higher

American Express (AXP 0.70%) is a global payments company with a different model from the card networks most investors know. Unlike Visa and Mastercard, which mainly run transaction networks and avoid lending, American Express issues cards, extends credit, and earns meaningful fee income from premium customers. That difference mattered on Friday, when shares jumped after the company posted strong third-quarter results and lifted its full-year outlook.

Is this move noise or the start of a repricing toward peer-like valuations? I think the latter. With spending and fee income looking good and credit holding steady, it wouldn’t be surprising to see the stock’s valuation multiple expand significantly over time, catching up with the valuation multiples of Visa and Mastercard.

Image source: Getty Images.

Impressive results

It wasn’t surprising to see shares jump following the release of the company’s latest financial results. Third-quarter revenue rose 11% year over year to $18.4 billion, and earnings per share increased 19% to $4.14. Card member spend growth accelerated to 9% (up from 7% growth in Q2). Management also raised full-year guidance, saying it expects 9% to 10% revenue growth and earnings per share of $15.20 to $15.50.

Driving the quarter, the company’s cardmember fee income climbed 18% year over year as more customers adopted its premium cards, which offer travel and lifestyle perks in exchange for annual fees. Additionally, net interest income rose 12%.

Credit metrics look good, too. American Express’s provision for credit losses declined year over year on a lower reserve build. And the company’s net write-off rate held at 1.9%, flat from a year ago and from the prior quarter. For a credit card issuer that keeps credit risk on its own balance sheet, steady write-offs and a lighter reserve build point to disciplined underwriting even as spend grows rapidly.

What makes American Express different

Of course, American Express doesn’t differentiate itself from Visa and Mastercard just by extending credit and charging substantial card fees across its flagship products. The company’s value proposition in the premium space is perhaps the company’s greatest edge. This is fresh on investors’ minds because American Express recently refreshed its U.S. consumer and business Platinum products — and it’s working; new U.S. Platinum account acquisitions in the three weeks following the refresh doubled versus pre-refresh levels, management said in its third-quarter update. Considering that the refresh came with a substantially higher annual fee, that kind of customer response suggests pricing power with the customers who spend the most, use travel benefits, and stay loyal.

Driving home just how premium American Express’s cardmembers are, they spend an average of three times more on their cards than the average spend per card on other networks.

Valuation still trails far behind Visa and Mastercard

Even after the rally, American Express trades at a lower price-to-earnings multiple than the pure networks Visa and Mastercard. The two peers earn higher valuations for their capital-light models, which carry less credit risk and produce steady cash flow. That premium makes sense.

Depending on how you look at it, however, there are also reasons that American Express may deserve a premium. Visa and Mastercard may take on less risk, but American Express participates in more of the profit pool per dollar of spend and has more control over the customer’s overall experience — an advantage that is likely key to helping the company cater to higher spenders.

Ultimately, if American Express can show that its approach is leading to a better customer experience, including higher engagement and greater lifetime customer spend while maintaining good credit metrics, investors may be willing to narrow the gap between American Express’s valuation multiple and its pure network peers.

Of course, being an integrated payments company requires carefully balancing underwriting and incentives to bolster cardmember spending. A surprise rise in delinquencies would pressure earnings. Likewise, a slowdown in the macroeconomic environment could hit discount revenue, customer acquisition trends, and even lending. These factors could keep the valuation discount in place longer than bulls expect.

Still, there’s a lot to like — especially given the stock’s fair price-to-earnings multiple of about 23. This compares to Visa and Mastercard’s price-to-earnings ratios of 34 and 38, respectively. With strong financials in the context of its valuation, American Express stock looks compelling. Revenue is growing at double-digit rates, spend is accelerating, and fee income tied to its premium cards is doing the heavy lifting. Management’s playbook of regularly refreshing its products and deepening engagement while broadening acceptance shows up in the numbers and in guidance.

If American Express’s momentum persists, a narrower valuation gap with Visa and Mastercard makes sense. Friday’s surge looks less like a spike and more like the start of a reset in how investors price this franchise. After years of consistent growth and strong credit metrics, investors might start seeing the company’s integrated payment model as a key competitive advantage worthy of a significantly higher premium.

Satellite telephony company Viasat (VSAT -1.30%) had quite a memorable week as far as its stock went. Driven by broad investor optimism on space-related titles generally and recent positive company-specific news items, it booked a near-double-digit gain over the period. According to data compiled by S&P Global Market Intelligence, Viasat’s share price rose in excess of 9% across the week.

Viable Viasat

What also helped was a live demonstration of its capabilities. On Thursday in Mexico City, Viasat put its direct-to-device satellite service through its paces.

Image source: Getty Images.

During the demonstration, Viasat sent text messages between two Android smartphones, one of which was linked to its satellite network and one through a traditional cellular matrix. It also flexed its satellite-powered services through a different device, the HMD Offgrid.

In the press release detailing the demonstration, the company quoted its general manager of Viasat Mexico Hector Rivero as saying that “This technology has the ability to bridge the connectivity gap in areas where traditional services are unreliable or non-existent, opening up possibilities for millions of individuals and devices to connect through satellite.”

