the entry of new competition and strengthens their pricing power.

Shares of $BTI have risen more than 103% since 2024 and are still, according to the Fair Price Index on Bulios, 23% below their fair price. That's certainly good news for long-term investors, because with its above-average dividend, this company could rule the tobacco market for years to come.

Altria Group $MO

Altria is a special case within the global tobacco sector. Unlike most of the big players, it focuses almost exclusively on a single market - the United States. Paradoxically, however, this geographical concentration is one of its main strengths. The US tobacco market is one of the most profitable in the world, with extremely high margins, a disciplined competitive environment and a very stable regulatory framework. Altria controls the key brands here, led by Marlboro, and has long maintained a dominant share of both the conventional and smokeless segments.

In terms of financial performance, $MO is a textbook example of a "money machine". Even with a gradual decline in cigarette sales volumes, the company has been able to generate robust operating profits through a combination of strong pricing, an extremely efficient distribution network and an optimized cost structure. In practice, this means that any percentage drop in volumes is often more than offset by price increases. This model allows Altria to maintain very high operating margins and predictable cash flows, which is a prerequisite for a long-term sustainable dividend policy.

At Altria, the dividend is one of the main pillars of the investment story. The company has a decades-long track record of continuously increasing dividends and has long paid out the majority of its free cash flow to shareholders. The dividend yield has consistently been well above the market average (currently 6.85%), making $MO one of the most sought-after titles among dividend investors in the U.S. market. Importantly, these payouts are not based on accounting adjustments, but on actual cash generated by the business, which enhances their long-term credibility.

Source: Tradingview

Adapting to the gradual change in consumer behaviour remains a strategic challenge for Altria. Recognising that the future of the nicotine market will not rest solely on conventional cigarettes, the company has invested in recent years in the development of smokeless products, nicotine sachets and alternative forms of consumption. These segments do not yet reach the volume of traditional tobacco, but they represent a key element of long-term stability. Here, Altria benefits from its exceptionally strong distribution, marketing know-how and long-term experience, which give it a distinct advantage in launching new products on the market.

But let us return to the company's margins, because they are worth paying attention to. Do 15, 20 or even 30% margins seem high to you? For some market segments, these are above average margins, and for some segments, they are values that most companies will never reach. But Altria is much higher! From 2021, when margins were between 11 and 12%, by 2024, they have climbed to, and now watch out, 55.10%! As a result, the company has managed to increase profits very significantly even though sales are stagnant. You can see this for yourself in the chart below, which, along with other metrics, can be found right in Altria's company detail.

Altria is primarily a defensive title whose value is based less on growth and more on its ability to generate cash over the long term and return it to shareholders. Risks lie primarily in regulatory developments in the US, pressure to restrict nicotine products and the pace at which the consumption pattern will change. On the other side, however, is one of the strongest tobacco business models in the world, which, even in an environment of structural volume decline, can produce profits that most industries can only dream of.

And while the stock has managed to grow 99% in recent years (from March 2020 to January 2026), thanks to rapidly rising margin values, it is still 21% below its intrinsic value, according to the Fair Price Index, which is based on DCF and relative valuations.

Imperial Brands $IMB.L

Imperial Brands presents a different investment profile within the big tobacco companies than global giants such as British American Tobacco or US-based Altria. It is a company that has undergone significant restructuring and strategic realignment in recent years. After a period of aggressive acquisitions, higher debt levels and fragmented attention in too many directions, management has decided to return to the basics - maximising cash flow from key markets, portfolio simplification and strict capital discipline. The result is a company with a smaller portfolio that is now significantly more focused on returning capital to shareholders.

From a fundamental perspective, Imperial Brands is typical of the "old school" tobacco business. The company's focus remains on conventional cigarettes and tobacco products, where it maintains strong regional positions, particularly in Europe, the US and selected emerging markets. Like other players, Imperial has long benefited from pricing power. Although volumes are declining in a number of regions, the ability to increase prices and optimise cost structures has enabled the company to maintain solid margins and stable operating profit. This is key as conventional tobacco remains the main source of cash, which funds dividends and buybacks. The dividend is currently 5.30% and the next one will be paid on 19 February this year. The company maintains this high payout despite the fact that debt here is higher than previous representatives of the sector. We're talking almost half the market capitalisation of the entire company, which is £23.87 billion. Debt currently stands at £10 billion.

Unlike some of its competitors, $IMB.L has taken a more cautious approach to alternative products. While the company is developing the smokeless, vaping and heated tobacco segments, it is doing so selectively and with a focus on return on invested capital. Instead of aggressively entering this market, management is focusing on markets and products where it sees real potential for profitability. This pragmatic approach reduces the capital intensity of the transformation and allows the company to maintain a high level of free cash flow, which is primarily directed to shareholders. On the other hand, it potentially limits the firm's future earnings.

Overall, this company is more of a safer alternative if you want to own a representative of the tobacco segment. The company has significantly reduced its debt in recent years (but it is still higher than its competitors), stabilized its cash flow and net income, which have been growing over the past few years, and set a clear policy on capital return. The dividend is covered by actual cash generated by the business, not by debt growth, which is the key difference between sustainable and risk-adjusted returns. At the same time, Imperial actively uses buybacks, further enhancing the total return to shareholders.

The risks with Imperial Brands lie primarily in its smaller global scale and greater sensitivity to developments in key regions. The company does not have as wide a geographic diversification as the major players, and therefore regulatory changes or tax interventions in individual countries may have a more significant impact on results in the short term. It is also the company with the lowest market capitalization on today's list. On the other hand, it is the smaller size and simplified structure that allows for quicker management response, tighter cost control and more targeted capital allocation.

The stock price has naturally responded to the transformation we mentioned at the beginning of our segment on this company. Over the last four years, the price per share is up 150%, which is really solid growth. Unfortunately for investors considering buying $IMB.L stock, the situation is more complicated than for $MO or $BTI. Thanks to slower margin growth and rather stagnant sales, Imperial Brands stock has fallen to levels that don't quite match the intrinsic value of the company. This is confirmed by the Fair Price Index, which is now red for this company.

