News about valuation

Nasdaq futures rose 1.1% before Monday's open, Dow futures gained 0.1%, and S&P 500 and Russell 2000 futures rose 0.5%, rebounding from the worst week for the Nasdaq and S&P 500 since early June amid concerns over AI spending and valuations. On Stocktwits, retail sentiment on SPY turned 'bearish' and QQQ moderated to 'neutral'. Nvidia is reportedly asking Samsung, SK Hynix and Micron to use TSMC's 3-nanometer process for the base die of its next-generation HBM chips. Tesla (TSLA) won a procedural ruling in a false-advertising lawsuit, while investor Gary Black sees SpaceX buying Tesla at $420/share. AST SpaceMobile (ASTS) drew interest after falling to $40, when Boost Mobile founder Peter Adderton said he was willing to buy the stock.

The author warns that the S&P 500 Shiller CAPE ratio, above 41, is extremely elevated, and says investors should favor companies with durable advantages before a downturn. Alphabet is highlighted for products embedded in everyday life, a diversified mix of advertising and Google Cloud, and vertical integration including custom TPU chips. In the second quarter, Alphabet reported revenue of $119.8 billion, up 24%, Google Cloud revenue up 82% to $24.8 billion, operating cash flow of $39.1 billion and $242.5 billion in cash and marketable securities. The article notes Alphabet fell 55% in 2008, about 31% in the COVID-19 crash and about 39% in 2022, and the author suggests buying gradually during dips and holding long term.

Nebius Group (NBIS) shares have fallen about 40% from their record close of $286.69 on June 18 to around $165, mostly in October, with no company news clearly explaining the drop beyond broader selling in AI cloud stocks. Revenue rose to $582 million in the second quarter, up 454% year over year, but management's 2026 forecast of $3.0 billion to $3.4 billion implies about $2 billion in second-half revenue, more than double the first half's $981 million. The company also posted a net loss from continuing operations of around $190 million and capital expenditures of about $5.7 billion in the quarter, while three customers accounted for 59% of second-quarter revenue. Trading at around 15 times expected 2026 sales, the author says the stock is still not cheap enough and would wait for a third-quarter report showing revenue heading toward $1 billion a quarter and backlog growth from customers beyond Microsoft and Meta.

The article highlights three stocks where discounted cash flow models suggest value above current prices. Amazon.com's AWS generated about USD 148.4 billion in revenue and grew roughly 20% in 2025, which the article attributes to AI demand, with a market cap of about USD 2,696.6 billion. Gamma Communications, whose enterprise operations contribute about GBP 136 million in annual revenue, sells cloud calling and connectivity tools with recurring cash flows. Yadea Group Holdings generated about CNY 34.1 billion from electric two-wheelers and trades below SWS DCF fair value, though the article notes an unresolved pressure on future margins.

In an early-May CNBC interview, Warren Buffett answered “Yeah” when asked whether stock prices were too high, saying many things would look very silly. From May 1 (7,230.12) to Oct. 15 (7,744.06), the S&P 500 rose 7%. Even so, Berkshire Hathaway became a net buyer of stocks in Q2 for the first time in three and a half years, buying about $23.5 billion while selling about $3.7 billion, and it bought back $4.5 billion of its own stock. It also invested in Alphabet, now nearly 13% of its equity portfolio, and in the recent IPO of Bending Spoons, with $600 million in July and $330 million in a private placement this month. The article notes Bending Spoons trades at 29 times forward earnings and will carry significant debt, so it is not a bargain in the traditional sense.

About 75% of VN-Index constituents (301 of 401 stocks) have fallen since the start of the year, even though median profit growth reached 18.2% in Q1 and 20.9% in Q2. Dragon Capital puts the index's trailing P/E at 13.5 times at end-September, or 11.4 times excluding five heavyweights (VIC, VHM, VPL, STB and LPB), while TVS reports 12.1 times versus a five-year average of about 13.8 times. Both firms caution that low valuations do not guarantee a recovery, citing persistent foreign net selling and weak liquidity. The article recommends checking whether profits are backed by operating cash flow, whether debt and refinancing needs pose risks, and whether the valuation reflects the outlook, since a low P/E alone does not signal an opportunity.

