Federal Reserve and Interest Rates - The Federal Reserve will hold its last FOMC meeting of 2025 on December 9-10, with market participants anticipating a 25 basis-point cut in the benchmark lending rate, marking the third rate cut of 0.25% in 2025 [1] - The CME FedWatch tool indicates an 84.7% probability of a 25-basis-point rate cut in December, a significant increase from 42% the previous week, with the current Fed fund rate at 3.75-4% [1] Financial Technology (Fintech) Industry - The fintech sector's performance is inversely related to interest rate movements, benefiting from a low-interest-rate environment which fosters technological improvement and product innovation [3] - The expansion of mobile and broadband networks, along with advancements in AI and machine learning, positions fintech for significant growth, revolutionizing banking, payments, and investments [4] Investment Recommendations - Five financial technology companies are recommended for investment based on favorable Zacks Ranks: Robinhood Markets Inc. (HOOD), Interactive Brokers Group Inc. (IBKR), Fair Isaac Corp. (FICO), SoFi Technologies Inc. (SOFI), and Moody's Corp. (MCO) [5] - Each of these companies currently holds either a Zacks Rank 1 (Strong Buy) or 2 (Buy) [5] Company-Specific Insights Robinhood Markets Inc. (HOOD) - Robinhood operates a financial services platform allowing users to invest in various assets, with expected revenue and earnings growth rates of 21% and 16.2% respectively for next year [10] - The company has seen improved trading revenues due to higher retail participation and solid trading activity, supported by a robust liquidity position [9][10] Interactive Brokers Group Inc. (IBKR) - IBKR's revenue growth is supported by proprietary software development, lower compensation expenses, and an expanding global footprint, with expected revenue and earnings growth rates of 5.5% and 8.1% respectively for next year [12][13] Fair Isaac Corp. (FICO) - FICO benefits from strong performance in its Scores and Software segments, with expected revenue and earnings growth rates of 19.7% and 31.3% respectively for the current year [16] - The company is expanding its scoring models and has seen increased adoption of its software solutions [15] SoFi Technologies Inc. (SOFI) - SOFI is positioned as a leader in online banking services, with expected revenue and earnings growth rates of 25.5% and 65.1% respectively for next year [19] - The company focuses on innovation and strategic partnerships to enhance its market presence [18] Moody's Corp. (MCO) - Moody's is expanding through strategic acquisitions and has a strong position in the credit rating industry, with expected revenue and earnings growth rates of 6.8% and 11.3% respectively for next year [23] - The company is benefiting from a rebound in bond issuance volume and has made significant acquisitions to enhance its market presence [22]

Oracle Corporation (NYSE:ORCL) is one of the AI stocks analysts are betting on. On November 26, HSBC maintained its Buy rating on Oracle Corporation (NYSE:ORCL) with a $382 price target, highlighting the company’s efforts to explore funding options for cloud infrastructure expansion. Is Oracle Corporation (ORCL) One of The AI Stocks Analysts are Betting on? While Oracle has not yet detailed a specific plan, HSBC noted that capital-intensive projects could use structures such as special purpose vehicles o ...

Let's talk more about it now with Terrell Wolf's co-founder and CEO Paul Prager. Paul, thanks for for coming back on. Um, what did you and your team see in Alphabet that it appears that others may have missed.>> I don't know if anybody could have missed it. I mean, they've been out in front of AI for nearly two decades. Um, they pioneered large-scale machine learning.They designed their own custom silicon. uh and they understand better than anyone uh that the next era of AI requires large enormous durable p ...

