Debit Spread

Magnificent 7 Stocks Remain Resilient Amid AI Financing Concerns

Market Performance Overview The Magnificent 7 technology stocks demonstrated resilience in December 2025, recovering with a 0.2% gain following a challenging November that saw a 1.9% decline. While the group of stocks slightly underperformed the S&P 500's 0.3% return, it managed to outpace the NASDAQ, which fell 0.1% during the month. This performance occurred amid ongoing investor rotation from technology stocks into financials and industrials, driven by profit-taking activities and concerns over high valuations in the technology sector. Mixed Individual Performance Amid Sector Challenges December 2025 revealed divergent performance within the Magnificent 7 group. NVIDIA emerged as the standout performer with a 5.4% gain, bolstered by the US government's decision to allow sales of its H200 chips to China. However, major AI infrastructure companies faced headwinds, with Google declining 2.1%, Microsoft falling 1.7%, and Amazon dropping 1.0%. These declines reflected broader market concerns about financing challenges for AI infrastructure projects, particularly following Blue Owl Capital's exit from a $10 billion deal intended to fund Oracle's data centre project. Investment Outlook and Supporting Factors Phillip Securities Research maintains an OVERWEIGHT recommendation on the Magnificent 7 stocks, citing several supportive factors for continued outperformance. The Federal Reserve's 25 basis point interest rate cut in December provided crucial support for higher equity valuations, particularly benefiting growth-driven technology stocks. The research firm believes that all Magnificent 7 companies except Tesla will continue to deliver earnings growth that outpaces both the S&P 500 and NASDAQ 100 indices. Future Growth Catalysts Several tailwinds are expected to drive continued growth for the Magnificent 7. Increasing demand for artificial intelligence solutions from sovereign nations presents significant expansion opportunities. Additionally, the US government's AI Action Plan, unveiled in July 2025, provides policy support for the sector's development. Further monetary policy accommodation is anticipated, with more rate cuts expected in 2026, which should continue supporting valuations for growth-oriented technology stocks. Frequently Asked Questions Q: How did the Magnificent 7 perform in December 2025? A: The Magnificent 7 recovered with a 0.2% gain in December 2025, following a 1.9% decline in November. This performance slightly underperformed the S&P 500 but outperformed the NASDAQ. Q: Which Magnificent 7 stock performed best in December? A: NVIDIA was the top performer with a 5.4% gain, driven by US approval for sales of its H200 chips to China. Q: What challenges did AI infrastructure stocks face? A: AI infrastructure stocks like Google, Microsoft, and Amazon declined due to concerns about financing challenges for AI infrastructure projects, highlighted by Blue Owl Capital's exit from a $10 billion Oracle data centre funding deal. Q: What is Phillip Securities Research's recommendation on the Magnificent 7? A: Phillip Securities Research maintains an OVERWEIGHT recommendation on the Magnificent 7 stocks. Q: What factors support the positive outlook for these stocks? A: Supporting factors include the Federal Reserve's 25 basis point rate cut, expected continued earnings outperformance versus major indices, greater AI demand from sovereign nations, the US government's AI Action Plan, and anticipated additional rate cuts in 2026. Q: Why are investors rotating out of technology stocks? A: Investors are rotating funds from technology into financials and industrials due to profit-taking and concerns about high valuations in technology stocks. Q: Which Magnificent 7 company is expected to underperform in earnings growth? A: Tesla is the only Magnificent 7 company that is not expected to outperform the S&P 500 and NASDAQ 100 in earnings growth according to the research. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Netflix Upgraded to Accumulate on Content Strategy and Ad Growth