Conclusion

The tobacco sector in 2026 represents one of the stock market's most interesting paradoxes. On the one hand, there is the long-term structural decline of conventional cigarettes, increasing regulatory pressure and a gradual change in consumer behaviour. But on the other hand, we see a sector that has managed to maintain exceptional pricing power, high margins and the ability to generate stable free cash flow even in this environment. It is this combination that allows tobacco companies to pay dividends that are well above the market average, over the long term, across economic cycles.

At the same time, the sector is in the midst of a gradual transformation towards alternative nicotine products that is fundamentally changing its structure, but not the underlying economics of these companies. High levels of regulation, often seen as a major risk, also act as a strong barrier to entry and protect existing players from new competition. Most importantly, there are still interesting companies to be found, often trading even below their fair intrinsic value and paying a really respectable dividend as a bonus.

The fourth-quarter results did not rely on one-off surprises. Instead, they highlighted something more durable: exceptional operating leverage, near-record margins, and sustained growth in core activity metrics. For investors, the key takeaway is not the quarter itself, but how resilient the model appears across different market regimes.

How was the last quarter?

In Q4 2025, Interactive Brokers $IBKR reported diluted earnings per share of $0.63 and $0.65, respectively , on an adjusted basis, a significant improvement over last year's period when adjusted EPS was $0.51. Net revenues were $1.64 billion and $1.67 billion, respectively, on an adjusted basis, representing year-over-year growth of roughly 18-20%.

In terms of revenue structure, net interest income remains the key driver, up 20% year-on-year to US$966 million. This growth was driven by higher client lending, rising client credit balances and strong securities lending activity. Commissions from trading grew even more strongly, up 22% to USD 582 million, with trading volumes up 27% in options, 22% in futures and 16% in equities.

The positive picture is illustrated by the extremely high pre-tax margin of 79%, which further improved from 75-76% a year ago. Interactive Brokers thus reaffirmed that it is one of the most profitable financial institutions in the world in terms of operational efficiency.

• Full presentation with results.

Management commentary

In particular, management highlighted the continued growth of the client base and the amount of capital under management. The number of client accounts grew 32% year-on-year to 4.4 million, while client assets reached nearly US$780 billion, up 37%. Management said this was clear evidence of the firm's long-term market share gains across regions and investor types, from retail to institutional clients.

It was also highlighted that the business model is well prepared for both periods of heightened volatility and any gradual rate cuts, as growth in volumes and client numbers remains a key long-term factor.

Outlook

Although the company does not traditionally provide detailed quarterly guidance, it is clear from management commentary and the structure of the results that 2026 is starting from a very strong base. Interest rates will be a key theme - a potential decline in interest rates could slow interest income growth in the short term, but the firm has natural protection against this risk in the form of rising trading volumes and continued inflows of new clients.

Management also stresses that even if rates normalise, Interactive Brokers will remain highly profitable due to its low costs, high automation and global scale.

Long-term results

Looking at the long-term development, it is evident that Interactive Brokers has undergone an extremely strong transformation over the past four years. Revenues have grown from approximately $4.2 billion in 2022 to $9.3 billion in 2024, reflecting the extreme growth in business activity during a period of high volatility and rapid rate increases. 2025 is confusing at first glance in the financial statements due to the significant decline in reported revenues, but this is primarily due to changes in reporting methodology and the structure of other revenue items.

More important is the evolution of profitability. Net profit grew from USD 380 million in 2022 to USD 755 million in 2024 and jumped to USD 3.37 billion in 2025, a more than fourfold year-on-year growth. Earnings per share increased from $0.95 to $2.23 over the same period, despite a gradual increase in the number of shares outstanding.

The company's operating leverage is also extremely strong. Operating expenses have grown only very slowly, while revenue and profit have responded strongly to volume growth. This is why Interactive Brokers is able to maintain margins over the long term that are virtually unrivalled within the financial sector.

News

Significant news for the quarter is the continued growth of the client base and record daily average trades (DARTs), which reached 4.04 million per day. At the same time, the firm continues to invest in technology infrastructure and automation, allowing it to manage growth without significant cost increases.

The announcement of a quarterly dividend of $0.08 per share is also a positive signal for long-term investors, confirming management's confidence in the sustainability of cash flow.

Shareholder structure

Interactive Brokers' shareholder structure is strongly institutional, with over 87% of shares held by institutional investors and funds. Long-term capital managers such as Vanguard, BlackRock and State Street play a dominant role, reflecting the perception of the company as a quality long-term asset rather than a speculative title. Also interesting is the relatively low proportion of retail investors, which typically contributes to the stock's lower volatility during market fluctuations.

Analysts' expectations

Analysts view Interactive Brokers as one of the best managed companies in the financial sector. The consensus consensus is that even with falling rates, the firm will remain able to generate above-average earnings growth due to structural growth in its client base and trading volumes. The key theme remains sensitivity to the macro environment, not the quality of the business itself.

Fair Price

I'm considering removing $CNDX.L because it overlaps with $CSPX.L, and instead I'd buy another ETF, ideally one focused on, for example, energy, cybersecurity, or the space sector.

What Past Results Reveal About What’s Next

In its previous earnings cycle, $MSFT delivered results that underscored continued strength in key areas of the business. For the first quarter of fiscal 2026, the company reported strong cloud revenue growth and solid adoption of productivity tools, reflecting sustained demand across its ecosystem. Analysts have pointed to this performance as evidence that Microsoft’s diverse portfolio from intelligent cloud services to AI tools embedded in Microsoft 365 remains a key driver of revenue expansion.

Analysts Weigh In Ahead of the Release

With earnings approaching, market observers are analyzing valuation, growth expectations, and what the numbers might mean for Microsoft’s stock trajectory. Recent commentary from financial research platforms suggests that questions around valuation and strategic execution could influence investor decisions. As Microsoft continues to invest heavily in AI and cloud infrastructure, investors will be looking for signs that those investments are generating robust returns and that management is balancing long-term innovation with near-term profitability.