“We are confident that this will have significant advantages for consumers and various industries worldwide,” he added.

Major contract in force

Viasat’s services seem to be striking a chord with major institutional customers, at least. Earlier this month, the company announced, no doubt happily, that it had earned a prime contract award from the U.S. Space Force. This will see it contribute to a dedicated satellite network for that branch of the American military.

A second analyst price target raise in nearly as many trading days was the catalyst igniting the stock of Murphy Oil (MUR 7.51%) on Monday. Bullish investors traded the company’s shares up by almost 8% on the day in response, a rate that trounced the 1.6% increase of the S&P 500 (^GSPC 1.56%).

A raiser and holder

Monday’s raiser was Roger Read from top U.S. bank Wells Fargo. Well before market open, Read changed his Murphy Oil price target to $28 per share from $26.

Image source: Getty Images.

He remains cautious on the stock, however, as he maintained his equal weight (hold, in other words) recommendation on it.

According to reports, Read wrote in his update that the company is expecting to deliver impressive operational and financial results for its third quarter (it’s scheduled to unveil those numbers on Oct. 30). The analyst expressed some concern about certain areas, such as the company’s 2026 guidance.

Industrywide adjustments

Previous to that, last Thursday, Bank of Nova Scotia also enacted a price target raise while maintaining its equivalent of a hold recommendation. The Canadian lender increased its fair-value assessment on Murphy Oil to $30 per share from $26, as part of a broader set of price target adjustments to U.S. oil stocks.

Energy Fuels (UUUU 17.87%) stock, involved in mining both uranium and rare-earth metals, soared 18% through 10:35 a.m. ET Monday after China threatened to throttle rare-earth exports to the United States.

President Donald Trump reassured investors that China isn’t serious, and everything “will all be fine.” Not everyone seems 100% convinced, however, and shares of pretty much every stock having anything to do with rare-earth materials — Energy Fuels included — is rising on elevated risk to the supply chain.

Image source: Getty Images.

Bad news for US is good news for UUUU

London’s Financial Times reports that the U.S. Defense Department will build a $1 billion stockpile of critical minerals to ensure supply chain continuity for defense systems.

Jamie Dimon, CEO of investment bank JPMorgan Chase (JPM 2.36%), is adding fuel to the fire. He commented that it is “painfully clear that the United States has allowed itself to become too reliant on unreliable sources of critical minerals, products and manufacturing — all of which are essential for our national security,” and the JPM CEO says his bank plans to invest $10 billion, in loans and direct investments, over the next decade, to support several critical sectors: defense and aerospace, artificial intelligence and quantum computing, energy technology, and supply chain and advanced manufacturing.

Is Energy Fuels stock a buy?

Dimon’s prediction aligns well with news last week that Energy Fuels is raising $700 million in convertible debt. Even with $115 million in annual cash burn, Energy Fuels’ move last week gives the company six extra years to grow its rare-earth and uranium businesses and reach profitability.

Valued at more than 200 times next year’s earnings, Energy Fuels isn’t a buy just yet, but the picture is at least getting clearer.

THE chancellor could raise tens of billions from tax reforms that don’t hit “working people”, leading economists have said.

Rachel Reeves is under pressure to fill an estimated £50billion black hole in the public finances ahead of November’s autumn statement. 

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Westminster is awash with rumours that Labour could extend the freeze on income tax thresholds.

However, critics say this would mean breaking Labour’s manifesto pledge not to increase taxes on “working people”.

But in a new report, the Institute for Fiscal Studies (IFS) urged the Chancellor to resist “half-baked” solutions like “simply hiking rates”. 

The IFS Green Budget Chapter report instead urges the chancellor to reform the “unfair” and “inefficient” tax system.

End capital gains tax relief on death

Reeves could scrap capital gains tax relief on death, the report said.

When you sell certain assets – like houses, land or other valuable items – you have to pay a tax on the profit you made on it.

However, there are some important exceptions.

For example, if someone dies and you inherit their asset, you don’t have to pay capital gains tax they would have paid.

But the IFS said Reeves should consider scrapping the relief, raising £2.3billion in 2029-30.

However, families could oppose the measure given Labour is already skimming more revenue off inherited wealth.

The inheritance tax threshold has been frozen at £325,000 since 2009.

And last year, Reeves announced she would extend the freeze until 2030.

Hit taxpayers with a ‘one-off’ wealth tax

Economists and politicians are often divided over whether a wealth tax would work.

Supporters argue that the UK’s richest 1% are wealthier than the bottom 70% – and that a wealth tax would reduce this inequality.

But critics say it would be an administrative nightmare and lead millionaires to leave the country, taking their businesses and tax revenues with them.

But if Labour does reach for wealth in the budget – it should opt for a “one-off” wealth tax, the IFS said.

The think tank argues this is a better option than a recurring wealth tax.

It would work by the government calculating how much people’s total assets are worth and taxing them over a certain threshold.

“An unexpected and credibly one-off assessment of existing wealth could in principle be an economically efficient way to raise revenue,” the IFS wrote.

