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Historians looking back at UCLA’s 2025 football season will peg the Penn State game as the Bruins’ first victory.

In ways both large and small, they will be wrong.

When Tim Skipper first took over the team a month ago, he placed a new opponent on the schedule: the locker room. The interim coach showed players pictures of how it should look, including the lockers and the surrounding floor.

They scrubbed the place and it’s been spotless ever since. Sort of like the Bruins’ play starting with that Penn State game.

“I think a clean locker room makes you a lot happier,” Skipper explained this week. “It shows team discipline and it shows you can win off the field, so now you can go ahead and get on the field.”

Skipper’s other primary motivational device — besides his highly transmissible energy — has been slogans. He started by telling his players to strain, to give everything they had in the pursuit of winning. After the Bruins beat Penn State, he asked players whether they were one-hit wonders. Now, his players having established they know what it takes to win following a smackdown of Michigan State, he’s asking them to maintain their approach.

At their Sunday meeting, the Bruins saw their new mantra — the standard is the standard — on a big screen.

“We have identified a style of play that we want to be, and it’s our job now to keep the standard the standard, you know, play with that fanatical effort, play with fundamentals, being smart, you know, all those things we just have to continue to do,” Skipper said. “But it’s not like something that’s just going to show up on Saturday. You have to practice about it. You have to work on it and not just talk about it.”

Can the Bruins keep it up after two consecutive victories? Here are five things to watch Saturday afternoon at the Rose Bowl when UCLA (2-4 overall, 2-1 Big Ten) faces Maryland (4-2, 1-2):

If you’re looking to put money to work in the market — say $1,000 — investing in some up-and-coming growth stocks could be a good route to take. Let’s look at two artificial intelligence (AI) stocks that could still be in the early days of a big ramp-up in growth.

Broadcom

Broadcom (AVGO -1.86%) has become the key architect for helping companies design custom AI chips, making it one of the most important players in the next phase of the AI infrastructure build-out. As companies look to increasingly loosen Nvidia‘s grip on the AI chip market, they are turning to Broadcom for help.

The company has already proved itself in its relationship with Alphabet, helping the cloud computing leader develop its highly successful tensor processing units (TPUs).

Broadcom expects just three of its established customers, which also include Meta Platforms and ByteDance, to represent a $60 billion to $90 billion opportunity by fiscal 2027. The midpoint of that estimate is more than the size of Broadcom’s entire current annual revenue base, which just shows you how big its custom-chip opportunity is.

The company recently announced a formal partnership with OpenAI to help develop and deploy 10 gigawatts of custom AI accelerators using Broadcom’s networking and Ethernet technology. The implications are enormous. A single gigawatt of data center capacity translates into tens of billions of dollars in hardware spending, meaning this partnership alone could represent a $100 billion annual opportunity in the coming years.

Broadcom has yet another new customer for its custom AI chips that ordered $10 billion worth of the semiconductors for next year. 

Now, with several of the world’s largest hyperscalers (companies that own huge data centers) as custom AI chip clients, Broadcom looks poised to see explosive growth in the coming years. This can be a good time to add shares before the company’s results start to really ramp up.

Image source: Getty Images

UiPath

Another company that has the potential to accelerate its growth in the coming years is UiPath (PATH -3.77%). The company built its name around robotic process automation (RPA), which uses software bots to handle repetitive business tasks, but it’s now moving into what it calls agentic automation.

The company has been busy forming partnerships that strengthen this strategy. It’s now working with Nvidia to integrate its Nemotron models and NIM microservices, which can accelerate AI deployment in industries where data security is paramount. It has also teamed up with Alphabet to use its Gemini models for voice-activated automation. 

However, its most interesting collaboration is with Snowflake, a data warehousing and analytics company that stores customers’ structured data. There has been a belief that AI would disrupt its business, given how well AI works with unstructured data, but companies like Palantir have actually shown that AI models work best when they have clean, organized data.

By connecting with Snowflake’s Cortex AI system, UiPath AI orchestration tools can give customers insights using their own data in real time. That is a powerful resource that could help make AI more actionable in the real world.

UiPath’s growth temporarily slowed as the AI frenzy took off and customers reevaluated their spending priorities, but the underlying business is improving again. Its annual recurring revenue (ARR) climbed 11% to $1.72 billion last quarter, and cloud-based ARR surged 25%, showing that customers are embracing the company’s newer offerings. Net revenue retention stabilized at 108%, and operating margins have expanded significantly after the company implemented cost cuts.

UiPath’s open approach, acting as the “Switzerland” of AI agents, should appeal to enterprises that don’t want to be tied to one AI ecosystem, and it represents a huge growth opportunity.

More than 450 customers are already building AI agents on its platform, and almost all new customers are adopting both its RPA and AI products together. That’s a strong sign the company’s AI expansion isn’t cannibalizing its core business but enhancing it.

Despite this progress, the market hasn’t caught on yet: The stock trades at a price-to-sales (P/S) multiple of only 5 times 2026 analyst estimates. If growth continues to reaccelerate, the stock’s upside could be substantial.

Artificial intelligence (AI) has become the megatrend of this decade and is fast transforming the enterprise landscape. According to Gartner, global AI spending will be nearly $1.5 trillion in calendar year 2025.

While the AI opportunity is massive, not every AI player can prove to be an exceptional business in the long run. Companies with proven technologies and well-established customer bases stand a better chance of sustaining high top-line and bottom-line growth rates in the coming years.

Here’s why Palantir Technologies (PLTR -0.31%) and Snowflake (SNOW 0.18%) are two companies that could deliver strong returns, turning disciplined investors into millionaires over the long run.

Image source: Getty Images.

Palantir

Palantir has evolved from a pure data analytics company to a full-stack AI enterprise platform. The company’s software solutions are now used in mission-critical operations by both government and commercial clients.

In the second quarter, the company’s revenue soared 48% year over year to over $1 billion. The U.S. continues to be the biggest market, with revenue growing 68% to $733 million. The company also closed a record $2.27 billion in total contract value, up 140% over the year-ago period.

A significant part of this growth is driven by the rapid enterprise adoption of the company’s Artificial Intelligence Platform (AIP). AIP combines large language model reasoning with the company’s proprietary ontology framework (used to relate physical assets to digital twins) to solve complex, real-time business challenges.

Palantir is also focused on helping clients scale through automation. The company has added new tools and features to AIP, such as AI Forward Deployed Engineer (software engineer) and AI Workbench, to automate application development tasks and develop, debug, and automate workflows.

The company has also introduced the Ontology-as-a-Code feature to enable clients to leverage ontology in their preferred integrated development environments, tools, and workflows.

Palantir’s shares are currently trading at a very aggressive valuation of over 123 times sales. Although not an ideal scenario, this premium reflects Wall Street’s confidence in the company’s future growth trajectory.

Analysts expect Palantir’s revenue to rise at a compound annual growth rate (CAGR) of 39.9% from $2.86 billion in fiscal 2024 to $11 billion in fiscal 2028. Adjusted earnings per share (EPS) are also expected to grow at a CAGR of 40.7% from $0.41 in fiscal 2024 to $1.61 in fiscal 2028. Hence, the valuation can continue to remain elevated for several more years.

Considering these factors, Palantir can prove to be a smart pick in 2025.

Snowflake

Snowflake is transitioning from a cloud data warehouse to an AI data cloud (unified platform comprising AI technologies, data, and applications) for enterprises.

In Q2 of fiscal 2026 (ended July 31, 2025), product revenue grew 32% year over year to $1.09 billion, while non-GAAP operating margin reached 11%. The company had $6.9 billion in remaining performance obligations (RPO) at the end of Q2, up 33% on a year-over-year basis. With a large base of renewing customers, contracted billings, and large deals in the pipeline, the company has strong revenue visibility for the next few years. Snowflake’s healthy net-revenue retention rate of 125% also demonstrates its success in cross-selling and upselling to existing clients.

AI has become the key growth engine, influencing almost half of all new customer wins in Q2. AI is also powering nearly 25% of the deployed use cases. Currently, over 6,100 accounts use Snowflake’s AI capabilities on a weekly basis for various activities such as data migrations, analytics, and workflow transformations.

Snowflake has further strengthened its position in enterprise AI with Snowflake Intelligence, which enables enterprises to interact directly with their data and also build intelligent agents. The company has introduced Cortex AI SQL, which enables users to leverage AI models directly within SQL databases. This removes the need to move data between applications and unifies analytics and AI.

The company is also committed to improving performance and efficiency. The company launched Gen2 data warehouses , which offer double the performance in extracting insights and managing data without increasing costs. The company’s new OpenFlow capability allows enterprises to bring unstructured, structured, batch, or real-time streaming data into the Snowflake platform.

All these AI-powered capabilities have accelerated the company’s customer acquisition pace. Snowflake added 533 new customers in Q2, including 15 Global 2000 companies. The company now is trading at 19.4 times sales, which is not cheap for a loss-making company. However, the premium seems justified when we consider its accelerating AI adoption, expanding customer base, and robust backlog.

Hence, the payoff in investing in Snowflake can be impressive despite its elevated valuation levels.

Stock prices continue to grow to the sky, and the S&P 500 index has set 28 record highs this year through the end of September.

Moreover, valuations continue to stretch. At 39.7, the Shiller Cyclically Adjusted (CAPE) Ratio is at its second highest level of the past century (higher than the eve of the Great Crash of 1929, though still a bit lower than the eve of the Internet bubble burst in 1999).

What should a prudent investor do in such a frothy market?

Investing in defensive stocks that are less vulnerable to market pullbacks, drawdowns, and corrections is one great idea. And here’s an even better idea: Buying reliable, stable defensive stocks that pay high dividends and reward investors with passive income.

Stability and income

So, what’s the best exchange-traded fund (ETF) to buy right now if you want exposure to defensive stocks that provide stable earnings and dividends? I like the Vanguard High Dividend Yield ETF (VYM) because it gives you a stake in a broad swath of high-yielding, stable, large-cap value stocks. Thus, you get safety and reliable passive income, and at a rock-bottom price.

The Vanguard High Dividend Yield ETF tracks the performance of the FTSE High Dividend Yield Index, which measures the return of a set of stocks characterized by high dividend yields. With total assets of $81.3 billion, the fund currently holds 579 stocks. Its top five holdings are:

• Broadcom, which accounts for 6.7% of the fund
• JPMorgan Chase, 4.1%
• ExxonMobil, 2.4%
• Johnson & Johnson, 2.1%
• Walmart, 2.1%

Such big, safe companies — ones that we would expect to be around for the long haul — are typical of the fund’s holdings. And it avoids risky and distressed firms.

Other than chipmaker Broadcom, no one stock currently accounts for more than 5% of the ETF, which makes it highly diversified. It’s also diversified among sectors. Its biggest holding by sector is financials, with about 22% of its assets in that industry. It also has large positions in consumer discretionary, healthcare, industrials, and technology, among a few other sectors.

The fund’s current yield is a very respectable 2.49%, about 1.3 percentage points above that of the S&P 500. The annual fee is a minuscule 0.06%, which is far lower than the 0.87% average for similar funds. The ETF is up about 10.4% year to date, which is solid given the income it produces.

Not so boring

Investors who think dividends are boring should think again. From 1940 to 2024, dividend income contributed 34% of the total return of the S&P 500, according to Hartford Funds.

Source: Getty Images.

That contribution varies a lot by decade. Dividends contribute a larger share of the total market return when the stock market is rising slowly, and a smaller share when it’s soaring. That makes sense. Companies with higher-yielding stocks tend to be large and slower-growing, just what you want to own in a challenging market environment.

Yes, there are stocks with much higher yields than those in the Vanguard High Dividend Yield ETF. But that’s by design, too. The fund avoids stocks with deteriorating fundamentals and declining prices, limiting its exposure to risky companies.

Best of all — considering the bubbly nature of the current stock market — this dividend ETF outperforms in difficult markets. It beat similar funds during the COVID-19 sell-off of early 2020 and outperformed other funds in its category by 7 percentage points in 2022, when the S&P 500 fell more than 19%.

The Vanguard High Dividend Yield ETF provides a steady, safer approach to higher-yielding stocks, and reliable passive income. Such an approach is beginning to look very attractive to many investors.

After it dipped nearly 4% lower last week, shares of fuel cell specialist Bloom Energy (BE -1.16%) reversed their downward trajectory and shot into the stratosphere this week. In addition to news that the company would help support the artificial intelligence (AI) industry, two analysts’ increasingly bullish outlook on Bloom Energy stock provided Main Street investors with more reasons to bid Bloom stock higher.

According to data provided by S&P Global Market Intelligence, shares of Bloom Energy had soared 32.5% from the end of trading last Friday through the close of Thursday’s trading session.

Image source: Getty Images.

The details of the recent deal

On Monday, Bloom Energy announced Brookfield Asset Management (BAM -3.63%) will make an investment of up to $5 billion to deploy Bloom’s fuel cell technology to support AI infrastructure. Exploring the development of AI factories located around the world, the two companies expect to announce a European site that will demonstrate this capability before the end of 2025.

It didn’t take long before analysts started to wax bullish on Bloom stock after it announced the deal with Brookfield. The next day UBS analyst Manav Gupta hiked the price target on Bloom stock to $115 from $105 based on the potential of the Brookfield partnership, and BMO Capital lifted its price target to $97 from $33.

Has the time to buy Bloom Energy stock passed you by?

The market’s seemingly insatiable appetite for AI exposure touched on Bloom Energy this week, and shares are now trading at a lofty 131 times forward earnings. While the fuel cell specialist is arguably the most promising opportunity among its fuel cell peers, the stock’s steep valuation suggests that it may be better to watch it from the sidelines for the time being and wait for a pullback before clicking the buy button.

And with respect to the analysts’ price targets — take them with a grain of salt. Analysts often have shorter investing horizons than the multiyear holding periods serious investors tend to favor; therefore, they shouldn’t be a priority when investors form investing theses.

Nvidia (NVDA 1.04%) has hit it out of the park quarter after quarter when reporting earnings, but that hasn’t made investors blasé about the artificial intelligence (AI) giant’s next update. Instead, investors wait with just as much anticipation each time around — and even wonder if, this time, they’ll see a slowdown in what’s been a whirlwind growth story.

As investors count the days until the next report — and in this case, it’s set for Nov. 19 — they look for clues about Nvidia’s AI business, one that’s generated record revenue in recent years. Nvidia, as the world’s biggest AI chip designer, delivered $130 billion in revenue in the latest fiscal year — that’s compared to $27 billion just two years earlier.

Now, one particular clue — and one investors truly can count on — comes from Taiwan Semiconductor Manufacturing (TSM -1.68%), a key Nvidia partner. TSMC, the world’s largest chip manufacturer, just announced big news for Nvidia stockholders. 

Image source: Getty Images.

How Nvidia and TSMC work together

Before we get to this fantastic news, though, we’ll take a quick look at Nvidia’s business and how the company works with TSMC. Nvidia for many years built its business around designing chips for the gaming market, but as AI surfaced as a growth opportunity, the company turned its attention there. And, as they say, the rest is history.

Today, Nvidia dominates this market with its high-powered chips as well as related products and services from enterprise software to networking systems. This has helped earnings and the stock price soar — Nvidia shares have climbed more than 1,100% over the past five years.

It’s important to note that though Nvidia is a chip designer, it’s not a chipmaker. Nvidia doesn’t actually manufacture its AI chips, known as graphics processing units (GPUs), and instead turns to TSMC for that job. TSMC has more than 500 customers across segments of the market, including the world’s chip leaders — from Nvidia to Broadcom and Advanced Micro Devices.