Industry Overview - The global cloud computing market is projected to reach approximately $1.9 trillion by 2030, with an estimated compound annual growth rate (CAGR) of 18.7% driven by the adoption of artificial intelligence and machine learning across various industries [1] - Enterprises are increasingly migrating core workloads to the cloud, indicating a sustained demand for scalable cloud capacity over the long term rather than a temporary spike [2] Company Focus: Amazon - Amazon is significantly entrenched in the cloud computing shift, operating around 900 cloud facilities across approximately 50 countries, which contributes to its growing dominance in cloud workloads [3] - Amazon's market capitalization stands at roughly $2.42 trillion, with a year-to-date gain of about 5% and a 52-week return of 11%, reflecting a recent share price of around $230 as of November 26 [5] - Amazon's valuation metrics are above sector averages, with a trailing P/E of approximately 31.96x and a forward P/E of 30.79x, compared to sector medians of about 15.68x and 17.18x, indicating a premium valuation as the company is viewed beyond just an online retailer [6] Financial Performance - In the third quarter ending September 30, Amazon reported net sales of about $180.2 billion, representing a 13% year-over-year increase, with a 12% growth rate when excluding currency effects, highlighting strong demand across its platforms [7] - Amazon Web Services (AWS) is a key growth driver, with segment sales increasing by 20% to approximately $33 billion, and AWS's operating income improved to $11.4 billion from $10.4 billion, underscoring the importance of cloud and AI workloads in Amazon's overall investment narrative [8]

Company Overview - Pagaya Technologies Ltd. is a global technology company focused on delivering AI-driven product solutions for the financial ecosystem [1][4] - The company aims to make life-changing financial products and services accessible to a broader audience, reshaping the financial services landscape [1][4] Upcoming Investor Conferences - Pagaya's management team will participate in the UBS Technology Conference on December 3-4, 2025, in Scottsdale, AZ [1] - The company will also attend the Jefferies Specialty Finance Crossover Conference on December 11, 2025, in New York, NY [1] Recent Developments - Pagaya has signed a forward flow agreement with Castlelake, L.P. to purchase up to $500 million in auto loans sourced through its platform [4] - The company recently closed a $500 million asset-backed securitization (ABS) backed by consumer loans, bringing its total amount raised for personal loans year-to-date to over $4 billion [6]

Core Insights - Pagaya Technologies Ltd. (PGY) and Upstart Holdings, Inc. (UPST) are key players in the AI-driven lending ecosystem, with distinct operational models [1] - Pagaya operates as a B2B enabler, while Upstart functions closer to a traditional lending marketplace [1] Pagaya Technologies Ltd. (PGY) - Pagaya has a capital-light operating model, reducing exposure to credit risk and enhancing scalability [3] - The company has diversified its loan offerings beyond personal loans to include auto lending and point-of-sale financing, improving resilience across economic cycles [5] - Pagaya has established a network of over 135 institutional partners and utilizes forward flow agreements to ensure funding stability [5][7] - The company has raised over $4 billion to fund personal loans in 2025, including a recent forward flow agreement for up to $500 million in auto loans [8] - Pagaya has achieved three consecutive quarters of positive GAAP net income, marking a turnaround from previous losses [9] - The stock has gained 49.9% over the last six months, outperforming Upstart, which has lost 13.7% [16] - Pagaya's return on equity (ROE) stands at 44.45%, significantly higher than Upstart's 23.54% [19] - The Zacks Consensus Estimate indicates year-over-year revenue growth of 28.4% and 19.2% for 2025 and 2026, respectively, with earnings growth of 273.5% and 10% [20] Upstart Holdings, Inc. (UPST) - Upstart utilizes machine learning to evaluate non-traditional data points for loan approvals, allowing for a broader range of borrowers [2] - The company has expanded into auto lending and is exploring small business loans and mortgages to diversify revenue streams [12] - Upstart's AI models detected rising risk, leading to tightened loan approvals and a decrease in conversion rates from 23.9% to 20.6% [14] - The company reported its best quarter for new bank and credit union partners, adding seven partners and reaching an all-time high in available monthly funding [15] - The Zacks Consensus Estimate for Upstart indicates revenue growth of 62.8% and 15.9% for 2025 and 2026, respectively, with earnings growth of 940% and 57.7% [24] Comparative Analysis - Pagaya's valuation is more favorable, trading at a trailing 12-month price-to-book (P/B) of 3.51X compared to Upstart's 5.10X [17] - Pagaya's flexible, capital-light model and strong funding network position it for long-term growth, while Upstart's model is more susceptible to credit cycles and capital market fluctuations [26][27]