Key Metrics Investors Will Watch

There are several headline metrics that traders and long-term holders will scrutinize once the report is published:

• Revenue growth in cloud and AI businesses such as Azure and Microsoft 365, which have historically driven the company’s top line performance and are central to expectations for sustained expansion.

• Earnings per share and margins, which give insight into how effectively Microsoft is converting revenue growth into profits in the face of strategic investments and competitive pressure.

• Guidance for the remainder of fiscal 2026, which could have an outsized impact on sentiment if the company signals confidence in its growth prospects or, conversely, expresses caution about demand conditions.

Options markets suggest investors expect potential volatility around the earnings release, with some traders pricing in notable share price moves in either direction.

Strategic Themes and Market Context

Microsoft’s performance will also be viewed within the broader context of the technology sector’s focus on artificial intelligence and enterprise services. Earlier reports highlighted how the company’s cloud segment and AI capabilities have contributed to strong results in prior quarters. Should the upcoming earnings release confirm continued strength in these segments, it could reinforce Microsoft’s narrative as a leader in next-generation enterprise technology.

At the same time, investors will be mindful of macroeconomic factors, competition, and how capital expenditure trends might affect profitability in the near term. Discussions around infrastructure build-out, data center capacity, and strategic investments in AI will likely surface during the earnings call and could influence share price reaction.

Investor Takeaway

Microsoft’s earnings release represents more than just another quarterly report. It is a barometer for the company’s ability to translate innovation into tangible financial performance, especially as artificial intelligence and cloud services become increasingly woven into enterprise digital transformation. Strong figures and optimistic guidance could reaffirm confidence among growth investors and analysts, while any signs of deceleration or disappointing guidance might raise questions about near-term valuation.

As earnings season unfolds, market participants are closely watching this tech bellwether to assess not just results, but management’s narrative about growth opportunities and strategic execution in a rapidly evolving technological landscape.

Wedbush argues that chapter is advertising. The firm believes the market is materially underestimating how quickly Netflix’s ad tier can scale, potentially doubling ad revenue by 2026 and turning it into a meaningful valuation driver rather than a side business. If that thesis plays out, the debate shifts from subscriber growth to monetization depth.

Why Netflix stock is falling even though the business is working

The current weakness in Netflix $NFLX stock isn't the result of deteriorating fundamentals. On the contrary - the company is still growing faster than most of the media sector. The problem lies in a combination of high expectations and changing investor optics. Netflix has built a reputation over the past few years as a company that almost never disappoints, and the market has grown accustomed to this "flawlessness."

As soon as management indicated that the rate of cost growth in the coming year may be slightly higher than the previous year, some investors began to question the near-term evolution of margins. This led to sell-offs, even though the long-term strategy - cost discipline and gradual margin expansion - remains unchanged. Wedbush sees this reaction as more of a correction of exaggerated expectations than a warning signal.

Advertising: Netflix's biggest untapped opportunity

Netflix's advertising model is still in its early stages, but the momentum is strong. In 2025, the company generated more than $1.5 billion from advertising, representing more than 2.5 times year-on-year growth. What's important is not just the rate of growth, but the quality of that revenue.

Netflix combines several key advantages:

• Global reach across 190 countries

• detailed data on user behaviour

• premium content with a high level of attention

• minimal advertising overload compared to traditional TV

All of this allows the company to sell advertising at a higher cost per view than most digital platforms. In addition, the ad plan does not cannibalize fully paid subscriptions to the extent that the market initially feared - it acts as a gateway into the ecosystem for some users.

The results confirm that the strategy is starting to work

Financial results show that Netflix is maintaining a healthy mix of growth and profitability. Revenues for the most recent quarter were up nearly 18% year-over-year, operating profit was up more than 30%, and net income approached $2.4 billion. Free cash flow grew at a rate of over 35%, which is key to long-term stability.

Equally important is the development of engagement. Users watched tens of billions of hours of content in the second half of the year, confirming that Netflix is retaining audience attention even in the face of strong competition. This is a crucial prerequisite for further advertising development - without high viewership, the advertising model would not have a chance to scale.

Don't overlook: Netflix | Q4 2025: Why did the share price fall despite strong results?

Valuation: an expensive streamer, or a high-quality business with misunderstood potential?

At first glance, Netflix may seem like an expensive stock, especially when an investor compares it to traditional media houses or telecom companies. With a market capitalization of about $385 billion and an enterprise value of about $391 billion, Netflix ranks among the most valuable media companies in the world. But the key is not the absolute number, but the quality of the profits and the return on capital that the company generates over the long term.

The P/E ratio of 14.6 is surprisingly moderate in the context of the tech-media sector. By comparison, both Alphabet and Amazon trade above 30 times earnings, even though their return on capital is lower or comparable. Thus, Netflix is now valued not as a growth "story stock" but rather as a mature, highly profitable business. That's a major shift from years past, and a reason why a portion of the market may be underestimating its potential.

From a profitability perspective, Netflix exhibits parameters that are exceptional in the media industry. Operating margins in excess of 29% and net margins of around 24% are closer to software companies than traditional studios. Even more impressive is the return on capital: an ROIC of 24% and an ROE of almost 42% show that Netflix can very effectively translate its investments in content and technology into real economic profit. In this respect, it matches Alphabet and significantly outperforms Disney, Comcast and Warner Bros. Discovery.

A frequently cited argument against Netflix is its relatively low free cash flow yield of around 2.3%. This is a fair criticism, but it needs to be put into context. Netflix is still in a phase where it is consciously reinvesting large amounts of cash - not just in content, but more recently in advertising infrastructure and data capacity. If the scenario of rapid growth in advertising revenue comes to fruition, FCF yields could improve significantly over the next few years without the need for major cost increases.