A deep look at the industry

On top of this, since the actual production of advanced chips becomes more and more complex with each chip innovation, TSMC starts work with customers two to three years prior to a new project. “Therefore, we probably get the deepest and widest look possible in the industry,” CEO C.C. Wei said during the company’s earnings call this week.

All of this means TSMC has a very clear picture of what’s happening in today’s AI market and what lies ahead. And this brings me to the news the company delivered this week — news that’s a big deal for Nvidia stockholders.

TSMC reported a 39% increase in profit and a 30% increase in revenue in the recent quarter, beating analysts’ estimates. Importantly, Wei said TSMC continues to see a “strong outlook” from customers and “received very strong signals from our customers’ customers. … Our conviction in the AI megatrend is strengthening.” Wei added that semiconductor demand “will continue to be very fundamental.”

Confirming the trend

All of this is incredible news for Nvidia’s shareholders as it confirms the trends the chip designer has spoken of in recent quarters and its prediction for growth in demand. In Nvidia’s most recent earnings report, back in August, CEO Jensen Huang predicted that AI infrastructure spending may jump to $4 trillion by 2030. TSMC’s report this past week offers us reason to be optimistic about that possibility and suggests that Nvidia is already starting to reap the rewards.

As customers seek GPUs, chip designers must turn to TSMC for production — and it’s likely that TSMC’s revenue gains reflect demand for Nvidia’s chips since Nvidia is the market leader.

All of this means there’s reason for investors to be optimistic about Nvidia’s upcoming earnings report and the messages it will deliver regarding future demand for its GPUs. That’s incredible news for Nvidia stockholders — and makes the stock a great one to buy and hold today.

One of the first investors to buy Nvidia (NVDA 1.04%) for the artificial intelligence (AI) boom was Stanley Druckenmiller at his Duquesne Family Office investment fund. At the end of 2023, it was one of his largest positions, a year where the stock more than tripled for investors, putting it on the path to become the largest company in the world by market capitalization.

Then, in 2024, Druckenmiller began to sell down his stake in Nvidia. By the end of last year, he had completely exited his position. What has he been buying instead? Last quarter, Duquesne bought two other trillion-dollar AI stocks: Taiwan Semiconductor Manufacturing (TSM -1.68%) and Microsoft (MSFT -0.43%).

Let’s see whether you should follow Druckenmiller and buy these two stocks for your portfolio today.

Image source: Nvidia.

Nvidia’s semiconductor supplier

Some readers may already know this, but Nvidia does not manufacture its advanced computer chips itself. It only designs them. The key manufacturing supplier of Nvidia chips is Taiwan Semiconductor Manufacturing, or TSMC for short. TSMC only makes computer chips for third parties and is known as a semiconductor foundry. These include Nvidia, but also the likes of Apple, Broadcom, and other technology giants.

With the insatiable demand for computer chips from the growing AI market, TSMC has been doing quite well in recent quarters. Last quarter, revenue grew 44.4% year over year to $30 billion. Not only is TSMC one of the largest businesses in the world, but one of the fastest growing.

As one of the only companies that can manufacture advanced semiconductors at scale, TSMC has been able to sell its computer chips to customers like Nvidia with fat profit margins. Last quarter, operating margin was close to 50%, which is unheard of for a manufacturing business.

At today’s stock price, TSMC trades at a price-to-earnings ratio (P/E) of 34. While this is slightly expensive, it is much better than Nvidia’s P/E ratio of 51. When you consider that both stocks will benefit from the growing demand for AI computer chips, it is no surprise that Duquesne sold its stake in Nvidia and owns TSMC today instead.

Microsoft’s opportunity in AI

Microsoft is a large customer of Nvidia as the company accelerates its buildout of cloud computing data center infrastructure to power the AI revolution. It has a relationship with OpenAI, the leading private AI company that is spending hundreds of billions of dollars on infrastructure. In 2025 alone, Microsoft is planning to spend $80 billion on capital expenditures to help catch up with AI demand.

Its cloud revenue is benefiting massively from the growth in AI. Its Azure cloud computing division grew revenue 34% year over year last quarter to $75 billion, making it the second-largest cloud business in the world apart from Amazon Web Services (AWS). Overall revenue is growing well due to Microsoft’s diversified assets in personal computing, Office 365 subscriptions, and other services such as LinkedIn. Revenue was up 17% year over year last quarter, with operating income up 22% (both in constant currency). Expanding operating margins to 45% makes Microsoft one of the most profitable businesses in the world.

Like TSMC, Microsoft trades at a much cheaper P/E ratio than Nvidia, at 37.5 as of this writing. With steady growth, margin expansion, and a clear line of new demand for Azure for AI solutions, Microsoft looks like a solid buy-and-hold stock for investors over the next decade and beyond.

At the end of the second quarter, TSMC was 4.3% of the Duquesne stock portfolio, according to its 13F filing, increasing its position by 27% more shares in the period. Microsoft was a completely new buy for the fund, but it is already a 2.5% position. Both stocks have done well throughout the second and third quarters, but can still be good long-term buys for investors looking for inspiration from super investors like Druckenmiller.

A lot of people start collecting Social Security specifically because they’ve stopped working, or when they’re ready to stop. But you should know that if you wish to work while collecting Social Security, that option exists.

However, there are rules you should know in the context of working while on Social Security. Here’s a rundown.

Image source: Getty Images.

Working while on Social Security has its advantages

You may find that your Social Security benefits aren’t enough to cover your retirement expenses in full. If you don’t have an IRA or 401(k) to supplement with, then you may be inclined to work in some capacity to make up the difference.

Once you reach full retirement age, which is 67 for people born in 1960 or later, you don’t have to worry about having Social Security benefits withheld for working, regardless of what you earn. But if you’re collecting Social Security before having reached full retirement age, you’ll be subject to an earnings test whose limits change annually.

This year, for example, you can earn up to $23,400 without having any Social Security withheld if you’re under full retirement age. Beyond that point, you’ll have $1 in Social Security withheld per $2 of income.

The earnings-test limit is much higher if you’re reaching full retirement age at some point in 2025. In that case, it’s $62,160. And beyond that point, you’ll have $1 in Social Security withheld per $3 of income.

If you’re under full retirement age but also earn less than the earnings-test limit, you can enjoy a nice supplement to your income without any negative impact. And even if you have benefits withheld for exceeding the earnings-test limit, you’ll get that money back eventually.

Once you reach full retirement age, your monthly benefits will be recalculated and boosted to make up for withheld Social Security earlier on. That could be a good thing, because if you get used to living on less and your monthly benefits go up substantially, it could feel like a bonus of sorts.

You may get larger monthly benefits for another reason

In addition to putting more money in your pocket, working while on Social Security could set you up for larger benefits down the line. The formula used to calculate your benefits accounts for your 35 highest-paid years of earnings while adjusting earlier wages for inflation.

If you earn a lot while collecting Social Security, you might replace a year of lower income with a higher income. That could, in turn, lead to larger benefit payments.

Let’s say you worked for 35 years, but for three of those years, you only worked part-time and earned very little. If you work part-time while on Social Security and bring in $22,000 over the course of the year, you’ll be below the earnings-test limit.

But $22,000 may also be a lot more than what you earned during one of your years of part-time work, even with those earlier wages adjusted for inflation. So you may find that working leads to a more generous monthly payday for life once the Social Security Administration is able to factor your most recent wages into your benefit formula.

Know the rules

You may have heard that working while on Social Security is not a good idea because of the earnings-test limit. Or, you may be under the impression that if you’re getting monthly benefits, you’re barred from working, period.

It’s important to understand the rules of working while collecting Social Security so you’re able to supplement your income as you please. And you may find that holding down a job while receiving benefits gives you more money not just from those wages, but in the form of larger monthly Social Security checks later on.

Over the next few weeks, many of America’s largest technology companies will report their operating results for the quarter ended Sept. 30. They will provide investors with a valuable update on their progress in the artificial intelligence (AI) race, which is driving an enormous amount of value right now.

Sept. 30 marked the end of Microsoft‘s (MSFT -0.43%) fiscal 2026 first quarter, and it is scheduled to report those results on Oct. 29. The company’s Azure cloud computing platform and its Copilot virtual assistant will be key points of focus for Wall Street because they are at the center of the company’s AI strategy.

Microsoft stock has already climbed 25% year to date. Is it still a buy ahead of the Oct. 29 earnings report?

Keep an eye on Copilot adoption

Microsoft launched its Copilot virtual assistant in early 2023. It was created using a combination of the company’s own AI models and those developed by its longtime partner OpenAI. The chatbot can be used for free in some of Microsoft’s flagship software products like Windows, Edge, and Bing, but it’s also available as a paid add-on for enterprise products like the 365 productivity suite.

Copilot can rapidly generate content in applications like Word and PowerPoint, autonomously transcribe meetings in Teams, and help users craft email replies in Outlook, so it has the potential to significantly increase productivity for enterprises. Microsoft says organizations around the world pay for over 400 million licenses for 365, all of which are candidates for the paid Copilot add-on, so the AI assistant could generate billions of dollars in recurring revenue for the company over the long term.

During the fiscal 2025 fourth quarter (ended June 30), Microsoft said several large customers expanded their Copilot adoption through 365. Barclays, for example, bought 100,000 licenses for its employees after running an initial test with 15,000, which implies a high degree of satisfaction with the assistant’s capabilities. This is the kind of information investors should look out for on Oct. 29, because it could be a predictor of future revenue.

But 365 isn’t Microsoft’s only enterprise opportunity when it comes to Copilot. There is Copilot Dragon, an innovative healthcare solution that autonomously documents millions of doctor-patient interactions, saving clinicians valuable time. Then there is Copilot Studio, a platform that allows businesses to create custom AI agents to automate workflows in any application, even those outside Microsoft’s ecosystem.

The most important segment to watch on Oct. 29

Microsoft’s Azure cloud platform operates hundreds of data centers spread across dozens of different regions around the world. They are fitted with the most advanced chips from suppliers like Nvidia and Advanced Micro Devices, and businesses rent the computing capacity from Azure to power their AI training and AI inference workloads.

Microsoft also launched Azure AI Foundry earlier this year, which ties many of the cloud platform’s AI services together to form a holistic solution for enterprises. It can be used to turn raw data into documents, build AI chat applications, deploy AI software, perform multimodal content processing, and more. It also offers access to the latest large language models (LLMs) from third parties like OpenAI to accelerate AI development.

Azure is regularly the fastest-growing part of Microsoft’s entire business, but it surprised even the most bullish analysts during the fiscal 2025 fourth quarter when its revenue soared by a whopping 39% year over year. It was the fastest growth rate in three years, and it marked a significant acceleration from the 33% growth Azure generated in the third quarter just three months earlier.

Demand for data center capacity and Foundry were the key drivers of the incredible result, so this is where investors should focus most of their attention on Oct. 29.

Should you buy Microsoft stock before Oct. 29?

Microsoft stock isn’t cheap right now. It’s trading at a price-to-earnings (P/E) ratio of 38.3, which is a 14% premium to its five-year average of 33.5. It’s also notably more expensive than the 33.3 P/E of the Nasdaq-100 index, which is home to many of Microsoft’s big-tech peers.

MSFT PE Ratio data by YCharts

As a result, investors who are looking for short-term gains over the next few months might be left disappointed. That doesn’t mean the stock is a bad buy ahead of Oct. 29, but investors who pull the trigger must be willing to hold it for the long term — preferably for three to five years — to maximize their chances of earning a positive return.

One single quarter is unlikely to shift Microsoft’s momentum in either direction, but as long as Copilot adoption continues to expand and Azure’s revenue growth maintains its recent momentum, investors will probably be glad this stock is in their portfolio.

You probably think of the money in your retirement accounts as yours, but if you have traditional IRAs or 401(k)s, it’s not that straightforward. You owe the IRS a cut of your savings, and at a certain point, it forces you to start taking required minimum distributions (RMDs). These are mandatory annual withdrawals that you must pay taxes on.

If you’re new to RMDs, they can seem a little intimidating. Failing to withdraw the required amount results in a steep 25% tax penalty on the amount you should’ve withdrawn, so it’s important to know how to calculate yours correctly. Let’s look at the example of a retirement account with a $500,000 balance.

Image source: Getty Images.

Three situations where you don’t have to take an RMD

You won’t have to take an RMD from your retirement account if any of the following are true:

• You’re under age 73: RMDs begin in the year you turn 73. If you turn 73 in 2025, you technically have until April 1, 2026 to take your first RMD. In all subsequent years, you must take RMDs no later than Dec. 31 of that year.
• It’s a Roth account: You fund Roth accounts with after-tax dollars, so you can enjoy tax-free withdrawals in retirement. Because of this, the government has no incentive to force you to take money out each year.
• The account is associated with your current employer: If you’re still working, you can delay RMDs from your current employer’s retirement plan until the year after the year you retire. However, you still have to take RMDs from old 401(k)s and traditional IRAs,if you have any.

If none of these things apply to you, then you will need to take an RMD. Fortunately, they’re not too difficult to calculate.

How to calculate your RMD on a $500,000 account

You calculate your RMD using the balance as of Dec. 31 of the previous year — Dec. 31, 2024 for your 2025 RMD. If you don’t know what your balance was at that time, you may need to look it up or speak to your plan administrator.

Once you know the amount, all you need to do is divide that by the distribution period next to your age in the IRS’ Uniform Lifetime Table. The result is your RMD.

So, for example, if you had $500,000 in your 401(k) as of Dec. 31, 2024 and you turned 73 in 2025, your RMD would be $500,000 divided by 27.4 — the distribution period for 73-year-olds. That comes out to about $18,248.

You’re free to take out more than this if you’d like. But this is the minimum amount you must withdraw in order to avoid the 25% penalty.

What if you don’t want to take your RMD?

Avoiding mandatory withdrawals generally isn’t worth it. The 25% penalty will likely cost you more than what you would’ve paid in income taxes if you’d just taken the RMD as scheduled.

That said, sometimes you may not want to deal with the extra taxes an RMD can bring. In that case, consider making a qualifying charitable distribution (QCD). This is where you ask your plan administrator to send an amount equal to your RMD or a portion of it to a qualifying tax-exempt organization.

The money must go directly to the charity. If the plan administrator distributes it to you first, it does not count, even if you give it all away to charitable causes. Done properly, the IRS won’t tax you on this retirement account withdrawal, and it’ll consider your RMD satisfied for the year.

The maximum QCD you can make in 2025 is $108,000. This should be more than enough for most people.

You may have already spent an amount equal to your RMD on living expenses this year. In that case, you’re in the clear until next year. Check with your plan administrator if you’re unsure how much you’ve already withdrawn from your accounts in 2025. If you come up a little short, be sure to make some more withdrawals in the next few weeks.

I love to collect dividend income. It provides me with more cash to invest each month and a growing level of financial freedom. My goal is to eventually generate enough passive income from dividends and other sources to cover my basic living expenses.

To support my income strategy, I focus on buying high-yielding dividend stocks. Two companies in particular, Brookfield Infrastructure (BIPC -2.38%) (BIP -1.62%) and W.P. Carey (WPC), have consistently stood out. Here’s why I can’t stop buying these income stocks.

Image source: Getty Images.