AMD shares have sold off recently, even though the company has benefited from an AI chip shortage because Nvidia cannot meet all demand. The article argues that valuation is a bigger risk than the AI business, with AMD's P/E at 139 and forward P/E at 72, several times higher than Nvidia, Broadcom and Taiwan Semiconductor. If AMD's P/E fell to Nvidia's current level, the stock could lose close to 80% of its value. Still, the valuation is seen as more of a threat to the stock than to the company, since data center AI chips made up 58% of AMD's latest-quarter revenue versus almost 93% for Nvidia. The author reduced AMD holdings for diversification but kept a substantial long-term position.

A Simply Wall St analysis asks whether American Electric Power (AEP) shares, after a strong multi-year run, still line up with the dividends the company returns to shareholders. The stock has returned 93.1% over the past 3 years, while planned spending on linear generators and a roughly US$4b fuel cell project for Google raises questions about how much capital will remain for dividends. Using a Dividend Discount Model with a trailing dividend of $4.11 per share, a 10.51% return on equity and a payout ratio of about 65%, the article implies dividend growth of roughly 3.66% and a value modestly below the current $127.14 share price. It also notes a pipeline of 69 GW of contracted load additions through 2030, a US$78b capital plan, recent price-target cuts by several banks and a major shareholder reducing its stake, and flags 2 warning signs (1 major).

The article estimates what a $10,000 investment in Nvidia, now worth nearly $179,000 after four years of AI-driven gains, could be worth by 2030. Nvidia's revenue in the first six months of fiscal 2027 rose 96% to $177.8 billion, and analysts expect fiscal 2027 revenue of $411.6 billion, with EPS nearly doubling to $9.31. The author cites Jensen Huang's view that chip sales will double in 2027 and a $3 trillion to $4 trillion AI infrastructure opportunity by 2030. Assuming revenue reaches $1.09 trillion in 2030 and the stock trades at half its current 18 times sales, the market cap could reach $9.8 trillion, implying 88% upside and a $10,000 stake worth more than $18,800. The article calls this a conservative estimate.

Micron is benefiting from a memory chip shortage driven by AI data center demand, with revenue rising nearly 380% year over year in its latest quarter. The author argues the company is reducing the cyclicality of its business through multiyear take-or-pay contracts covering about 35% of revenue through 2030, along with new production facilities expected in mid-2027 and late 2028. The stock trades at 5.3 times fiscal 2027 earnings estimates, while Wall Street projects 16% growth for 2028; the author instead assumes 30% growth and a 20 times multiple, implying a price of $4,590 versus today's $920. According to the article, the market has not yet priced these changes into the stock.

American Electric Power (AEP) is committing about $4 billion to a 702-megawatt fuel cell project near Cheyenne, Wyoming, backed by a 20-year power purchase agreement with Google. The stock rose 2.29% over one day and 5.95% over 30 days, last closing at $127.14. The article cites several valuation markers: the most-followed narrative's fair value of about $113, a discounted cash flow estimate of about $114.95, and an average analyst target of $140.88. It also notes counterweights such as recent earnings softness, lower profit margins than last year, and reliance on external borrowing.

CrowdStrike (CRWD) has nearly doubled in 2026, while its revenue growth has stayed steady at 26%. Analysts expect 24% revenue growth in the third and fourth quarters and 23% next year. The author, who is a shareholder, notes that the price-to-sales ratio, used because the company is not profitable, is the highest since 2021, and that the stock may have gotten ahead of itself, similar to the 2022 software sell-off when expectations outran growth. He suggests it may be time to trim and take gains, and says a $5,000 investment could be worth less by 2028 given the high valuation, preferring other AI stocks with better valuations and faster growth.

Citigroup shares have fallen almost 5% since its earnings release on Oct. 13, to $126 per share, about 13% below their 52-week closing high of $145, which the article suggests may present a buying opportunity. The bank posted its highest third-quarter revenue in a decade at $23.8 billion, up 8%, while net income rose 37% to $5.2 billion and EPS of $2.85 beat estimates. The article highlights the dividend, raised to $0.67 per share for a 2.18% yield, with a payout ratio of just 24% and a CET1 ratio of 12.8% in Q2. The stock trades at 10 times forward earnings, and 78% of analysts rate it a buy with a median target of $154, though the author is skeptical of the implied 25% upside given economic uncertainty.

Apple and Nvidia are the only two companies to have reached a $5 trillion market cap. The article argues Nvidia offers more upside than Apple but carries more risk. Nvidia's revenue is projected at nearly $412 billion in fiscal 2027, up from nearly $27 billion in fiscal 2023, and the company forecasts another 70% growth next year, driven by demand for AI infrastructure. It trades at 13.5 times forward earnings on fiscal 2028 estimates, versus 36 times for Apple's fiscal 2027, while Apple's EPS is projected to rise from $6.11 to $8.83, a 45% increase on 21% revenue growth. The author warns that a major slowdown in AI infrastructure spending would hit Nvidia hardest.