Company Overview and Market Position Netflix operates as a leading video-on-demand (VOD) streaming service, delivering entertainment content to subscribers globally. The company has established itself as the dominant player in the streaming industry, leveraging its extensive content library, original programming investments, and technological infrastructure to maintain competitive advantages. Netflix's business model combines subscription revenues with an increasingly important advertising component, thus positioning it well in the evolving media landscape. Strong Q4 Performance Exceeds Expectations Netflix delivered solid fourth-quarter results that met analyst expectations while surpassing the company's own guidance for both Q4 and full-year 2025. The streaming giant's FY25 revenue and profit after tax and minority interests (PATMI) came in at 100% and 99% of estimates respectively, which demonstrates the company's ability to execute on its financial projections. Revenue Growth Accelerates Across Multiple Drivers The company reported impressive revenue growth of 17% year-over-year, fuelled by several key factors. Membership growth contributed significantly with an 8% year-over-year increase, while strategic pricing adjustments and an improved plan mix further boosted revenues. Particularly noteworthy was the scaling of advertising revenue, which grew 2.5 times compared to the previous year, highlighting Netflix's successful diversification into the ad-supported streaming model. Management projects continued momentum with 15% year-over-year growth expected for the first quarter of 2026. Investment Recommendation and Outlook Phillip Securities Research has upgraded Netflix to ACCUMULATE from SELL, raising the target price to US$100 from the previous US$95. This upgrade reflects the firm's confidence in Netflix's structural positioning and financial strength for long-term growth. The analysts maintain their FY26 forecasts, terminal growth assumptions, and weighted average cost of capital (WACC) calculations unchanged, indicating stability in their fundamental analysis. The research highlights Netflix's clear leadership in the Videa on Demand (VOD) space and strong pricing power as key investment merits. While potential volatility is expected due to the Warner Bros. deal, analysts believe Netflix's strategic positioning and financial foundation make it well-equipped to navigate industry challenges and capitalise on growth opportunities. Frequently Asked Questions Q: What was Netflix's revenue growth rate in the most recent quarter? A: Netflix reported revenue growth of 17% year-over-year, driven by membership growth, pricing adjustments, improved plan mix, and scaling ad revenue. Q: How did Netflix's advertising revenue perform? A: Netflix's advertising revenue grew 2.5 times year-over-year, demonstrating significant scaling in this new revenue stream. Q: What is Phillip Securities Research's current recommendation and target price for Netflix? A: Phillip Securities Research upgraded Netflix to ACCUMULATE from SELL with a target price of US$100, increased from the previous US$95. Q: How did Netflix's actual results compare to expectations? A: Both Q4 and full-year results were in line with analyst expectations and exceeded Netflix's own guidance. FY25 revenue and PATMI came in at 100% and 99% of estimates respectively. Q: What membership growth did Netflix achieve? A: Netflix reported membership growth of 8% year-over-year, contributing to the overall revenue increase. Q: What are the key reasons behind the stock upgrade? A: The upgrade is based on Netflix's clear leadership in the VOD space, strong pricing power, and solid structural and financial positioning for long-term growth. Q: What revenue growth does management project for the next quarter? A: Netflix’s management has projected 15% year-over-year revenue growth for the first quarter of 2026. Q: What potential risks does the research highlight? A: The research house notes that volatility is expected due to the Warner Bros. deal, though analysts believe Netflix is well-positioned to handle this challenge. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Palantir Technologies: Strong Growth Prospects Drive BUY Recommendation

Company Overview Palantir Technologies Inc is a leading US analytics software company founded in 2003 and headquartered in the United States. The company specialises in helping large organisations integrate and analyse massive datasets to enhance decision-making and operational efficiency. Palantir serves a diverse client base that includes government agencies and commercial enterprises across numerous industries worldwide, positioning itself as a critical technology partner for data-driven organizations. Investment Highlights Drive Optimistic Outlook Phillip Securities Research has initiated coverage of Palantir with a BUY recommendation and an ambitious target price of US$208, citing three key investment merits that support significant upside potential. The first major growth driver is Palantir's expansion beyond its traditional defence market into commercial sectors. The company's proprietary Ontology platform is generating impressive momentum, driving commercial revenue growth exceeding 50% year-over-year. This expansion is primarily led by large US enterprises, with projections indicating US commercial revenue will comprise 73% of total commercial sales in FY25. Deal values have doubled year-over-year in the third quarter of 2025, demonstrating strong market demand. The company's sector diversification has