However, a wealth tax that happened on a regular basis would have “serious drawbacks,” the think tank warned.

Valuing everyone’s wealth every year would be “extremely difficult,” it said.

Moreover, a regular tax could deter the highest tax payers from residing in the UK long-term, potentially hitting overall tax revenues.

But the IFS said that even a “one-off” levy could spell trouble if people don’t trust the government not to come back for more.

The report said: “The potential efficiency of such a tax could be
undermined, however, if announcing a one-off tax created expectations of, or uncertainty about, other future taxes.”

Double the council tax rates paid by highest value homes

A new council tax surcharge could raise up to £4.4billion.

Council tax is a local tax on residential properties in the UK, with homes assigned to Bands A to H based on their value.

Bands G and H generally include the highest value homes.

The IFS said doubling the council tax paid by these households could mean a £4.4billion boost.

However, critics already say the council tax system is “unfair and arbitrary”.

As reported by The Sun, families living in modest homes sometimes pay more than those in multi-million-pound mansions.

The root of the problem is simple – council tax bills are not based on what your home is worth today.

Instead, it’s based on its value way back in 1991, when homes were categorised into bands ranging from A to H. 

Decades of uneven house price growth mean this once-simple system is now riddled with inequalities.

Moreover, councils set their own tax rates – leading to a “postcode lottery”.

The average Band D council tax in England is £2,280, but councils set their own rates.

For example, in Wandsworth, people pay just £990, while in Nottingham, they pay £2,656.

This means that millions of homeowners pay much less compared to their property’s value than those in poorer areas, according to PropertyData.

Another potential problem is that the extra cash would go to local authorities rather than central government.

Local authorities use council tax to pay for local services like schools, bin collections and libraries.

So to make sure it reaps the benefits of the change, Downing Street could reduce the grants being paid to councils, the IFS said.

The UK government gives councils more than £69billion in funding – a 6.8% increase in cash terms compared to 2024-25.

But councils would likely still fight back against any funding downgrade – with sticky 3.8% inflation already eating into their grants.

Rejig inheritance tax

The IFS admits that changes to inheritance tax could ‘provoke’ strong reactions.

But its report said that the £9billion said annually is ‘modest’ – although high by historical standards.

Reforming death duties to abolish the additional £175,000 tax-free allowance could raise around £6billion, the economists wrote.

“One obvious option would be to increase the rate of inheritance tax from its current 40%,” the economists wrote.

They said an increase of just 1% would raise £0.3billion in 2029–30.

The government could also reduce the threshold at which the tax begins to be paid.

Currently, people can pass on up to £325,000 of wealth tax-free.

Then there’s an additional £175,000 tax-free allowance that can be used only when passing on a primary residence to a direct descendant.

Abolishing the second of these allowances, for example, could raise around £6billion in 2029–30, the IFS said.

Crack down on businesses underpaying their taxes

The think tank has urged Labour to tackle tax non-compliance.

Corporation tax, a tax on company profits, has become increasingly important to the Treasury’s coffers in recent years.

Over the course of the 2010s, revenue averaged 2.4% of national income, rising to 3.3% in 2025–26.

But corporation tax dodging meant 15.8% of liabilities went unpaid in 2023-24, up from just 8.8% in 2017-18.

Small businesses are mainly to blame, the IFS said, admitting that claiming the prize of missing corporation tax “would not be straightforward in practice”.

The think tank added: “More work is needed to understand why so many small companies are submitting incorrect tax returns.

“It is likely that tackling the gap would require targeted
compliance activities from HMRC, such as auditing small businesses.”

The IFS also said “more revenue could be raised from corporation tax”.

However, it did warn that, while a 1% increase would raise £4.1billion, there could be adverse consequences.

The authors wrote that investment in the UK could become “less attractive” and reduce future tax yields.

However, critics may argue that any tax hike hitting members of the public – even if targeting inheritance or council tax – will still feel like a broken promise.

What must the chancellor avoid doing?

The personal tax allowance has been frozen at £12,570 since April 2021.

Prime Minister Rishi Sunak announced the freeze would remain until April 2026 and Labour extended it until April 2028.

Extending the freeze on personal tax thresholds including national insurance contributions would raise around £10.4billion a year from 2029-30.

But IFS economists say Reeves must not do this – and instead lift the threshold amid rising inflation.

Extending the freeze would be a breach of Labour’s manifesto pledge not to increase taxes for “working people” which includes income tax, national insurance and VAT, the IFS said.

The report’s authors also said restricting income tax relief on pension contributions would raise large sums but should be avoided.

Currently, when you put money into a pension, the income tax you’ve already paid on that money is essentially returned via a government top-up.

The IFS said restricting relief would be “unfair” to penalise pensions again when pension income is already taxed.

The Chancellor should also resist the temptation to up stamp duties, the IFS said.

The think tank fears it would cause people to avoid selling their homes when they want to – hitting the jobs market and holding back growth.