A high-octane dividend growth stock

Brookfield Infrastructure currently yields nearly 4%, more than triple the S&P 500’s dividend yield (1.2%). The global infrastructure operator supports its high-yielding payout with very stable cash flows. Long-term contracts and government-regulated rate structures account for around 85% of its annual funds from operations (FFO). Most of those frameworks have no volume or price exposure (75%), while another large portion of its cash flow (20%) comes from rate-regulated structures that only have volume exposure tied to changes in the global economy. The bulk of these arrangements also either index its FFO to inflation (70%) or protect it from the impact of inflation (15%).

The company pays out 60% to 70% of its very resilient cash flow in dividends. That gives it a comfortable cushion while allowing it to retain a meaningful amount of cash to invest in expansion projects. Brookfield also has a strong investment-grade balance sheet. Additionally, the company routinely recycles capital by selling mature assets to invest in higher-returning opportunities.

Brookfield has grown its FFO per share at a 14% annual rate since its inception in 2008, supporting a 9% compound annual dividend growth rate. While its growth has slowed in recent years due to headwinds from interest rates and foreign exchange fluctuations, a reacceleration appears to be ahead. The company believes that a combination of organic growth driven by inflationary rate increases, volume growth as the economy expands, and expansion projects will drive robust FFO per share growth in the coming years. Additionally, it expects to get a boost from its value-enhancing capital recycling strategy. These catalysts should combine to drive more than 10% annual FFO per share growth.

The company’s strong financial profile and robust growth prospects easily support its plan to increase its high-yielding payout at a 5% to 9% annual rate. Brookfield has increased its payout in all 16 years since it went public.

Rebuilt on an even stronger foundation

W.P. Carey has a 5.4% dividend yield. The real estate investment trust (REIT) owns a well-diversified portfolio of operationally critical real estate across North America and Europe. It focuses on investing in single-tenant industrial, warehouse, retail, and other properties secured by long-term net leases featuring built-in rental escalation clauses. Those leases provide it with very stable and steadily rising rental income.

The REIT has spent the past few years reshaping its portfolio. It accelerated its exit from the office sector in late 2023 by spinning off and selling its remaining properties. W.P. Carey has also been selling off some of its self-storage properties, particularly those not secured by net leases. It has been recycling that capital into properties with better long-term demand drivers, such as industrial real estate.

W.P. Carey’s strategy should enable it to grow its adjusted FFO at a higher rate in the future. Its portfolio is delivering healthy same-store rent growth (2.3% year-over-year in the second quarter). Meanwhile, its investments to expand its portfolio are driving incremental FFO per share growth. W.P. Carey is on track to grow its adjusted FFO per share by 4.5% at the mid-point of its guidance range this year.

That growing income is allowing the REIT to increase its dividend. It has raised its payment every quarter since resetting the payout level in late 2023 when it exited the office sector, including a 4% increase over the past 12 months. With a strong portfolio and balance sheet, W.P. Carey has the financial flexibility to continue growing its portfolio, FFO, and dividend in the coming years.

High-quality, high-yielding dividend stocks

Brookfield Infrastructure and W.P. Carey stand out for their stable and growing cash flows, as well as high-yield dividends. Brookfield offers inflation-protected cash flows that minimize risk, while W.P. Carey generates reliable rental income from long-term leases. With lots of income and growth ahead, I just can’t stop buying these high-quality, high-yielding dividend stocks.

According to data compiled by S&P Global Market Intelligence, Wells Fargo (WFC -2.93%) stock was up by more than 8% week to date as of Thursday night. That was hardly a surprise, as the company delivered quarterly results that beat analyst estimates and pleased investors.

A satisfying third quarter

On Tuesday, Wells Fargo — one of the so-called big four U.S. banks — took the wraps off its third quarter. For the period, total revenue came in at over $21.4 billion, representing an improvement of 5% over the same quarter of 2024.

Image source: Getty Images.

The company’s generally accepted accounting principles (GAAP) net income saw a healthier rise, growing by 9% year over year to almost $5.6 billion. On a per-share basis, that profitability stood at $1.66.

As for traditional banking metrics, average loans crept up by 2% to just under $929 billion. Average deposits, however, declined marginally to almost $1.34 trillion.

The two headline numbers comfortably exceeded the consensus analyst estimates. Prognosticators tracking Wells Fargo stock were collectively anticipating slightly more than $21.1 for total revenue and $1.55 per share for profitability.

Multiple revenue streams

In its earnings release, Wells Fargo attributed its improvements mainly to a rise in fee-based income from both commercial and consumer operations. The bank also benefited from higher vehicle loan originations and an increase in total client assets for its wealth and investment management business.

A potential legal headache for consumer healthcare giant Kenvue (KVUE -13.50%) was causing pain for investors on Thursday. Such troubles tend to spook the market; hence the more than 13% sell-off of Kenvue across that trading session. The S&P 500 (^GSPC -0.63%), by comparison, did much better on the day with “only” a 0.6% decrease.

New lawsuit with old allegations

Until it was spun off into a separate company, Kenvue was part of sprawling pharmaceutical company Johnson & Johnson (JNJ 0.50%). The company has faced tens of thousands of lawsuits over its Johnson’s Baby Powder, a once talc-based product that is widely alleged to have caused various types of cancer.

Image source: Getty Images.

The first such lawsuit in the U.K. has been filed by a group of roughly 3,000 claimants, according to reporting from various media. It was submitted to the English High Court against both Kenvue and Johnson & Johnson.

The former company basically inherited Johnson & Johnson’s numerous consumer healthcare products, a portfolio that included Johnson’s Baby Powder. In 2020, the main ingredient in the now-controversial product was switched from talc to cornstarch.

Kenvue responds

Reporting on this development, Reuters wrote that Kenvue’s response was that it did not believe the court would find that the talc-based powder causes cancer, as the claimants allege.

Aerospace and defense company RTX (RTX -0.10%) didn’t really have a banner day on the market Thursday, but in a trading session when the S&P 500 index fell by 0.6%, the stock’s flat performance made it a winner. Investors were reacting to good news from one of RTX’s three core business divisions.

Up in the air

That division is aircraft engine specialist Pratt & Whitney, which this morning reported it had earned an important certification abroad.

Image source: Getty Images.

Specifically, Pratt Whitney’s GTF Advantage engine got the nod from the European Union Aviation Safety Agency (EASA). This follows similar certification from EASA’s American equivalent, the Federal Aviation Agency (FAA), and the company said it clears a path for the product to enter service next year.

The GTF Advantage is a next-generation engine for airliners that, according to its maker, delivers more thrust and boasts higher fuel efficiency than competing products currently on the market.

Big promises

In its press release divulging the happy news, Pratt & Whitney quoted its president of commercial engines, Rick Deurloo, as saying that the company’s new engine “will be a game-changer for operators.”

Despite the confidence, however, Pratt & Whitney did not provide any estimates as to how sales of the GTF Advantage will impact its fundamentals, or those of its parent RTX.

In this podcast, Motley Fool analyst Jason Moser and contributors Travis Hoium and Jon Quast discuss:

• How 2025 compares to 1999 and 2007.
• What they wish they had known in the past.
• Energy’s role in AI.

To catch full episodes of all The Motley Fool’s free podcasts, check out our podcast center. When you’re ready to invest, check out this top 10 list of stocks to buy.

A full transcript is below.

This podcast was recorded on Oct. 10, 2025.

Travis Hoium: How does the market in 2025 fit into the history of the stock market? Motley Fool Money starts now.

Welcome to Motley Fool Money. I’m Travis Hoium joined today by Jon Quast and Jason Moser, and I think this is an important time in the market. Take a step back and look at a little bit of context in history. There are these decade long trends that we typically go through, and it seems like we’re either at the beginning or end of one of those with artificial intelligence and all of the companies that are going crazy right now. I want to get your guys’ thoughts on where we are. We all see the potential of artificial intelligence, but the Internet was a massive opportunity in 1999. Mobile was a huge opportunity in 2007. That didn’t stop the crashes that ensued. What historic parallels, Jason do you see in the market today that investors can learn from?

Jason Moser: Yeah well, I love this idea. I think there are a lot of parallels we can draw here. There are some similarities and I think there are some differences as well. You go back to for example, the buildout of the Internet back in 1999, the .com crash that ensued. I mean, there’s a lot of similarities from then to what’s going on today. There’s massive infrastructure buildout. It’s the foundation for what looks to be a new era of technology. It’s also accompanied by a lot of speculation in the markets. We’re seeing that in the form of a lot of nosebleed valuations. I mean, I’m not saying they’re all nosebleed valuations, but there is some data that shows that AI first companies today that are coming to market, are getting 20-40% premium valuations over their non AI driven types of companies. Then you’re also seeing some of the most speculative names are garnering valuations in the neighborhood of 200 times sales.

Travis Hoium: Some of them have gone parabolic just in the past few.

Jason Moser: Yeah, absolutely. I understand the enthusiasm, but there was an interesting interview with Orlando Bravo the other day on TV. He heads up the firm Toma Bravo which they specialize in SAS software and stuff like that. The question that was posed as it’s been posed to most of us is, are we in a bubble? He answered simply yes. I mean, you can’t have companies that are working on $50 million in annualized recurring revenue value to $10 billion, that just doesn’t work. It’s not sustainable. At some point, we will see that shift. But I do think there are some differences too. I mean, primarily, you look at the physical restraints of what was being built out back in 1999, that was laying all that optic cable. Physically difficult to do, but a little bit different than really the restraint today. Now we’re talking about power. We’re trying to figure out how to get the electricity, the power to really make all of this stuff run. I think funding is a little bit more realistic this time around just because so much of it is coming from the hyperscalers. Let’s put OpenAI aside here and look at the other companies, your Amazons, your Alphabets, your NVIDIAs of the world that are helping to fund a lot of this. When you have businesses that are that big with more reliable cash flows, I think the funding side of it seems to be a little bit less speculative than it was back then.

Travis Hoium: Do you think that has changed over the past, even the past few weeks with things like guaranteeing revenue? I think, you know, India did that with CR weave. You’re seeing more variable interest entities or they’re going by different names now, but it’s basically doing some of these financings off balance sheet. That’s what ultimately got Enron in trouble. That isn’t necessarily a parallel that we want to go down, but it’s one of those things where there are these small red flags that you can look throughout history and go, Okay, when you start to see this happen, you should perk up a little bit.

Jason Moser: I think you need to be asking the questions. I think it’s no accident that this week we really saw a lot of those maps circulating around that were showing the intertwinenss of all of these. It’s just a handful of companies that are really dictating the space and you want to put some numbers around it. I mean, this is what really makes me nervous. I think you look at Morgan Stanley research. They say that OpenAI itself, they make up more than $300 billion of this something like $880 billion total future contract value that’s tied to the spending with Microsoft, Oracle, and CR weave, among others. You think about that in the context of the fact that OpenAI, I mean, they just generated basically $13 billion annualized at the midpoint of 2025, and they’re losing money still hand over fist. Where that capital ultimately comes from I think, is a question that investors really need to be focused in on. It’s not to say that OpenAI won’t continue to grow, but that is a big Delta that they’re going to have to figure out a way to shore up.

Travis Hoium: Jon, how do you think about this in a more historical context? What things are you trying to learn from history that could maybe apply today?

Jon Quast: Well, I think historically, whenever you see something new and exciting, investors are wanting in on that and they’re not wanting to miss out. I’d say that applies to both retail investors and private equity investors. You can see that in a couple of fronts here that there are some companies, I think, that are preying on that, taking advantage of that, knowing that investors are willing to pay up for the excitement, the admission to the theme park. You look at the public markets, for example, look at special purpose acquisition companies.

Travis Hoium: These are SPACs. This is what was really popular in 2020 and 2021.

Jon Quast: Yeah, right before we had major, major pullback in so many of the companies out there. These are companies that don’t even have a business. They’re saying, give us money so we can go buy a business. Many of them came forward in 2020, 2021. There’s been a couple of years of a lull but now this year, we have 161 that have gone and filed so far this year, and the years not even over yet. That’s as much as basically the last three years combined. I’m not saying that they’re all bad opportunities. I’m not even saying that most, but I’m saying somewhere in there, the data is saying, yeah, somebody is taking advantage of a situation where investors are very excited and they’re willing to pay for a lottery ticket, essentially. The same thing in the private equity space, you look at the AI private companies out there starting to do perhaps some questionable things, maybe counting some one time deals as part of the calculation in their annual recurring revenue and doing that so that they can boost their valuations, and that increases the amount of funding that they’re able to get from these private investors. We would think that private investors are a little bit smarter than that. But again, I mean, we all have human psychology, and we don’t want to miss out on something that is truly transformative in artificial intelligence.

Travis Hoium: Jason, you brought up those images that are going around. There’s one from the FT, there’s one from Bloomberg, just show this web around OpenAI. One of the things that I think I learned in the 2008, 2009, downfall of the market and the recession that ensued was things just got really, really complicated when a lot of things didn’t need to be complicated. We started with mortgages, mortgage is a fairly straightforward financial instrument, but then you start turning it into 48 different products that you’re cutting into different pieces, and nobody knows where the risk is or who’s holding the risk. That’s what I get concerned about right now is, if AI is such a no brainer and it’s such a high return on investment, then why do we need all this complicated these complicated financial structures? Again, it’s just raising red flags to me. Let me put it this way because I think what we’re trying to do today is take a little bit of our knowledge and pass it on to everybody who’s listening. If you are going to go back, Jason, I’ll start with you, if you were going to go back and talk to yourself in 1999 or 2007, what would you tell yourself that you could maybe implement as an investor?

Jason Moser: Wow, yeah. I like that question a lot. I think if I look back to 1999, while I was investing at the time, I wasn’t a member of the Motley Fools. I think, first and foremost, and I’m being dead serious here, I would have told myself to get a subscription to the Motley Fool because from an educational perspective alone, I think that style of thinking, that style of investing and taking that longer term view is just invaluable. I’d also say, wow, it’s tempting. Steer clear of speculation. I think you’re right. One of the big problems back in 2007/8 was just how ununderstandable that web of financial instruments ultimately became. I think that was a result of greed primarily. But I also look at today and you’re talking about these special interest entities and whatnot. Money isn’t limitless and so I think they start to make it a little bit more complicated when they need to figure out ways to raise more money. That becomes a little bit more concerning as well. I’d say, for me, I’d steer clear speculation. These were stretches of time when some of the great businesses of our time went on sale. Stay focused on owning those high quality businesses, leave the speculating to those who think they probably know what they’re doing and maybe don’t necessarily actually know.

Travis Hoium: Jon, what do you think?

Jon Quast: So 1999, I wasn’t an investor yet, and so it didn’t really start for me until around the great recession.

Travis Hoium: You weren’t investing, but do you remember feeling the.com bubble and crash? Because I think that is an interesting until you actually have money in the market, it is kind of ah, this thing happens, but it doesn’t really affect me.

Jon Quast: Well, I would say absolutely not. I mean, just where we were in our little corner of North Carolina back in those days, I mean, man, we had dial up Internet. I mean, we weren’t even all that aware of what was going on. For me, the great recession was where I really began to take investing seriously. What I tell myself, besides what Jason already said was, I wish that I had just held on to my original vintage of stocks that I invested in. I know it’s 20 years later now, but I look at some of the ones that I had at the time. Buffalo Wild Wings, which is no longer publicly traded, but if I’d just held onto Buffalo Wild Wings from the time I invested until the time that it went private, it was a 10 bagger or more, and I sold after it doubled. I owned Marvel back before Disney acquired it and sold around the time of the announcement. I wish I had just held onto Disney all that time. McDonald’s was one of the first stocks I ever bought. Yeah, maybe that’s not the flashiest thing, but it’s up over 1,000% with dividends. I know some of the listeners are saying, hey, well, that’s 20 years ago, but let me tell you something. For me, it’s 20 minutes. I just started investing. Time goes by so fast. At the time you say, invest for three years, invest for five years. How could you ever? Twenty years is a heartbeat. Man, I wish I could just go back and say, hang on. Don’t try to get cute. Don’t try to buy and sell, trade, all this. Just buy and hold.

