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Sept. 23 (UPI) — The Wall Street Journal filed a motion Monday to dismiss President Donald Trump‘s $10 billion defamation lawsuit over the newspaper’s reporting on a 50th birthday letter he claims he did not write to Jeffrey Epstein more than two decades ago.

According to the filing, The Journal argued the case should be thrown out because “the article is true.”

“Epstein’s estate produced the Birthday Book, which contains the letter bearing the bawdy drawing and Trump’s signature, exactly as The Wall Street Journal reported.”

“While this case’s threat to the First Amendment is serious, the claims asserted by President Trump are meritless and should be promptly dismissed with prejudice,” the newspaper said.

Trump has denied writing the letter, saying, “This is not me,” and “This is a fake thing.” He is asking for $10 billion on two counts of defamation, which could total more than $20 billion.

The Journal’s filing asks the court to order Trump pay the defendants’ attorneys’ fees. The newspaper argues the article is not defamatory.

“Even if it had reported that President Trump personally crafted the letter — and it does not — there is nothing defamatory about a person sending a bawdy note to a friend,” according to the motion, which detailed the note that included a drawing of a naked woman.

Trump disagreed.

“The Wall Street Journal and News Corp. owner Rupert Murdoch, personally, were warned directly by President Donald Trump that the supposed letter they printed by President Trump to Epstein was a FAKE and, if they print it, they will be sued,” Trump wrote in a post on Truth Social in July. “The press has to learn to be truthful and not rely on sources that probably don’t even exist.”

The Wall Street Journal’s motion to dismiss comes days after a federal judge threw out a $15 billion lawsuit, also filed by the president, against The New York Times. The judge called Trump’s allegations “superfluous.”

Last year, Trump won a $15 million settlement from ABC News in a defamation suit against the network over false statements. Trump also won a $16 million settlement from CBS News over what he called deceptively edited comments during the presidential election.

Despite periods of turmoil in the stock market this year, most of the “Magnificent Seven” stocks have stayed hot. Those tech-focused megacaps have histories of generating strong earnings and free cash flows, and they’re all investing heavily in artificial intelligence (AI). Many investors expect them to be the primary beneficiaries of the AI revolution, which helps explain why their market caps have all now surpassed $1 trillion.

Despite their sheer size, some Wall Street analysts still foresee their shares making big moves upward. According to certain analysts, these two Magnificent Seven stocks could rise by 31% and 19%, respectively, over the next year.

Image source: Getty Images.

Microsoft: Reaping the rewards of AI investment

There was a time when investors had questions about Microsoft‘s (MSFT -0.44%) investments in artificial intelligence. But recent quarters have largely put those doubts to rest, and Microsoft’s stock has risen about 20% so far this year. In the company’s fiscal 2025 fourth quarter (which ended June 30), Microsoft’s Azure and other cloud services division, which houses a lot of its AI offerings, generated astounding revenue growth of 39% year over year.

“Cloud and AI is the driving force of business transformation across every industry and sector,” said CEO Satya Nadella in Microsoft’s latest earnings release.

Following the earnings release, Truist Securities analyst Joel P. Fishbein Jr. issued a research report, maintaining a buy rating on Microsoft and raising his price target on the stock to $675, forecasting a gain of about 31% over the next 12 months. Fishbein thinks the tech giant will continue to see strong growth from its cloud business, as well as tailwinds in the broader AI ecosystem. “Sustained strong cloud growth at scale & growing AI demand capture can lead to at least low teens double-digit rev, profit & CF (cash flow) growth over an extended period, while consistently returning cash via divs/repurchases,” he wrote.

Microsoft has been able to monetize AI by integrating AI models from OpenAI and charging clients that use these templates. Additionally, Microsoft sells its Azure clients enterprise AI tools through Azure Foundry that allow them to build and implement AI chat, conversational AI, and AI agents, among other tools. Further growth is likely as AI begins to spread to more parts of the economy and different types of businesses across sectors.

Though it can be hard to gauge how much more room for growth a company with a more than $3 trillion market cap might have, I don’t have any issue recommending Microsoft to long-term investors. In addition to AI, the company has a tremendous slate of businesses, including its popular suite of office productivity software, its traditional cloud business, video games, and social media platforms. Plus, Microsoft is one of the only companies with a debt rating higher than the U.S. government.

Alphabet: Overcoming challenges all year

It’s been a tremendously volatile year for Alphabet (GOOG 0.14%) (GOOGL 0.03%). Toward the end of 2024, a federal judge sided with the Department of Justice in a lawsuit, agreeing that the Google parent had employed monopolistic practices to protect its domination of the search engine space, as well as in its digital advertising practices.

The Justice Department then asked U.S. District Judge Amit Mehta to make Alphabet divest itself of its Google Chrome unit, a key element of the company’s search business, which drives over half of Alphabet’s revenue. But recently, Judge Mehta ruled that the company would not have to do this.

Furthermore, Mehta said Alphabet can continue to pay distributors like Apple to make Google the default search engine on their web browsers. Alphabet reportedly paid Apple over $20 billion in 2022 to make it the default engine on the Safari browser, which is installed standard on all iPhones. However, Mehta said that exclusive contracts will not be allowed and that Google would have to share some of its search data with rivals. Overall, investors considered this a positive outcome for Alphabet.

Many were also concerned earlier this year that AI chatbots like OpenAI’s ChatGPT might significantly cut into Google’s search business. However, the AI Overviews results powered by Google Gemini that now top the responses to most Google search queries appear to be making progress and meeting the needs of consumers. Evercore ISI analyst Mark Mahaney said the judge’s ruling had removed a clear overhang on the stock, which will allow investors to focus on the company’s fundamentals.

“What we see is a Core Catalyst, with Google Search revenue growth likely to remain DD% [double digit] for the foreseeable future,” Mahaney wrote in a research note. While generative AI  will undoubtedly continue to provide competition, Mahaney believes Google’s ability to innovate will keep its search engine competitive and allow the company to continue to generate solid growth. His new 12-month price target on Alphabet stock is $300, implying about 19% upside from current levels.

I largely agree with Mahaney, although I think investors should monitor competition from the likes of ChatGPT. But Alphabet also has many other strong and growing businesses, among them its cloud business, YouTube, its Waymo self-driving vehicle unit, and even its own AI chip design business. Even after its big run-up, Alphabet still trades at about 24 times forward earnings. Given that the company’s relevance is unlikely to fade any time soon, at that level, it looks like a good long-term buy.

On Wall Street, market cap serves as a differentiator of good and great businesses. While there are plenty of budding small- and mid-cap companies, businesses with valuations in excess of $10 billion have (more often than not) demonstrated their innovative capacity and backed up their worth to Wall Street.

But among this class of proven businesses is a truly elite group of 11 public companies that have reached the psychologically important trillion-dollar valuation plateau, not accounting for the effects of inflation over time (looking at you, Dutch East India Company). These 11 indelible titans include all seven members of the “Magnificent Seven,” Broadcom, Berkshire Hathaway, Taiwan Semiconductor Manufacturing, and Saudi Aramco, the latter of which doesn’t trade on U.S. exchanges.

Image source: Getty Images.

Last week, integrated cloud applications and cloud infrastructure services provider Oracle (ORCL 3.33%) came within a stone’s throw of becoming the 12th public company to reach at least a $1 trillion valuation before retreating. While the rise of artificial intelligence (AI) makes it a logical candidate to eventually surpass a market cap of $1 trillion, there’s another industry leader that’s ideally positioned to become Wall Street’s next trillion-dollar stock.

Oracle came oh-so-close to entering the trillion-dollar ranks

Following the closing bell on Sept. 9, Larry Ellison’s company delivered nothing short of a jaw-dropper with its fiscal 2026 first-quarter operating results.

It’s exceptionally rare when a megacap company moves by a double-digit percentage in a single trading session. At one point on Sept. 10, Oracle stock was higher by more than 40% and peaked at a market cap of $982 billion. Though it’s given back $150 billion in market value since its Sept. 10 peak, it closed out the week with a 25% gain, which isn’t shabby at all.

The hoopla surrounding Oracle has to do with its updated remaining performance obligations (RPO) forecast — RPO is essentially a backlog of future revenue based on contracts signed — and projected growth ramp for its high-margin Oracle Cloud Infrastructure (OCI) segment. OCI offers on-demand cloud-computing services, which can run AI workloads on private, public, and hybrid clouds, and also leases out AI compute.