expanded from 60 industries in 2021 to 90 in 2024, significantly broadening its addressable market. The second pillar of growth comes from stable government revenue streams anchored by entrenched US defence relationships. Government revenue is expected to surge 43% in FY25, with the US market representing 76% of this segment. Major contracts, including the US Army's decade-long US$10 billion deal and the Maven Smart System expansion, underscore Palantir's strategic importance amid heightened geopolitical tensions. The third investment merit centres on Palantir's robust financial position. The company maintains a cash-rich balance sheet with minimal outflows, expecting cash and equivalents to reach US$8.4 billion in FY25, representing over 80% of total assets. Operating cash flow is projected to grow approximately 80% year-over-year, while the company remains debt-free since 2022. Market Opportunity and Technology Advantages Palantir has captured merely 2.4% of its US$119 billion total addressable market as of 2020, based on FY24 revenue of US$2.9 billion. With AI software markets growing at over 25% compound annual growth rate, the expanding market presents substantial upside potential. The company's core Ontology platform, enhanced with AI features through its Artificial Intelligence Platform (AIP), accelerates adoption and expands enterprise use cases, creating a competitive moat that supports sustained growth. Frequently Asked Questions Q: What is Palantir's primary business and target market? A: Palantir is a leading US analytics software company that helps large organisations integrate and analyse large datasets to improve decision-making and operations. Its customers include government agencies and commercial enterprises across various industries worldwide. Q: What is Phillip Securities Research's recommendation and target price for Palantir? A: Phillip Securities Research has initiated coverage with a BUY recommendation and a target price of US$208. Q: How fast is Palantir's commercial business growing? A: Palantir's commercial revenue is growing over 50% year-over-year, driven by large US enterprises. Deal values doubled year-over-year in the third quarter of 2025, and US commercial revenue is projected to reach 73% of total commercial sales in FY25. Q: What major government contracts support Palantir's growth? A: Key government deals include the US Army's 10-year US$10 billion contract and expansion of the Maven Smart System. Government revenue is expected to grow 43% in FY25, with the US representing 76% of this segment. Q: How strong is Palantir's financial position? A: Palantir maintains a robust cash position with expected cash and equivalents of US$8.4 billion in FY25, representing over 80% of total assets. The company has been debt-free since 2022 and expects operating cash flow to grow approximately 80% year-over-year. Q: What is Palantir's market opportunity? A: The company has captured only 2.4% of its US$119 billion total addressable market from 2020, based on its FY24 revenue. With AI software markets growing over 25% annually, the expanding market presents significant upside potential. Q: How has Palantir expanded its commercial market reach? A: The company has diversified from serving 60 industries in 2021 to 90 industries in 2024, broadening its commercial addressable market and supporting adoption across new sectors. Q: What technology advantages drive Palantir's competitive position? A: Palantir's core Ontology platform creates a competitive moat, while AI features added through AIP (Artificial Intelligence Platform) accelerate adoption and expand enterprise use cases. AIP Bootcamps help shorten sales cycles for faster market penetration. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Singapore REITs Monthly: Cheaper Funding Costs Set to Drive DPU Recovery

Market Performance Overview The Singapore REITs (S-REITs) sector demonstrated resilience in Dec 2025, with the S-REITs Index posting a 0.7% gain that reversed the previous month's 0.8% decline. This positive momentum contributed to impressive annual performance, with price returns reaching 11.3% for 2025. When dividends are included, total returns for the year reached a robust 16.1%. Individual REIT performance varied significantly during Dec. Stoneweg Europe Stapled Trust emerged as the month's standout performer, surging 6.5% supported by ongoing share buyback programmes. Conversely, Keppel REIT experienced the steepest decline, falling 7.8% following news of a dilutive acquisition involving an additional one-third interest in MBFC Tower 3. Sector Analysis and Outlook From a sub-sector perspective, overseas industrial REITs led the gains with a 2.9% increase, while overseas commercial properties struggled, declining 1.9% primarily due to weakness in MUST. The varying performance across sub-sectors