How to think about Netflix as an investor

The Netflix $NFLX investment story is shifting. It's no longer just about fighting for new subscribers, but monetizing an existing audience. Advertising plays a key role here - it has the potential to increase revenue without having to dramatically increase content or prices.

In the short term, the stock may remain volatile, especially if the market continues to focus on costs. In the long term, however, it is the advertising segment that can significantly change the perception of the value of the entire company. If Wedbush is right, today's stock price may in retrospect act more as a stepping stone than a warning.

Wedbush's view: advertising as Netflix's second growth engine

Investment bank Wedbush Securities is one of the most optimistic voices around Netflix at the moment, precisely because of the advertising segment, which it says the market still significantly undervalues. Wedbush argues that the stock's current weakness is not a reflection of deteriorating fundamentals, but rather the result of overblown expectations from investors who have become accustomed to "flawless execution" in every quarter.

Wedbush's key thesis is that Netflix's advertising business is only at the beginning of the monetization curve. They estimate that the advertising segment could at least double revenues to about $3 billion in 2026, with further significant growth expected in 2027. That's a major difference from the market consensus, which still sees advertising as an add-on rather than a full-fledged pillar of the business.

Wedbush also points out that the advertising model has significantly better operating leverage than traditional subscriptions. Content costs don't increase linearly as ad revenue grows, meaning that every additional dollar of advertising has an above-average impact on margins and cash flow. This is where Wedbush sees room for positive surprises in the coming years - not necessarily in the number of subscribers, but in the quality of monetization of the existing user base.

Another point Wedbush sees as key is the potential deepening of partnerships and consolidation in the media space, including a speculated deepening of the collaboration with Warner Bros. Discovery. Any move in that direction could further accelerate ad inventory growth and improve Netflix's negotiating position with global advertisers, according to analysts.

Could I ask for some advice? I would like to cancel my daughter's building savings account and move the funds into ETFs, because the account maintenance fees and the 2,000 CZK state contribution seem meagre compared to what they could earn in indices over the next 13 years. I opened it back when I knew nothing about investing and I don't want to take on greater risk like in my own portfolio.

I'm wondering how best to set this up — I was thinking of splitting it into thirds: $BRK-A $CSPX.L and $CNDX.L I want it to be as safe and worry-free as possible, ideally not touching it for the entire period. A return of around 8–12% year-on-year would be enough for me, but if it performs weaker for 1–2 years I wouldn't mind.

I know this year isn't the best for investing in indices and is more about picking individual stocks. I'm also not sure whether to do it now or wait for a bigger market correction.

So I'm asking this community for opinions and possibly some recommendations — I'd appreciate any comment.

Thank you all in advance and have a nice rest of the day

Investors will be especially attentive to top line trends such as revenues and patient enrollment, as well as profitability metrics like adjusted earnings per share and margins. Third quarter 2025 results showed solid growth in revenue with a 12 percent year-over-year increase to $113.2 billion and a modest upward revision to full year earnings guidance.

Past Results Set the Stage

In the most recent earnings cycle, UnitedHealth reported a significant year-over-year revenue increase and raised its guidance for the full year 2025, reflecting continued execution on its operational priorities. Consolidated revenues climbed to $113.2 billion, with strong contributions from both its insurance business and its Optum services division. While net margins remained compressed due to elevated medical cost trends and funding changes in government programs, the company’s ability to drive top line expansion was noted as a positive development going into the fourth quarter.

Beyond quarterly results, UnitedHealth’s management has been actively addressing structural challenges. Earlier in the year the company reassessed its full-year outlook after cost pressures emerged, yet maintained expectations that performance would improve heading into 2026.

Policy and Market Dynamics Could Influence Reaction

The broader healthcare landscape will also influence investor reaction to UnitedHealth’s earnings. Recently the company announced plans to rebate profits from its Affordable Care Act plans in response to rising premiums and an uncertain subsidy environment, a move that underscores how public policy and healthcare economics are intertwined. This initiative was described as an effort to alleviate cost burdens on consumers and stabilize ACA markets, and the news helped UnitedHealth shares tick higher in recent sessions.

UnitedHealth’s public positioning has also extended into Congressional testimony, where health insurers, including leadership from UnitedHealth, addressed rising healthcare costs and proposed reforms that could affect industry revenue and profits.

What Investors Should Watch

Heading into this earnings release, investors are likely to focus on several key items:

• Revenue growth and membership trends — especially in Medicare Advantage and Medicaid, where enrollment shifts could alter future revenue dynamics.

• Profitability metrics — including adjusted earnings per share and operating margins, which in recent quarters have been pressured by higher medical care costs.

• Guidance for 2026 — arguably the most important forward-looking metric. If UnitedHealth can provide a compelling outlook that addresses cost management and growth opportunities, it could ease lingering skepticism.

Policy and public commentary — with healthcare costs a major public issue, management’s tone on regulatory dynamics and cost containment will be watched closely.

Market and Stock Implications

UnitedHealth’s stock has experienced volatility as investors weigh structural challenges against underlying demand for healthcare services. In recent trading, the company’s shares have shown signs of support amid profit rebate announcements and expectations that policy-related relief could improve market conditions. Analyst sentiment remains mixed but focused on forward momentum. Some market observers note that valuation multiples and growth expectations are beginning to reflect the possibility of stabilization and gradual improvement as healthcare demand continues to expand.

Ultimately, this earnings release will offer investors a comprehensive snapshot of UnitedHealth’s current performance and its strategy for navigating cost pressures, regulatory shifts, and enrollment dynamics. Strong results or reassuring guidance could reinvigorate confidence in one of the largest healthcare insurers in the world, while any signs of persistent margin strain could prompt a reevaluation of near-term valuation.

I’ve held the stock for about 3 years and have practically seen no profit. Only now, after a long time, have I finally come out of a loss to break-even / a slight gain. Honestly, I’m getting tired of holding it — it feels like the capital is kind of dead there. I could find more interesting picks to move it into, and generally I’m starting to think this sector is becoming uninteresting.