On a year-over-year basis for the quarter ended Aug. 31, Oracle announced its RPO jumped 359% to $455 billion on the heels of signing four multibillion contracts during the fiscal first quarter. During the company’s conference call, CEO Safra Catz singled out privately held OpenAI and xAI, as well as Magnificent Seven members Meta Platforms and Nvidia, as some of these significant cloud contracts.

What’s perhaps even more impressive than the growth of Oracle’s backlog is its projected ramp in sales from OCI. Catz laid out a stunning growth forecast that calls for:

• 77% sales growth to $18 billion in fiscal year (FY) 2026
• 78% sales growth to $32 billion in FY 2027
• 128% sales growth to $73 billion in FY 2028
• 56% sales growth to $114 billon in FY 2029
• 26% sales growth to $144 billion in FY 2030

Catz and Oracle co-founder/Chief Technology Officer Larry Ellison have outlined a clear path to outsized growth that the company has lacked since the dot-com days. However, a wait-and-see approach from investors may be preferred in the quarters to come given that Oracle has missed Wall Street’s earnings per share consensus in three of the last four quarters. This could stall its efforts to quickly join the elite trillion-dollar club.

Image source: Getty Images.

This is the sensational company that can beat Oracle to the trillion-dollar plateau

Considering how Wall Street lives and breathes anything having to do with AI, you might be thinking a tech company is the next logical candidate to reach the trillion-dollar plateau. But what if I told you that time-tested retailer Walmart (WMT 0.14%), which closed out last week with a market cap of $825 billion, has an inside path to a $1 trillion valuation?

On the surface, things might not seem perfect for the retail industry. Recent job market revisions point to a potentially weakening U.S. economy.

At the same time, the effects of President Donald Trump’s tariff policies have begun to show up in monthly inflation reports. Between May and August, the trailing-12-month inflation rate, based on the Consumer Price Index for All Urban Consumers (CPI-U), rose by 67 basis points to 2.92%. When coupled with a weakening job market, rising inflation ignites fears of stagflation, which is a worse-case scenario for the Federal Reserve.

These scenarios are typically bad news for most retailers — but Walmart isn’t “most retailers.”

For decades, Walmart’s success has derived from its focus on value and convenience. When times are tough or uncertain in America, people turn to Walmart for a good deal on groceries, toiletries, and countless other items. If Trump’s tariffs are eventually ruled legal by the Supreme Court and remain in place, their inflationary impact is only going to drive more consumers, including affluent shoppers, into Walmart stores. Even if the company eats a portion of these tariffs, the benefit from increased foot traffic more than outweighs its sacrifice.

To build on this low-cost/value point, Walmart undeniably uses its size to its advantage. It has deep pockets and purchases products in bulk to lower its per-unit cost. This allows it to undercut mom-and-pop shops and national grocery chains on price and keeps consumers confined to its ecosystem of products and services (especially when they live close to a supercenter).

Another key to Walmart’s success has been its embrace of technology. Promoting its online retail channels and Walmart+ subscription service helped lift global e-commerce sales by 25% during the fiscal 2026 second quarter (ended July 31), and has pushed its U.S. e-commerce operations into the profit column. It’s also leaning into AI as a way to improve supply chain management and improve order fulfillment times.

It would only take a 21% move higher for Walmart to become the 12th public company to reach $1 trillion, and it looks to be in an ideal position to do so.

International Business Machines (IBM 1.15%), which is usually referred to by its ticker IBM, is a global icon in the technology sector. The company has a surprising ability to change with the times, and it’s been doing so for more than 100 years now. Indeed, when IBM was founded back in 1911, it made things like scales and clocks. Today, it makes all sorts of equipment, including quantum computers, and it supports the cloud computing industry, which is the backbone of artificial intelligence (AI).

Wall Street loves IBM again

Even after a fairly sizable drawdown since July, shares of IBM still trade up around 20% or so over the past year. Over the trailing three years, the stock has nearly doubled in price. That’s a pretty sizable return and highlights the fact that Wall Street is obsessed with IBM shares again. As noted, the company has shifted into key areas like quantum, cloud computing, and AI.

Image source: Getty Images.

But what’s special about IBM is that it hasn’t always been focused on these areas. Just a few years ago, investors pretty much hated the stock because it was out of step with the technology sector. The concern about IBM was so bad that between 2012 and 2020, the stock actually lost roughly half of its value. Contrarian investors with a long-term view, however, realized that IBM had updated its business many times before.

IBM is worth loving most of the time

The business revamp was difficult and took many years. It involved a large corporate spin-off, asset sales, and acquisitions, the largest of which was Red Hat. But IBM did what needed to be done to remain relevant. So while IBM is popular again because of its current business focus, the real reason to be obsessed with IBM for long-term investors is its proven ability to change with the world around it.

Video shows US Secretary of State Marco Rubio posing for photographs while placing a note in the Western Wall alongside Israeli Prime Minister Benjamin Netanyahu. Rubio is reportedly ‘seeking answers’ from officials after Israel’s strike on Qatar upended efforts to end the Gaza war.

Move over, Superman! The only thing more powerful than a locomotive at the moment is the U.S. stock market, which, seemingly faster than a speeding bullet, has rallied to new heights.

When the closing bell tolled on Sept. 11, the benchmark S&P 500 (^GSPC -0.05%), iconic Dow Jones Industrial Average (^DJI -0.59%), and growth stock-dependent Nasdaq Composite (^IXIC 0.44%) all catapulted to record closing highs. Everything from the evolution of artificial intelligence (AI) — a potentially $15.7 trillion global addressable opportunity by 2030, according to PwC — to the growing prospect of a Federal Reserve rate cut in September has fueled optimism and risk-taking.

But the tricky thing about Wall Street is that when things seem too good to be true, they usually are.

President Trump delivering remarks. Image source: Official White House Photo by Shealah Craighead, courtesy of the National Archives.

While a lot of attention is currently being paid to President Donald Trump’s tariff and trade policy and how it might adversely impact the U.S. economy by influencing the prevailing rate of inflation, there’s a far more sinister concern waiting in the wings, based on what history tells us.

Donald Trump’s tariff and trade policy is in the spotlight

Although the S&P 500, Dow Jones, and Nasdaq Composite have soared year to date, things looked a lot different in early April. Following the close of trading on April 2, President Trump unveiled his widely touted trade policy, which included a 10% global base tariff, as well as the implementation of higher “reciprocal tariffs” on dozens of countries deemed to have adverse trade imbalances with America. The stock market plunged in the subsequent days, with the S&P 500 tallying its fifth-steepest two-day decline since 1950.

To be fair, what Trump unveiled on April 2 and the current tariff policies in place today look markedly different. A number of countries/regions have hashed out trade deals with America, and the president has delayed the implementation date of reciprocal tariffs for select countries.

Additionally, there’s no guarantee Trump’s tariffs will legally remain in place. In November, the Supreme Court will consider the validity of the president’s tariffs following an appeal from the Trump administration after lower courts ruled most of his tariffs were illegal.

Despite these uncertainties, worry about Donald Trump’s tariff and trade policy, specifically pertaining to its effect on inflation, is heightened.

The domestic rate of inflation has moved decisively higher as the president’s tariffs take effect. US Inflation Rate data by YCharts.

In the three months since Trump’s tariffs began having a discernable impact on the U.S. economy, the inflation rate, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), jumped from 2.35% to 2.92%. It’s quite the jump, and it’s certainly raising eyebrows amid a weakening job market.

The biggest issue with Trump’s tariff policy, as told by four New York Federal Reserve economists who published a study in December 2024 for Liberty Street Economics, is that it does a poor job of separating output and input tariffs.

In their study, Do Import Tariffs Protect U.S. Firms?, the four New York Fed economists examined the impact of Trump’s China tariffs in 2018-2019 on the U.S. economy and businesses. What they found was added pricing pressure on domestic manufacturers caused by the China trade war. Whereas output tariffs are placed on finished products, an input tariff is a duty for a good used to complete the manufacture of a product in the U.S. This type of tariff runs the risk of increasing production costs and reigniting the prevailing rate of inflation.

While some degree of pricing power is a good thing for businesses, the inflationary ramp-up we’ve witnessed over the previous three months is a bit concerning.

Image source: Getty Images.