Memory chips have historically moved in boom-and-bust cycles, and Micron trades at a forward P/E of just over 5 times fiscal 2027 estimates as investors expect the current AI-driven supercycle to eventually end. Micron has signed 26 strategic customer agreements covering about 35% of its sales through 2030, while China's CXMT has lifted its DRAM share from 4% in Q2 2025 to 10% in Q2 2026 and could add new supply. KeyBanc analysts reportedly see HP and Dell extending their deals into 2031 and Alphabet talking about extensions to 2035. In the near term, KeyBanc projects DRAM prices rising 15% to 20% quarter over quarter, with NAND prices up more than 20%.

ASML reported record third-quarter 2026 revenue of 11.7 billion euros, up 56% from a year earlier, with gross margin rising to 57.5% and earnings per share up 136% to 12.95 euros, and it raised full-year guidance. CEO Christophe Fouquet said customers do not expect supply to catch up with demand until 2028, even with plans to increase supply by 30% in 2027 and 2028. For the current quarter, guidance is 14.7 billion euros in revenue, a 51% rise, with a 57% gross margin. The article says the stock trades at 29 times forward earnings versus 20 for the S&P 500, with consensus expecting 67% earnings growth in 2026 against 32% for the index. Its scenario assumes 45% annual earnings growth in 2027 and 2028 and an unchanged 29x multiple, which would imply a price of $2,827 in 2028, or 72% upside.

ASML reported record third-quarter results on October 14 and raised its full-year guidance. Revenue reached 11.7 billion euros, up 56% year over year, with gross margin rising to 57.5% and earnings per share jumping 136% to 12.95 euros. CEO Christophe Fouquet said supply is not expected to catch up with demand until at least 2028, and guidance calls for 14.7 billion euros in revenue next quarter, up 51%. The stock trades at 29 times forward earnings, a premium to the S&P 500's 20, which the author says is justified by expected growth. Assuming 45% annual earnings growth in 2027 and 2028, the author projects EPS of 97.49 USD and a stock price of 2,827 USD by 2028, implying 72% upside.

Bùi Văn Huy, General Director of FIDT, believes the VN-Index is accumulating around 1,700 points, with a bottom likely forming within about 20 points, most likely as a "flat bottom" rather than a V-shaped recovery. The market P/E is about 13 times forward 2027 earnings, or about 10 times excluding five Vingroup-group stocks. Interest rate pressure remains: the Fed raised rates in September to 3.75–4%, US inflation rose to 3.7%, and Vietnam's CPI rose 5.08% in September, while 12-month deposit rates at many private banks kept climbing. Although GDP grew 9.95% in Q3 2026, he says the market is pricing in the capital cost of that growth, and the biggest risk is a Fed hike stronger than expected.

General Director Bùi Văn Huy of FIDT says the VN-Index's P/E of about 12 times (about 10 times excluding the Vingroup group) looks more attractive, but weak liquidity makes gradual accumulation the more suitable approach. He notes that investors who have not yet deployed capital could test with 20–30% of their planned amount, keeping the rest in deposits or short-term bond funds, while reviewing funds heavily concentrated in a few stocks. FIDT's estimates show Q3 2026 profit growth diverging sharply: residential real estate up 185%, oil and gas up 141%, retail up 90.9%, steel up 40.8%, while construction is seen falling 85.8%. However, excluding Vinhomes (VHM), the remaining residential real estate companies' profits are estimated to fall about 0.4%, indicating that growth is concentrated in large sector leaders.

J.P. Morgan analyst Doug Anmuth raised his price target for Alphabet stock to $425, about 23% above the current price, betting that selling its custom TPU AI processors to other companies will accelerate cloud revenue. Google Cloud sales rose 82% to $24.8 billion in the second quarter of 2026, and Anmuth thinks cloud revenue could double in the third quarter. Piper Sandler's Thomas Champion estimates Google's processor sales could reach $104 billion by 2028, compared with Alphabet's total second-quarter revenue of $120 billion. Alphabet reported Q2 EPS of $9.11, up 294%, but some investors worry about its roughly $200 billion AI infrastructure spending this year. The stock trades at a trailing P/E of about 17, versus a tech sector average of 33.