reflects the diverse dynamics within the Singapore REIT market. Phillip Securities Research maintains an OVERWEIGHT recommendation on S-REITs, highlighting the sector's attractive valuation metrics. The sector currently trades at a forward dividend yield spread of approximately 3.3% and a price-to-net asset value ratio of 0.99x, which the team views as a compelling entry level given the potential for distribution per unit growth in FY25-26. Investment Strategy and Key Drivers The team expects FY25 results to exceed expectations, driven primarily by declining financing costs. REITs with higher exposure to Singapore dollar-denominated floating-rate debt are positioned to benefit most from the significant 183 basis points year-over-year decline in 3-month SORA rates to 1.19% as of 31 Dec, 2025. The investment strategy will ocus on REITs with strong sponsor backing, robust balance sheets, and improving operational metrics. Within sub-sectors, retail REITs are favoured for their potential to deliver high single-digit positive rental reversions in 2026. High-yielding overseas S-REITs offering yields above 8% with resilient portfolios are also preferred, including Stoneweg Europe Stapled Trust (BUY, target price €1.86), and Elite UK REIT (ACCUMULATE, target price £0.39). Frequently Asked Questions Q: What was the overall performance of Singapore REITs in 2025? A: The S-REITs Index delivered price returns of 11.3% for 2025, with total returns including dividends reaching 16.1%. December saw a 0.7% gain, reversing November's 0.8% decline. Q: Which REIT was the best and worst performer in December 2025? A: Stoneweg Europe Stapled Trust was the top performer, rising 6.5% supported by share buybacks. Keppel REIT was the worst performer, falling 7.8% due to a dilutive acquisition announcement. Q: What is driving the positive outlook for Singapore REITs? A: Lower financing costs are the primary driver, with 3M SORA rates declining 183 basis points year-over-year to 1.19%. REITs with SGD-denominated floating-rate debt are expected to benefit most. Q: What is Phillip Securities Research's recommendation on Singapore REITs? A: The firm maintains an OVERWEIGHT recommendation on S-REITs, citing attractive valuation levels and potential for DPU growth in FY25-26 as financing costs continue to ease. Q: Which sub-sectors and specific REITs are favoured? A: Retail REITs are preferred for potential high single-digit rental reversions. Specific recommendations include Stoneweg Europe Stapled Trust (BUY, €1.86), Elite UK REIT (ACCUMULATE, £0.39), and Prime US REIT (BUY, US$0.30). Q: How attractive are current REIT valuations? A: The sector trades at a forward dividend yield spread of 3.3% and P/NAV of 0.99x, which are viewed as attractive entry levels given the growth potential from declining financing costs. Q: Which sub-sectors performed best and worst in Dec? A: Overseas industrial REITs led with a 2.9% gain, while overseas commercial was the weakest, declining 1.9% primarily due to MUST's performance. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Bank of America Shows Strong Growth Momentum with Record Net Interest Income

Company Overview Bank of America Corporation (BOA) stands as one of America's largest financial institutions, operating across multiple segments including consumer banking, global markets, investment and brokerage services, and wealth management. The bank maintains a diversified revenue stream with its substantial investment and brokerage segment contributing approximately 18% of total revenue, positioning it well to capitalise on market volatility and capital markets activity. Strong Fourth Quarter Performance Bank of America delivered solid fourth quarter 2025 results with profit after tax and minority interests (PATMI) rising 12% year-over-year to US$7.6 billion. While earnings came in slightly below analyst estimates, full-year 2025 earnings reached 95% of forecasted levels. The bank demonstrated its commitment to shareholder returns by raising its dividend per share 8% year-over-year to US$0.28 and conducting US$6.3 billion in common stock net repurchases during the quarter, significantly higher than the US$3.5 billion repurchased in the same period last year. Record Net Interest Income Drives Growth The quarter's standout performance came from record net interest income(NII), which surged 10% year-over-year, driven by robust Global Markets activity, fixed-rate asset repricing, and increased deposit and loan balances. This strong NII performance formed the foundation of the bank's earnings growth, complemented by a 12% year-over-year recovery in investment and brokerage revenue and a 10% year-over-year decline in provisions. Positive Outlook and Investment Thesis BAC’s management has provided encouraging guidance for fiscal year 2026, projecting NII growth of 