Wall Street’s ticking time bomb is nearing historic levels

But even though Donald Trump’s tariffs are pretty consistently in the headlines, they’re not Wall Street’s biggest concern. Based on historical precedent, valuation is the ticking time bomb ready to pull the rug out from beneath the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite at any moment.

Truth be told, there isn’t a one-size-fits-all blueprint when it comes to valuing stocks. That you might find a stock to be expensive while another investor believes it to be a bargain is precisely what makes the stock market a market in the first place.

However, there’s one valuation tool that leaves little interpretative wiggle room: the S&P 500’s Shiller price-to-earnings (P/E) ratio, also referred to as the cyclically adjusted P/E (CAPE) ratio.

The most familiar of all valuation tools is the P/E ratio, which divides a company’s share price by its trailing-12-month earnings per share (EPS). While this is a handy valuation measure for mature businesses, it often fails to pass muster during recessions and for high-growth companies. This isn’t a problem for the S&P 500’s Shiller P/E since it’s based on average inflation-adjusted EPS over the prior 10 years. It means shock events have minimal impact on the Shiller P/E ratio.

When back-tested 154 years to January 1871, the Shiller P/E has averaged a multiple of 17.28. As of the closing bell on Sept. 11, it clocked in at 39.58, which is the highest reading during the current bull market and the third-priciest multiple during a continuous bull market in over 150 years. The only two times the CAPE ratio has been higher are when it fractionally topped 40 during the first week of January 2022 and when it peaked at its all-time high of 44.19 in December 1999.

S&P 500 Shiller CAPE Ratio data by YCharts. CAPE Ratio = cyclically adjusted price-to-earnings ratio.

Admittedly, the S&P 500’s Shiller P/E isn’t a timing tool. Just because stocks are historically pricey, it doesn’t mean a game-changing innovation like artificial intelligence can’t keep valuations at nosebleed levels for months, perhaps even a few years. However, history is unmistakably clear in showing that premium valuations eventually end in short-term disaster.

Including the present, there have been six instances since 1871 where the Shiller P/E ratio has topped 30 for at least a two-month period. Following each of the previous five instances, the S&P 500, Dow Jones Industrial Average, and/or Nasdaq Composite tumbled between 20% and 89%. While the 89% is an outlier for the Dow during the Great Depression, plunges of 50% or more are not out of the question, as was witnessed during the bursting of the dot-com bubble in the early 2000s.

If there’s a silver lining for this ticking time bomb, it’s that bear markets are historically short-lived.

In June 2023, Bespoke Investment Group calculated the calendar-day length of every S&P 500 bull and bear market dating back to the start of the Great Depression in September 1929. Bespoke found that the average length of 27 documented S&P 500 bear markets was just 286 calendar days, or less than 10 months. In comparison, the average bull market stuck around for 3.5 times as long, or 1,011 calendar days.

Even though history is quite clear that trouble is brewing on Wall Street, long-term investors remain in the driver’s seat.

If you’ve been paying attention to the tech world for the past couple of years, you’ve likely noticed how unavoidable artificial intelligence (AI) is. Even if you haven’t been tuned into tech news, chances are good that you’ve come across AI in some form or fashion.

This AI hype has made many tech stocks go-tos for investors looking to capitalize on the new technology, but there have been very few stocks that Wall Street has obsessed over quite like Palantir Technologies (PLTR 4.14%). The stock is up over 120% year to date through Sept. 10, and up over 378% in the past 12 months.

Image source: Getty Images.

Why the obsession with Palantir?

The reason why Wall Street has become obsessed with Palantir is that the company has demonstrated that it’s not a one-trick pony.

For a while, Palantir was viewed as a niche data software company that served government agencies like the U.S. Department of Defense and CIA. However, the growth of its U.S. commercial business — thanks to its Artificial Intelligence Platform (AIP) — has shown that the company can scale in the private sector and compete in the mainstream enterprise AI space.

In the second quarter, Palantir’s U.S. commercial business increased its revenue 93% year over year to $306 million. Although it didn’t earn more than Palantir’s U.S. government revenue ($426 million), it was easily its fastest-growing segment.

Should you also be obsessed with Palantir?

Palantir showing additional revenue streams is encouraging, but if you’re not currently an investor, you should proceed with caution before going all in on the stock because of its extremely high valuation. Palantir is currently trading at close to 267 times its forward earnings, which is one of the highest in history on the stock market, regardless of the company.

This doesn’t make Palantir a bad investment, but such a high valuation means that investors have priced a lot of growth into the stock, and anything short of meeting these lofty expectations could result in a sharp pullback.

By&nbspAP with Doloresz Katanich

Published on
11/09/2025 – 8:13 GMT+2

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Klarna stock opened at $52 (€45) a share on Wednesday, a 30% premium on the company’s $40 pricing. It took roughly three-and-a-half hours for the specialists on the floor of the NYSE to manually price the first batch of trades of the company. The shares rose as high as $57 before losing some momentum and ending at $45.82, up 14.6%.

More than 34 million shares worth approximately $1.37 billion (€1.17bn) were sold to investors, making it the largest IPO this year, according to Renaissance Capital. That’s notable because 2025 has been one of the busier years for companies going public.

Founded in 2005 as a payments company, Klarna entered the US buy-now-pay-later market in 2015 in partnership with department store operator Macy’s. Since then, Klarna has expanded to hundreds of thousands of merchants and embedded itself in internet browsers and digital wallets as an alternative to credit cards. The company recently announced a partnership with Walmart.

The company is trading under the symbol “KLAR”. While Klarna was founded in Sweden and is a popular payment service in Europe, company executives said they made the decision to go public in the US as a signal that Klarna’s future growth opportunities lay with the American shopper.

“It’s the largest consumer market in the world, and it’s the biggest credit card market in the world. It’s a tremendous opportunity, from our perspective,” said CEO and co-founder Sebastian Siemiatkowski in an interview with The Associated Press ahead of the IPO.

Over the years and in multiple interviews, Siemiatkowski has made it clear that Klarna wants to steal away customers from the big credit card companies and sees credit cards as a high-interest, exploitative product that consumers rarely use correctly.

Klarna’s most popular product is what’s known as a “pay-in-4” plan, where a customer can split a purchase into four payments spread over six weeks. The company also offers a longer-term payment plan where it charges interest. The business model has caught on globally, particularly among consumers who are reluctant to use credit cards. The company said 111 million consumers worldwide have used Klarna.

The buy-now-pay-later market is booming

Klarna and other buy-now-pay-later companies have attracted increased public interest in recent years as the business model has caught on. State and federal regulators, as well as consumer groups, have expressed some degree of worry that consumers may overextend themselves financially on buy-now-pay-later loans just as much as they do with credit cards.

Siemiatkowski says the company is actively monitoring how consumers use their products, and the average balance of a Klarna user is less than $100 (€85.50). Because the company issues loans that are six weeks or less, Klarna argues it can more easily adjust its underwriting standards depending on economic conditions.

With Klarna going public, its co-founders are now billionaires. At Klarna’s IPO price of $40, Siemiatkowski’s 7% stake in the company is worth around $1bn (€850 million), while Victor Jacobsson, who left the company in 2012, owns an 8.4% stake in the company now worth $1.3bn (€1.11bn). Siemiatkowski said he did not sell shares as part of the IPO.

But with Klarna’s 20-year-long incubation period before going public, and several fundraising rounds, major parts of Silicon Valley are walking away with a handsome return for their patience. Sequoia Capital, the storied venture capital firm that was an early backer in the company, has accumulated a 21% ownership in Klarna worth roughly $3.15bn (€2.69bn). Silver Lake, another major VC firm, owns roughly 4.5% of the company.

Klarna reported second-quarter revenue of $823 million (€703.64mn) in August before going public and had an adjusted profit of $29m (€24.8mn). The delinquency rate on Klarna’s “pay-in-4” loans is 0.89% and on its longer-term loans for bigger purchases, the delinquency rate is 2.23%. Those figures are below the average 30-day delinquency rates on a credit card.

Klarna will now be the second-largest buy-now-pay-later company by market capitalisation behind Affirm. Shares of Affirm have surged more than 40% so far this year, putting the value of the company around $28bn (€23.94bn), helped by a belief among investors that buy-now-pay-later companies may take away market share from traditional banks and credit cards. Affirm fell slightly on Wednesday.