Travis Hoium: Yeah, Jon, the lessons that I have learned more than anything is not selling to give you an idea of what I owned in those days that I sold Chipotle, Apple, these are Las Vegas Sands. I remember buying for $2 a share. I think that was a 20 bagger over the next couple of years that I sold too early. Yeah, owning those companies that aren’t going anywhere that can survive any downturn, I would also say start paying attention to balance sheets. Because if companies are going to not survive, it’s not going to be the revenue drops a little bit. It’s going to be because there’s more risk on the balance sheet than they can handle. Something to keep in mind. When we come back, we are going to talk more about this buildout and where there could be opportunities you’re listening to Motley Fool money.

Come back to Motley Fool Money. One of the big topics of the AI buildout has been energy, and this has gotten a lot more attention over the past couple of months. Every hyperscalar, every Neo Cloud is looking for basically as much energy as they can get. Some of them have made deals with Bitcoin miners. I think that’s an interesting play here. Bitcoin Miners spent a lot of time building out the energy they need to run their mining equipment. Now we’re moving that to AI. Jon, where are the opportunities for investors in energy or at least what should we be keeping an eye at?

Jon Quast: Well, I think that nuclear power is big trend and I know that people have been hearing about it. I just think it’s going to be a lot of emphasis put there and even the emphasis that we put there isn’t going to be enough. You look at what OpenAI is reportedly wanting. They’re reportedly wanting 250 gigawatts of electricity by 2033, just for running their AI data centers. That’s just one company. President Trump earlier this year, signed an executive order to quadruple the country’s nuclear power. It will add basically 300 gigawatts of nuclear power. You look at that,250 is what OpenAI wants. We’re saying, we’ll add 300 gigawatts of nuclear power. Basically, they’ll take all of that.

Jason Moser: Doesn’t seem like a lot of wiggle room there, Jon.

Jon Quast: Exactly. Here’s the thing. The order is by 2050 to have that much extra power. President Trump is saying, we’re going to add 300 gigawatts. Give us 25 years. OpenAI is like, we need it now and so does every other company that’s doing what OpenAI is doing. I just think we’re going to have a heyday for nuclear, but even if we do, it’s still not going to be enough.

Travis Hoium: I want to put some numbers to this. The EIA, Energy Information Administration, which is a phenomenal source for energy information because they pull all the prices, all the capacity production, all that stuff. Between 2024 and 2028 in the US, there is a planned about 200 gigawatts of additions. About half of that, over half of that is solar, so an intermittent energy source. You have to consider that the capacity factor of solar, meaning the amount of time that it produces energy on an average day is about 20, 25% of the time. We’re not anywhere near hitting those numbers in what is planned, and power plants don’t go up. Even a solar plant, which can be built relatively quickly, you’re still talking many months, in some cases, years. All that said, Jason, where are you looking for opportunities today?

Jason Moser: It definitely feels like we’re going to need all we can get. It’s all hands on deck. I think the key is going to be focusing on every resource available. I think in regard to AI specifically and the capabilities that it’s driving, I think the overwhelming demand is going to be on those reliable or firm energy sources. The stuff that’s on 24/7 that’s easily distributable. Renewables are one thing. But I think for AI specific stuff, we’re going to be looking at nuclear, natural gas and hydro electric primarily. We saw Google earlier in the year made a deal to provide some early stage capital for elemental power to prepare some nuclear sites here in the US. I think those were those small modular reactors. The other thing to think about longer term and I’m talking about longer term, Travis, but think a decade out. There was an interview with Jeff Bezos this week that I was pretty, I was fascinated by because I actually could totally see this happening. He was talking about data centers in space. Essentially.

Travis Hoium: It sounds crazy.

Jason Moser: It sounds crazy. It does. It sounds like. But if you think about it, they’re already trying. They’re already in the process of trying to figure out how to make this work. Now, that solves two key problems. You get the limitless resource of solar up in space and you’ve solved your.

Travis Hoium: Suddenly, that becomes a base source of energy as opposed to variable.

Jason Moser: You solve your cooling problems as well. It knocks out you kill two birds with one stone, so to speak. I think that’s pretty interesting to think about just further out. Just keep an eye on that. I don’t think that’s high in the sky stuff. I think that’s actually pretty legit. Beyond that, I looked to other companies in the value chain that enable SMRT usage and monitoring. The company I’ve talked about before called Itron that does that. They help their customers safely and securely monitor that critical infrastructure and power and water. You can look beyond the providers and look to those value chain adders as well.

Travis Hoium: Do you think that the rise in electricity prices which again, is getting more attention this year, I’ve noticed it with my electricity bill Jason, is that a pending problem in the US because if AI is what’s raising the costs for the average person, seems like an issue.

Jason Moser: Consumers will not like it. I can guarantee you that. I mean, I noticed the power bill difference when the winter hits here in Northern Virginia, and it basically doubles. If we see things going beyond just your typical seasonality, I think that’s going to be a real problem.

Travis Hoium: Yeah, that’s something to keep an eye on because regulators do play a pretty big role in this, who’s gonna get the electricity? What are people paying? That’s not just an economics process, although the economics could help with justifying some of these investments too, something else to keep in mind is that, you know, energy costs are important, and if prices are going up, people are gonna put more money into the ground. When we come back, we’re going to see how well Jason and Jon know their history of investing you’re listening to Motley Fool money.

Welcome back to Motley Fool Money. I want to know how well Jason and Jon know their market history. I’m going to ask you guys a few questions and see who knows the answer. Jon, I’ll have you go first here. What was the date of the 1987 crash? As a bonus, how much did the Dow Jones Industrial average drop on that day?

Jon Quast: Oh, and I assume that you’re wanting more than the year 1987, yeah?

Travis Hoium: Yeah, I would like you can give me the day of the week. Any information is.

Jon Quast: Well, it was on a Monday.

Travis Hoium: What color was this Monday, Jon.

Jon Quast: Well, there we go. A very black Monday. I would think it’s in October, but I don’t remember.

Travis Hoium: Jason, do you know the date?

Jason Moser: I actually do know this one. It’s October 19th.

Travis Hoium: 1987 and how much did the Dow drop?

Jason Moser: Do we have a little wiggle room here? I know it was 20%. It was a little bit more than 20%, but I don’t think it was 25%. It was somewhere in the middle between 20 and 25%.

Travis Hoium: Oh, that’s good. Jon. Do you have an answer.

Jon Quast: I was going to say 12.

Travis Hoium: Okay, 22.6% drop for the Dow Jones Industrial average. But the other thing that’s interesting with that historically is the Dow was what really got all the attention back then. It was not the S&P 500. We don’t talk much about the Dow anymore, but it was those 30 stocks. That’s what was reported on the nightly news. That’s the numbers that everybody knew is, what was the Dow doing?

Jason Moser: Yeah, and it’s interesting to think about the difference between the Dow and the S&P. We talk about, they definitely tried to modernize the Dow to a degree. It’s a little bit more up to speed now. But there’s also that difference between the stock price weighted index, the Dow Jones.

Travis Hoium: Do you want to explain that? Because that is a really weird thing about the Dow.

Jason Moser: Yeah, essentially, I mean, you’re just looking at one index and the Dow where it’s basically measured by the value of the stock price itself.

Travis Hoium: The number, so if you have $100 stock, it has a 10X weighting of a stock that has a $10 stock.

Jason Moser: Whereas the S&P, it’s market capitalization weighted. You’re actually talking about how heavy the whole company is. Stock price can be a function of anything. I mean, stock splits and whatnot can change it. It is just interesting to see that difference there and how that ultimately plays out in the way those indices perform.

Travis Hoium: Yeah, and back then that was a big reason that a lot of stocks typically were kept with stock splits and things like that, between somewhere around $30 and $100 per share. We get 100, you would expect a stock split to come. We don’t really think about that anymore because we have fractional shares and all that kind. That stuff didn’t exist.

Jason Moser: Yeah, I think didn’t memory serves, I think when Apple joined the Dow and didn’t it actually split its stock in order to be able to facilitate that membership? I feel like that might have happened.

Travis Hoium: That is a historical question I do not have the answer to. Speaking of big tech though, and maybe I’m giving things away here, what was the most valuable company in the world on January 1st, 2000? Jason, I’ll have you go first here. This is .com bubo. Lots of options.

Jason Moser: There are a lot of options. Was it global crossing? I don’t know. Honestly, just I feel like that’s a Jon.

Jon Quast: I would guess Cisco.

Travis Hoium: That would have been my guess. Cisco was the most valuable company in the world for a short period of time, but that was in March of 2000 at the turn of the century to the millennium, it was Microsoft. That was really most valuable company in the world. Interesting, parallel to where we are today, Microsoft was the most valuable company in the world. That is still one of the most valuable companies in the world. But if you would have invested in Microsoft at the beginning of 2000 and held it for the next 15 years, you would have basically the same amount of money.

Jason Moser: I was going to say the Balmer years didn’t treat shareholders very well.

Travis Hoium: Yeah, and so there’s a couple of things. I mean, their business actually did fine during the 2000, but the end of the ’90s, early 2000s, the price that you were paying was extremely high, and so multiple compression, meaning the price to earnings multiple or the price to sales multiple was going down over that period of time. Instead of multiples being a tailwind, like they’ve been for a lot of stocks over the past couple of years, it was a headwind for Microsoft. Again, just something to think about as we think about the market today. Pets.com gets a lot of attention in the .com bubble. Do you know when pets.com IPOed, and what its highest market cap was before falling apart. Jon, I will have you go first. When was the IPO, and what’s the highest market cap?

Jon Quast: Oh, how should I know? I mean, you want more than the year.

Travis Hoium: Actually, you might not get the year.

Jon Quast: I know. I mean, I feel like this is a high bar. I’m gonna go with June 12th, 1995, and I’ll say peak valuation was 50 billion.

Travis Hoium: See, Jason, I’ll give you a guess here, but these numbers surprise me.

Jason Moser: Yeah, the IPO, I don’t know, so I’m just going to guess March 1997, valuation wise, I know given the valuations that we see today, you would want to say something like 50 billion or I get that. But I think actually it was really especially at that time. This was even big at that time. I think it was something like 450 million, $500 million.

Travis Hoium: Wow. You guys are both way off for the timing. Their IPO was February of 2000. Way later than I would have guessed. But, Jason, you’re almost exactly right. $400 million was their top market what I think is interesting about that is, that is the name that we all remember from the .com bubble. But it wasn’t all that big of a company.

Jason Moser: No. Well, I mean, at the time it was. I mean, consider.

Travis Hoium: But you’re looking at I think today’s prices, that would be still less than billion dollar.

Jon Quast: I literally 100 times more than that.

Jason Moser: They had obviously a very short lived campaign as a publicly traded company. But yeah, I mean, that was like the quintessential Internet stock. I mean, just advertising at the Yin Yang, found a clever brand with that little sock puppet puppy, and they were just selling stuff on the Internet, like, this is the way we do it and just making no money in the process. But it’s interesting how we gave Amazon so much leeway to build out that concept, and yet your pets.coms of the world just never really stood a chance.

Travis Hoium: The lesson that I take from that one because you’re right. Amazon has become, obviously a household name everywhere. But if you would have just waited. If you would have just said, I’m not going to invest. The Internet, I think, is a huge thing. But 1999 I’m just going to say, you know what? I’m going to let things play out a little bit and you just waited even till 2002, 2003, 2004, 2008, when you knew who the winners were, that was actually a great time to invest in even a company like Amazon.

Jason Moser: That’s a really good lesson.

Travis Hoium: This one’s fun. OpenAI has 800 million weekly active users. How many users did AOL have at its peak? Then I have a follow up, Jason. Users. How many subscribers? That’s the, basically households. We were sending disks around, in those days.

Jason Moser: That’s the thing, OpenAI, 800 million weekly some odd user, 20 million paying subscribers. They got to figure out a way to short that up. AOL, I have no idea. Households,125 million.

Travis Hoium: John?[laughs]

Jon Quast: Well, I want to change my answer now. I was going to go with eight million. Here’s why. You had other companies. You had Juno, you had NetZero. You had all those. The trend started, but then eventually we switched off of those things. I was going to say eight million.

Jason Moser: John, I could be spectacularly off.

Travis Hoium: John, you’re actually pretty close, 25 million was their peak. But here’s the follow up. When did AOL shut down its dial up service?

Jon Quast: I think I know this one. It was earlier this year.

Travis Hoium: Jason do you want to?

Jason Moser: I was going to say, you would think they did this 15 years ago. It just happened, like John said, very recently. I think sometime within the last year, they actually stopped the whole thing.

Travis Hoium: It was last week.

Jon Quast: I would love to know the guy who was still using it two weeks ago.

Travis Hoium: Who was shocked that their Internet was shut down.

Jason Moser: Not one person.

Travis Hoium: I got a couple of quick ones here. At its peak, how much was invested annually in the USTelecom buildout? The thing that I wanted to bring in here is we talk about the .com bubble bursting. But in the late ’90s, there was really two bubbles. There was the Internet bubble, so the companies that was a valuation bubble, and there was basically an investment bubble where telecoms were investing a lot of money in building out the fiber that Jason mentioned earlier. But what was the actual number that they were putting in the ground? This is just in the US. What is your guess, Jason? Annual number, annual peak.

Jason Moser: One hundred billion dollars.

Travis Hoium: John.

Jon Quast: Did you say million or billion?

Jason Moser: Billion.

Jon Quast: Man, I was going with 10 billion.

Jason Moser: Again, it could be spectacularly off.

Travis Hoium: Jason, you’re about right, 118 billion in 2000. I believe we’ve only passed that number in two years since then. Interesting that the telecom buildout was basically hockey stick growth rate, and then it just plateaued. The other one that we’re not going to get to that is a similar is Apple in 2007, sold 1.4 million iPhones. 2015, that got up to 231 million, and then essentially plateaued. The question, for all these businesses is, when do you hit that plateau? Because that’s when you could potentially run into problems. Here’s the one I wanted to end on quickly. From January 1st, 2000 to March 2000, how much did the QQQ NASDAQ-100 rise? Then my follow up is, how much did it fall over the next six months, John? How much did it go up in those first three months? How much did it go down in the next six?

Jon Quast: I’m going to guess for going up, I’m going to guess it went up 15% during those three months. Then I believe there was a 50% drawdown from there.

Travis Hoium: Jason?

Jason Moser: I was going to say 20% for the first one. Then for the next six months, from that point, I think it fell.

Travis Hoium: From March to September.

Jason Moser: March to September, I would say it fell probably a good 60%.

Travis Hoium: Up 18% in those first, a little less than three months. Then over the next six months, fell 71%. Up an escalator out of window is the way that we quit this. Well, hopefully that was good context for people because I think we can always learn from history whether things repeat or not, they typically rhyme. I think that’s how the saying goes. When we come back, we will get to the stocks that are on our radar. You’re listening to Motley Fool Money.

As always, people on the program may have interest in the stocks they talk about and the Motley Fool may have formal recommendations for or against, so don’t buy or sell stocks based solely on what you hear. All personal finance content follows Motley Fool editorial standards and is not approved by advertisers. Advertisements are sponsored content and provided for informational purposes only. To see our full advertising disclosure, please check out our show notes. One company I want to bring into the discussion, we’ve high level, talked about history and AI. But Google had some interesting announcements. OpenAI is obviously getting all the attention, but Google Gemini Enterprise was announced this week. Jason, what did you take away from that?

