JPMorgan

Before market open this morning, JPMorgan Chase (JPM -1.49%) published results for the third quarter. Performance for the period actually came in significantly better than the market had anticipated — with earnings per share of $5.07 on sales of $47.12 billion beating the average analyst estimate’s call for per-share earnings of $4.84 on sales of $45.4 billion.

On the other hand, the strong quarter also arrived with some commentary from CEO Jamie Dimon and other executives highlighting concerns for the financials sector and broader U.S. economy. Has JPMorgan just raised major warning flags that could signal powerful headwinds for other major banks?

Image source: Getty Images.

Jamie Dimon’s “cockroach” comments raise eyebrows

Speaking on losses his company experienced connected to its position in automotive credit supplier Tricolor Holdings, JPMorgan Chase CEO Jamie Dimon acknowledged that the relationship was not the bank’s best moment. Taking it a step further, Dimon said, “When you see one cockroach, there’s probably more.”

Tricolor filed for bankruptcy protection last month, and the development has raised concerns about the broader U.S. consumer credit market. In the third quarter, JPMorgan took a $170 million impairment charge connected to loans it had extended to Tricolor. In JPMorgan’s third-quarter conference call, Dimon suggested that bankruptcies for Tricolor and other companies in the auto industry raised concerns about whether lending standards had become too lax.

Dimon’s comments about seeing cockroaches highlight the risk that issues facing the U.S. consumer credit market may be greater than what is visible on the surface. In other words, Tricolor’s bankruptcy may be the visible cockroach that signals a much larger nest of bugs that could present issues for the credit market and broader economy.

Dimon’s comments about Tricolor and consumer credit trends are also seemingly an acknowledgment that JPMorgan could face similar issues in the not-too-distant future. Perhaps more importantly, his comments raise the concern that other large U.S. banks could soon face similar issues that have impacts on the financials sector and U.S. macroeconomic health.

Between inflation levels that have remained relatively sticky, uncertainty surrounding the impact of tariffs, and some concerning indicators for U.S. economic growth, there are a lot of pressure points on the table for the broader macroeconomic picture right now. Shifting geopolitical dynamics with China and other rivals and trade partners present additional risk factors.

The U.S. economy is going through some historic shifts at the moment, and there are good reasons to think that some potentially serious fault lines exist in the consumer credit market right now. Dimon’s suggestion that Tricolor’s bankruptcy and other signs of weakness connected to the auto market signal real credit risks appears well founded, and it wouldn’t be shocking to see other major banks dealing with headwinds along those lines in the near future.

On October 8, 2025, Osprey Private Wealth LLC disclosed a buy of 13,580 shares of JPMorgan Chase & Co.(JPM -0.63%), an estimated $4.04 million trade.

What happened

According to its SEC filing dated October 8, 2025, Osprey Private Wealth LLC acquired an additional 13,580 shares of JPMorgan Chase & Co. in the third quarter of 2025. The estimated value of the shares purchased is approximately $4.04 million, based on the average closing price for the quarter. The post-trade position stands at 48,910 shares, worth $15.43 million at quarter-end.

What else to know

The fund increased its JPMorgan Chase & Co. stake, now representing 5.6% of reportable assets.

Osprey’s top holdings after the filing:

• Alphabet: $22.44 million (8.2% of AUM) as of September 30, 2025
• Nvidia: $21.11 million (7.7% of AUM) as of September 30, 2025
• JPMorgan Chase: $15.43 million (5.6% of AUM) as of September 30, 2025
• Meta Platforms: $14.74 million (5.4% of AUM) as of September 30, 2025
• Visa: $12.47 million (4.5% of AUM) as of September 30, 2025

As of October 7, 2025, shares were priced at $307.69, up 45.9% over the past year, outperforming the S&P 500 by 32.0 percentage points over the past year

Company overview

Company snapshot

JPMorgan Chase:

• offers a comprehensive suite of financial products and services, including consumer banking, investment banking, commercial banking, asset and wealth management, and payment solutions.
• serves a broad client base comprising individual consumers, small businesses, corporations, institutional investors, and government entities worldwide.
• operates globally with significant scale across multiple banking segments.

JPMorgan Chase & Co. is one of the world’s largest and most diversified financial institutions, with significant scale across consumer, commercial, and investment banking segments. The company’s integrated business model and global reach enable it to capture a wide range of revenue streams and maintain a strong competitive position.

Foolish take

While Osprey’s addition of $4 million to its JPMorgan Chase position purchase may seem encouraging to investors, it may not be as big a deal as it looks.

Despite this hefty purchase, Osprey’s portfolio allocation to JPMorgan Chase actually dipped from 5.7% to 5.6%. This decline stems from the fact that the firm added to almost all of the investments it holds.

Ultimately, Osprey mostly holds niche-leading stocks that may prove hard to disrupt, so its 5.6% in JP Morgan Chase — making it the largest bank in the United States — fits this billing nicely.

Despite being the largest bank here in the states, JPMorgan Chase has grown its net income and dividend payments by 13% and 9% annually over the last decade.