“Changing rates and thresholds is all very well, but unless the Chancellor is willing to pursue genuine reform it will be taxpayers that shoulder the cost of her neglect,” the report, which forms a chapter in the IFS’s wider budget assessment for 2025, said.

Isaac Delestre, a senior research economist at the think tank and an author of the chapter, said Ms Reeves would have “fallen short” if she reaches for quick revenue without wider reform.

“Almost any package of tax rises is likely to weigh on growth, but by tackling some of the inefficiency and unfairness in our existing tax system, the Chancellor could limit the economic damage,” he said.

Although TeraWulf (WULF 1.04%) stock’s September wasn’t quite as hot — literally and figuratively — as its August, it still did gangbusters on the exchange. The Bitcoin mining company and increasingly, high-performance computing (HPC) and artificial intelligence (AI) infrastructure provider, saw its share price rise by almost 21% during the month.

Bark and bite

Compared to August, September for TeraWulf was rather quiet and not as eventful. The company’s rise in that 30-day stretch was due more to external developments than any proprietary news coming from the company.

Image source: Getty Images.

Its money asset (Bitcoin, of course) had a good run over those few weeks, benefiting from generally positive investor sentiment on cryptocurrencies. Typically, when Bitcoin does well, so do the companies who earn money mining it, for understandable reasons.

Like other miners, TeraWulf has been attempting to leverage its assets to bring in more coin. In September, this dovetailed nicely with the popularity of data center operators and businesses associated with such facilities.

The upgrading and expansion of data centers, the sprawling buildings that host banks of computer servers, are necessary steps to advance the AI revolution. After all, AI is quite resource- and power-hungry compared to preceding IT technologies.

Another development helping to drive TeraWulf stock northward in September was a pair of bullish new analyst notes. In the middle of the month, researcher Compass Point initiated coverage of the company, with its pundit Michael Donovan rating it a buy at a price target of $6.50.

It wasn’t immediately clear why Donovan was so bullish on the company. That sunny view wasn’t out of the ordinary, however — during TeraWulf’s hot August, several of his peers also upped their price targets on the stock.

New York groove

As September came to a close, that second prognosticator became more positive on TeraWulf’s future.

Darren Aftahi was the man behind the move, and it wasn’t a minor one. He cranked his fair value assessment on TeraWulf more than 50% higher, to $21.50 per share from his former $14. In line with other analysts and many investors, Aftahi is particularly impressed with the company’s confident push into HPC and AI, according to reports.

The analyst singled out TeraWulf’s Lake Mariner facility in upstate New York as being especially packed with promise. He wrote that there are currently around 422 megawatts in signed leases with two clients at the site, and expects more take up in TeraWulf’s facilities in the future.

On the stock market, it often helps to be associated in some way with a company that pops with investors. So it was with electronics manufacturer Sanmina (SANM 22.73%) on Monday, as a business that it’ll be partnering with on an important initiative saw a monster pop in stock price. Sanmina was lifted along with this, as its stock soared to close the day nearly 26% higher.

A not-so-micro development

That associated company is storied chip maker American Micro Devices, which was quite the stock market star with its own double-digit share-price raise. This occurred on the back of a multiyear deal to supply crucial technology to artificial intelligence (AI) company OpenAI, developer of the high-profile ChatGPT app.

Image source: Getty Images.

That deal will see AMD provide current-generation graphics processing units (GPUs) totaling 6 gigawatts. The first delivery is to occur in the second half of next year.

It just so happens that Sanmina and AMD have agreed for the former to buy the latter’s data center infrastructure unit, ZT Systems. That acquisition, agreed to in May, is pending; if it is approved by the relevant regulators, it will see AMD retain ZT Systems’ AI design services.

On top of that, AMD will collaborate with Sanmina as a manufacturing partner of choice for components needed for AI functionalities.

Adding to the bottom line

The AMD/Sanmina arrangement is expected to be accretive to the acquirer’s non-GAAP (adjusted) earnings starting in the first year after the deal closes, Sanmina said when announcing the purchase. Those earnings should grow “as synergies are fully realized over time,” the company added.

Even before Micron‘s (MU 2.28%) earnings report on Sept. 23, shares of the memory chip manufacturer had already logged an impressive month-to-date gain. Strong results and guidance ultimately led the stock even higher to close out September. Micron stock gained 40.6% last month, according to data provided by S&P Global Market Intelligence, largely thanks to booming demand for artificial intelligence data centers.

Image source: Getty Images.

Scrambling for AI computing capacity

Two things related to AI are happening within the memory chip market. First, demand for high-bandwidth memory, a special type of dynamic random-access memory critical for AI accelerators, is exploding. Mega-deals involving OpenAI, Oracle, Nvidia, and other tech giants to build massive AI data centers will require equally massive quantities of HBM chips.

Micron sold $2 billion worth of HBM chips in the fourth quarter of fiscal 2025, which ended on Aug. 28, and it’s working on bringing its next-generation HBM4 chips to market. Nearly all of its HBM3 chip supply for calendar 2026 is spoken for, and the company is talking to customers about HBM4 commitments. For the time being, Micron is easily selling every bit of HBM that it can make.