5-7% supported by continued fixed-rate asset repricing and deposit and loan growth. First quarter 2026 NII is expected to grow approximately 7% year-over-year, though expenses are anticipated to rise by around 4% year-over-year. Research Recommendation Phillip Securities Research maintains an ACCUMULATE recommendation on BAC with a raised target price of US$60, up from the previous US$56 target. The valuation assumes a 1.48x FY26e price-to-book value multiple and a 15.3% return on equity estimate. The research firm expects growth drivers to include higher NII from fixed-asset repricing and loan growth recovery, continued wealth management fee growth, higher global markets revenue from increased volatility, and a slower pace of expense growth. Frequently Asked Questions Q: What was Bank of America's fourth quarter 2025 profit performance? A: Bank of America's PATMI rose 12% year-over-year to $7.6 billion in 4Q25, though it was slightly below estimates. Full-year 2025 earnings reached 95% of forecasted levels. Q: What drove the bank's earnings growth in the fourth quarter? A: Earnings growth was primarily driven by record net interest income that increased 10% year-over-year, a 12% year-over-year recovery in investment and brokerage revenue, and lower provisions that declined 10% year-over-year. Q: What is the bank's guidance for 2026? A: Bank of America expects FY26e NII growth of 5-7% and 1Q26e NII growth of approximately 7% year-over-year, with 1Q26e expenses expected to rise by around 4% year-over-year. Q: What is Phillip Securities Research's recommendation and target price? A: Phillip Securities Research maintains an ACCUMULATE recommendation with a raised target price of US$60, up from the previous US$56 target, based on rolling valuations to FY26e. Q: How did the bank return value to shareholders? A: Bank of America raised its dividend per share 8% year-over-year to US$0.28 and conducted US$6.3 billion in common stock net repurchases in 4Q25, compared to US$3.5 billion in 4Q24. Q: What are the expected growth drivers for 2026? A: Expected FY26e growth drivers include higher NII from fixed-asset repricing and loan growth recovery, continued wealth management fee growth, higher global markets revenue from increased volatility, and slower expense growth. Q: What makes Bank of America attractive as an investment? A: The research house likes BAC for its substantial investment and brokerage segment representing approximately 18% of revenue and its ability to maintain stable NII during periods of market volatility. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

JPMorgan Chase Delivers Solid Q4 Results Despite Investment Banking Headwinds

Company Overview and Market Position JPMorgan Chase operates as one of the largest diversified financial services institutions globally, with leading positions in Consumer & Community Banking and Corporate & Investment Banking. The bank's diversified revenue streams and strong market presence enable consistent performance across various economic cycles. Strong Fourth Quarter Performance JPMorgan Chase & Co reported adjusted fourth quarter 2025 profit after tax and minority interests of US$15.2 billion, representing a 9% year-over-year increase that met analyst estimates. The bank's full-year 2025 earnings reached 101% of forecasted levels, demonstrating consistent execution across its diversified business model. The company increased its dividend per share by 20% to US$1.50, while the dividend payout ratio rose to 32% from 26% in the previous year. Additionally, JPMorgan returned significant capital to shareholders through US$7.9 billion in net common stock repurchases during the quarter. Revenue Growth Drivers and Segment Performance Net interest income grew 7% year-over-year, supported by higher deposit balances and increased revolving balances in the Card Services division, despite a 7-basis point decline in net interest margin. The bank's loan portfolio expanded 9% year-over-year, contributing to overall growth momentum. Non-interest income increased 7% year-over-year, serving as the primary growth driver with notable strength in principal transactions and asset management fees, which surged 17%. However, investment banking fees declined 4%, creating a headwind for overall performance. Forward Guidance and Investment Outlook JP Morgan’s management provided fiscal year 2026 guidance projecting net interest income of US$103 billion, representing 7% growth, while expenses are expected to reach US$105 billion, indicating 10% growth. Phillip Securities Research maintains a NEUTRAL recommendation with a raised target price of US$320, up from the previous US$305, based on fiscal year 2026 estimates. The research firm's Gordon Growth Model valuation assumes 2.54 times price-to-book value and a 20.6% return on equity estimate. Investment Merits and