Do you own $SBUX? Have you sold it?

I've held the stock for about 3 years and have practically seen no profit on it. Only now, after a long time, have I finally gotten out of the loss and reached break-even / a slight gain. Honestly, I'm getting tired of holding it — it feels like the capital is pretty much dead there. I could find more interesting stocks to move it into, and generally I'm starting to think this sector is becoming uninteresting.

Do you own $SBUX? Have you sold it?

This development matters because access to cutting edge computing power is central to Alibaba’s long term ambitions in cloud services, artificial intelligence, and enterprise technology. After years of regulatory uncertainty, even incremental clarity around hardware access represents a meaningful change in the operating environment for large Chinese technology firms.

AI Infrastructure Becomes a Strategic Priority

Alibaba’s cloud and AI businesses sit at the center of this policy shift. Advanced chips are essential for training large language models, running recommendation systems, and supporting enterprise customers that increasingly demand AI driven solutions. Allowing companies to plan for future chip procurement signals that authorities recognize the strategic importance of domestic technology champions remaining globally competitive.

This policy direction aligns with broader efforts by China to stabilize growth and support innovation while maintaining oversight. As highlighted in broader China tech coverage by Reuters, officials appear increasingly focused on balancing regulation with economic competitiveness rather than applying blanket restrictions.

Market Sentiment Turns More Constructive

For investors, the implications extend beyond hardware access alone. Alibaba’s valuation has long reflected a discount tied to regulatory risk and limited visibility. Any reduction in policy uncertainty can have an outsized impact on sentiment, particularly for global investors who have remained cautious toward Chinese equities.

Recent optimism around AI related growth has already contributed to renewed interest in large technology platforms, a trend also discussed in market commentary on Yahoo Finance. If Alibaba can combine regulatory stabilization with tangible progress in cloud monetization and AI adoption, the stock could see improved perception as a long term compounder rather than a regulatory risk story.

Broader Implications for the China Tech Sector

Alibaba’s situation also serves as a proxy for the wider Chinese technology sector. Moves that support AI investment and cloud infrastructure may benefit peers across ecommerce, digital payments, and enterprise software. Analysts view this as part of a broader effort to counter slowing economic momentum and encourage productivity gains through technology investment.

At the same time, authorities have made it clear that oversight remains in place, particularly around pricing practices and competition. Coverage from the Financial Times highlights ongoing efforts to discourage destructive price competition while supporting sustainable growth. This suggests a more nuanced regulatory framework rather than a full deregulation cycle.

Investor Takeaway and Forward Outlook

For investors evaluating Alibaba, the recent policy signals introduce an important shift in the risk reward equation. While challenges remain, including global competition and domestic economic pressures, the direction of travel appears more supportive than in previous years. Access to AI infrastructure, combined with a more predictable regulatory environment, strengthens Alibaba’s ability to execute on its long term strategy.

As markets continue to reassess China exposure, Alibaba stands out as a bellwether stock where policy, technology, and valuation intersect. Investors will be watching closely for follow through in earnings results, capital allocation decisions, and further regulatory guidance that could confirm whether this shift marks a durable change or simply a temporary easing.

This case fits that pattern. Analysts see meaningful upside and expect a return to sustainable revenue growth above 10% annually, driven primarily by a fast-accelerating therapy segment. The divergence between overall company growth and the performance of this core engine is what matters most for investors, as it defines both the credibility of the recovery and the metrics that will shape sentiment over the coming quarters.

Top points of the analysis

• The investment thesis is based on a return to 10%+ sustainable revenue growth to be underpinned by new product launches, indication expansion and market development, with TMT growing the fastest.

• The company has superior profitability and a "cushion" on its balance sheet: high margins, high liquidity and a net cash position, which reduces the risk of the dividend thesis and investment flexibility.

• Valuation-wise, it is a more expensive quality title: a P/E of around 36.8 and P/S of 8.5 mean the market is already discounting some of the growth return, and disappointing growth rates may punish it more heavily than cheaper stocks.

• In the near term, the key will be whether the growth from TMT actually translates into a company-wide "top-line" and whether operating margins can be maintained even with higher investment in development and commercialisation.

Company performance

Edwards Lifesciences $EW is a cardiovascular medical technology specialist where the economics of the business are based on a combination of clinical value, regulatory approvals and the ability to convince hospitals and care payers that a new procedure is not only more effective but also cost rational in the long term. In practice, this means that success is measured not just by the number of devices sold, but also by how quickly indications spread and procedures become the "standard of care" in a given country or hospital network.

From a business perspective, it is important that companies like this typically operate on high gross margins and relatively stable demand because they address diagnoses with high clinical impact. At the same time, however, revenues can be sensitive to the pace of procedure adoption, hospital capacity, changes in reimbursement, or competitive innovation during certain periods.

For an investor, the key is to divide the story into two levels: the core, which generates stable cash flow and maintains margins, and the growth engines, which can accelerate sales but typically require higher spending on development, trials, marketing and market education. This is where market expectations are breaking down today.

Products, customers and geographic exposure

Customers are primarily hospitals and specialty cardiac centers, with the real "buyer" often being a combination of the clinical team and hospital economics. This is why clinical evidence, referrals and the ability to demonstrate real benefits in practice are so important to this sector. Once a procedure reaches recommended clinical standards, demand inertia increases and the barrier to competition increases.

Geographically, it is a global market, but each country has a different mix of reimbursement, speed of adoption of innovation and different administration. This is practical for the investor: even if a product is clinically strong, monetisation can be delayed if the reimbursement or approval process drags on. On the other hand, this creates a "pipeline" of growth over time - something will launch in the US, later in Western Europe, and still later in other regions.

In practice, this means that an investor should monitor not only overall revenues, but also the growth structure by segment, the pace of new product generation launches, and how quickly indications are scaling up. These are often metrics that outpace accounting results by several quarters.

Edwards says it is unique in having multiple different minimally invasive solutions across catheter for multiple valves, whereas competitors are typically only strong in one area.