The second development is related to standard DRAM memory chips. While AI data centers also need commodity server DRAM chips, manufacturers including Micron are aggressively prioritizing HBM production. Even with somewhat weak demand for PCs and smartphones, which both require DRAM chips, overall supply is now tight. This situation has pushed up prices, boosting Micron’s bottom line further.

Together, these trends pushed up Micron’s revenue by 46% year over year in the fourth quarter to $11.3 billion. Non-GAAP gross margin expanded by more than 9 percentage points to 45.7%, and adjusted earnings per share more than doubled.

Micron expects both trends to continue into fiscal 2026. The company expects to generate around $12.5 billion in revenue during the first quarter, along with a non-GAAP gross margin of roughly 51.5%. That gross margin is historically high for Micron.

Micron stock looks cheap, but be careful

Based on the average analyst estimate for fiscal 2026 adjusted earnings per share, Micron trades at a price-to-earnings ratio of just above 11. That may look incredibly inexpensive for a company growing so quickly and benefiting so greatly from the AI boom, but investors need to be careful.

The memory chip market is cyclical, and pricing is largely determined by supply and demand. Every single boom, marked by demand outpacing supply, has been followed by a bust. Micron makes a lot of money during booms, but the bottom line can plunge deep into negative territory during severe downturns.

Amazon founder Jeff Bezos called AI a bubble on Friday, joining a chorus of high-profile voices warning of overexuberance. If AI infrastructure is overbuilt, which looks likely given the massive investments being made, demand for memory chips could fall off a cliff once the reckoning arrives. That’s the big risk with Micron stock. Despite how amazing things look right now, a downturn is always coming.

After driving more than 30% higher in August, Chinese electric vehicle (EV) maker Nio (NIO -2.41%) continued powering higher last month. Investors found good news bookmarking September, with the company reporting strong quarterly earnings early in the month, through the end of the month, when Nio posted encouraging September sales.

According to data provided by S&P Global Market Intelligence, shares of Nio rose 19.4% in September.

Image source: Getty Images.

Strong vehicle deliveries was only one of several green flags investors

From the starting line in September, Nio gave investors a reason to cheer. The company reported 31,205 vehicle deliveries for August, a 55.2% year-over-year increase. Nio’s performance was especially impressive considering it grew vehicle deliveries in July a mere 2.5% compared to July 2024.

Further good news came on Sept. 2, when Nio reported second-quarter 2025 financial results. In addition to growing revenue 10% year over year, the company reported a slimmer net loss. Nio posted an adjusted loss per share of $0.25 in Q2 2025 compared to an $0.30 adjusted loss per share in Q2 2024.

Management also charged up investors’ excitement for the EV maker’s stock with an auspicious outlook for the third quarter: vehicle deliveries of 87,000 to 91,000. Should the company achieve this forecast, it will represent a year-over-year increase of 40.7% to 47.1%.

In response to its Q2 2025 financial report, Wall Street grew increasingly bullish on Nio. Mizuho raised its price target on Nio stock to $6 from $3.50, while Bank of America bumped its price target up to $7.10 from $5.

Growing increasingly optimistic about Nio stock’s upside over the ensuing weeks, Bank of America revisited the price target two weeks later and raised it to $7.60. Citigroup took the pole position for the most bullish on Nio stock in September, however; it raised it price target to $8.60 from $8.10, keeping a buy rating on the stock

Is Nio stock a buy now?

While Nio stock was in reverse for the first half of 2025, shares have shifted gears and driven higher in the second half of the year as the company continues to report growth — growth that extended into September. The company recently reported 34,749 vehicles deliveries for September 2025, a year-over-year increase of 64.1% and a new monthly record.

Impressive as the company’s performance may be, the company is still consistently unprofitable, making it an undesirable option for investors looking to mitigate their risk exposure. Fortunately, there are plenty of other EV stocks to consider.

What a difference a week can make on the stock market. Next-generation healthcare tech company Tempus AI‘s (TEM 1.56%) stock was doing quite well, thank you very much, over the past few days, in contrast to the preceding five-day trading stretch.

Due to some positive news from a subsidiary brought into its portfolio recently, this week to date (as of early Friday morning) Tempus AI’s shares were rising by almost 14%, according to data compiled by S&P Global Market Intelligence.

Image source: Getty Images.

A technological leap forward

That subsidiary, California-based genetic testing specialist Ambry Genetics, was acquired by Tempus AI in February. Ambry announced a major upgrade to its cancer risk assessment platform Wednesday. It said that the Ambry CARE Program integrates data such as breast density to feed into the score calculated by the benchmark Tyrer-Cuzick breast cancer risk assessment tool.

This update, the company said, supplies “clinicians with more precise and personalized risk estimates at the point of care that can guide recommendations for breast cancer screening and risk reduction.”

Ambry added that this type of cancer is the most common to be diagnosed in women. As such, it makes CARE that much more compelling for this large addressable market.

Reputation enhancer

Not only is this a boost for the Ambry Genetics product, it should also help burnish the reputation of Tempus AI as a whole. After all, the company has positioned itself as a cutting-edge, tech-forward solutions provider harnessing artificial intelligence (AI) to improve outcomes for patients.