Jason Moser: A few things, I think. I use both Gemini and ChatGPT interchangeably. Probably use Gemini a little bit more. I wasn’t terribly surprised to see the announcement because this is an arms race. I think it speaks to Google’s ability to respond to market forces and competition. I think, also the real advantage that it has, and it’s already massive user base and the powerful business model, not to mention just customer mind share. I think ChatGPT absolutely is doing a great job on customer mind share, but going back to earlier in the show, when we were talking about 800 million some odd weekly users, only 20 million really of those are subscribers. I think that is just a big hurdle for a company like ChatGPT to overcome. The reason why Google doesn’t have to worry about it so much is because they’ve got a business that’s funded by this powerful advertising model, not to mention it’s growing Cloud business, as well. Now, when you look at Google in this space, they’re a total package. What’s that? They call it a full stack player?

Travis Hoium: A few of the things they announced, it pulls Gemini into applications. This goes into GCP, Google Cloud Platform. That is actually a profitable business. I think that’s something, as investors, we should highlight. OpenAI is losing money. They’re not public yet, but this is a huge growth business for Google and for Alphabet, and it is now profitable, as well. I think the idea here is, this is going to be an enterprise play along with, hey, you know what? If Gemini as a consumer app wins great.

Jason Moser: Well, I think this shows a couple of things. This technology at its core is totally replicable. Basically, all they need is the resources and the time to be able to do it. I think the thing that’s not necessarily replicable is the power under the hood, so to speak, with what Google has built through the decades. ChatGPT is just not there yet. It’s not to say they can’t get there. Don’t get me wrong, but I’m just saying that it’s a much younger company that still has a lot to prove. From that perspective, again, I look at something like a Google today, and I think, wow, they’re doing a lot of really neat stuff. I think ChatGPT is doing a lot of really neat stuff, too. I think we’re going to see at some point, OpenAI is going to have to resort to some sort of an ad supported model in order to be able to continue generating that revenue, or they’re just going to have to come up with a way to grow that subscriber number, which is just so small today compared to what Google has just on an ongoing basis.

Travis Hoium: The 800 pound gorilla in the room that we always continue to overlook. Let’s get to this accident on our radar. John, I’m going to have you go first. What is on your radar this week?

Jon Quast: On my radar right now is a company called Rubrik that is ticker symbol RBRK. This is a small cybersecurity company. But what I like about this is that it’s not trying to prevent attacks. Its business model is assuming an attack has already taken place, and it’s going to get your business back up and running in a fraction of the time. You think about that. That’s really an interesting counter positioning, when it comes to maybe what your CrowdStrikes of the world are trying to do. That’s really interesting. It trades at about 15 times its sales. You look at its annual recurring revenue. It’s up 36%. That’s a good growth. Gross margin has jumped to about 80%. Those two things right there signal to me that I don’t think it looks terribly overvalued. It does generate positive free cash flow, despite being a young business. It has a net cash position. It’s adding new customers at a good pace. But with only 2,500 spending 100,000 a year, I think there’s plenty of room to grow that. Net dollar retention is over 120%, so its existing customers are spending more over time. I really like its co-founder and CEO, Bipul Sinha. He really values this mentality of basically innovate or cease to be a business. That could make things a little bit volatile, but I think it’s going to also potentially make it a key innovator here in the cybersecurity space. It’s definitely on my radar and one I’m watching.

Travis Hoium: Dan, what do you think about Rubrik?

Dan Caplinger: I do like the company, John, but I have a question about what they call themselves. They call themselves a zero trust data security and zero trust doesn’t exactly make me feel good.[laughs].

Jon Quast: That’s an unfortunate way to talk about it in the trade.

Travis Hoium: Jason, what is on your radar?

Jason Moser: Something we’ve been doing here on the website recently with the analyst team, it’s something we’re calling the Analyst Stream, and a couple of days a week, we’re taking a topic of the day and all just offering our spin on it. Today, Friday, we’ve got safety stock pitches for folks. A stock that I recently purchased from my own portfolio with safety in mind is Waste Management. Ticker is WM. As the old saying goes, your trash is my treasure, and we certainly produce a lot of trash here, but weights management, they own or operate the largest network of landfills in the US and Canada with 262 sites, making it the top dog. They also benefit from a growing recycling segment, renewable energy segment, and healthcare solutions business, too. Because you remember they just acquired Stericycle last year, I think, given the nature of the market there, trash is pretty reliable. I think holding onto this one for a decade or longer makes a lot of sense for investors.

Travis Hoium: Dan, what do you think about investing in garbage?

Dan Caplinger: Garbage isn’t going anywhere, gang. We’re not going to stop making it. It’s going to be something that we’re going to have to deal with forever.

Jason Moser: As the kids say, Dan, it true.

Travis Hoium: Dan, Rubrik or Waste Management, which one is going on your watches?

Dan Caplinger: Like I said, garbage ain’t going anywhere. We’re going to go Waste Management. I like that dividend, too.

Travis Hoium: We are out of time this week. Thank you for listening to Motley Fool Money. We’ll see you here tomorrow.

NuScale Power (SMR -8.95%) stock has had a breakout year. Shares are up more than 170% since the start of 2025. It hasn’t been a smooth ride for shareholders, though. NuScale stock has plunged about 40% twice just since January.

This week was another turbulent period for the stock. As of late Thursday, NuScale Power shares are 15% off this week’s highs, yet still up by 24.2% since last Friday’s close, according to data provided by S&P Global Market Intelligence.

Image source: Getty Images.

NuScale Power’s Trump tailwind

NuScale has been a big beneficiary of what it calls “multi-billion dollar federal support.” Several executive orders signed by President Trump earlier this year have boosted the nuclear power sector. Even prior to the current Trump administration, bipartisan passage of the ADVANCE (Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy) Act of 2024 has helped streamline approvals by the National Regulatory Commission for faster deployment of nuclear power projects.

This week another federal department spurred investors to jump into NuScale Power stock. The U.S. Army announced the launch of the Janus Program. The initiative is meant to fast-track the installation of commercially owned and operated small nuclear reactors to provide energy to domestic military installations.

Investors should be wary of jumping into NuScale stock after this week’s surge, though. While it has just begun generating revenue from a Romanian power project, investors have pushed its enterprise value to over $6.5 billion. Consider that revenue for the second quarter was just $8.1 million. Investors who believe in the future of modular nuclear reactors should still consider it a speculative investment.

On October 16, 2025, Collar Capital Management, LLC disclosed a new position in Salesforce (CRM 3.83%), acquiring 14,161 shares in a trade estimated at $3.36 million as of September 30, 2025.

What happened

According to a filing with the U.S. Securities and Exchange Commission (SEC) dated October 16, 2025, Collar Capital Management, LLC initiated a new position in Salesforce, purchasing approximately 14,161 shares. The estimated value of the acquisition was $3.36 million as of September 30, 2025. This transaction brought the fund’s total number of reportable positions to 71.

What else to know

This new $3.36 million position accounts for 2.36% of the fund’s $142.14 million in reportable U.S. equity holdings as of September 30, 2025.

Top holdings after the filing:

NASDAQ:MSTR: $7.33 million (5.2% of AUM) as of September 30, 2025

NASDAQ:TSLA: $7.19 million (5.1% of AUM) as of September 30, 2025

NASDAQ:MU: $5.15 million (3.6% of AUM) as of September 30, 2025

NASDAQ:COIN: $4.96 million (3.5% of AUM) as of September 30, 2025

NASDAQ:AAPL: $4.85 million (3.4% of AUM) as of September 30, 2025

As of October 15, 2025, Salesforce shares were priced at $236.58, down 17.95% over the past year and underperforming the S&P 500 by 32.23 percentage points (source: FMP, 1-year price change: -17.95%, 1-year alpha vs S&P 500: -32.23%).

Company overview

Company snapshot

Salesforce offers a comprehensive suite of cloud-based solutions, including its Customer 360 platform, Sales, Service, Marketing, Commerce, Tableau analytics, MuleSoft integration, and Slack collaboration tools.

It serves a global customer base across industries including financial services, healthcare, and manufacturing.

The company generates revenue primarily through subscription-based software and professional services.

Salesforce is a leading provider of enterprise cloud software, enabling organizations to manage customer relationships and business processes at scale. Its platform-centric strategy and broad product ecosystem position it as a key player in digital transformation initiatives.

Foolish take

Collar Capital appears to be making a contrarian move with the customer relationship management (CRM) specialist. The stock has tumbled about  26% in 2025.

Salesforce wasn’t a holding for Collar Capital in the second quarter. After buying 14,161 shares in the third quarter, it’s the fund’s 13th largest holding.

Salesforce was the second largest new acquisition Collar Capital completed in the third quarter. It also acquired 12,590 shares of UnitedHealth Group worth about $4.3 million. UnitedHealth Group is now the fund’s sixth largest holding.

Salesforce’s investments in artificial intelligence are starting to pay off for investors. In its fiscal second quarter that ended July 31, 2025, Data Cloud and AI annual recurring revenue climbed over 120% year over year to $1.2 billion.

Success with its new AI tools encouraged management to raise expectations. Now, it expects operating cash flow in fiscal 2026 to rise by 12% to 13% year over year.

Glossary

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

Position: The amount of a particular security or asset held in a portfolio.

Reportable positions: Holdings that must be disclosed to regulators, typically due to size or regulatory requirements.

Stake: The ownership interest or share in a company or asset.

Filing: An official document submitted to a regulatory authority, often detailing financial or ownership information.

Alpha: A measure of an investment’s performance relative to a benchmark, indicating value added or lost.

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

Dividend yield: A financial ratio showing how much a company pays in dividends each year relative to its stock price.

Cloud-based solutions: Software and services delivered over the internet rather than installed locally on computers.

Platform-centric strategy: A business approach focused on building and expanding a central technology platform for multiple products or services.

Shares of Standard Lithium (SLI 12.79%) jumped sharply today, surging 25% in early-morning trading and still holding up about 15% through 11:30 a.m. ET Thursday. And, it isn’t about tariffs or trade wars or even lithium prices today.

Standard Lithium is yet to start commercial production, but it has just hit a major milestone that moves it closer to the goal.

Image source: Getty Images.

Standard Lithium inches closer to first production

Standard Lithium is still in the pre-production stage. Its flagship projects are located in the lithium-brine-rich resource, the Smackover Formation, which extends from central Texas to the Florida panhandle. Standard Lithium is focused on projects in South-West Arkansas (SWA) and East Texas within the Smackover Formation.

While the company is still exploring East Texas and has only filed an initial resource estimate for the deposit, the SWA project is in the advanced stages now.

Standard Lithium is jointly developing SWA with Equinor (EQNR -0.61%), with Standard Lithium owning a 55% stake. On Oct. 14, it filed a definitive feasibility study (DFS) for the project, outlining an annual production capacity of 22,500 tonnes of battery-grade lithium carbonate over a 20-year lifespan.

A DFS is the cornerstone for a mine, as it confirms its commercial viability.

In other words, it is now proven that Standard Lithium can economically mine lithium from SWA and, therefore, move on to the nest stage of raising funds to start the production process. So it’s a major milestone for the company and explains why the lithium stock is flying higher.

Time to buy Standard Lithium stock hand over fist?

Though the DFS sets the stage for commercial extraction of lithium from SWA, it’s still a time-consuming process.

Standard Lithium is estimating a 34-month timeline, from construction to the start of commercial operations. So if construction begins in early 2026, the earliest expected date for first commercial production is around the end of 2028, provided Standard Lithium can secure capital, finalize the technical plans, and start and complete construction at the project on time.

Keep in mind that Standard Lithium stock has already doubled within just one month and has surged over 300% so far in 2025, as of this writing. However, that rally was largely fueled by speculation of a possible U.S. government stake.

Retirement can be incredibly expensive, and with many Americans’ finances stretched thin right now, it can be tough to save anything at all for the future.

Investing in the stock market is one of the most effective ways to grow your savings, and you don’t need a lot of cash to get started. In fact, it’s possible to retire with $1 million or more with just $10 per day. Here’s how.

Building long-term wealth in the stock market

Investing doesn’t have to mean spending countless hours researching and building a portfolio full of individual stocks. Contributing to your 401(k) or IRA can be a more approachable way to invest, and you can earn far more with this strategy than stashing your spare cash in a savings account.

Image source: Getty Images.

While investing can seem daunting and risky, it’s safer than you might think. Mutual funds and index funds can carry less risk than many other types of investments, and depending on where you buy, they can also be more protected against market volatility.

Whether you’re investing in a 401(k), IRA, or other type of retirement account, consistency is key. These types of investments thrive over decades thanks to compound earnings, as you earn gains on your entire account balance rather than just the amount you’ve invested.

Over time, compound earnings can have a snowball effect on your savings. The more you earn on your investments, the greater your account balance will grow, and you’ll earn even more. By giving your money as much time as possible to build, you can accumulate $1 million or more while barely lifting a finger.

Turning $10 per day into $1 million or more

Exactly how much you can earn in the stock market will depend on where you invest, but historically, the market itself has earned an average rate of return of around 10% per year over the last 50 years.

That’s not to say you’ll necessarily earn 10% returns every single year. Some years, you’ll earn much higher-than-average returns — like in 2024, for example, when the S&P 500 earned total returns of more than 23%. Other years, though, you’ll earn lower or even negative returns. Over decades, those ups and downs have historically averaged out to roughly 10% per year.

Let’s say your investments are in line with the market’s long-term performance, earning returns of 10% per year, on average. If you were to invest $10 per day — or around $300 per month — here’s approximately how much you could accumulate over time.

Data source: Author’s calculations via investor.gov.

In this scenario, it would take just over 35 years to reach the $1 million mark. But if you have even a few extra years to invest or can afford to contribute more than $10 per day, you can earn exponentially more in total.

For example, say that you can afford to invest $15 per day, or roughly $450 per month. If you’re still earning an average annual return of 10%, those contributions would add up to more than $2.3 million after 40 years.

No matter how much you can contribute each day or month, getting started investing as early as possible is key. The more consistently you invest, the easier it will be to retire a millionaire.

Image source: The Motley Fool.

Date

Thursday, Oct. 16, 2025 at 9:00 a.m. ET

Call participants

Chairman and Chief Executive Officer — Alan Schnitzer

Chief Financial Officer — Dan Frey

President, Business Insurance — Greg Toczydlowski

President, Bond & Specialty Insurance — Jeffrey Klenk

President, Personal Insurance — Michael Klein

Senior Vice President, Investor Relations — Abbe Goldstein

Need a quote from a Motley Fool analyst? Email [email protected]

Takeaways

Core Income — $1.9 billion in core income, or $8.14 per diluted share, driven by underwriting gains and increased investment income.

Return on Equity — Core return on equity was 22.6% for the quarter; trailing twelve-month core return on equity at 18.7%.

Underwriting Income — $1.4 billion pretax, doubling compared to the prior-year quarter, aided by reduced catastrophe losses and a 1.7-point improvement in the underlying combined ratio to 83.9%.

Net Investment Income (After Tax) — $850 million, a 15% year-over-year increase, driven by fixed income portfolio growth and higher yields.

Net Written Premiums — $11.5 billion in net written premiums, with Business Insurance at $5.7 billion (up 3%), Bond & Specialty at $1.1 billion, and Personal Insurance at $4.7 billion.