Klarna’s primary underwriters for the IPO were JPMorgan Chase and Goldman Sachs.

Some investors and analysts alike have expressed mixed feelings about Palantir Technologies (PLTR 4.00%) over the past couple of years. Yes, demand for the company’s software has been booming and translating into fantastic earnings growth. But this also has resulted in a soaring valuation as other investors piled into the stock. Palantir has traded for as much as 289 times forward earnings estimates in recent times, a level that many consider exorbitant.

But in recent weeks, Palantir stock has pulled back, dropping as much as 18% since early August. And this movement has pushed the stock price to a few dollars away from Wall Street’s average 12-month price forecast. Is it finally time to buy this high-growth player? Let’s find out.

Image source: Getty Images.

Why has Palantir soared?

So, first, let’s consider why Palantir, up a mind-blowing 1,900% over the past three years, has climbed so much in the first place. It’s important to note that, though Palantir has existed for more than 20 years, the company only launched an initial public offering five years ago. The company took its time refining its products and strategy and working to move closer to profitability before deciding on such an operation.

And though Palantir stock advanced in the months following its IPO, the stock truly started to pick up major momentum about two years ago. This coincides with the launch of the company’s Artificial Intelligence Platform (AIP), software that, integrating the power of AI, helps customers bring together all of their disparate data and use it to supercharge decision-making and growth.

Palantir, in the past, was most associated with government contracts, but the launch of AIP boosted the commercial business — and now both government and commercial revenues are soaring in the double digits quarter after quarter. Uses for AIP are vast, from the military applying it to real-time decision making on the battlefield to commercial customer United Airlines using it to predict maintenance issues.

All of this has helped Palantir reach profitability and grow the commercial business from a handful of customers just four years ago to 485 today.

This may be the beginning…

Chief executive Alex Karp in recent quarters has said growth is in its early stages, and in the latest letter to shareholders wrote, “This is still only the beginning of something much larger.” Considering the AI market is set to grow from billions of dollars today to trillions of dollars in just a few years, according to analysts’ forecasts, this may be very true.

Palantir’s AIP offers customers an opportunity to quickly and easily apply AI to their operations, and this sort of service already is showing itself to be in high demand — as need for AI grows, this could continue.

As mentioned above, the one problem that Palantir has faced over the past year or so is valuation. As some investors looked at the company’s booming sales and stellar ability to balance growth with profitability, they rushed to get in on this AI player. And that pushed many Wall Street analysts to warn investors about buying the stock at current valuations.

Now, though, following recent declines, the stock has been trading for less than $160. The average Wall Street share price target is about $151. Since Palantir has neared this average estimate, some investors may view the stock as more reasonably priced than it was in the past. The stock traded for more than $181 at its high in August.

And this also has lowered valuation, with the stock now trading at 243x forward earnings estimates, down from 289x just a month ago.

PLTR PE Ratio (Forward) data by YCharts

Is Palantir a buy?

Does this mean that now, on the dip, is a good time to buy Palantir? It’s important to note that, if you’re a value investor, you’ll still find Palantir expensive at today’s valuation. But it’s also important to say that it’s hard to apply such valuation measures to high growth tech stocks — since these measures reflect earnings estimates in the near term but don’t include the potential a few years down the road.

Meanwhile, demand for Palantir’s software is going strong and future prospects look bright so there’s reason to be confident about the company’s future. And Palantir’s recent drop, bringing it near Wall Street’s average 12-month price forecast, shows the stock may be approaching a level that could appeal to investors — especially those who thought the price was too high in the past.

All of this means, if you’re a growth investor looking for a potential long-term AI winner, it’s a great idea to buy Palantir now on the dip.

It’s the end of an era on Wall Street. In less than four months, Berkshire Hathaway‘s (BRK.A -1.26%) (BRK.B -1.40%) Warren Buffett will retire from the CEO role he’s held for six decades. During his 60 years at the helm, he’s overseen a roughly 6,140,000% cumulative gain in his company’s Class A shares (BRK.A), which compares quite favorably to the roughly 43,300% total return, including dividends, delivered by the benchmark S&P 500 (^GSPC -0.32%) over the same timeline.

The Oracle of Omaha’s outperformance has made him the most-followed money manager on Wall Street, with some investors riding his coattails to substantial long-term gains.

Berkshire Hathaway CEO Warren Buffett. Image source: The Motley Fool.

But the other factor — aside from market-crushing returns — investors have come to appreciate about Buffett is his willingness to share his thoughts and the company traits he looks for when taking stakes in wonderful businesses. Whether it’s Berkshire’s annual shareholder letter or the company’s yearly meeting, Buffett is no stranger to offering up nuggets of wisdom.

While books have been written about Warren Buffett’s investment ideals, four ominous words from Berkshire’s latest shareholder letter perfectly encapsulate why he’s such a phenomenal investor, and explain why his recent investment activity sends a clear warning to Wall Street.

Warren Buffett sends a $344 billion warning to Wall Street using just four words

Investors are likely aware of some of the Oracle of Omaha’s core principles. For example, Buffett prefers to buy stakes in companies with sustainable competitive advantages, strong management teams, and hearty capital return programs. He also looks at investments as multiyear or multidecade commitments, with eight stocks in Berkshire’s portfolio currently considered “indefinite” holdings.

But possibly the best investment advice Buffett has ever offered, which perfectly encapsulates the promise and peril of the stock market, was penned in Berkshire Hathaway’s latest annual shareholder letter. While discussing where his company has money allocated, Buffett proclaimed, “Often, nothing looks compelling.”

At his core, Berkshire’s billionaire boss is an unwavering value investor. Though there are some unwritten “Buffett rules” that sometimes get broken, such as investing for the short-term via an arbitrage opportunity, Berkshire’s head honcho isn’t willing to buy a stock if its valuation doesn’t make sense.

Warren Buffett Indicator hits 215%, the most expensive stock market valuation in history 👀 pic.twitter.com/kjnbGN67be

— Barchart (@Barchart) August 29, 2025

At the moment, stock valuations are historically expensive. Keeping in mind that valuation is subjective, the affably dubbed “Buffett Indicator” recently hit an all-time high. This valuation measure adds up the cumulative market cap of all public companies in the U.S. and divides this figure by U.S. gross domestic product (GDP).

The market cap-to-GDP ratio, which has averaged closer to 85% of U.S. GDP when back-tested to 1970, surpassed 214% in late August. In other words, finding value has been exceedingly difficult for Buffett and his team.

Beginning in October 2022, the Oracle of Omaha began selling more stock than he was purchasing. This net-selling activity has been ongoing for 11 consecutive quarters (Oct. 1, 2022 – June 30, 2025), totaling $177.4 billion in net stock sales. All the while, Berkshire Hathaway’s cash pile, which includes cash, cash equivalents, and U.S. Treasuries, has ballooned to a near-record $344.1 billion.

Despite sitting on $344 billion in capital, Buffett prefers to be a net-seller of stocks, and isn’t even buying shares of his own company any longer. It’s as direct a warning as Wall Street will get from Berkshire’s billionaire chief.

Image source: Getty Images.

Patience pays off handsomely in the stock market

Though Buffett’s ominous advice – “often, nothing looks compelling” — perfectly explains why he’s been more of a seller than a buyer amid a historically pricey stock market, it also provides a backdrop of how Berkshire’s boss has been able to deliver outsized returns spanning six decades.

Fundamentally, Warren Buffett is well aware that the U.S. economy and stock market have both expanded over the long run. Even though recessions and stock market corrections are normal and inevitable aspects of respective economic and stock market cycles, optimism prevails over long periods. This means being patient and waiting for price dislocations to become apparent is a winning and time-tested strategy — in case the nearly 6,140,000% aggregate return for Berkshire’s Class A shares didn’t give it away.

In August 2011, shortly after the worst of the financial crisis, the Oracle of Omaha engineered a $5 billion stake in Bank of America (BAC -1.29%) preferred stock. While Bank of America wasn’t desperate for cash, it wasn’t going to turn down the opportunity to shore up its balance sheet amid ongoing litigation and a still-uncertain loan portfolio.

When Buffett initially made this investment, Bank of America’s common stock was trading at a 62% discount to its book value. But in the summer of 2017, Berkshire exercised its warrants to purchase 700 million shares of BofA stock at $7.14 per share. This August 2011 price dislocation instantly netted Berkshire a $12 billion (unrealized) profit, which has since grown even larger.