The U.S. economy will be hampered by the Trump administration’s tariffs in the coming months, which along with interest rate cuts could lead to a “stagflation-lite” scenario of modestly elevated inflation and unemployment, according to the UCLA Anderson Forecast released Wednesday.

The fourth-quarter estimate also predicts that rising layoffs could lead to a recession, and if President Trump is successful in exerting more control over the Federal Reserve, a “full blown stagflation scenario becomes a more significant risk.”

“This forecast is being produced at a time when more extreme scenarios have become increasingly plausible, even though they do not yet represent our baseline outlook,” states the report by Clement Bohr, senior economist at the forecast.

UCLA’s report notes that the labor market “deteriorated notably” in June while inflation pivoted away from a path of “gradual normalization” onto a rising trajectory.

The quarterly forecast does not take into account the government shutdown that began Wednesday that could results in thousands of layoffs, but predicts third-quarter GDP growth will come in at just 1% on a seasonably adjusted basis, and it will weaken further as the full cost of the tariffs takes hold.

It expects growth to recover in the middle of next year and reach 2% by the fourth quarter, remaining there throughout 2027.

Driving the stagflation prediction is an effective tariff rate of about 11%, with the risk of future levies on pharmaceuticals and the potential lack of a resolution of the China trade dispute. The report notes the political pressure on Federal Reserve Chairman Jerome Powell and the decision by the bank to cut the federal funds rate by a quarter point in September. UCLA predicts a similar rate cut this month.

Trump’s “big beautiful” budget reconciliation bill passed in July, which included $703 billion in temporary tax cuts over the next four years starting in 2026, also will provide substantial stimulus. The Consumer Price Index is expected to peak at 3.6% in the first quarter of next year before easing.

However, the economy will be held back by a tightening labor supply caused by retiring baby boomers and restrictive immigration policies. The unemployment rate has crept up to 4.3% and is expected to peak at 4.6% early next year.

Also Wednesday, closely watched ADP Research released figures showed private-sector payrolls decreased by 32,000 in September with job growth slowing across many industries.

The billions of dollars being invested in artificial intelligence by large technology firms has helped prop up the economy, the forecast noted, which should result in productivity gains — but the capital expenditures should tail off as a “trough of disillusionment” sets in when revenue gains don’t meet expectations.

The report also expects consumer consumption to weaken following a surge in electric-vehicle purchases in the third quarter due to the expiration of federal tax credits last month.

Mark Zandi, chief economist at Moody’s Analytics, said if the government shutdown lasts a week or two it won’t have a “meaningful economic impact.” However, if it lasts for a month or more and is accompanied by mass federal layoffs, it would have a profound effect on the economy, Zandi said.

“It would wreak havoc on the financial markets as global markets and investors begin to wonder if we can govern ourselves,” he said. “That would mean higher interest rates and lower stock prices.”

Memory-chip maker Micron (MU -2.68%) has historically been one of the most cyclical stocks in the chip sector. Memory is prone to boom and bust cycles as inventory levels and prices fluctuate according to supply and demand.

However, Micron has been one of the best performers in the semiconductor sector this year, a sign that investors may be underrating its momentum and that of the memory segment in the AI boom. Micron and its peers make high-bandwidth memory (HBM) chips that are an essential component of AI, and that’s a key reason the stock has doubled this year, outpacing better-known industry players like Nvidia and AMD. That strength and momentum were on display in Micron’s fourth-quarter earnings report.

After raising its guidance in August, the company topped both its updated guidance and analyst estimates.

Image source: Getty Images.

Revenue in the quarter jumped 46% to $11.32 billion, which topped the consensus at $11.16 billion. The quarter capped off a year with similar growth and full-year revenue of $37.4 billion.

The company also fulfilled an earlier promise, made in March 2024, that Micron would be one of the biggest beneficiaries of AI in the semiconductor industry, and that it would deliver record revenue and significantly improved profitability for the year it just completed. It did just that.

In addition to the strong revenue growth, gross margin improved from 35.3% to 44.7%, reflecting the ramping up of high-value data center products and pricing strength in dynamic random-access memory (DRAM), which includes HBM.

Operating margin improved from 19.6% to 32.3% as it gained leverage on research and development and selling, general, and administrative expenses, and it reported adjusted earnings per share of $3.03, up from $1.18 in the quarter a year ago, and ahead of estimates at $2.86.

Micron stock was essentially flat on the report, but that seems to just be a reflection that high expectations were baked in after the stock rose roughly 40% in September coming into the report. Keep reading to see three reasons the stock can continue gaining.

1. Guidance shows results will get even better

Micron did not give guidance for the full fiscal year, but its outlook for the first quarter shows its momentum will continue into the current quarter.

It called for $12.2 billion to $12.8 billion in revenue, up 44% from the quarter a year ago at the midpoint and well ahead of the consensus at $11.83 billion. It also forecast gross margin to top 50% at 50.5% to 52.5% on an adjusted basis. The company’s gross margin has only been above 50% one other time before, during a boom in the late 2010s.