Risk Considerations The bank's ability to generate consistent revenue growth across all segments, particularly in Consumer & Community Banking and Corporate & Investment Banking, represents a key investment merit. However, analysts express caution regarding macro uncertainties including trade tensions and policy shifts that could increase provisions and non-performing loans. Additionally, higher expense growth trajectory may pressure earnings, while current valuations appear elevated with price-to-earnings ratio at 15 times versus the 10-year average of 11.6 times. Frequently Asked Questions Q: What was JPMorgan Chase's fourth quarter 2025 profit performance? A: JPMorgan Chase reported adjusted fourth quarter 2025 profit after tax and minority interests of US$15.2 billion, representing a 9% year-over-year increase that met analyst estimates. Q: How did the bank's net interest income perform despite margin pressure? A: Net interest income grew 7% year-over-year from higher deposit balances and increased revolving balances in Card Services, even though the net interest margin declined by 7 basis points. Q: Which business segments drove non-interest income growth? A: Non-interest income increased 7% year-over-year, primarily driven by principal transactions and asset management fees, which grew 17%, while investment banking fees declined 4%. Q: What is JPMorgan's guidance for fiscal year 2026? A: JPMorgan's management provided guidance for fiscal year 2026 net interest income of US$103 billion, representing 7% growth, and expenses of US$105 billion, indicating 10% growth. Q: What is Phillip Securities Research's investment recommendation? A: Phillip Securities Research maintains a NEUTRAL recommendation with a target price of US$320, raised from the previous US$305, based on fiscal year 2026 estimates. Q: What are the key investment merits for JPMorgan Chase? A: The bank's ability to continue growing revenue across all segments, particularly in Consumer & Community Banking and Corporate & Investment Banking, represents the primary investment merit. Q: What risks are analysts concerned about regarding JPMorgan's outlook? A: Analysts express caution due to macro uncertainties such as trade tensions and policy shifts that could increase provisions and non-performing loans, plus higher expense growth that may pressure earnings. Q: How do current valuations compare to historical levels? A: Current valuations appear elevated with the price-to-earnings ratio at 15 times versus the 10-year average of 11.6 times, and price-to-book ratio at 2.5 times versus the 10-year average of 1.5 times. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Wells Fargo Reports Mixed Q4 Results as Severance Costs Weigh on Performance

Company Overview and Market Position Wells Fargo & Company operates as one of the largest financial services institutions in the US, providing banking, investment, mortgage, and consumer finance services. The company serves millions of customers through its extensive branch network and digital platforms, maintaining a strong market position in retail banking, commercial lending, and wealth management services. Strong Earnings Growth Offset by One-Time Expenses The company delivered solid fourth-quarter 2025 results with earnings growing 6% year-over-year to US$5.4 billion, though full-year earnings came in slightly below analyst expectations at 96% of forecasted levels. The bank's performance was supported by net interest income growth from loan expansion, higher non-interest income, and reduced provision expenses. Shareholders benefited from a 13% dividend increase to US$0.45 per share and US$5 billion in common stock repurchases, representing a 25% year-over-year increase. Revenue Diversification Drives Performance Wells Fargo & Company's revenue growth was bolstered by a 4% year-over-year increase in net interest income, while non-interest income expansion came primarily from investment advisory and brokerage services, along with card fee income. Credit provisions declined 5% year-over-year, providing additional earnings support. However, a significant severance expense of US$612 million hampered the pace of earnings acceleration during the quarter. Forward Guidance and Investment Outlook The company’s management has provided guidance for fiscal year 2026, projecting net interest income of approximately US$50 billion, representing 5% year-over-year growth, while expenses are expected to reach around US$55.7 billion, up 2% from the previous year. The Phillip Securities Research team maintains an ACCUMULATE recommendation with a raised target price of US$98, up from the previous US$95 target. This valuation assumes a 1.73x price-to-book ratio and 15.8% return on equity estimate. The research team expects the eventual lifting of Wells Fargo's asset cap will enable deposit