Berkshire’s billionaire CEO recognized a price dislocation with Apple (AAPL -0.16%), as well, in early 2016. The maker of the beloved iPhone was trading at just 10 to 15 times forward-year earnings nine years ago, which is an inexpensive valuation for a company that had been consistently growing by high single digits to low double digits annually. Apple stock has jumped approximately tenfold since Buffett first entered the position, with artificial intelligence euphoria and the company’s rapidly growing services segment doing a lot of the heavy lifting.

Although it can be frustrating waiting for Warren Buffett and his top advisors to deploy Berkshire Hathaway’s treasure chest, being patient has paid off handsomely for decades. When price dislocations do become apparent in the future, Buffett or his successor Greg Abel will be ready to pounce.

Donald Trump says he can be the first Republican presidential nominee to win California since 1988, but his rhetoric on immigration, the environment and guns risks pushing the strongly Democratic state even further out of his reach.

In recent travels across the state, Trump has shown no inclination to modulate his language the way nominees normally do as they turn from their party’s primary toward a wider general-election audience.

Instead, he has emphasized positions that are not only out of step with independents and Democrats whose support he would need to carry California, but also with many fellow Republicans in the state.

“He’s reinforcing all of the negative stereotypes of the Republican brand that have been hurting us for 20 years, which is a peculiar approach to putting California back in play,” said Mike Madrid, a Republican campaign consultant in Sacramento.

At rallies in Anaheim, San Diego, Sacramento, San Jose and Redding over the last week, Trump has riled up overwhelmingly white crowds with his call to build a wall along the southern border and force Mexico to pay for it.

“It’s going to be a big, fat, beautiful wall!” Trump shouted to cheering supporters Thursday night in San Jose.

More than 7 in 10 Californians oppose building a border wall, according to a poll last month by the Public Policy Institute of California.

Though Republicans favored the proposal, they are a sharply diminished force in California elections, thanks largely to a GOP hard line on illegal immigration that has turned away the state’s growing Latino and Asian population. The party’s share of California voters has slid to 27%.

In San Diego last week, Trump deepened his trouble with Latinos as he attacked the judge overseeing a fraud lawsuit against Trump University, his defunct real estate program, calling the judge a Mexican and saying, “I think that’s fine.”

He went further Thursday and Friday, saying the ethnic heritage of U.S. District Judge Gonzalo Curiel, who was born in Indiana to Mexican immigrants, made it a conflict of interest for him to handle the case. “He’s a Mexican,” Trump told CNN. “We’re building a wall between here and Mexico.”

Bill Carrick, a veteran California strategist running the U.S. Senate campaign of Democrat Loretta Sanchez, called the initial remark “blatantly racist” and “blatantly stupid.”

“It just makes it harder for him to have any appeal to Latino voters at all – and a lot of other voters,” Carrick said.

Republican leaders have voiced similar concerns on a national scale. Senate Majority Leader Mitch McConnell of Kentucky said Thursday that he worries Trump might drive Latinos from the Republican Party the way GOP nominee Barry Goldwater did with blacks after opposing the Civil Rights Act during the 1964 presidential race.

McConnell, who has endorsed Trump, told CNN that Trump made a “big mistake” last week by attacking Republican Gov. Susana Martinez of New Mexico, the nation’s first Latina governor.

Trump spokeswoman Hope Hicks did not respond to a request for comment.

Trump can be deft about calibrating his rhetoric at times, routinely muting some of his more controversial positions.

Apart from answering reporters’ questions, Trump rarely discusses his support for barring Muslims from entering the U.S., punishing doctors who perform abortions, overturning the Supreme Court ruling that legalized same-sex marriage, and deporting millions of immigrants in the country illegally.

Trump also refuses to answer questions about his demand in 2011 that President Obama release his birth certificate to prove he was born in the U.S.

And he rarely talks about his belief that climate change is a hoax, a topic he often raised on Twitter in the years before his run for president – and one that could cause him trouble in California.

On the eve of his California visit last week, Trump told a petroleum conference in North Dakota that he would withdraw the United States from the landmark Paris treaty to curb greenhouse gas emissions.

“In a Trump administration, political activists with extreme agendas will no longer write the rules,” he said.

But 8 in 10 Californians, including half of Republicans, viewed global warming as a serious threat to the state’s economy and quality of life, a Public Policy Institute survey found last year. And nearly two-thirds of Californians supported the state making its own policies separate from the federal government to address global warming.

At his California rallies, Trump has steered clear of climate change. But in Fresno, he mocked environmentalists, saying their misguided efforts “to protect a certain kind of 3-inch fish” were depriving farmers of sorely needed water.

It was a sharp break with the custom of California Republicans to use support for environmental protections to appeal to Democrats and the independents who side with them in most statewide elections.

The state’s last Republican governor, Arnold Schwarzenegger, made efforts to cut greenhouse gas emissions a cornerstone of his 2006 reelection campaign. Schwarzenegger also broke with conservatives in his party on immigration, supporting a path to citizenship for many of those in the country illegally.

When he was first elected in the 2003 recall election, Schwarzenegger also had advantages Trump will not: Most Californians thought the state was moving in the wrong direction, and they strongly disapproved of its Democratic leadership.

“That’s not the mood in California now,” said pollster Mark Baldassare, president of the Public Policy Institute of California.

Trump’s staunch opposition to gun control could also pose problems in the state, where polls have found most voters believe in stronger restrictions on access to firearms. At all of his campaign stops here, Trump has touted his endorsement by the National Rifle Assn. and accused his presumed Democratic rival, Hillary Clinton, of trying to abolish the 2nd Amendment.

“We’re going to keep our guns — don’t worry about it,” Trump told the crowd in Sacramento. “You need them.”

Beth Miller, a Republican campaign consultant in Sacramento, frets that Trump could cause long-term harm to GOP candidates in California who embrace his candidacy.

“It could potentially backfire for years to come,” she said. “I think there are going to be a lot of Republican candidates who are going to have to very delicately distance themselves from Donald Trump’s rhetoric.”

As for Trump himself, his prospects in California are grim, according to the latest USC Dornsife/Los Angeles Times poll. It found that 71% of California voters had an unfavorable impression of him, and Clinton would beat him in a hypothetical November match up by 26 points.

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Twitter: @finneganLAT

UPDATES:

June 3, 5:41 p.m.: This article was updated with additional remarks by Trump.

June 2, 8:09 p.m.: This article was updated with a quote from Trump in San Jose.

Investors in search of stocks that can produce dramatic gains in a short time frame will want to turn their heads toward the healthcare sector. A handful of stocks in the space more than doubled in price recently.

Shares of Precigen (PGEN -4.61%) and Mineralys Therapeutics (MLYS 4.86%) have already risen more than 100% since the end of July. Despite the recent run-ups, Wall Street experts who follow these stocks believe they could soar even further.

Image source: Getty Images.

1. Precigen

From the end of July through Friday, Sept. 5, shares of Precigen shot 155% higher. The market cheered because the drugmaker earned approval from the Food and Drug Administration (FDA) for its first treatment. Papzimeos is a cell-based immunotherapy for the treatment of recurrent respiratory papillomatosis (RRP), a rare disease that results in tumors lining the respiratory tract.

Papzimeos is the first and only treatment approved by the FDA to treat an estimated 27,000 patients with RRP. The agency granted the drug full approval instead of waiting for a confirmatory study. In the single-arm trial supporting its application, 18 out of 35 patients responded well enough to avoid tumor removal surgery for at least 12 months after treatment with Papzimeos.

The agency and analysts following Precigen were encouraged by the fact that 15 out of the initial 18 responders remained surgery-free 24 months after treatment with Papzimeos. In response, Swayampakula Ramakanth from HC Wainwright reiterated a buy rating and an $8.50 price target that implies a 95% gain in the year ahead.

2. Mineralys Therapeutics

Shares of Mineralys Therapeutics rose 146% from the end of July through Sept. 5. Investors were excited about a successful new funding round to support continued development of lorundrostat, its lead candidate. On Sept. 2, Mineralys suspended an at-the-money equity offering and, within a couple of days, completed a secondary offering that ended up raising $287.5 million.