Product Portfolio:

• Transcatheter Heart - Products for treating heart defects through a catheter, i.e., without major surgery and opening the chest. Typically, these are replacements or repairs of heart valves inserted through blood vessels, which shortens recovery and reduces risks.

• Transcatheter Mitral and Tricuspid Technologies - Technologies specifically targeting the mitral and tricuspid valves, the "left" and "right" valves between the atria and ventricles. It is a minimally invasive solution for patients who are not suitable for conventional surgery.

• Surgical Heart - Classical surgical products used in open heart surgery, especially for valvular and structural defects. Includes implants and accessories that surgeons use in standard cardiac surgery procedures.

• Advanced Tissue - Specialized biological tissues and materials for reconstruction and repair in cardiac surgery and other medical fields. These materials aid in healing, increase the safety of the procedure and often improve the long-term durability of the solution.

Management and CEO

Bernard J. Zovighian (56) is the Chief Executive Officer of Edwards Lifesciences and a member of the Board of Directors since 2023. He joined the company in 2015 and has progressively led key divisions ranging from Surgical Structural Heart to Transcatheter Mitral and Tricuspid Therapies. Prior to Edwards, he spent nearly 20 years at Johnson & Johnson, where he rose to senior global management roles, including leading one of the global divisions. He holds two master's degrees from the Universities of Marseille, France, in science and business.

Financial performance in recent years

At the revenue level, the company reported US$5.44 billion in 2024, a year-on-year growth of 8.6% after a weaker year in 2023, when revenues fell to US$5.01 billion. Sales were US$5.38bn in 2022 and US$5.23bn in 2021, so this is a business that has moved rather "sideways" in recent years and is now breathing again.

Gross profit has increased to US$4.32 billion in 2024, with a very high gross margin, which the data puts at 78.25%. This is a key characteristic: the company has room to absorb growth investments. But also important for investors is that operating expenses rose to US$2.94bn in 2024, a faster growth rate than sales, and operating profit therefore fell slightly year-on-year to US$1.38bn.

At the profitability level, it is interesting to note that net income jumped significantly to US$4.17bn in 2024, a jump from US$1.40bn in 2023. Such a difference for a medtech firm usually implies a significant one-off factor (such as a tax effect, accounting revaluation or one-off income), and investors should read these results with an eye on quality and repeatability. In other words, operating performance and cash flow tend to be more important to valuation and dividend sustainability than one-time inflated net income.

Balance sheet, liquidity and financial flexibility

Balance sheet is one of the greatest strengths in the context of today's market. Total assets grow to US$13.06 billion in 2024, while liabilities are US$2.99 billion and equity is US$10.06 billion. This is a very comfortable structure that reduces the risk of "financial surprises" when a company needs to invest for growth or address temporary pressure in a segment.

Importantly, the firm is also net cash - net debt -2.35 billion USD. In practice, this means the firm is not dependent on refinancing in an adverse environment, can invest more aggressively in R&D or buy selectively, and can afford a stable dividend policy without being threatened by the interest rate curve.

Liquidity metrics are superior: current ratio 4.0, quick ratio 2.86 and cash ratio 1.69. That is - liabilities are not a "threat" but rather an operating item, and the company has room for growth investments without shareholder pressure.

Valuation: what the market values and where the risk is

Valuation is a typical "quality growth" profile - more expensive but with high profitability and low balance sheet risk. The P/E of 36.78 and P/S of 8.52 say that the investor is paying for both the quality of the margins and the expectation that growth will resume. At the same time, however, the P/CF of 62.3 suggests that there may be more volatility or temporary weakness in cash flow (or in its accounting presentation), which in a medtech firm is often related to working capital, investments, or timing of payments.

From a "fair value" perspective, there is a very low Valuation Level score of 11/100. Practical translation: even if a firm is high quality, by this metric the market is willing to pay a high multiple for it and there is less room for error. This is important because for more expensive stocks, the response to disappointing growth is typically asymmetric - the downside tends to be faster than the upside when "meeting expectations".

On the other hand, this is where the investment opportunity arises if the market is too skeptical about the return of growth. If TMT's growth is confirmed to be sustainable and spills over into the overall top-line, a more expensive valuation may be defensible even without multiple growth - purely through earnings and cash flow growth. And if improved sentiment is added to the mix, there may be a secondary effect in the form of revaluation.

A potential growth catalyst

The analyst view explicitly works to return the company to sustainable revenue growth above 10% through multiple layers of growth: new product lines, indication expansion and market development. This is important because the market typically does not believe in a "single" catalyst, but begins to change its mind when it sees that growth has multiple independent sources and one failure will not jeopardize the entire plan.

The most specific part is TMT(Transcatheter Mitral and Tricuspid), which is expected to grow at about 54% year-on-year in constant currency, according to the analyst view. For an investor, this creates a clear map of metrics: TMT growth alone is not enough if it is too small in the mix, but once it starts to lift company-wide revenue momentum, it changes how the market approaches multiples and long-term "growth rate." In other words: TMT is probably the most important argument today for why this title can become a growth stock again and not just a quality defensive stock.

For the catalyst to translate into share price, the market will want to see repeated confirmation over multiple quarters: not just one-off growth, but consistency, and proof that growth is not being bought out by a sharp decline in margins. That's why the combination of high gross margins and a strong balance sheet is so important - the company has a chance to grow "well", not just "fast".

TMT Segment Overview

• How fast TMT is growing now (recent quarters): in Q2 2025, Edwards reported TMT sales of $134.5m. USD 134 million, which is roughly +62% year-over-year. In Q3 2025, TMTT sales then grew to $145.2 million. USD, again around +59% y-o-y.

• What the firm expects in the short term (guidance): for FY2025, Edwards raised TMTT's revenue guidance to $530-550mn. THE COMPANY EXPECTS THE TMTT TO REACH USD 53050M BY 2020. At the investment conference, the CEO subsequently communicated FY2026 TMT revenue guidance of USD 740-780mn. USD 740-780m and constant currency growth of 35-45%.