growth, lending expansion, and increased investment in markets and trading activities, which will strengthen the bank's competitive position. However, potential headwinds include macroeconomic factors that could impact non-interest income growth, particularly in investment banking and trading, while potentially leading to higher provision expenses. Frequently Asked Questions Q: What was Wells Fargo's fourth-quarter 2025 earnings performance? A: Wells Fargo reported fourth-quarter 2025 earnings of US$5.4 billion, representing 6% year-over-year growth, though full-year earnings came in at 96% of analyst forecasts. Q: What factors supported Wells Fargo's earnings growth? A: Earnings were supported by net interest income growth from loan expansion, higher non-interest income from investment advisory and brokerage services and card fees, and a 5% year-over-year decline in credit provisions. Q: What expense impacted Wells Fargo's earnings acceleration? A: A severance expense of US$612 million hampered the bank's earnings acceleration during the quarter. Q: What is Phillip Securities Research recommendation and target price for Wells Fargo? A: The Research house maintains an ACCUMULATE recommendation with a raised target price of US$98, up from the previous target of US$95. Q: What are Wells Fargo's guidance projections for fiscal year 2026? A: Management projects net interest income of approximately US$50 billion (5% year-over-year growth) and expenses of around US$55.7 billion (2% year-over-year increase) for fiscal year 2026. Q: How did Wells Fargo reward shareholders during the quarter? A: The bank increased its dividend by 13% year-over-year to US$0.45 per share and conducted US$5 billion in common stock repurchases, up 25% from the previous year. Q: What are the key growth opportunities for Wells Fargo? A: The expected lifting of the bank's asset cap will allow for deposit growth, lending expansion, and increased investment in markets and trading activities, strengthening its competitive position. Q: What potential headwinds does Wells Fargo face? A: Macroeconomic factors could impact non-interest income growth, particularly in investment banking and trading activities, and may lead to higher provision expenses. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Reddit Inc.: Transforming Community Engagement into Revenue Growth

Company Overview Reddit Inc. (RDDT) operates as a community-driven social media platform that facilitates conversations across diverse topics and interests. The company has positioned itself as a unique digital ecosystem where user-generated content and community interactions create valuable data assets and advertising opportunities. Key Investment Highlights Reddit's business model is experiencing a fundamental transformation, with community-driven conversations emerging as a significant growth engine. The company is successfully transitioning its data licensing strategy from one-time training deals to recurring, usage-based monetisation models. This shift is supported by robust demand from the artificial intelligence industry and the development of deeper strategic partnerships. The platform's differentiated approach centres on high-intent, rich first-party user data that creates sustainable advertising opportunities. Reddit is leveraging AI-driven advertising tools to enhance efficiency and drive average revenue per user (ARPU) expansion, which positions the company to capture greater value from its engaged user base. Strong Financial Performance Reddit achieved a significant financial milestone in FY24 by turning cash flow positive. The company demonstrated exceptional cash generation capabilities, with operating cash flow and free cash flow growing 396% and 355% year-over-year, respectively. This impressive performance was supported by IPO-related capital inflows and the company's capital-efficient operating model, with capital expenditures representing less than 1% of total revenue. Investment Recommendation and Outlook Phillip Securities Research has initiated coverage of Reddit with a BUY rating and established a discount cash flow (DCF)-based target price of US$280. The valuation framework incorporates a weighted average cost of capital (WACC) of 7.5% and a terminal growth rate of 6%, which reflects confidence in the company's long-term growth prospects. For FY25, analysts project robust revenue growth across Reddit's key business segments. Advertising revenue is forecasted to increase 66% year-over-year, driven by continued product enhancements and platform improvements. Additionally, "other" revenue, which includes data licensing agreements, is expected to grow 55% year-over-year, supported by existing contractual arrangements and expanding partnerships within the AI industry. Frequently Asked Questions Q: What is Phillip Securities Research's