This growth, paired with the company’s solid return on equity of 16%, reasonable price-to-earnings ratio of 16, and top-quality leadership, makes JPMorgan Chase a great steady-Eddie investment to consider — and why it looks like an excellent stock for Osprey to add to.

Glossary

AUM: Assets under management – The total market value of investments managed by a fund or firm.

Reportable AUM: The portion of a fund’s assets required to be disclosed in regulatory filings.

Stake: The ownership interest or amount of shares held in a particular company or asset.

Holding: A specific security or asset owned within an investment portfolio.

Outperforming: Achieving a higher return than a relevant benchmark or index over a given period.

Dividend yield: Annual dividends per share divided by the share price, expressed as a percentage.

Quarter-end: The last day of a fiscal quarter, used as a reference point for financial data.

Integrated business model: A company structure combining multiple business lines or services to create operational efficiencies.

Institutional investors: Organizations such as pension funds, insurance companies, or endowments that invest large sums of money.

TTM: The 12-month period ending with the most recent quarterly report.

eGain(EGAN 6.00%) reported fourth quarter 2025 results on Sept. 4, 2025, with total revenue (GAAP) rising 11% sequentially and 3% year over year to $23.2 million, and a record non-GAAP Software-as-a-Service (SaaS) gross margin of 80%. The company announced a marquee design partnership with JPMorgan Chase (NYSE:JPM) in April, outlined the sunset of its legacy messaging product, and guided for a return to full-year revenue growth in fiscal 2026 (period ending June 30, 2026), with annual recurring revenue (ARR) in its core AI knowledge business expected to grow 20% or more.

AI knowledge ARR accelerates as legacy messaging sunsets

ARR from AI knowledge customers increased 25% year over year, reaching nearly 60% of total company ARR as of September 2025. Net dollar-based SaaS retention for these customers improved to 115% for the last twelve months, up from 98% a year earlier. Management guided for approximately $4.7 million in current ARR from the legacy messaging product to run off throughout fiscal 2026, beginning in the second quarter.

“SaaS ARR from knowledge customers increased 25% year over year or 22% in constant currency, while SaaS ARR for all customers increased 11% year over year or 9% in constant currency. Turning to our net retention rates, LTM dollar-based SaaS net retention for knowledge customers was 115% or 112% in constant currency, up from 98% a year ago, while net retention for all customers was 105% or 103% in constant currency, up from 88% a year ago.”
— Eric Smith, CFO

This rapid growth in AI knowledge ARR and improved retention rates (now at 115%) highlights the company’s successful transition away from legacy products and its ability to drive higher-value, recurring revenue streams.

JPMorgan Chase partnership expands eGain’s strategic reach

The partnership with JPMorgan Chase represents one of the largest deals in company history, expanding eGain’s footprint from discrete business units to a company-wide AI knowledge hub. The agreement included collaborative product development, warrant grants to JPMorgan Chase in August, and the addition of a JPMorgan Chase board observer to inform next-generation product direction for the broader market.

“Our AI Knowledge Hub will now serve all bank employees in their U.S. Chase business. What is exciting for us is that we are now actively partnering with JPMorgan Chase to improve customer experience and drive AI efficiencies across the business. To strengthen this partnership, we issued warrants to JPMC in August, and they agreed to nominate a senior executive to join our eGain board as an observer.”
— Ashu Roy, CEO

This strategic relationship positions eGain to benefit from JPMorgan Chase’s scale and expertise, while also accelerating product innovation and enhancing credibility with other large enterprise customers.

Gross margin expands as cloud migration and automation drive efficiency

Total gross margin rose to 73% in the fourth quarter, up from 71% a year ago, with non-GAAP SaaS gross margin reaching 80%, up from 76%. Non-GAAP operating costs declined 2% year over year, even as research and development (R&D) spending increased 15% for the full year. The migration of all customers to a new cloud architecture and increased AI-driven automation have resulted in sustained improvements to the company’s cost structure.

“We completed our migration of all clients over to the new architecture, the new cloud platform that we have been working on for a few couple of years now. So we had mentioned that in the past. So that is one place where we are seeing benefits, which now will continue to be there. Right? So, that’s one. But the second one is, with not just AI, but also our ability to develop new product and capabilities faster, we are automating the process of supporting and operating our cloud and being much more efficient on the cloud resources that we are using. All three of those. And so that is another big chunk of improvement if we are able to create on a sustainable basis.”
— Ashu Roy, CEO

These operational improvements are expected to support further gross margin expansion and enable continued investment in product development without increasing the overall cost base.

Looking Ahead

Management guides for total revenue of $90.5 million to $92 million in fiscal 2026 (ending June 30, 2026), GAAP net income of $3.5 million to $5 million, adjusted EBITDA of $10.4 million to $11.9 million, and non-GAAP net income of $8.3 million to $9.8 million. Gross margin is forecasted to expand to 74% to 75%, and core AI knowledge ARR is expected to grow 20% or more year over year, partially offset by the full-year wind-down of approximately $4.7 million ARR from legacy messaging. R&D investment will increase by about 6% year over year, while adjusted EBITDA is targeted to rise by 20% to 40% year over year.