Segment Combined Ratios — Business Insurance: 92.9% (88.3% underlying); Bond & Specialty: 81.6% (85.8% underlying); Personal Insurance: 81.3% (77.7% underlying).

Shareholder Capital Return — $878 million returned, with $628 million in share repurchases and $250 million in dividends.

Adjusted Book Value Per Share — Adjusted book value per share was $150.55 at quarter end, up 15% from a year earlier.

Expense Ratio — 28.6% (year-to-date 28.5%), with management maintaining a 28% target for both 2025 and 2026.

Catastrophe Losses — $42 million pretax, described as “benign,” driven largely by tornado and hail events in the Central U.S.

Net Favorable Prior Year Reserve Development (PYD) — $22 million pretax (includes $277 million asbestos charge in Business Insurance, offset by favorable PYD in other lines).

Operating Cash Flow — Record $4.2 billion, with holding company liquidity of $2.8 billion at quarter end.

Share Repurchase Outlook — Management expects Q4 repurchases to reach about $1.3 billion, with a total of approximately $3.5 billion projected over Q3 2025 through Q1 2026, equating to a 5% reduction in share count.

Business Insurance Pricing Metrics — Renewal premium change (RPC) of 7.1% segment-wide, increasing to 9% ex-property; renewal rate change of 6.7%; retention at 85%.

Bond & Specialty Insurance — Segment retention of 87% in management liability, renewal premium change of 3.7% in domestic management liability, and a 40% increase in new lines of business sold to existing customers (private and nonprofit).

Personal Insurance Homeowners Metrics — Renewal premium change at 18%, expected to decrease to single digits in early 2026 as insured values align with replacement costs; retention at 84%.

Personal Insurance Auto Metrics — Combined ratio of 84.9%, underlying combined ratio of 88.3%, auto new business premium up year-over-year for the fourth consecutive quarter; retention at 82%.

Investment Portfolio Update — Portfolio grew by approximately $4 billion; more than 90% in fixed income with an average credit rating of AA; net unrealized investment loss narrowed from $3 billion to $2 billion after tax.

Debt Issuance — $1.25 billion issued (split between $500 million ten-year and $750 million thirty-year notes) for ordinary capital management.

Technology Investment — $13 billion invested since 2016 in technology, enabling a 300-basis-point reduction in expense ratio and access to over 65 billion clean data points to power AI and analytics initiatives, as disclosed by management.

Summary

Travelers (TRV -3.30%) reported substantial earnings growth, citing record profitability driven by improved underwriting and investment performance. Management highlighted excess capital and liquidity, with plans to accelerate share repurchases through Q1 2026 and indicated additional buybacks linked to the Canadian operations sale, specifically referencing a three-quarter period. The call outlined targeted underwriting strategies, with disciplined risk selection in property and actions to optimize exposure in high-catastrophe geographies. The company emphasized advancements in technology and AI, quantifying its scale, data advantage, and focus on sustainable cost improvements and operating leverage. Leadership reaffirmed a measured approach to capital deployment, prioritizing technology and potential M&A before returning excess to shareholders.

Chairman Schnitzer said, “we anticipate a higher level of share repurchase over the next couple of quarters,” underscoring shareholder return as a key use of surplus capital.

CFO Frey stated, “Our outlook for fixed income NII, including earnings from short-term securities, has increased from the outlook we provided a quarter ago,” signaling rising yield expectations for the investment portfolio.

President Klein provided forward guidance: We expect RPC to remain elevated and then drop into single digits beginning in early 2026.

President Toczydlowski disclosed middle market new business of $391 million—its highest third-quarter result—up 7% from the prior year, despite selective property underwriting and competitive market dynamics.

Industry glossary

Renewal Premium Change (RPC): The percentage change in premium for renewed policies, reflecting both pricing actions and changes in exposure or insured value.

Combined Ratio: A measure of underwriting profitability, calculated by summing incurred losses and expenses as a percentage of earned premiums; a ratio below 100% indicates underwriting profit.

PYC/PYD (Prior Year Reserve Development): The adjustment (favorable or unfavorable) to reserves set aside in prior periods for claims, as new information becomes available.

Retention: The proportion of policies or premium renewed with the company, stated as a percentage.

Middle Market: The business segment serving mid-sized commercial insurance customers, distinct from small businesses (“Select”) and large national accounts.

Travis: Travelers’ proprietary digital experience platform for distribution partners.

Full Conference Call Transcript

Alan Schnitzer chairman and CEO Dan Frey CFO and our three segment presidents. Greg Toczydlowski of Business Insurance, Jeff Klenk of Bond and Specialty Insurance, and Michael Klein of Personal Insurance. They will discuss the financial results of our business and the current market environment. They will refer to the webcast presentation as they go through prepared remarks, and then we will take questions before I turn the call over to Alan, I’d like to draw your attention to the explanatory note included at the end of the webcast presentation. Our presentation today includes forward looking statements. The company cautions investors that any forward looking statement involves risks and uncertainties and is not a guarantee of future performance.

Actual results may differ materially from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described under forward-looking statements in our earnings press release and in our most recent 10-Q and 10-Ks filed with the SEC. We do not undertake any obligation to update forward-looking statements. Also, in our remarks or responses to questions, we may mention some non-GAAP financial measures. Reconciliations are included in our recent earnings press release, financial supplement, and other materials available in the Investors section on our website. And now I’d like to turn the call over to Alan Schnitzer.

Alan Schnitzer: Thank you, Abby. Good morning, everyone, and thank you for joining us today. We are pleased to report excellent third-quarter results. We earned core income of $1.9 billion or $8.14 per diluted share. Our return on equity for the quarter was 22.6%, bringing our core return on equity for the trailing twelve months to 18.7%. Very strong underwriting results and higher investment income drove the bottom line. Underwriting income of $1.4 billion pretax more than doubled compared to the prior year quarter, benefiting from both the lower level of catastrophe losses and higher underlying underwriting income. The underlying result was driven by higher net earned premiums and an underlying combined ratio that improved 1.7 points to an exceptional 83.9%.

Underwriting income was higher in all three segments. Our high-quality investment portfolio also continued to perform well, generating after-tax net investment income of $850 million for the quarter, up 15%, driven by strong and reliable returns from our growing fixed income portfolio. Our underwriting and investment results, together with our strong balance sheet, enabled us to return almost $900 million of capital to shareholders during the quarter, including $628 million of share repurchases. At the same time, we continue to make strategic investments in our business. Even after this deployment of capital, adjusted book value per share was up 15% compared to a year ago.

With strong results over the past year and a particularly light cat quarter, we have a higher than usual level of excess capital and liquidity. Consequently, we anticipate a higher level of share repurchase over the next couple of quarters. Dan will have more to say about that in a minute. Turning to the top line, we grew net written premiums to $11.5 billion in the quarter. In business insurance, we grew net written premiums by 3% to $5.7 billion, led by 4% growth in our domestic business. Excluding the property line, we grew domestic net written premiums in the segment by more than 6%. The declining premium volume in property continues to be a large account dynamic.

In fact, we grew property in both middle market and small commercial. We’ve seen this dynamic in the large property market before, and we won’t compromise our underwriting discipline. Over time, particularly as catastrophic events inevitably unfold, the value of that discipline and the cost to those who abandon it will become unmistakable. Renewal premium and change in business insurance was 7.1%, driven by continued historically high RPC in our middle market and select business businesses. Excluding the property line, renewal premium change in the segment was a very strong 9%, and renewal rate change was a very strong 6.7%. Greg will share additional detail by line. Retention in the segment was 85%.

Given the high quality of the book, we were very pleased with that result. In Bond and Specialty Insurance, we grew net written premiums to $1.1 billion with higher renewal premium change and continued strong retention of 87% in our high-quality management liability business. Net written premiums in our market-leading surety business remained strong. In personal insurance, written premiums were $4.7 billion with strong renewal premium change in our homeowners business. You’ll hear more shortly from Greg, Jeff, and Michael about our segment results. As we head toward the end of the year, our planning for 2026 is well underway. As always, that process involves assessing the environment ahead.

There are uncertainties out there: economic, political, geopolitical, not to mention the loss environment. We are very confident that we’re built and very well positioned for whatever lies ahead. We’re operating from a position of considerable strength. Profitability is strong, reflecting our leading underwriting expertise and the operating leverage we’ve built through a sustained focus on productivity and efficiency. Our competitive advantages have never been stronger or more relevant. Strong underwriting is the flywheel that sets everything in motion. Our premium growth at attractive margins has generated strong cash flow, which enables us to make strategic investments in our business, return excess capital to shareholders, and grow our investment portfolio.

Since 2016, we have successfully invested $13 billion in technology, returned more than $20 billion of excess capital to our shareholders, and grown our investment portfolio by nearly 50% to more than $100 billion. Scale matters, increasingly so. We have the scale to win in an environment where technology and AI will continue to segment the marketplace. We have a track record of identifying the right strategic priorities and driving value from them. You can see that in the 300 basis point reduction we’ve achieved in our expense ratio since 2016, even while we were significantly increasing our overall technology spend.

Importantly, our size gives us the data to power AI, creating a virtuous cycle: better insights, better decisions, better outcomes, more resources to invest. For example, our long-time focus on organizing and curating data has given us access to more than 65 billion clean data points from decades of history across multiple business lines. We leverage that to sharpen our underwriting and shape our claim strategies. With the vast majority of our business in North America, we hold a leading position in the largest and most stable insurance market in the world, an advantage that insulates us from much of the risk arising from the economic instability and geopolitical uncertainty around the globe.

Our fortress balance sheet and exceptional cash flow provide us with the financial strength to invest consistently in the business regardless of the external conditions. Our financial strength also enables us to manage comfortably through large loss events like the January California wildfires. When it comes to the loss environment, from weather volatility to the impact of social inflation on casualty lines, no one is better positioned. Diversification provides powerful protection. In fact, our business mix produces a consolidated loss ratio that’s actually less volatile than the loss ratio of our least volatile segment. That’s the power of a balanced and diversified portfolio. Equally important is our demonstrated ability to confront the loss environment head-on.

We have the data, the analytics, and the discipline to establish reserves and loss picks appropriately and generally ahead of the market. That matters because until you have an accurate view of the loss environment, your risk selection, underwriting, and claim strategies are all operating with the wrong inputs. Since our early identification of the acceleration of social inflation in 2019, we’ve grown the business and delivered significantly improved margins. Getting an accurate and timely view of the loss environment isn’t just about the balance sheet. It’s foundational to running the business effectively. Our internally managed investment portfolio was another source of strength.

Our disciplined focus on achieving appropriate risk-adjusted returns has served us exceptionally well through various markets, especially during periods of market turmoil. More than 90% of our portfolio is in fixed income with an average credit rating of AA. We’re highly selective. We don’t reach for yield. We hold the vast majority of our fixed income securities to maturity. And we carefully coordinate the duration of our assets and liabilities. The track record speaks for itself. Our default rates during the most challenging environments over the past two decades were a fraction of industry averages. This consistency comes from a world-class investment team, with extraordinary tenure and a shared long-term perspective.

In short, the franchise we’ve built, the capabilities we’ve developed, and our depth of expertise create advantages that are durable across operating environments. Before I wrap up, I’ll share that we’re just back from one of the industry’s premier conferences, where we had the opportunity to meet with dozens of our key agents and brokers, who collectively represent a substantial amount of our business. We left as convinced as ever that our position with the independent distribution channel is an unmatched strategic advantage. We heard clearly that our strategic investments are resonating and that looking ahead, we’re focused on the right priorities to extend that advantage. I want to acknowledge and thank all of our distribution partners.

I also want to reiterate our unwavering commitment to being an indispensable partner for them and the undeniable choice for their customers. To sum it up, we’re very well positioned and very optimistic about the road ahead. And with that, I’m pleased to turn the call over to Dan.

Dan Frey: Thank you, Alan. In the third quarter, we once again delivered excellent financial results on a consolidated basis and in each of our three segments. Core income for the quarter of $1.9 billion resulted in core return on equity of 22.6%, reflecting both excellent underwriting results and strong investment income. We generated higher levels of written premium and earned premium while delivering excellent combined ratios on both a reported and underlying basis. At 83.9%, the underlying combined ratio marked its fourth consecutive quarter below 85. The combination of higher premiums and the excellent underlying combined ratio led to an 18% increase in after-tax underlying underwriting income, which surpassed $1 billion for the fifth consecutive quarter.

The expense ratio for the third quarter was 28.6%, bringing the year-to-date expense ratio to 28.5%. We continue to expect an expense ratio of around 28% for the full year 2025 and expect to manage to that level again in 2026. Catastrophe losses in the quarter were fairly benign at $42 million pretax, consisting mainly of tornado hail events in the Central United States. Turning to prior year reserve development, we had total net favorable development of $22 million pretax. In Business Insurance, the annual asbestos review resulted in a charge of $277 million. Excluding asbestos, business insurance had net favorable PYD of $152 million driven by continued favorability in workers’ comp.

In Bond and Specialty, net favorable PYD was $43 million pretax with favorability in Fidelity and Surety. Personal insurance had net favorable PYD of $104 million pretax driven by favorability in auto. After-tax net investment income of $850 million increased by 15% from the prior year quarter. Fixed maturity NII was again the driver of the increase, reflecting both the benefit of higher invested assets and higher average yields. Returns in the non-fixed income portfolio were also up from the prior year quarter. During the quarter, we grew our investment portfolio by approximately $4 billion. Our outlook for fixed income NII, including earnings from short-term securities, has increased from the outlook we provided a quarter ago.

And we now expect approximately $810 million after tax in the fourth quarter. For 2026, we expect more than $3.3 billion, with quarterly figures starting at around $810 million in Q1 and growing to around $885 million in Q4. New money rates as of September 30 are roughly 70 to 75 basis points above the yield embedded in the portfolio. Turning to capital management. Operating cash flows for the quarter were a new record at $4.2 billion, and we ended the quarter with holding company liquidity of approximately $2.8 billion.

Interest rates decreased during the quarter, and as a result, our net unrealized investment loss decreased from $3 billion after tax at June 30 to $2 billion after tax at September 30. Adjusted book value per share, which excludes net unrealized investment gains and losses, was $150.55 at quarter end, up 8% from year end and up 15% from a year ago. Also of note for Q3, we issued $1.25 billion of debt back in July, with $500 million of ten-year notes and $750 million of thirty-year notes. This was simply ordinary course capital management, maintaining a debt-to-capital ratio in our target range as we continue to grow the business.

Sticking with the theme of capital management, we returned $878 million of our capital to shareholders this quarter, comprising share repurchases of $628 million and dividends of $250 million. As Alan shared, our very strong earnings over the past year have provided us with an elevated level of capital and liquidity well in excess of what we had planned to use for investment and to support continued growth. As a result, we expect to increase the level of share repurchases in the fourth quarter to roughly $1.3 billion.

Also, keep in mind that we previously shared our plan to deploy about $700 million from the sale of our Canadian operations, expected to close in early 2026, for additional share repurchases as well. So if we look across the three-quarter period from Q3 2025 through Q1 2026, our repurchases in Q3 combined with our current outlook for the next two quarters has us repurchasing a total of somewhere around $3.5 billion worth of our stock. Using the average share price over the past thirty days for purchases during the next two quarters, that would result in a reduction of our outstanding share count of about 5% in the nine-month period.