recommendation and target price for Reddit? A: Phillip Securities Research has initiated coverage with a BUY rating and a DCF target price of US$280, using a WACC of 7.5% and terminal growth rate of 6%. Q: How is Reddit's data licensing business model evolving? A: Reddit is transitioning from one-off training deals to recurring, usage-based monetisation supported by strong AI industry demand and deepening partnerships. Q: What makes Reddit's advertising opportunity unique? A: Reddit offers differentiated, high-intent, rich first-party user data that enables a durable advertising opportunity, with AI-driven ad tools improving efficiency and driving ARPU expansion. Q: How did Reddit perform financially in FY24? A: Reddit's cash flow turned positive in FY24, with operating cash flow and free cash flow growing 396% and 355% year-over-year, respectively, supported by IPO-related inflows. Q: What are the revenue growth projections for FY25? A: Reddit operates with minimal capital expenditure requirements, with CAPEX representing less than 1% of total revenue, demonstrating a capital-efficient operating model. Q: What drives Reddit's community-based growth engine? A: Reddit's community-driven conversations are becoming a growth engine through the monetisation of user engagement and data assets for both advertising and AI industry applications. This article has been auto-generated using PhillipGPT. It is based on a report by a Phillip Securities Research analyst.    Disclaimer These commentaries are intended for general circulation and do not have regard to the specific investment objectives, financial situation and particular needs of any person. Accordingly, no warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of any person acting based on this information. You should seek advice from a financial adviser regarding the suitability of any investment product(s) mentioned herein, taking into account your specific investment objectives, financial situation or particular needs, before making a commitment to invest in such products. Opinions expressed in these commentaries are subject to change without notice. Investments are subject to investment risks including the possible loss of the principal amount invested. The value of units in any fund and the income from them may fall as well as rise. Past performance figures as well as any projection or forecast used in these commentaries are not necessarily indicative of future or likely performance. Phillip Securities Pte Ltd (PSPL), its directors, connected persons or employees may from time to time have an interest in the financial instruments mentioned in these commentaries. The information contained in these commentaries has been obtained from public sources which PSPL has no reason to believe are unreliable and any analysis, forecasts, projections, expectations and opinions (collectively the “Research”) contained in these commentaries are based on such information and are expressions of belief only. PSPL has not verified this information and no representation or warranty, express or implied, is made that such information or Research is accurate, complete or verified or should be relied upon as such. Any such information or Research contained in these commentaries are subject to change, and PSPL shall not have any responsibility to maintain the information or Research made available or to supply any corrections, updates or releases in connection therewith. In no event will PSPL be liable for any special, indirect, incidental or consequential damages which may be incurred from the use of the information or Research made available, even if it has been advised of the possibility of such damages. The companies and their employees mentioned in these commentaries cannot be held liable for any errors, inaccuracies and/or omissions howsoever caused. Any opinion or advice herein is made on a general basis and is subject to change without notice. The information provided in these commentaries may contain optimistic statements regarding future events or future financial performance of countries, markets or companies. You must make your own financial assessment of the relevance, accuracy and adequacy of the information provided in these commentaries. Views and any strategies described in these commentaries may not be suitable for all investors. Opinions expressed herein may differ from the opinions expressed by other units of PSPL or its connected persons and associates. Any reference to or discussion of investment products or commodities in these commentaries is purely for illustrative purposes only and must not be construed as a recommendation, an offer or solicitation for the subscription, purchase or sale of the investment products or commodities mentioned. This advertisement has not been reviewed by the Monetary Authority of Singapore.

Stocks