2. Supply remains tight

Supply/demand dynamics are kind in Micron’s business, so it’s good news that management sees supply remaining tight in the year ahead.

Micron was sold out of HBM capacity for this year by June 2024, and management continues to see a tight supply environment in fiscal 2026, especially as demand for AI capacity keeps accelerating.

That dynamic should support high prices for Micron’s products and strong margins into fiscal 2026. The company also said it expects to sell the remainder of its HBM supply for calendar 2026 in the coming months.

3. Micron is still a good value

Forward estimates on Micron have moved steadily upward, and should do so again following the latest earnings report. It now trades at a trailing price-to-earnings ratio (P/E) of 20, and a forward P/E of 12.5.

Compared to its peers in the AI sector, those are rock-bottom valuations, and it’s still growing faster than many of its chip stock peers. In fact, its revenue growth is now rivaling that of Nvidia.

The low valuation seems to reflect the previous boom-and-bust cycles in memory, but the AI era may have introduced a new paradigm for the sector. While the same underlying dynamics still exist, the size of the market now seems to be significantly larger, meaning Micron could have more years of booming growth ahead of it — good news for its investors.

Tuesday wasn’t one of the more memorable days on the stock exchange for U.S. chip titan Intel (INTC 1.98%). There was little fresh news affecting the company directly, still it managed to drift 2% higher in price across the trading session. Lingering positive sentiment related to the recently announced Nvidia buy-in, in addition to recent analyst moves, played a role in this.

At any rate Intel beat the S&P 500 index, which fell by 0.6% Tuesday.

Chipping away

To a degree, investors are still reacting to the blockbuster news from the end of last week that Nvidia will invest a meaty $5 billion in Intel’s equity, and the two chip giants will collaborate on certain projects. More recently, on Monday a European bank upgraded its recommendation on the stock.

Image source: Getty Images.

Mind you, the analyst didn’t exactly join the bull stampede on Intel; still any upgrade is reason for renewed optimism. That pundit, Hans Engel of Austrian lender Erste Group, changed his recommendation to hold from his previous sell. It wasn’t immediately clear what price target Engel set.

According to reports, the analyst’s modification is due to what he considers to be progress in the company’s transformation program. He wrote in his Intel update that the chipmaker has successfully increased production speed, which should have positive knock-on effects with key fundamentals.

Potential flip into the black?

Speaking of Nvidia, Engel wrote that the company and fellow state-of-the-art chip manufacturer Broadcom are currently testing Intel’s production platform, which bodes well for its future. Also, in his view, if Intel can continue roping in new clients for its contract manufacturing business, the company has a shot at returning to profitability.

Plug Power (PLUG 18.35%) stock took off Monday morning. Shares of the hydrogen fuel cell supplier peaked with an almost 15% gain in early trading. The stock remained higher by 11.9% as of 1:30 p.m. ET.

Plug develops and commercializes hydrogen fuel cell systems. Large companies including Amazon, Walmart, and Home Depot utilize Plug’s systems to power forklifts and other material handling equipment in distribution centers and warehouses.

A big announcement today has investors thinking Plug’s future business could be related to an even faster-growing segment.

Image source: Getty Images.

Plug Power can help fill growing power needs

Plug operates a green hydrogen production facility in Georgia that began liquid hydrogen shipments last year. That hydrogen fuel could soon be used for more than forklifts as the need to power data centers explodes.

An announcement today highlighted that growing need. Tech giant Nvidia announced plans to invest as much as $100 billion in ChatGPT developer OpenAI as part of a major data center buildout.

Plug Power stock has already been rising in recent weeks due to increasing power needs as well as the Federal Reserve’s decision to lower interest rates last week. The strategic partnership between Nvidia and OpenAI will enable OpenAI to build and deploy a minimum of 10 gigawatts (GW) of data centers used for artificial intelligence (AI) growth. That would be enough power to supply electricity to over 8 million homes.

Plug Power has seen strong demand for its GenDrive fuel cells, with total revenue increasing 21% in the most recent quarter. As more companies look to supply power for data centers, Plug Power could see sharply increasing demand.

Plug has reported big losses in the first half of 2025, though. Operating losses of over $350 million were an improvement over last year, but investors should still consider it a high-risk investment. If customers do line up for its fuel cells, however, there could be more upside to Plug Power stock.

Clinical-stage biotech Nektar Therapeutics (NKTR 15.06%) had some encouraging news to report from the lab about one of its investigational medicines on Thursday. As often happens in such circumstances, investors flocked to the stock, and it closed the trading session a bit more than 15% higher. With that rise, it crushed the 0.5% advance of the bellwether S&P 500 index.

Skin in the game

That morning, Nektar published new data from a phase 2b study of rezpegaldesleukin, which targets moderate to severe atopic dermatitis, a skin disorder.

Image source: Getty Images.

The healthcare company said that a high dose of the drug achieved statistical significance on its primary endpoint, improvement in the eczema area and severity index versus a placebo over the course of 16 weeks of treatment. It also performed well in key secondary endpoints measuring a reduction of the disorder.