The article argues Micron is the better AI chip stock compared with Taiwan Semiconductor Manufacturing, even though both are among the largest chip foundries by market cap. Micron makes memory chips with commodity-like pricing, while TSMC makes logic chips designed by companies such as Nvidia and AMD. Memory demand has outpaced supply and pushed prices sharply higher, and the shortage is expected to worsen in 2027 and 2028. Micron also has faster revenue growth and trades at 5.3 times forward earnings versus 24 for TSMC, a gap the author attributes to market doubts that the current memory demand wave will last. The author calls this valuation mismatch too large to ignore, while still considering TSMC a fantastic investment.

U.S. stocks keep hitting record highs, but the so-called Warren Buffett indicator, the total market cap of U.S. stocks relative to GDP, stands at a record 237.5%, far above the 138.5% peak during the early-2000 dot-com mania. The author argues the backdrop shapes how to invest rather than whether to invest, and recommends Pfizer (PFE) and Alphabet (GOOG, GOOGL) despite the warning. Pfizer's revenue has fallen from just over $100 billion in 2021 to around $60 billion, and patent expirations threaten roughly one-third of its drug portfolio, but Padcev sales reached $667 million in Q2, up 23%, and its forward dividend yield is nearly 6%. Alphabet is well positioned in AI as its Gemini chatbot outgrows competitors, Google handles nearly 90% of the world's web queries, and Android runs on 69% of the world's mobile devices.

The 10-year US Treasury yield reached 5.06% on the morning of October 15, after crossing 5% in late September for the first time since it last closed above that level on July 19, 2007. The article says this rate anchors pricing, mortgages, corporate borrowing costs and valuations across the economy. It compares today with 2007, when the S&P 500 fell 19% over the following 12 months and 11% over the next five years, noting a similar backdrop of rising yields, central bank rate hikes and an index near record highs. However, it highlights key differences: banks now face stricter rules after Dodd-Frank, the yield curve is normal rather than inverted as in 2007, and the market is dominated by highly profitable tech giants. It advises long-term investors to focus on high-quality companies and not rely too heavily on macro data.

This article compares Roper Technologies (ROP) and Danaher (DHR) on long-term capital allocation. Over the six months to October 15, ROP returned 4.01% and DHR 18.97%, versus 21.5% for the Insider Monkey Billionaire Index and 15.74% for the State Street SPDR S&P 500 ETF Trust. Roper focuses on specialized vertical-market software with recurring revenue, reporting enterprise software gross retention in the mid-90% range and 7% organic recurring revenue growth in the second quarter, while Danaher applies its Danaher Business System across biotechnology, life sciences and diagnostics, completing its Masimo acquisition in June and announcing the StatLab deal. ROP trades at 15.16x trailing and 14.97x forward earnings, compared with 39.41x and 23.81x for DHR, a gap the article calls sizable given Roper's 5% organic revenue growth against Danaher's 3% core revenue growth in the quarter. The article argues both strategies depend on buying the right businesses at the right price.

Waste Management (WM) returned 0.19% over the six months to October 15, compared with 21.5% for the Insider Monkey Billionaire Index and 15.74% for the State Street SPDR S&P 500 ETF Trust. The article credits WM's advantage to its hard-to-replicate network of landfills, transfer stations and collection routes, along with its pricing power. In the second quarter of 2026, weaker-than-expected waste volumes led management to lower its revenue outlook, yet WM still expanded margins and maintained full-year earnings and free cash flow guidance. Other growth areas include automated recycling facilities that cut labor cost per ton by 30% versus older plants, renewable natural gas from landfills, and the Stericycle business, whose integration took longer than expected. WM trades at 29.4x trailing and 22.52x forward earnings, versus 30.18x and 26.32x for Republic Services and 37.54x and 18.08x for Waste Connections, and the article views its valuation as not a bargain but relatively reasonable given its moat.

Berkshire Hathaway (BRK.B) returned 10.56% over the six months to October 15, versus 21.5% for the Insider Monkey Billionaire Index and 15.74% for the State Street SPDR S&P 500 ETF Trust. Since Greg Abel became CEO, the company invested about $10 billion in Alphabet in the second quarter of 2026, repurchased roughly $4.5 billion of its own shares and acquired homebuilder Taylor Morrison for about $6.8 billion. Its insurance float stood at approximately $177.5 billion at the end of June, and after 14 consecutive quarters as a net seller of stocks, Berkshire bought more equities than it sold in the second quarter. The company also invested $600 million in Bending Spoons' July IPO and $330 million more in October, lifting its stake to 4%. The article notes BRK.B's trailing P/E of 12.75x versus a forward P/E of 22.73x, attributes the gap to how investment gains and losses flow into reported earnings, and cautions against drawing conclusions from either figure alone.