Core Viewpoint - Snowflake Inc. is positioned as a strong investment opportunity in the AI sector, with positive indicators for continued growth and product adoption, despite competitive pressures from Databricks [1][2][3]. Group 1: Financial Performance and Projections - Oppenheimer maintains an "Outperform" rating on Snowflake with a price target of $295, citing encouraging third-quarter checks and resilient AI/ML momentum [1]. - The firm anticipates revenue growth for Snowflake could approach 29-30%, potentially exceeding the consensus estimate of 25.6%, despite a challenging comparison from the previous quarter [3]. - Snowflake is expected to sustain a Net Revenue Retention (NRR) rate of 125%, indicating strong demand for its products and healthy consumption trends [3]. Group 2: Market Position and Competitive Landscape - Snowflake is experiencing broad-based consumption across various regions and verticals, which signals a strong quarter ahead [2]. - The company is seeing continued momentum for new tools such as Snowpark and Cortex, contributing to its positive outlook [3]. - Street expectations for product growth in the third quarter are modeled in line with guidance, suggesting beatable targets that could keep investors engaged [4].

Core Insights - The market is becoming increasingly aware of the potential of Google's developments, particularly in relation to its cloud services and Tensor Processing Units (TPUs) [1][2] - Analysts are questioning how competitors like NVIDIA will respond to Google's advancements, especially after NVIDIA's significant investment in OpenAI [3][4] - The competition in the AI and cloud computing space is intensifying, with companies like Alphabet, Amazon, and Alibaba aiming for vertical integration in their offerings [12][15] Company Developments - Alphabet has been developing its TPUs for over ten years and has started to market them more aggressively, particularly to high-frequency trading firms [2][4] - The efficiency of Google's Gemini 3 model is highlighted as a competitive advantage, showcasing the effectiveness of its technology stack [4][11] - Alphabet's strategy includes not only hardware development but also software integration, aiming to provide a comprehensive ecosystem for AI applications [10][11] Industry Dynamics - The competition among major players like NVIDIA, Google, and Amazon is expected to drive innovation and efficiency in AI infrastructure [7][8] - The market is witnessing a shift towards energy efficiency as a critical factor for success, with companies focusing on optimizing their energy use [16][17] - Analysts are observing a divergence in stock performance among tech companies, indicating a need for investors to be discerning in their evaluations [18][21] Market Sentiment - Despite recent fluctuations in stock prices, there is a belief that the long-term outlook for AI CapEx remains positive, driven by competition and innovation [9][22] - The current market environment is characterized by a rotation into value-focused sectors, reflecting investor caution towards tech stocks [21][24] - The emotional pulse of the market suggests a reset in valuations, with potential opportunities for investors to identify undervalued stocks [25]

Financial Data and Key Metrics Changes - Revenue increased to $14.4 billion, representing pro forma growth of 4% year-over-year [9] - Adjusted EBITDA reached $1.1 billion, an increase of 5% year-over-year [9] - Adjusted diluted earnings per share rose to $2.22, up 11% [9] - Free cash flow was $516 million, supporting debt reduction objectives and bringing net leverage to 3.2 times [9][26] Business Line Data and Key Metrics Changes - Digital solutions generated revenues of $1.5 billion for the quarter and $5.5 billion for the year, representing 11% and 7% growth respectively [24] - Global engineering solutions generated revenues of $2.4 billion for the quarter and $8.9 billion for the year, representing 9% and 2% growth respectively [25] Market Data and Key Metrics Changes - The company submitted $35 billion in bids, achieving a full-year book-to-bill ratio of 1.2 times and a quarterly book-to-bill ratio of 1.6 times [10] - Backlog grew 5%, reaching over $47 billion, with $20 billion in proposals awaiting awards [10] Company Strategy and Development Direction - Amentum aims to integrate and deliver end-to-end advanced engineering and technology solutions across key markets including defense, nuclear energy, intelligence, and space [5][6] - The company is focusing on core growth areas such as RDT&E, intelligence operations, and environmental remediation, while also targeting accelerating growth markets like space systems and technologies, critical digital infrastructure, and global nuclear energy [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to adapt to changing government priorities and maintain operational resilience [13][14] - The outlook for fiscal year 2026 includes expected revenues in the range of $13.95-$14.3 billion, with adjusted EBITDA projected between $1.1 billion and $1.14 billion [28][29] Other Important Information - The company has exited all transition service agreements and is on track to deliver at least $60 million in net run rate synergies by the end of fiscal year 2026 [8] - Amentum's diverse portfolio, with 20% of revenue tied to commercial and international work, provides insulation from sector volatility [14] Q&A Session Summary Question: Can you discuss the level of timing or one-time margin and cash flow dynamics in the quarter? - Management noted that additional working days generated around $20 million in cash, which should be normalized moving into FY26 [35] Question: Can you provide an update on the multi-year margin progression and synergy targets? - The long-term goal is to achieve 8.5%-9% margins by FY28, with expected margin expansion of 20 basis points in FY26 [38][42] Question: How do you view the timing and magnitude of potential divestitures? - Management is currently excited about the entire portfolio and will evaluate non-core assets during strategic planning [50] Question: Can you elaborate on the nuclear opportunities and their impact on margins? - The nuclear energy market represents about 17% of the business today, with strong margins expected from both front-end and back-end nuclear work [76] Question: What is the expected impact of the government shutdown on FY26? - Management anticipates a 1% impact from reduced spending in Q1 due to the government shutdown, but remains confident in the underlying business trajectory [84]