In August, investors hardly noticed a presentation of phase 3 trial results regarding lorundrostat. Patients who added the aldosterone inhibitor to the medications they were already taking reduced their systolic pressure by 16.9 millimeters of mercury after six weeks on treatment, compared to just 7.9 millimeters of mercury for patients who received a placebo.

Mineralys’ stock shot higher after AstraZeneca reported arguably inferior 12-week data for an aldosterone inhibitor it’s developing called baxdrostat. At week 12, it reduced patients’ systolic pressure by 15.7 millimeters of mercury, compared to 5.8 millimeters of mercury for the placebo group.

Less than a week ahead of Mineralys’ successful secondary stock offering, Bank of America analyst Greg Harrison boosted his target for the stock to $43 per share. The raised target implies a gain of about 24% from recent prices.

Time to buy?

Before you get too excited about Mineralys and its hypertension candidate, it’s important to realize the pre-commercial-stage business finished June with $325 million in cash, or enough to last into 2027. Diluting shareholder value to raise additional capital that could now push the stock price higher means the company isn’t super confident that it can quickly submit an application and earn approval for its lead candidate before the beginning of 2027.

MLYS Shares Outstanding data by YCharts.

At recent prices, Mineralys sports a huge $2.7 billion market cap that could shrink significantly if it looks like timing will become an issue that allows AstraZeneca’s candidate to gain and maintain a large share of the market for new hypertension drugs. It’s probably best to wait and see whether this company can earn approval for lorundrostat in a timely manner before adding the stock to your portfolio.

With a market cap of $1.3 billion at recent prices, expectations for Precigen are lower than they probably should be. Papzimeos is already approved and will launch unchallenged in its niche market.

Papzimeos’ addressable patient population is small, but a list price north of $200,000 per year per patient means it could rack up more than $1 billion in annual sales at its peak. Since drugmaker stocks generally trade at mid- to high-single-digit multiples of total sales, adding some shares to a diversified portfolio now looks like a smart move.

New York Yankees manager Aaron Boone questioned the legality of a bat used by Houston Astros outfielder Taylor Trammell during Thursday’s series finale.

Down by five runs in the bottom of the ninth inning, Houston mounted a comeback by starting off the inning with a single by catcher Victor Caratini and a double off the wall by Trammell. After the at-bat, Boone asked the umpires to check the bat used by the 27-year-old because of its “discoloration.”

Rule 3.02(c) by Major League Baseball bans the usage of a “colored bat in a professional game” unless approved by the league.

The crew chief, Adrian Johnson, took the bat and called a review to verify the legality of the discoloration on barrel.

After the review, the bat was confiscated by the umpires, authenticated and sent to the league office to be inspected, according to Astros manager Joe Espada.

“The bat was worn down a little bit,” Espada said. “He uses that bat all the time and I guess they thought it was an illegal bat.

“I thought it was … whatever,” he added.

Boone said they noticed the color of the bat earlier in the series and brought it up to the league officials on Thursday.

“You’re not allowed to do anything to your bat,” Boone said after the game. “I’m not saying he was … we noticed it and the league thought it maybe it was illegal too.”

After the game, the outfielder remained confused.

“I feel kind of defensive right now, more so a test of my character, like I’m going to willingly do that,” Trammell said. “Just kind of lost on that thing, and if anyone knows me, knows I’m never going to cheat or anything like that.”

Trammell, who played a couple of games for the Yankees last season, stayed on second base. The Astros later scored a run on a single by designated hitter Yordan Alvarez but the Yankees held on to win the game 8-4.

The Trump administration made no attempt to hide its goals when it came to tariffs. As the current U.S. president ran for office, he made it very clear to U.S. voters and the world that they should expect higher tariffs. And that’s exactly what his administration has offered up in dramatic fashion. Some on Wall Street worry that the tariffs could turn the bull market into a bear. Here’s how a long-term investor should be thinking about this issue.

The tariffs are coming! The tariffs are coming!

To simplify what is a fairly complex issue, a tariff is a tax imposed on imported goods. The Trump administration has been using tariffs in an aggressive attempt to reshape global trade. This will have an impact on the economy and the stock market, but what that might be is hard to define today. Simply put, so many things are up in the air right now that nobody knows where the chips are going to fall.

Image source: Getty Images.

That said, one concern is that higher tariffs will eventually be passed through to consumers. That would increase inflation, crimp consumption, and lead to lower earnings for corporate America. The flip side of that argument is that companies have increased prices so much in recent years that they can’t easily push higher costs onto consumers, and, thus, companies are likely to absorb the tariff hit. That would mean lower profit margins. Even here, however, Wall Street could still end up in the dumps as companies earn less and investors react to that negative news.

It seems like nothing good can come of this whole tariff thing. Except that, so far, the market hasn’t really paid much attention. The Vanguard S&P 500 ETF (VOO +0.00%) is up more than 10% so far in 2025. Yes, there was a brief market correction early in the year, but the S&P 500 index, which is what the Vanguard S&P 500 ETF tracks, seems to have shrugged that off, as it is again trading near all-time highs.

VOO data by YCharts.

Don’t get too caught up in the short term

Here’s the big takeaway from the tariff kerfuffle: It is shockingly hard to predict performance on Wall Street. Some people get market turns right once, but very few have been able to time the ups and downs with any consistency. For most investors, trying to jump in and out of the market — a practice known as market timing — is a mistake.

It is far better to buy and hold for the long term, perhaps including an exchange-traded fund (ETF) like Vanguard S&P 500 ETF in the mix. Indeed, focusing on a well-diversified portfolio is key, as it will help to soften the impact of the market’s gyrations over time. Which brings the story back to the potential for a bear market. Simply put, there will be one.

That’s not a prediction; it is just a statement of fact. Eventually, for some reason, investors will go from being bullish to being bearish. That’s just what market history tells us is the norm on Wall Street. Why it happens will be the topic of debate, and eventually, some common cause will be determined. Maybe it will be tariffs. It could also be geopolitical tensions, which are very high today. Or maybe artificial intelligence (AI) won’t turn out to be as profitable as investors expect, and that will lead the market lower, given that AI enthusiasm has helped lead the market higher.

Something will eventually give way, and there will be a bear market. Then, after some period of time, a bull market will arrive. It’s just how the market works. You should spend more of your time thinking about ways to save money and how to invest wisely. Investing wisely means taking into consideration the ever-present risk of a bear market.

Keep it simple and think long term

Far too often, investors get caught up in short-term market movements. The big picture is more important, including the sometimes erratic upward march of stocks over the long term. Sticking to an investment plan is hard, but it is likely to result in better long-term performance than trying to jump in and out of the market. Which is why a simple portfolio consisting of an S&P 500 index fund and a broadly diversified bond fund or ETF — say, in a 60% stock/40% bond breakdown — could be all you need.

^SPX data by YCharts.

Bonds help provide safety during market turmoil, and stocks provide growth over the long term. That combination will allow you to ride out bear markets without letting your emotions lead you into making investment mistakes (like selling everything you own and never investing again). Another option is just to buy a balanced mutual fund that does all the investing work for you. That leaves you to focus on saving money, which is where you will likely have the biggest impact on your long-term wealth, anyway.

If you do choose to buy individual stocks, which can be a lot of fun, don’t focus on the short term. Or to put it another way, think in decades, not days. When you do that, a bear market will probably end up looking like just a small hiccup. And it won’t really matter to you what precipitated the bear, anyway, because you will be too busy. You see, long-term investors often find their best investments during deep market declines.

For much of the last 30 years, investors have had a next-big-thing innovation to captivate their attention. But in rare instances, two or more hyped trends can coexist. Though the rise of artificial intelligence (AI) is the primary headline-grabber at the moment, investor euphoria surrounding stock splits in high-profile companies comes in a close second.

A stock split is an event that allows a publicly traded company to cosmetically adjust its share price and outstanding share count by the same factor. The “cosmetic” aspect of these changes has to do with stock splits having no effect on a company’s market cap or its underlying operations.

But although these changes are superficial, they’re often viewed very differently by investors on Wall Street. Reverse splits, which are designed to increase a company’s share price, are typically viewed as a situation to avoid by investors. Businesses that need to increase their share price are often doing so to avoid delisting from a major stock exchange and may be operating from a position of weakness.

Image source: Getty Images.