Costco (COST) and Walmart (WMT) have returned -0.71% and -5.38%, respectively, over the six months to October 15. Costco keeps customers returning through its membership model, low prices and the Kirkland Signature brand, while Walmart can grow its e-commerce, advertising and third-party marketplace by leveraging its large customer base and store network. Costco posted fiscal 2026 revenue of $303.2 billion, including $5.9 billion from membership fees, and net income up 14% to $9.2 billion; it ended the year with 84.1 million paid members and a 92.3% renewal rate in the US and Canada. In fiscal Q2 2027, Walmart's global e-commerce sales rose 23% and advertising rose 38%, yet Walmart US comparable sales grew only 2.6%. Costco trades at 40.32x forward earnings versus 38.02x for Walmart.

Alphabet (GOOGL) shares gained 3.43% over six months to October 15, but its 17.62x trailing P/E is misleading because reported earnings were inflated by large investment gains. Google Search revenue rose 17% to $63.3 billion in Q2 2026, even as ChatGPT and Claude offer alternatives to traditional search. Google Cloud revenue jumped 82% to $24.8 billion with a 35.6% operating margin, and its $514 billion backlog is more than half expected to convert to revenue over the next 24 months. About $99 billion of gains, largely unrealized, could reverse if valuations fall; a rough adjustment puts the trailing multiple near 26x, versus a 22.83x forward P/E.

Amazon (AMZN) shares were flat over the six months to October 15, while the company ramps up AI infrastructure spending to about $220 billion in 2026, up from roughly $200 billion, partly due to higher memory costs. Amazon Supply Chain Services, launched in May, lets outside companies use its freight, distribution, fulfillment and parcel delivery network, with Procter & Gamble, 3M, Lands' End and American Eagle among its first customers; its Trainium and Graviton chips could also reach customers beyond AWS. Management expects servers to break even in just under three years and remain useful for five to six years, but returns depend on utilization, customer pricing and how quickly newer chips make existing equipment less competitive. Amazon trades at about 20x trailing earnings and 24x expected earnings, well below its historical valuation.

Broadcom (AVGO) closed at $344.33 on October 15 after returning -13.59% over six months, even though revenue in the latest quarter rose 85.5% and earnings grew 216.1% year over year. Most of that growth comes from custom chips designed for large technology companies, which are sticky because customers cannot switch suppliers without restarting engineering, while infrastructure software is a smaller business acquired through deals. Per CNN, analysts' median target sits 52.47% above the current price, while the stock is down 1.43% over twelve months. The article flags concentration risk, since the custom chip business depends on a few very large customers able to bring the work in-house, and notes a trailing P/E of 46.50x.

NVIDIA (NVDA) closed at $217.23 on October 15 and has returned 9.52% over six months, trailing the 15.4% return of the Insider Monkey Billionaire Index and 11.4% of the State Street SPDR S&P 500 ETF Trust. Over the past year the stock rose 16.48%, while chipmaker Taiwan Semiconductor gained 43.10% and memory supplier Micron gained 360.14%. The article argues the business itself is sound: revenue in the latest quarter rose 105.9% year over year, earnings grew even faster, and operating margin stands at 66.24%. It says NVIDIA was repriced earlier in the cycle than its suppliers, whose earnings the market still treats as temporary. Shares trade at 24.88 times next year's expected earnings, against 28.51 times last year's, because earnings have climbed faster than the share price.

SanDisk (SNDK) closed at $1,394.83 on October 15, giving it a market value of $265.98 billion, above the $170.78 billion of Western Digital, the parent that separated it out. The flash memory maker has grown sharply as AI-driven demand for data center storage pushed revenue up 371.6% from a year earlier in the latest quarter, and the shares are up 901.24% over twelve months. Operating margin reached 78.47% of revenue, but the article notes SanDisk has not yet operated through a full cycle on its own, and that producers' decisions to add capacity could later create oversupply. The stock trades at 8.04 times next year's expected earnings, far below its trailing multiple, and the article reads this as the market refusing to pay a premium for earnings that may not survive a full cycle.