Of course, the actual amount and timing of repurchases will depend on a number of factors, including the timing of the closing of the transaction in Canada, actual quarterly earnings, and other factors we disclose in our SEC filings. Recapping our results, Q3 was another quarter of excellent underwriting profitability on both an underlying and as-reported basis, and another quarter of rising net investment income. These strong fundamentals delivered core return on equity of 22.6% for the quarter and 18.7% on a trailing twelve-month basis, and position us very well to continue delivering strong results in the future. And now for a discussion of results in Business Insurance, I’ll turn the call over to Greg.

Greg Toczydlowski: Thanks, Dan. Business Insurance had a very strong quarter, delivering a record third-quarter segment income of $907 million and an all-in combined ratio of 92.9%. The quarter reflected relatively benign catastrophes and the continued strong contribution from our exceptional underlying underwriting results. This quarter’s underlying combined ratio of 88.3% marked the twelfth consecutive quarter where we’ve produced an underlying combined ratio below 90%. We’re pleased that our ongoing strategic investments have contributed to this sustained level of profitability. In particular, through meaningful advancements in data and analytics, we continue to advance our underwriting tools.

One specific highlight is the development and utilization of sophisticated models that derive risk characteristics, refine technical pricing, and summarize historical and modeled loss experience, all of which is provided to our underwriters at the point of sale. Moving to the top line, our net written premiums increased to an all-time third-quarter high of $5.7 billion. We grew our leading middle market and select businesses by 7% and 4%, respectively. These two markets make up 70% of the net written premiums in business insurance. We saw a decline in net written premiums in National Property and Other, which, as you heard from Alan, reflects our disciplined execution in terms of risk selection, pricing, and terms and conditions.

As for production across the segment, pricing remained attractive with renewal premium change just over 7%. Renewal premium change remains strong in select and middle market. From a line of business perspective, renewal premium change was positive in all lines, double digits in umbrella, CMP, and auto, and up from the second quarter or stable in all lines other than property. As you heard from Alan, excluding the property line, renewal premium change in this segment was 9%. Retention remained excellent at 85%, and new business of $673 million was about flat to a very strong prior year level. We’re very pleased with these production results and particularly our field’s execution for our proven segmentation strategy.

Across the book, pricing and retention results this quarter reflect excellent execution, aligning price, terms, and conditions with environmental trends for each lot. As for the individual businesses, in select, renewal premium change of 10.8% was about flat with the second quarter. Retention ticked up as expected as we near completion of our targeted CMP risk return optimization efforts. And lastly, for Select, we generated new business of $134 million, up 3% over the prior year. As we’ve mentioned previously, we’ve made meaningful strategic investments in this market in both product and user experience.

Our new BOP and auto products have been well received in the market, and we’re pleased that the industry-leading segmentation contained in both products is contributing to profitable growth. We’re also very pleased with the success of Travis, our digital experience platform for our distribution partners. As we continue our strategic rollout, Travis is already producing over 1 million transactions annually. In our core middle market business, renewal premium change of 8.3% was also about flat sequentially from the second quarter. Price increases remain broad-based as we achieved higher prices on more than three-quarters of our middle market accounts. And at the same time, the granular execution was excellent, with meaningful spread from our best-performing accounts to our lower-performing accounts.

We’re pleased that retention of 88% remained exceptional given the level of price increases we achieved. And finally, new business of $391 million was our highest ever third-quarter result and up 7% over the prior year. We’re pleased with the new business risk selection and strength of pricing and overall with the combination of strong returns and customer growth in middle market. On a strategic note for middle market, we continue to enhance our industry-leading underwriting workstation with models that assess new business opportunities for risk characteristics with the propensity to produce the highest level of lifetime profitability.

This information helps our field organization focus on the highest priority opportunities, resulting in a greater likelihood of success in winning more accounts that contribute to strong margins. To sum up, Business Insurance had another terrific quarter. We’re pleased with our execution in driving strong financial and production results while continuing to invest in the business for long-term profitable growth. With that, I’ll turn the call over to Jeff.

Jeffrey Klenk: Thanks, Greg. Bond and Specialty delivered very strong third-quarter results. We generated segment income of $250 million and an outstanding combined ratio of 81.6%, nearly one point better than the prior year quarter. The strong underlying combined ratio of 85.8% drove very attractive returns in the segment. Turning to the top line, we grew net written premiums in the quarter to $1.1 billion. In our high-quality domestic management liability business, renewal premium change improved to 3.7% while retention remained strong at 87%. These results reflect our intentional and segmented initiatives to improve pricing in certain lines, with a focus on employment practices liability, cyber, and public company D&O.

We’re pleased with the strong underlying pricing segmentation achieved by our outstanding field organization on both renewal and new business, enabled by our advanced analytics and sophisticated pricing models. New business was lower than in 2024, as Corvus production was reflected as new business in the prior year quarter and is now mostly reflected as renewal premium. Comparisons to prior year new business levels will be similarly impacted for the remainder of the year. Outside of the Corvus impact, we’re pleased with early returns on multiple tech and operational investments we’ve made to drive account growth. For example, in our private and nonprofit business, we’re leveraging predictive analytics and AI to enhance our customer segmentation and sales effectiveness.

We’re pleased that these initiatives drove a 40% increase in new lines of business sold to existing customers as compared to the prior year quarter. Turning to our market-leading surety business, where production can be lumpy based on the timing of bonded construction projects, net written premiums remain strong relative to the record high quarter in the prior year. This reflects our customers’ continued confidence in our industry-leading surety expertise and value-added service offerings, as well as benefits from digital investments we’ve made to enhance distribution experiences in our small commercial surety business.

So we’re pleased to have once again delivered strong results this quarter, driven by our continued underwriting and risk management diligence, excellent execution by our field organization, and the benefits of our market-leading competitive advantages. And with that, I’ll turn the call over to Mike.

Michael Klein: Thanks, Jeff, and good morning, everyone. In Personal Insurance, we delivered third-quarter segment income of $807 million, an excellent result that reflects the continued impact of our disciplined approach to selecting, pricing, and managing risks. The combined ratio of 81.3% improved 11 points relative to the prior year quarter, driven primarily by lower catastrophe losses and a lower underlying combined ratio. The underlying combined ratio of 77.7% was five points better compared to the prior year quarter, driven by continued improvement in both homeowners and other and auto.

Net written premiums of $4.7 billion in the third quarter reflect our continued focus on improving profitability in homeowners while seeking growth in auto as we execute our strategies to deliver appropriate risk-adjusted returns across the portfolio. The ceded premium impact of the enhanced personal insurance excess of loss reinsurance program we announced last quarter reduced net written premium growth in the quarter by one point as the full year’s worth of ceded premium was booked in the third quarter. In auto, the third-quarter combined ratio was very strong at 84.9%, reflecting lower catastrophe losses, a strong underlying combined ratio, and favorable net prior year development.

The underlying combined ratio of 88.3% improved by 2.9 points compared to the prior year quarter. The improvement was driven by favorable loss experience in bodily injury and, to a lesser extent, vehicle coverages. Similar to last year’s third-quarter result, this quarter’s underlying combined ratio included a two-point benefit related to the re-estimation of prior quarters and the current year. The year-to-date underlying combined ratio was also 88.3%, reflecting sustained profitability in an auto book that is larger than it was five years ago, both in terms of premium dollars and policy count.

Looking ahead to 2025, it’s important to remember that the fourth-quarter auto underlying loss ratio has historically been six to seven points above the average for the first three quarters because of winter weather and holiday driving. In Homeowners and Other, the third-quarter combined ratio of 78% improved by 13.5 points compared to the prior year quarter, primarily because of lower catastrophe losses and improvement in the underlying combined ratio. Net prior year development was favorable but lower compared to the prior year. The underlying combined ratio of 68% improved by almost 6.5 points compared to the prior year quarter. The year-over-year favorability in homeowners was primarily related to the benefit of earned pricing, as well as favorable non-catastrophe weather.

Overall, these outstanding results reflect favorable weather conditions throughout the third quarter, along with our actions to manage exposures in high catastrophe risk geographies to help optimize risk and reward. Turning to production, we’re making progress in positioning our diversified portfolio to deliver long-term profitable growth. While our production results don’t quite show it yet, we’re confident that the actions we’re taking will build momentum toward this objective. In domestic auto, retention of 82% remained consistent with recent quarters. Renewal premium change of 3.9% continued to moderate and will continue to decline in the fourth quarter, reflective of improved profitability and our focus on generating growth.

Auto new business premium was up year over year for the fourth consecutive quarter, as new business momentum continued in states less impacted by our property actions. In Homeowners and Other, retention of 84% remained relatively consistent with recent quarters. Renewal premium change remained strong at 18%, as we continue to align replacement costs with insured values. We expect RPC to remain elevated in the fourth quarter and then drop into single digits beginning in early 2026 as values will have largely aligned with replacement costs. We continued to execute actions to reduce exposure and manage volatility in high-risk catastrophe geographies in the quarter, causing further declines in property new business premium and policies in force.

Most of our property actions will be completed by the end of the year, at which point the downward pressure on both property and auto growth should begin to moderate. As we conclude this year and head into 2026, we’re focused on building momentum toward generating profitable growth.

To that end, we have a range of actions currently or soon to be in market, including the following: adjusting pricing, appetite, terms, and conditions to better reflect improved profitability in both Auto and Home; removing temporary binding restrictions and winding down some of our property new non-renewal actions in certain geographies; appointing new agents and partnering with existing agents to consolidate books of business; continuing to modernize our specialty products and platforms; and investing in artificial intelligence and digitization to deliver better experiences for our agents and customers. These messages resonate as we share them in the marketplace, reinforcing our commitment to being the undeniable choice for consumers and an indispensable partner for our agents.

To sum up, we delivered terrific segment income as our team continued to invest in capabilities and deliver value to customers and agents. These results position us well to build on a long track of profitably growing our business over time. Now I’ll turn the call back over to Abby.

Abbe Goldstein: Thanks, Michael. And with that, we’re ready to open up for Q&A.

Operator: Thank you. We will now begin the question and answer session. Your first question today comes from the line of Gregory Peters from Raymond James.

Gregory Peters: Well, good morning, everyone. Boy, you’re producing great bottom line results. Kind of surprising the stock’s down as much as it is on the open. I think it’s probably a reflection of the top line. And I know you spoke in detail about the different headwinds that you’re facing, whether it’s in business insurance, the property, Corvus and Bond and Specialty, or the underwriting actions in personal insurance that have affected your top line. When you go beyond the balance of this year and you start thinking at 26%, 27%, what does the Travelers business model look like in terms of top line growth on a consolidated basis? And how are you thinking about them?

Alan Schnitzer: Hey, good morning, Greg. It’s Alan. Thanks for the thoughts and the question. So we’re not going to give outlook on the top line, as you can imagine. But clearly, we understand that in order to meet our objective of delivering industry-leading return on equity over time, we need to grow over time. So it’s a priority for us. And if you look back over the last couple of years, we’ve been very successful with that. In our, you know, we, as you noted by segment, we’ve talked about what’s driving the results this quarter. But I guess what I would say is we are very confident that we’ve got the right value proposition.

We’re investing in the right capabilities to make sure we’re positioned to grow this business. So we feel very good about the execution in the quarter. We feel very good about what we’ve accomplished in recent periods, and we feel very good about the outlook.

Gregory Peters: Okay. The other I seem to ask this like every other quarter on the technology front, but you keep bringing it up, talked about the digital initiative you have going on in business insurance. Talk about some of the stuff going on in personal insurance. I think one of your peers came out earlier in the third quarter and talked about the potential of artificial intelligence to deliver human resource savings and headcount reductions over time of maybe up to 20%.

I’m just curious if we can just go back to, I know you’ve got best use case on technology and AI, but go back to how you’re thinking about this in the three to five-year period in terms of what it might mean to your expense ratio?

Alan Schnitzer: Yes. So Greg, I’ll tell you, we are very bullish on AI, and we’re leaning into it. You know, we’re spending, you know, more than a billion dollars a year on technology. A lot of that is focused on AI. We expect significant benefits from it. And I think we’ve got a long track record, as I said in my prepared remarks, of identifying the right strategic initiatives and driving value from them. We’re not going to tell you what our plan is for the expense ratio beyond next year, but I’ll also tell you that more than our focus is on the expense ratio, it’s on creating operating leverage.

And that’s what gives us the flexibility to deploy those gains however we want to deploy them. And so maybe it’ll be efficiency, maybe it’ll be productivity, but we are very bullish about the opportunity for investments that we have underway. We’re very bullish about the data we have to fuel the AI. And think that it’ll make a big difference in the years to come.

Gregory Peters: Got it. Thanks for the answers.

Operator: Thank you. Your next question comes from the line of David Motemaden from Evercore. Your line is open.

David Motemaden: Hey, thanks. Good morning. I had a question. You gave the RPC and rate ex property. I was wondering, that’s a new disclosure. Wondering if you can just talk about what that was last quarter versus this quarter and then maybe zooming in specifically in business insurance. What do you guys see in property pricing outside of national property this quarter?

Greg Toczydlowski: Yes, certainly. Well, on the first one, David, it is a metric that we’re not going to give every quarter, and we’re not going to go back and give that. We offered it up this quarter just to give you some color and let you know how much property the leverage it had on the pricing for this particular quarter. As we’ve shared with you, the large property has definitely been a market where typically leads in terms of when softening may happen, and it certainly has been the case over the last couple of quarters. In the select and middle market, to directly answer your question, we continue to get positive price increases there.

But it’s certainly, we’re feeling some deceleration. But again, certainly still seeing positive increases.

David Motemaden: Got it. Thank you. And then maybe this is just sort of related to your answer there. But on business insurance premium growth by market. So it’s good to see the tick up in select year over year and national accounts, you know, sort of we know the story there. But I’m surprised we saw the deceleration in growth in middle market. I was hoping you could just impact that a little bit. Is that just sort of the property dynamics you just mentioned?

Greg Toczydlowski: Yes. And if you’re looking at overall quarter of middle market, I think you’re reading that wrong. The quarter alone was up for middle market 7% relative to year to date of five.

David Motemaden: Got it. Yeah. No, I was just looking at the because I know 1Q had the reinsurance dynamic. So I was just comparing it to 2Q, the 10 decelerating to seven. That’s what I was looking at there. But, no, appreciate the answer.

Operator: Your next question comes from the line of Mike Zaremski from BMO. Your line is open.

Michael Zaremski: Great. My first question is on the loss cost trend line. I know it’s not easy pinning a broad brush, but if we look at kind of your reserve release trend line, loss ratio trend line, we’re also adding IBNR. But a lot of good things going on. Curious if your view on loss cost inflation has changed at all or directionally, is it the I feel like you’ve only raised it over recent years. Over long periods of time. It flattening out? Thanks.

Dan Frey: Hey, Mike, it’s Dan. So another quarter of net favorable PYD despite the asbestos charge. I don’t really think you can put a trend on PYD. Really what matters for us is in aggregate across the enterprise is that favorable or unfavorable, and we’ve got now a very long track record of generally having that favorable. As it relates to loss trend, we haven’t explicitly commented on loss trend for a while because we think it’s just too narrow a way to look at the business in terms of what’s pure rate versus what’s some blended number of loss trend, but it hasn’t moved dramatically in recent periods. Alan’s talked about that in prior quarters.

We do take a look at it every quarter. Some lines do move up a little bit. Some lines do move down a little bit over time. But it’s been pretty stable for a while now. Mike, there was nothing in the quarter that particularly surprised us when it comes to loss activity.