More encouragingly, Nektar found that participants who kept taking the treatment experienced even more profound effects. The biotech added that rezpegaldesleukin was generally well tolerated by the study’s participants.

In addition to atopic dermatitis, the drug is currently being developed by Nektar for the treatment of severe alopecia areata, a disease that can result in hair loss. The next readout from clincal testing for that indication is expected in December by the company.

A new kind of treatment

In its press release on the atopic dermatitis trial’s results, Nektar quoted its chief research and development officer Jonathan Zalevsky as saying that those results “demonstrate the potential of this new biology and the promise of Tregs [regulatory T-cells] as a therapeutic modality to treat inflammatory skin disorders.”

Chinese internet search king Baidu (BIDU 11.34%) was looking very regal on Wednesday, at least as far as its U.S.-listed equity was concerned. The company’s American depositary receipts (ADRs) shot more than 11% higher in price on the back of two successive, bullish analyst updates in as many days. That double-digit gain came during a trading session when the S&P 500 index fell by 0.1%.

Bet on Baidu, says analyst

Well before market open, Jefferies‘ Thomas Chong upped his price target on Baidu substantially. He now believes the company’s ADRs could rise to $157 per ADR, where before he thought their ceiling was $108. In making the change, he maintained his buy recommendation on the company.

Image source: Getty Images.

According to reports, Chong is convinced that the artificial intelligence (AI) Baidu has embraced so fully and rapidly will have a very positive effect on its fundamentals.

He noted several positive developments in this area, specifically the company’s success in partnering with large companies on AI cooperation, and its becoming a top earner of AI cloud revenue. Additionally, one factor that sets Baidu apart is that it’s developing its own AI accelerator chip, the Kunlun.

One big bump

Chong’s upbeat new take on Baidu might not have had as much of an impact on Wednesday if it hadn’t been for a peer’s recommendation upgrade the day before.

On Tuesday, Richard Kramer at Arete changed his rating on Baidu for the better. This is understating the case, as he moved it all the way up from sell to buy, tagging it with a price target of $143 per ADR.

Chinese e-commerce giant Alibaba Group (BABA 2.24%) was standing tall on the stock market Wednesday. Fueled by a successful round of capital-raising, the company’s U.S.-traded American depositary shares (ADSes) were rising by nearly 3% in late-session action. That was easily outpacing the S&P 500 index’s gain of 0.2% at that point.

Billions of dollars in fresh capital

Alibaba announced that it has completed a roughly $3.2 billion flotation of zero coupon convertible senior notes. The purchasers were “certain non-U.S. persons,” it did not identify.

Image source: Getty Images.

These securities can be converted into ADSes at an initial rate of nearly 5.18 per every $1,000 in principal amount of the notes. The notes mature in 2032 if not converted. Alibaba stressed that the conversion rate is subject to adjustment, under certain conditions.

At the initial rate, Alibaba wrote, the conversion price would be $193.15 per ADS. That’s a more than 31% premium to the price of the company’s Hong Kong-listed ordinary shares.

The company said it will use the amount it nets from the sales of the notes for “general corporate purposes.” The two specific uses it mentioned were a bolstering of its cloud infrastructure and international operations.

Dilution? What dilution?

Investors liked the idea of Alibaba raising capital in this way because the note issue won’t end up being too dilutive to existing shareholders, or present a huge additional burden to the balance sheet. The market cap of the ADSes currently tips the sales at almost $397 billion, while at the end of its latest-reported quarter its debt pile stood at 227 billion Hong Kong dollars ($32 billion).

SEOUL, Sept. 17 (UPI) — To address its low fertility rate, the South Korean government has gone all out. Now, the country’s private corporations are joining the campaign by offering higher savings interest rates for families with multiple children.

The Korean Federation of Community Credit Cooperatives said Wednesday that its newly launched savings product attracted more than 30,000 customers. With more than 1,250 financial cooperatives, it is the nation’s largest apex organization.

The product provides 10% interest for customers with a newborn this year. If the child is their second, the rate increases to 11%, and for a third child, it rises to 12%. A monthly deposit limit applies, though.

“We will develop various programs to uphold our responsibility as a local financial institution, and to contribute to building a sustainable community,” cooperative Chairman Kim In said in a statement.

KB Kookmin Bank, Korea’s largest lender in terms of assets, also has a savings account that offers interest rates up to 10% to families with multiple children.

Last year, Seoul-based builder Booyoung started to award a $72,000 bonus to employees each time they had a baby. The company told UPI that it had spent $7.1 million for the initiative so far.

Cosmetics maker Kolmar Korea provides a childbirth grant of $7,200 for the first and second children, and $14,400 for the third. It has also made parental leave mandatory.

South Korea’s fertility rate has been plummeting, falling to 0.72 in 2023 before slightly going up to 0.75 last year. This means that for every 100 women, only 75 babies are expected to be born.

It is one of the lowest rates in the world. Only a handful of places recorded fertility rates below 1 in recent years, including Hong Kong, and Taiwan.