In comparison, investors almost always gravitate to companies announcing and completing forward splits. This type of split reduces the share price (and correspondingly increases the share count) to make it more nominally affordable for retail investors who can’t purchase fractional shares with their broker. Generally, if a business needs to reduce its share price to make it more “affordable” for everyday investors, it must be doing something right from an operating standpoint.

To date, three prominent companies have announced and completed a forward stock split in 2025. One of these high-flying stocks — which has gained just shy of 300% over the trailing-three-year period — is becoming the newest member of the benchmark S&P 500 (^GSPC 0.24%), effective as of the start of trading today, Aug. 28.

The newest member of the benchmark S&P 500 completed its first-ever stock split this year

The phenomenal business that’s forever changing the broad-based S&P 500 is automated electronic brokerage firm Interactive Brokers Group (IBKR -2.37%).

Unlike auto parts chain O’Reilly Automotive, which completed a 15-for-1 split in June, and Fastenal, which effected its ninth forward split in May since going public in 1987, Interactive Brokers had never completed a split. That changed when its 4-for-1 split was completed in mid-June.

The S&P 500, which consists of 500 of the largest (and generally profitable) public companies, tends to change a bit each year. Because of mergers and acquisitions, as well as poor stock performance, not all of the 500 components in the benchmark index stick around.

For instance, pharmacy chain Walgreens Boots Alliance (WBA 0.55%) is being acquired by private equity firm Sycamore Partners in an all-cash deal, with a potential divested asset proceed right to come for remaining shareholders. While there’s no set closing date for the Walgreens deal, it’s expected to wrap up before the end of the year. This means it’s only a matter of time before the S&P 500 needs a new member.

Interactive Brokers Group checked all the right boxes to become the S&P 500’s newest entrant and replace Walgreens Boots Alliance. It handily surpasses the minimum market cap requirement of $22.7 billion, as of July 1, 2025, more than meets than minimum monthly trading volume requirements, and has been profitable over the trailing four quarters.

Entering the S&P 500 means index funds that attempt to mirror the performance of this broad-based index will be buying up shares of Interactive Brokers Group stock.

Image source: Getty Images.

Investing aggressively in automation has given Interactive Brokers an edge

However, entering the S&P 500 today represents just a short-term milestone for a company that’s been firing on all cylinders.

Without question, Interactive Brokers is a business that thrives off of the nonlinearity of stock market cycles. Though stock market corrections and bear markets are normal, healthy, and inevitable events on Wall Street, they’re historically short-lived.

Based on an analysis from Bespoke Investment Group that was published on X (formerly Twitter) in June 2023, the average S&P 500 bear market since the start of the Great Depression in September 1929 lasted only 286 calendar days, or less than 10 months.

On the other end of the spectrum, the typical S&P 500 bull market has endured 1,011 calendar days, or roughly 3.5 times longer. Bull markets tend to encourage investors to trade and put more money to work in the stock market, which is good news for online brokers.

But what’s really helped Interactive Brokers Group stand out is its investments in technology and automation, which have been targeted at retail investors.

Aggressively investing in its platform and emphasizing automation has lowered its operating expenses and allowed the company to be more competitive in other areas where it can lure/retain retail investors. For example, Interactive Brokers offers a higher interest rate on cash held in customer accounts than its competitors provide, and its margin loan rates are notably lower than its peers. It’s able to maintain these dangling carrots thanks to its prudent investments in automation.

Every key performance indicator (KPI) for Interactive Brokers is currently growing by a double-digit percentage from the prior-year period. As of the end of June, total customer accounts jumped 32% to 3.87 million from the comparable period last year, with customer equity rising 34% to nearly $665 billion. Perhaps most importantly, daily average revenue trades rose 49% to 3.55 million, which signals that its clients are trading more than ever before.

While a nearly 300% move higher for Interactive Brokers Group stock may merit a short breather at some point, the company’s KPIs point to additional long-term upside.

Arguably, nothing has commanded the attention of professional and everyday investors quite like artificial intelligence (AI). In Sizing the Prize, the analysts at PwC forecast AI would provide a $15.7 trillion boost to the global economy by 2030, with $6.6 trillion tied to productivity improvements, and the remainder coming from consumption-side effects.

Excitement surrounding this technology has sent some of the market’s largest and widely held AI stocks soaring, including AI-data mining specialist Palantir Technologies (PLTR 2.37%) and electric-vehicle (EV) manufacturer Tesla (TSLA 1.42%).

But just because these stocks have been (thus far) unstoppable, it doesn’t mean optimism is universal among analysts. Two Wall Street analysts who are respective longtime bears of Palantir and Tesla stock believe both companies will lose most of their value.

Image source: Getty Images.

1. Palantir Technologies: Implied downside of 72%

There’s a solid argument to be made that Palantir has been the hottest AI stock on the planet since 2023 began. Shares have rallied approximately 2,370%, with Palantir adding more than $360 billion in market value, as of the closing bell on Aug. 22.

Both of the company’s core operating segments, Gotham and Foundry, lean on AI and machine learning. Gotham is Palantir’s breadwinner. It’s used by federal governments to plan and execute military missions, as well as to collect/analyze data. Meanwhile, Foundry is an enterprise subscription service that helps businesses better understand their data and streamline their operations. Neither operating segment has a clear replacement at scale, which means Palantir offers a sustainable moat.

But in spite of Palantir’s competitive edge, RBC Capital Markets’ Rishi Jaluria sees plenty of downsides to come. Even though Jaluria raised his price target on Palantir shares for a second time since 2025 began, his $45 target implies downside of up to 72% over the next year.

If there’s one headwind Jaluria consistently presents when assigning or reiterating a price target on Palantir, it’s the company’s aggressive valuation. Shares closed out the previous week at a price-to-sales (P/S) multiple of roughly 117!

Historically, companies that are leaders of next-big-thing technology trends have peaked at P/S ratios of approximately 30 to 40. No megacap company has ever been able to maintain such an aggressive P/S premium. While Palantir’s sustainable moat has demonstrated it’s worthy of a pricing premium, there’s a limit as to how far this valuation can be stretched.

Jaluria has also previously cautioned that Foundry’s growth isn’t all it’s cracked up to be. Specifically, Jaluria has opined that Foundry’s tailored approach to meeting its customers’ needs will make scaling the platform a challenge. Nevertheless, Palantir’s commercial customer count surged 48% to 692 clients in the June-ended quarter from the prior-year period, which appears to be proving RBC Capital’s analyst wrong.

There’s also the possibility of Palantir stock being weighed down if the AI bubble were to burst. History tells us that every next-big-thing trend dating back three decades has undergone a bubble-bursting event early in its expansion. While Palantir’s multiyear government contracts and subscription revenue would protect it from an immediate sales decline, investor sentiment would probably clobber its stock.

Image source: Tesla.

2. Tesla: Implied downside of 94%

Over the trailing-six-year period, shares of Tesla have skyrocketed by more than 2,200%. Though Tesla hasn’t moved in lockstep with other leading AI stocks, its EVs are increasingly reliant on AI to improve safety and/or promote partial self-driving functionality.

Tesla was the first automaker in more than a half-decade to successfully build itself from the ground up to mass production. It’s produced a generally accepted accounting principles (GAAP) profit in each of the last five years, and it delivered in the neighborhood of 1.8 million EVs in each of the previous two years.

In spite of Tesla’s success and it becoming one of only 11 public companies globally to have ever reached the $1 trillion valuation mark, Gordon Johnson of GLJ Research sees this stock eventually losing most of its value. Earlier this year, Johnson reduced his price target on Tesla to just $19.05 per share, which implies an up to 94% collapse.

Among the many concerns cited by Johnson is Tesla’s operating structure. Whereas other members of the “Magnificent Seven” are powered by high-margin software sales, Tesla is predominantly selling hardware that affords it less in the way of pricing power. Tesla has slashed the price of its EV fleet on more than a half-dozen occasions over the last three years as competition has ramped up.

Johnson has also been critical of Tesla’s numerous side projects, which are providing minimal value to the brand. Although energy generation and storage products have been a solid addition, the company’s Optimus humanoid robots and extremely limited robotaxi service launch have been grossly overhyped.

This builds on a larger point that Tesla CEO Elon Musk has a terrible habit of overpromising and underdelivering when it comes to game-changing innovations at his company. For instance, promises of Level 5 full self-driving have gone nowhere for 11 years, while the launch of the Cybertruck is looking more like a flop than a success.