Financial Data and Key Metrics Changes - Revenue increased to $14.4 billion, representing pro forma growth of 4% [11] - Adjusted EBITDA reached $1.1 billion, an increase of 5% year over year [11] - Adjusted diluted earnings per share rose to $2.22, up 11% [11] - Free cash flow totaled $516 million, supporting debt reduction objectives and bringing net leverage to 3.2 times [11][28] Business Line Data and Key Metrics Changes - Digital Solutions generated revenues of $1.5 billion for the quarter and $5.5 billion for the year, representing 11% and 7% growth respectively [26] - Global Engineering Solutions reported revenues of $2.4 billion for the quarter and $8.9 billion for the year, showing 9% and 2% growth respectively [27] Market Data and Key Metrics Changes - The company submitted $35 billion in bids, achieving a full-year book-to-bill ratio of 1.2 times and a quarterly ratio of 1.6 times [12] - Backlog grew 5%, reaching over $47 billion, with $20 billion in proposals awaiting awards [12] Company Strategy and Development Direction - Amentum aims to integrate and deliver advanced engineering and technology solutions across key markets, including defense, nuclear energy, intelligence, and space [6][10] - The company is focusing on core growth areas such as RDT&E, intelligence operations, and environmental remediation, while also targeting accelerating growth markets like space systems and digital infrastructure [17][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resilience and ability to adapt to changing customer priorities and government spending dynamics [15][23] - The outlook for fiscal year 2026 includes expected revenues in the range of $13.95 to $14.3 billion, with adjusted EBITDA projected between $1.1 to $1.14 billion [29][31] Other Important Information - The company has exited all transition service agreements and is on track to deliver at least $60 million in net run rate synergies by the end of fiscal year 2026 [10] - Amentum's diverse portfolio, with 20% of revenue tied to commercial and international work, provides insulation from sector volatility [15] Q&A Session Summary Question: Discussion on timing or one-time margin and cash flow dynamics in the quarter - Management noted that additional working days contributed approximately $20 million to cash flow, and they expect a strong cash flow trajectory with 12% growth in FY26 [34][35] Question: Multi-year margin progression and synergy targets - The company aims for 8.5 to 9% margins by FY28, with a target of exceeding $60 million in net run rate cost synergies by the end of FY26 [36][39] Question: Update on nuclear opportunities and growth areas - Amentum plays a critical role across the entire nuclear energy life cycle, with 17% of its business currently in this sector, and anticipates significant growth driven by demand for electricity and AI [58][59] Question: Timing and magnitude of potential divestitures and upcoming awards - Management expressed excitement about the current portfolio and indicated that they are evaluating growth opportunities while remaining committed to maximizing free cash flow per share [50][52]