• What are the "predictions" and why TMT is being talked about as a growth engine: management has long framed the structural heart market as multi-core (TAVR, TMTT, surgical valves, etc.) and has previously indicated that the combined market space across key product groups is set to roughly double to nearly US$20bn by 2028. Practically, this means that TMT is still from a small base, but with the ramp-up of platforms like EVOQUE (tricuspid replacement) and PASCAL (repair), it has several years ahead of it where it can grow many times faster than the more "mature" TAVR.

Business risks: what can break the investment thesis

The first risk is valuation: high multiples mean that the stock can be penalised even in a relatively mild disappointment. If the expected return to 10%+ growth is delayed, the market may react not only by lowering earnings estimates but also by compressing the P/E. That's a double whammy that can be painful even for an otherwise quality company.

The second risk is "pipeline and execution". With medtech, it is often the case that product launches are clinically successful but commercially slower to take off due to reimbursement, center capacity, or physicians changing practices incrementally. From an investment perspective, it's not a question of "if" but "when" - and timing is what makes the difference between a patient holder and an investor who bought in too early.

The third risk is competitive and technological. Once the market becomes convinced that TMT or other growth segments are attractive, competitors will start pushing the innovation, pricing or clinical arguments. In this sector, competitive advantage is not sustained by marketing, but by clinical data, product generation and speed of iteration.

What is expected in the future: how to read the "promises" and how to measure them

If a company is to deliver a return to 10%+ sustainable revenue growth, it needs to see the growth engine gradually expand. Practically, this means that TMT should not be the only segment that grows, but rather the first one that "pulls" while the rest of the portfolio stabilizes and adds incrementally. In investment parlance: the market wants to see a transition from "single-engine story" to "portfolio growth".

The pace of indication expansion will also be important. This is often less visible in the headline numbers, but it is critical to the sustainability of growth because expanded indications enlarge the addressable market without having to dramatically change the product. Once the indication is expanded, growth tends to be more robust and less dependent on "one-off" sales waves.

Finally: the investor should monitor whether the company is maintaining cost discipline so that higher investment in growth does not damage the long-term margin structure. If growth should be "bought" by sharp cost increases, the market may reward sales but punish earnings - and in expensive stocks, this is exactly the scenario that leads to uncomfortable volatility.

Investment scenarios with price projections

Optimistic scenario: growth returns and the market stops doubting

In the optimistic scenario, a return to 10%+ revenue growth is confirmed and TMT maintains its high momentum to translate into company-wide numbers. Operating margins will remain robust even with higher investment and investors will begin to see the stock as a quality growth title, not a "turnaround in waiting". In such an environment, it is realistic that the multiple will remain high and total return will be driven primarily by earnings growth.

Price-wise, this would typically mean that the stock can approach or exceed the fair price (about $73) and trade well above it with strong execution and good sentiment. The practical projection for an investor in this scenario is more in the high teens percent range over a few years, because at more expensive valuations, "much" of the return has to be worked off by results, not just by multiple expansion.

Realistic scenario: improvement comes, but unevenly

In the realistic scenario, TMT will grow strongly but the rest of the portfolio picks up more slowly, so the return to 10%+ growth will be gradual rather than immediate. Margins will remain healthy, but investment in growth will keep operating profit in "quality stability" rather than rapid acceleration. The stock will act as a combination defensive and growth option.

Price-wise, this usually results in a stock that can gradually catch up to a fair price, but without a dramatic overshoot. In such a scenario, an investor should expect more of a gradual return with higher swings, where part of the return is the dividend component and part is a slight improvement in valuation when the market believes that growth is indeed sustainable.

Negative scenario: the growth thesis is delayed and valuation becomes an issue

In the negative scenario, TMT growth will be less sustainable, or will be sustained but not large enough in the mix to lift the company-wide top-line above expectations. At the same time, development, clinical trial or commercialization costs may grow faster than revenues, and the market will begin to question not only the growth rate but also the margin trajectory.

The pricing risk is twofold: a decline in estimates and a compression of multiples. At a P/E of around 36, this can mean that even a relatively "normal" disappointment leads to a noticeable decline. Rather, in this scenario, an investor should work on the assumption that the stock may trade significantly below the estimated fair price until there is clear evidence that the upward trajectory is back.

What to take away from the article

• The investment thesis rests on a return to 10%+ earnings growth; without it, the stock will likely remain "high quality but expensive."

• TMT is the key driver today and the most important metric the market will track as it is set to be on a ~54% growth trajectory in constant currency.

• The balance sheet is extremely strong and the company is net cash, which reduces financial risk and increases flexibility.

• Valuation is at a premium (P/E ~36.8; P/S ~8.5), so there is less room for error and the market reaction to disappointment could be severe.

Surprising performance outside the US

The year 2025 brought surprising results for global equity markets. The traditional story of US dominance in equity returns was partially overshadowed by the fact that most international indices ended the year with higher valuations than the major US benchmarks. In fact, some regional indices, such as those from emerging markets, outperformed the most closely watched S&P 500 or Nasdaq by a wide margin.

The trend of capital shifting to other markets is confirmed by the data, and our team's analysis of the data concluded that while U.S. equities rose steadily, global markets posted stronger relative performance, driven in part by growth outside the traditional technology sector and the greater role of value, materials, and financials titles in regions other than the U.S. We've found the most interesting indices that grew by 20 percent or more last year, and now we'll introduce them to you.

• In Japan, the Nikkei 225 $SXRZ.DE posted strong gains and closed the year above 50,000 points for the first time, with full-year appreciation of approximately 26%.

• The FTSE 100 from the London Stock Exchange had one of its best summers since 2009 and ended the year with a gain of over 21%, outperforming the major US indices.

• The MSCI Brazil Index, which measures the performance of Brazilian equities including large and mid-cap companies, was among the fastest growing emerging market indices in 2025, with growth exceeding the average performance of developed markets. It has appreciated by more than 49% in 2025 .