ASML, the only supplier of the machines that print the most advanced chip patterns, reported third-quarter net sales of 11.7 billion euros and net income of 5.0 billion euros on October 14. The bigger news is that the company does not expect to build enough machines to meet customer demand in 2027 or 2028. It is looking at ways to add capacity beyond the 30% increase it had already promised, and some customers are interested in orders for 2029 and 2030. Because ASML stopped publishing quarterly orders this year, that demand is closer to a statement of intent than a contract, and customer delays and government export rules are risks the company cannot control. The article argues the shortage, rather than the monopoly, better justifies the valuation, with shares at 28.90 times next year's expected earnings versus 59.89 times over the past year.

Applied Materials supplies equipment for more steps of chip manufacturing than most rivals, and the article says that breadth is the core of its case. Customers find it costly to switch because machines must be qualified and tuned to their processes, and selling many steps together gives the company deeper knowledge of each customer's process. Its operating margin of 33.74% and return on equity of 41.07% are cited as consistent with a strong position. The article identifies pressures: the most advanced patterning step is controlled by a single Dutch company that Applied does not compete with, a few large chipmakers can push hard on price, and government export rules decide which customers it may sell to. Applied trades at 23.42 times next year's expected earnings after rising 88.83% over twelve months.

Wall Street faces a tug-of-war as booming earnings for technology and energy firms collide with a relentless rise in bond yields, which have reached their highest levels in decades. Analysts expect earnings to keep soaring on AI data center build-outs, while oil prices, pushed into triple-digit territory by the war with Iran, add pressure on consumers. The market has split into AI and non-AI stocks, and AI stocks sold off last week as Treasury yields fell and investors questioned the AI-driven growth story. Valuations have slumped: the S&P 500 trades at 19 times expected earnings, below its five-year and 10-year averages, according to FactSet. Fidelity's Jurrien Timmer said earnings growth and the rising cost of capital are in a race to determine stock prices.

Anthropic reportedly told investors at a private day that its revenue reached $16.8 billion for the three months ended Sept. 30, up 50% quarter over quarter, and that it was cash-flow positive and adjusted-profitable. That growth is slower than the 140% gain seen between the first and second quarters, and Jefferies had reportedly expected an annual revenue run rate of at least $80 billion. The company has delayed its IPO registration statement twice amid AI safety concerns and very heavy infrastructure spending. A Saxo Markets strategist says a valuation above $2 trillion would be about 30 times annualized Q3 revenue, making valuation the main debate. The article argues investors are now asking tougher questions about funding, cost of capital and returns, so these results may not impress them much.

The author argues IonQ, with a $12 billion market cap, could rise tenfold to about $120 billion by 2035 if quantum computing takes off. IonQ's trapped-ion approach holds the world record in two-qubit gate fidelity, and its 256-qubit quantum computer, expected in early 2027, has already drawn several orders. The company also closed its SkyWater acquisition for chip fabrication and bought cybersecurity platform Elisity, though it is currently unprofitable. Reaching $120 billion at 10 times sales would require about $12 billion in annual revenue, versus just over $800 million analysts project for next year. The article cites industry expectations of viable commercial quantum computers around 2029 and McKinsey's projection of up to $72 billion in annual industry revenue by 2035, but notes there is no guarantee IonQ will succeed.

Warren Buffett, who built Berkshire Hathaway into a $1.1 trillion company, handed the chairmanship to his son Howard and remains as chairman emeritus at age 96. In a 2014 letter, he said the chance of permanent capital loss for patient shareholders is as low as can be found among single-company investments, because intrinsic value per share is almost certain to advance over time. Greg Abel, a longtime Berkshire manager who has led its energy operations, was chosen as successor CEO, and Buffett said in his farewell letter that his expectations for Abel were sky high and have been exceeded. Buffett also said he has never felt better about what comes next. The article notes BRKB's forward P/E of 25.6 is above its five-year average of 21.2, and considers the shares reasonably valued or a bit overvalued.

JPMorgan Chase (JPM) traded at $335.53 on Oct. 15, 8% below its record close of $365.18 on Aug. 12, 2026. Third-quarter net revenue rose 8% to $50.2 billion and diluted EPS rose 10% to $5.57, but both missed analyst expectations, the first earnings miss since second-quarter 2022. Equities revenue surged 49%, average loans rose 10% and average deposits rose 8%, and management raised full-year net interest income guidance by $700 million to $97.2 billion. The stock trades at a price-to-book ratio of 2.5, a premium to Bank of America, Wells Fargo and Citigroup, but its 20% return on tangible common equity is significantly higher and it offers a dividend yield of nearly 2%. The author believes the valuation may be justified, though the stock is not a bargain.