Michael Zaremski: Okay, great. And my follow-up is honing in on the home segment. Maybe you need a comment on auto too since there’s a lot of bundle in there. But if we look at the RPC trends, they remain very high on I’m assuming there’s terms and conditions changes that you’re incorporating in kind of those double-digit RPC increases. But the last few years haven’t been great for you all in the industry. Consensus kind of has you guys pegged at a 95 combined ratio for the foreseeable future in home. If you can kind of remind us what do we expect RPC to eventually fall? Are those terms and conditions changes going to help?

Is 95% the right combined ratio that you guys are targeting given how profitable auto is? Thanks.

Michael Klein: Sure. Thanks, Mike. It’s Michael. So just to unpack the RPC part of your question for starters, as I mentioned in my prepared remarks, RPC remains elevated. Again, it’s rate and exposure, right? So RPC remains elevated largely because we’re raising insured limits to keep up with rising replacement costs. And my point about RPC dropping to single digits in 2026 is we’ll have largely caught up in getting replacement costs in line with insured values. And so the change in RPC as we head into 2026 will really be those the premium impact from increasing coverage A, the dwelling limits on property coming back to more normal levels.

Yes, baked into RPC is also a reflection of a number of the other actions we’re taking on the book. I think increasing deductibles, particularly across the Midwest, think different strategies around targeted limits on how big a coverage A we’re going to write in some hail-prone geographies, other things like that are all rolled into that figure. And again, I think it’s just reflective of the actions that we’re taking to improve the profitability of that book. As respect to target combined ratio, we’re not going to really disclose the target combined ratio by line. We are certainly encouraged by the progress we’ve made, particularly in improving the underlying combined ratio in property.

It’s down period to period, quarter over quarter for something like the last ten or eleven quarters in a row. So it’s demonstrative of the progress that we’re making there. And again, continue to be pleased with our progress there.

Operator: Your next question comes from the line of Meyer Shields from KBW. Your line is open.

Meyer Shields: Great, thanks. Good morning. I don’t know if this is a question for Alan or Greg, but is there really a disentangling the how much of a property premium decline in BI is from nonrenewed business as opposed to accepting lower rates because you still have adequacy?

Alan Schnitzer: Meyer, I don’t think we’re gonna unpack that. Certainly not right here right now. I don’t think we’re gonna get into that level of detail. And I honestly, we don’t have that level of data at our fingertips right now.

Meyer Shields: Okay. Fair enough. Also, to talk a little bit, Michael talked about, I guess, book rolls in personal lines. Does that involve any changes to agency commissions? Or what other tools are you using to encourage that?

Michael Klein: Sure, Meyer. Thanks for the question. Yes. So typically, and again, book growth consolidations in the personal lines space are pretty much standard operating procedure. We had stepped away from them. The reason I mentioned it is because we had stepped away from them as we were working to improve profitability. And I think it’s an important point to recognize that we’re back actively engaged in the marketplace in those conversations with agents looking for situations where their book of business may be disrupted for one reason or another. It is fairly typical in a book consolidation scenario to offer enhanced commission on that book roll for the first term as that business comes over.

Operator: Your next question comes from the line of Tracey Banque from Wolfe Research. Your line is open.

Tracey Banque: Good morning. My first question is for Mike. I’m curious what you’re seeing that’s driving favorable loss experience in bodily injury. And, to a lesser extent, vehicle coverages?

Michael Klein: Tracy. Thanks for the question. I mean, really is a combination of favorable frequency in both bodily injury and physical damage losses, as well as continued moderation in severity again really across coverages.

Tracey Banque: Got it. And a follow-up on Dan’s comment about elevated level of capital liquidity. Driven by your earnings that’s well in excess of your investment needed to growth. As you know, capital is a big focus for me. And I’ve really not seen so much excess capital for the entire sector. Is it fair to assume that your excess capital position surpasses the buyback targets you shared and could we expect concurrent deployment of capital on the technology side and or M and A.

Dan Frey: Yes, Tracy, it’s Dan. So I think I understand the question. So I guess I’d start by saying, look, there’s no change at all to what has been now our long-standing capital management philosophy, which is we’ve got a business that’s generating terrific margins. We generate a lot of capital. We generate more than we need just to support the growth of the business. First objective for that excess capital is going to be to find a way to deploy it and generate a return. And so we’ll make all the technology investments that we think we can and should make. Always be open to M and A, open to any opportunity to generate returns on an excess capital.

Once we’ve exhausted all those opportunities, then it’s not our capital, it’s the shareholders we’re going to give it back through dividends and buybacks.

Tracey Banque: Got it. Thank you.

Operator: Your next question comes from the line of Robert Cox from Goldman Sachs. Your line is open.

Robert Cox: Hey, thanks. Good morning. Yes, just wanted to go back to the removal of the growth restrictions. It looks like a couple of parts of the business, CMP, within Select and then also in homeowners you give us a sense of how much business is being unlocked for growth here? And if easing those can result in a noticeable uplift in growth?

Greg Toczydlowski: Robert, this is Greg. I’ll start off and then Michael can talk about the PI. We’ve been talking about the select mix optimization for some time now. And as we begin to finalize some of those actions, you saw a slight tick up in our retention. We’re not really going to quantify what that means for overall growth, but that was the reason that we pointed out the slight pickup in retention.

Michael Klein: Yeah. And Robert, Michael, up here on the personal lines side. I think the important point to note in terms of the impact on growth in personal insurance as we relax those property restrictions as our goal is to leverage that property capacity to write package business. And so if you my suggestion, if you want to sort of dimensionalize it, is just look back historically at retention in new business levels in property and in auto. You can see that retention remains depressed right now given the actions we’re taking. Again, the property actions depressed retention in both lines.

And you can see particularly in property the new business levels are pretty significantly depressed relative to what they’ve run historically. And so those levers, I think, would give you a way to kind of dimensionalize it.

Robert Cox: Okay, great. Thanks for the color there. And then I just wanted to follow-up on the business insurance underlying loss ratio. When you think about the margin improvements during this year, are we seeing improved picks in casualty at all? Or is the improvement year to date largely been a shift lower in some of the shorter tail exposures?

Dan Frey: Hey, Rob, it’s Dan. Look, I think if you look at the improvement in you’re talking about business insurance specifically, right?

Robert Cox: Yes. Is that correct?

Dan Frey: Yes. I think the single biggest factor we’d say in terms of that sort of 50 basis point improvement on a year-to-date basis has been the continued benefit of earned price. So in the casualty lines especially, and we’ve talked about this a couple of times, we’re continuing to include some provision for a level of uncertainty in those lines that we think is going to serve us well in the long term as opposed to taking those picks down the improvement in the loss ratio. You have other things that impact every quarter too. Mix will change a little bit.

But headline number the main driver of the improvement year over year has been the continued benefit of earned price.

Robert Cox: Thank you.

Operator: Your next question comes from the line of Elyse Greenspan from Wells Fargo. Your line is open.

Elyse Greenspan: Hi, good morning. I guess I want to stick there with business insurance. So if we look I guess, just specifically at the underlying loss ratio that was stable year over year in the Q3. So I’m not sure if there were certain pushes and pulls that you want to point out specific to the third quarter or if maybe this quarter rate you know, earned rate, you know, got close to trend and that’s kind of what we’re seeing in the numbers. And just how do we think from here, you know, just given, you know, slowing pricing, which I know is mostly driven by fiber property, do we think about just the underlying loss ratio and BI?

Should we think about that starting to deteriorate as rate gets closer to trend?

Dan Frey: Yeah. Good morning, Elyse. Let’s just start with where the margins are in business. I mean, they are pretty spectacular margins. And I don’t think we’re to parse out that level of detail. We’re certainly not going to get into what the outlook for margins is. But I’ll tell you at these margins, we really like the margins and we really like the business that we’re putting on the books at these margins.

Elyse Greenspan: Okay. And then I guess, you know, my second question would be, I guess, maybe shifting to personal auto. Have you guys did you guys see any impact of tariffs at all in the quarter, whether it was September relative to July and August? And how are you guys currently thinking about a potential impact of tariffs on the margins in that business?

Michael Klein: Sure Elyse, it’s Michael. Thanks for the question. I would say we haven’t seen a ton of impact to date from tariffs. But our results for the third quarter do include a small impact from tariffs. That said, it’s well below the single-digit severity numbers that we discussed a couple of quarters ago. There certainly is the potential for that impact to grow the longer tariffs remain in effect. As you know, it’s a very fluid situation. Tariff changes weekly, daily, fairly frequently. So predicting is challenging, but we are keeping a very close eye on it. To your point, there are some external industries that show some moderate increases. Others look largely unaffected.

So we’re going to continue to closely monitor it. But there is a little bit of a provision in the third quarter results for tariff increases, but it’s not yet at the level that we had potentially forecast. And just to be clear, Michael, correct me if I’m wrong, we’ve got a provision in there because we expected that we might see it. We’re not really seeing it in any meaningful way.

Michael Klein: Yes. It’s significant. Again, we’re seeing it on the margins, and so we booked the provision for it. But again, well below the mid-single-digit level that we had described before.

Elyse Greenspan: Thank you.

Operator: Your next question comes from the line of Paul Newsome from Piper Sandler. Your line is open.

Paul Newsome: Good morning. Yesterday, Progressive gave us a little unpleasant news about their poor charge. Just curious if that is something that you’ve looked at yourself and I’m also curious about the accounting related to these kinds of things. I know that orders not unique. There are other states that have restrictions on proper on profitability. Just curious about how you account for that as well.

Michael Klein: Sure, Paul. It’s Michael. I’ll start with sort of response on the overall situation. Maybe Dan can chime in on accounting. The Florida excess profit provision and the statute isn’t actually a new thing. It’s sort of standard operating procedure in Florida. It’s actually fairly infrequent that people have to return premiums given the statute. What I would say about our business in Florida is we’re pleased with our auto business in Florida. But we don’t expect to need to make a return of premium to policyholders in Florida due to excess profits for the 2023 to 2025 accident year period for which we would make the filing in 2026.

The other thing I would say is given the size of our business in Florida, think of our Florida auto business less than 10% of our PI auto business. Think of the Florida PI auto business 1.5% of Travelers’ overall premium. I mean, it’s just not going to be a significant issue for the organization even if we were to need to make a return of premium, which we don’t anticipate.

Dan Frey: Then Paul, it’s Dan. With regard to the accounting, I guess I’m going to not give a definitive answer. And one of the reasons I won’t give a definitive answer is if you go back to COVID, when we and some of our peer companies returned premium because frequency and losses declined so rapidly, so quickly, not every company accounted for that the same way. So we had a view of how that should be accounting for. That’s what we reflected in our results. Other peer companies had slightly different view of how that should be accounted for.

And reflected it differently in their results, by which I mean some companies took that as an expense, some companies took that as a return to premium. And as Michael said, since we’ve not had to deal with the Florida excess profit issue, we haven’t done a real deep dive on how we think it would come through the P and L. But most importantly, I think as Michael said, we ever had it, we wouldn’t expect it to be much of an impact on our consolidated results in any event.

Paul Newsome: Great. That’s super helpful. That’s all I had. Appreciate it.

Operator: Your next question comes from the line of Josh Shanker from Bank of America. Your line is open.

Josh Shanker: Yes. Very much for taking my question here at the end. I was trying to understand a little bit about the retention effective retention numbers that you give in the back of the supplement about auto and home. Your retention bottomed, I guess, about three quarters ago. And it’s ticked up, but you’re still losing more of cars or more policies than you were before. Is that a projected retention based on where you’re pricing the business today, or have you already seen retention bottom and it’s improving here?

Dan Frey: Josh, it’s Dan. So retention is a way that we try to give you color relative to what’s the change in net written premium. So a couple of things we know definitively. We know definitively at any point in time how many policies are enforced. We give you that number. We know definitively at any point in time how much premium made it into the ledger. We give you that number. Production statistics like retention, renewal premium change, new business, are all in the disclosure say. They’re all subject to actuarial estimate of what do we think the ultimate retention is going to be.

Because you could start on day one of a policy and look like you’d retained all of them, but we know that there’s some peer period of those that are going to cancel early in the term and either go somewhere else or drop their insurance. So it’s very challenging to do, I think, you’re trying to do at a very specific level and go A plus B equals C. Production statistics are really color around what’s happening with the top line. And I’m sorry, can’t give you a more helpful answer than that.

Josh Shanker: If I look back at 3Q 2024, is that a more because now you have all that data. Is that a more accurate representation of what you know to have happened over the past year?

Dan Frey: Production statistics do get updated. So if you went back in true in business insurance, true in personal insurance, if you looked at historical quarters, you could almost do a triangle of what was retention as originally reported because it’s an estimate. We true those up as time goes on.

Josh Shanker: And can you confidently say, and I’ll leave it at this, that retention has improved from where it was a year ago, or it’s still not certain?

Dan Frey: I think we’re pretty confident in saying that retention has improved from where it was a year ago.

Josh Shanker: Okay. Thank you.

Operator: Your next question comes from the line of Alex Scott from Barclays. Your line is open.

Alex Scott: Hey, thanks. First one I have is on commercial auto and general liability. Just noticing, you know, those are, you know, sort of the lines where net written premium is growing more and was just interested in if that’s more a reflection of, you know, the rate’s obviously different there than maybe some of the other lines where there’s pressure. But, you know, is there anything about the commercial auto product launch and some of the things you’re doing that are actually causing you to lean into businesses a little more?

Greg Toczydlowski: Hey, Alex. This is Greg. You know, just to get the second part of your question, we did roll out a new automobile product across all business insurance that includes select and middle market that would roll up into the aggregate commercial auto numbers. So we do think that’s our most sophisticated product in auto that we brought into the marketplace. So that helps us from a segmentation point of view. But we’ve been very thoughtful around our growth in commercial auto. The thrust of what you’re seeing there in premium deltas really is based on renewal premium change. And that’s why I gave you some of that color in my prepared comments at a product line level.

Alex Scott: Got it. Okay. That’s helpful. And over in personal lines, I mean, the appetite you’ve been pretty clear on in that should help on the growth front. Is there anything from just a marketing spend kind of standpoint and thinking through the expense ratio that we should be aware of is you think through ramping up growth?

Michael Klein: Sure, Alex. It’s Michael. I would say that on the margins, we have increased our marketing spend in personal insurance largely in support of our direct-to-consumer business. But it’s a very different ballgame for us than marketing spend other places. Our direct-to-consumer business is less than 10% of our overall business. So we are on the margin increasing marketing spend there to drive more growth. But it doesn’t have a dramatic impact on the overall financial results of the business.

Alex Scott: Got it. Thank you.

Operator: And we have time for one more question. And that question comes from the line of Ryan Tunis from Cantor. Your line is open.

Ryan Tunis: I just had a question, just one on in business insurance, just on incurred loss. But I guess it’s, in national property, we don’t trend losses like we do or property for that matter. We trend losses like we do with other stuff, but certainly are still attritional losses on that line. I guess I’m just curious if those attritional losses have run better or worse or in line with your expectations so far this year? Thanks.

Dan Frey: Hey, Ryan, it’s Dan. I think the quarter results are really strong. Weather was generally leaning towards favorable, including in business insurance. If you’re wondering about whether it’s so significant that we would say this isn’t really a clean jump-off point for business insurance and you’d make some big adjustment, we would say no sort of inside of the normal realm of variability from quarter to quarter, but leaning towards the favorable.

Operator: And we have reached the end of our question and answer session. I will now turn the call back over to Abby Goldstein for closing remarks.

Abbe Goldstein: Thanks, everyone, for joining us today. And as always, please follow up with Investor Relations if you have any other questions. Have a good day.

Operator: This concludes today’s conference call. Thank you for your participation. You may now disconnect.