The reasons why these particular indices grew more than many others in 2025 are a combination of fundamental and sentiment factors. On the one hand, investors have sought to diversify against the predominant technology composition of US indices, leading to a rotation of capital into value-oriented markets with broader representation in multiple sectors. On the other hand, geopolitical pressures, trade policy and currency movements contributed to investors seeking alternative regions and markets where overall valuations were relatively lower and growth potential higher.

In addition, according to data from our team's in-depth analysis of global markets, the "emerging markets" were the best performing group of equity markets ever in 2025, with total gains far exceeding most developed country indices.

Source: JPMorgan

Nikkei 225 (Japan): a return to the global top

The Japanese market really surprised in 2025. According to FE Analytics data, the Nikkei 225 rose 25.9% (in local currency) in 2025, outperforming many global indices. This growth was the result of several factors combining to drive the index higher in 2025.

The main driver has been the ongoing wave of corporate governance reforms (a long-term process of changes in the management of Japanese companies to increase transparency, management accountability and return on capital for shareholders. These reforms have been gradually unfolding since around 2014) and a general push for a more efficient capital structure.

Japanese firms have historically held high cash cushions, suffered from low returns on capital, and have been less motivated to reward shareholders, for example in the form of share buybacks. But this is changing. Buybacks, dividends, and moves to increase ROE (return on equity, or ROE, is a financial indicator that tells how efficiently a company is working with shareholders' money) are on the rise, and the market is seeing a greater willingness by management to make changes that benefit shareholders. This factor also adds to the pressure from institutional investors, who have not been as involved in Japan as, say, in the US.

The second factor was a combination of macroeconomic conditions and the evolution of the yen. In 2025, the local market has been shown several times to be extremely sensitive to yen developments and Bank of Japan policy. For example, at moments when the BOJ's actions (and the currency market's reaction) were addressed, stocks reacted very quickly. This is also key for the future outlook. If the BOJ were to tighten more quickly (by which we mean raising interest rates), it could strengthen the yen and reduce exporter profits in the short term, which is no small risk for the Nikkei (with its high proportion of export and industrial companies).

But Japan enters 2026 with relatively strong fundamentals. Some investment houses are already explicitly questioning whether the market's high levels are sustainable, citing a combination of corporate fundamentals as well as trade policy and rate risk. It's also not surprising. The current situation in the Japanese market has only lasted a couple of years. Indeed, the local markets and the NIKKEI 225 index were still at the same levels in 2020 as they were in 1995, and that is not taking into account the covariance decline, but the TOP levels of 2020.

FTSE 100 (UK): Europe on the move

The FTSE 100 delivered one of its best performances since the financial crisis in 2025. The index is up 21.5% for the year.

Why did the FTSE grow? First and foremost, the composition of the index helped: The UK index is heavily exposed to sectors such as energy, mining, banks and defence. As a result, it has been labelled outdated and outperforming in recent years. However, in 2025, it is these segments in Europe and globally that have benefited from a combination of geopolitics, commodity trends and investor rotation into stable businesses based on cash flow streams. In addition, the UK market also benefited from strong moves in individual titles linked to precious metals, mining and defence contracts, which boosted the overall performance of the index.

The second issue was valuations. UK equities had long been perceived as cheap relative to the US (and partly to Europe), and this began to show in 2025 with capital inflows.

Outlook for the year ahead: for the FTSE 100, the key point is that its future performance will depend a lot on:

• The global commodity and energy cycle,

• the health of the banking sector, and interest rates,

• the geopolitical environment (defence procurement)

If the scenario of monetary easing and more stable inflation in developed economies comes to fruition, this could be positive for the value and cyclical segments in Europe. Investment banks remain relatively constructive on Europe (and cyclical sectors) for 2026.

MSCI Brazil (Brazil): representative of emerging markets

Brazil was one of the most prominent emerging markets in 2025. According to the official MSCI report (Morgan Stanley Capital International - a company that creates and manages global equity indices), the MSCI Brazil Index had a return of 49.72%. That's a performance that usually requires a combination of strong improvement in sentiment, valuations and tremendous investor interest.

The first and often underappreciated reason is valuations and the dividend component. Earlier in the year , a number of analyses warned that the local market looked cheap, had a low P/E ratio and strong dividend potential, a combination that investors can quickly overvalue in an environment of global uncertainty. The second reason is the mix of companies operating in Brazil. Brazil is largely a commodity and financial market.

The third factor is macroeconomic, which has always been, is and will always be crucial for Brazil. The market worked hard in 2025 in anticipation of future monetary easing (or at least stabilization), although the reality was more cautious and rates remained higher. Still, even the mere belief that the inflation trajectory is improving and the trend will reverse over time tends to be a strong catalyst for Brazilian assets, especially when foreign investment in the billions of dollars comes into play.

Brazil will typically stand on three pillars in 2026:

• Inflation and the timing of the first major rate cuts,

• fiscal discipline and political risk,

• commodities and China's influence.

If the scenario of gradual easing by the central bank is confirmed, while inflation does not deteriorate, the Brazilian market may remain attractive. Conversely, when inflationary pressures worsen or return, this is exactly the type of market where sentiment can turn very quickly.

Conclusion

The year 2025 has once again reminded investors that stock markets are not just about the United States. In an environment that alternates between phases of technological optimism, geopolitical tensions and fears of an economic slowdown, the importance of regional diversification and the ability of capital to move to where interesting valuations meet specific fundamentals has become apparent. The strong returns of markets outside the US were no accident. They were the result of structural changes, sector rotations and a return of investors to markets that had long been on the sidelines of mainstream interest.

Meanwhile, the outlook for the period ahead remains open. Some regions are entering this year with better corporate capital discipline, while others are benefiting from changes in global supply chains, commodity flows or monetary policy. But the common factor is that the global market is once again becoming much more diverse and less predictable. Diversification not between segments but also between markets is making its way into more and more portfolios around the world.