Furthermore, Tesla’s earnings quality is highly suspect. Though the company has been decisively profitable for five straight years, more than half of its pre-tax income in recent quarters has been traced back to automotive regulatory credits and net interest income earned on its cash. In other words, a majority of Tesla’s pre-tax income derives from unsustainable and non-innovative sources that have nothing to do with its actual operations. Worse yet, President Trump’s flagship tax and spending bill, the “Big, Beautiful Bill” Act, will soon put an end to automotive regulatory credits in the U.S.

What investors are left with is an auto stock valued at north of 200 times trailing-12-month earnings per share (EPS) whose EPS has been declining with consistency for years. While Johnson’s price target appears excessively low, paying over 200 times EPS for a company that consistency underdelivers is a recipe for downside.

Aug. 26 (UPI) — U.S. Department of Homeland Security Secretary Kristi Noem on Tuesday approved the seventh waiver intended to hasten construction of the border wall in Texas by sidestepping environmental reviews and other requirements.

The waiver applies to about five miles of a new 30-foot tall border wall in Starr and Hidalgo counties near the southern tip of the state, according to a department press release. The move is part of President Donald Trump‘s long-held goal of erecting a border wall along the southern border as part of his hardline approach to immigration.

With waiver in hand, Noem will be able to override the National Environmental Policy Act and other similar requirements. In a document justifying the move, Noem cited a high level of illegal border crossings and drug trafficking in the area. She wrote that in the last four years authorities had apprehended 1.5 million people trying to cross illegally and had seized more than 87 pounds of heroin, and more than 118 pounds of fentanyl, among other drugs.

However, the Center for Biological Diversity blasted the decision in a press release, citing figures showing that border crossings have plummeted over the last year. The center stated that the area is home to endangered ocelots, aplomado falcons, hundreds of migratory birds as well as plants that would be harmed by the wall.

“There’s a special cruelty in walling off national wildlife refuges that were created for conservation,”Laiken Jordahl, the center’s Southwest Conservation Advocate, said in the statement. “These lands exist to protect endangered species and connect fragmented habitat, not to be bulldozed for Trump’s wall.”

The center has previously sued the Trump administration over past waivers.

In July, the Noem signed a similar waiver for 17 miles of the barrier to prevent migrants from swimming across the Rio Grande. A month earlier, Noem took a similar action for a 27-mile stretch in Arizona near Tucson and another that extended into New Mexico.

U.S. Customs and Border Protection has about 100 miles of the barrier in varying states of completion with money from previous appropriations, according to the announcement. The so-called One Big Beautiful Bill included $46.5 billion for the project that will fund secondary walls, waterborne barriers, as well as patrols, cameras, sensors and others.

Wall Street analysts tend to be a decidedly optimistic bunch. Of the 503 stocks in the S&P 500 (^GSPC -0.43%) (there are more than 500 because some companies have multiple share classes), analysts rate 409 as buys or strong buys. As you might imagine, the artificial intelligence (AI) stocks that have propelled the market higher in recent years are among Wall Street’s favorites.

However, this bullishness has its limits. There’s an especially popular AI stock among retail investors that could plunge 70% or more, according to one Wall Street analyst.

Image source: Getty Images.

An AI favorite

The stock I’m referring to is Palantir Technologies (PLTR -0.98%), which been one of the hottest stocks on the market. Palantir has skyrocketed more than 23x since the beginning of 2023.

Sure, Palantir’s shares have pulled back by a double-digit percentage from its recent high. However, the stock has still roughly doubled year to date. That’s enough to rank Palantir as the best-performing member of the S&P 500.

The excitement about Palantir stems primarily from the growing demand for its products. The company makes software for analysis, pattern detection, and AI-assisted decision-making. In the second quarter of 2025, Palantir’s revenue jumped 48% year over year, and the company projects next quarter’s revenue growth will be even higher.

Palantir CEO Alex Karp wrote to shareholders earlier this month, “For a start-up, even one only a thousandth of our size, this growth rate would be striking, the talk of the town.” He added, “For a business of our scale, however, it is, we continue to believe, nearly without precedent or comparison.” Karp thinks, “This is still only the beginning of something much larger and, we believe, even more significant.”

The biggest Palantir bear on Wall Street

One analyst isn’t on the Palantir bandwagon, though. RBC Capital‘s Rishi Jaluria is the biggest Palantir bear on Wall Street. His 12-month price target for the stock is a little over 70% below the AI software company’s current share price, and that’s after Jaluria raised his price target from $40 to $45 earlier this month.

Before Palantir’s Q2 update, Jaluria wrote to investors that Palantir’s “valuation seems unsustainable.” Even after Palantir’s strong earnings results, Jaluria pointed to the stock’s “unfavorable risk-reward profile.”

Several Wall Street analysts are concerned about Palantir’s valuation with its sky-high forward price-to-earnings ratio (P/E) of 250. Three others, in addition to Jaluria, rated the stock as an underperform or sell in a survey of analysts conducted by LSEG in August. Another 17 analysts recommended holding the stock, with only four rating Palantir as a buy or strong buy.

However, Jaluria is much more negative about Palantir stock than his peers. The average 12-month price target for Palantir is only slightly below the current share price.

Jaluria isn’t bearish about every AI stock, though. The RBC analyst thinks some companies will be bigger winners than others as AI adoption increases. He has especially singled out software leaders, including Microsoft and Intuit, as good picks.

Could Palantir really plunge more than 70%?

Could RBC’s Jaluria be right that Palantir’s share price could plunge more than 70%? Maybe. However, I suspect that his low price target is overly pessimistic.

Don’t get me wrong — I agree with Jaluria and other analysts who view Palantir as overpriced. The company’s growth prospects — even though they’re impressive — don’t justify its stock valuation, in my opinion. I think Jefferies analyst Brent Thill is correct in stating that Palantir’s premium multiple is “disconnected from even optimistic growth scenarios.”

I suspect that we could see Palantir’s share price fall well below the current level over the next 12 months. But I doubt that Palantir’s share price will fall nearly as much as Jaluria predicts.

Mizuho analyst Gregg Moskowitz recently argued that Palantir’s “uniqueness demands substantial credit,” pointing to the company’s ability to profit from AI, government digitization, and other trends. If he’s right (and I think he is), it means that Palantir could have a higher floor than the stock’s biggest Wall Street bears project.

There’s at least one good thing to say about Iovance Biotherapeutics (IOVA 5.71%), a small-cap biotech. The drugmaker is an innovative company. It developed Amtagvi, a medicine that became the first of its kind approved for advanced melanoma (skin cancer).

However, this breakthrough hasn’t led to solid performances. Since Amtagvi’s launch last year, Iovance Biotherapeutics’ stock has been southbound. Even so, with an average price target of $9.10, which implies a potential upside of 261% from its current levels, Wall Street continues to have faith in the company. Should investors consider buying Iovance Biotherapeutics’ shares?

Image source: Getty Images.

What’s going on with Iovance Biotherapeutics?

The process involved in manufacturing and administering Amtagvi is complex. It requires physicians to collect a piece of the patients’ tumors from which they extract T cells (which, among other things, help fight cancer) to grow in a lab. From that, patient-specific infusions of Amtagvi are manufactured in a specialized facility. Before receiving Amtagvi, patients have to undergo chemotherapy. The entire process typically takes over a month.

There are also significant expenses associated with the medicine that wouldn’t exist if Amtagvi were an oral pill. All these factors have made it challenging for Iovance Biotherapeutics. Earlier this year, the company revised its guidance after realizing it had been too optimistic with its estimates of activating authorized treatment centers where Amtagvi can be administered to patients.

Still, Amtagvi is generating decent sales. In the second quarter, Iovance Biotherapeutics reported revenue of about $60 million, almost double what it reported in the year-ago period. Most of that was from Amtagvi. The company’s other commercialized product, Proleukin, another cancer medicine, generates relatively little revenue. For fiscal 2025, Iovance expects total product revenue of $250 million to $300 million. Again, most of that will be from Amtagvi. That’s not bad for a medicine that was only approved last year.

Is there more upside for the stock?

Those bullish on the stock might point out several things. First, Amtagvi could earn approval in other regions within the next 12 months, including Canada and Europe. That would significantly expand Iovance Biotherapeutics’ addressable market. Considering the medicine could generate upward of $200 million in the U.S. the year after approval, the global opportunities look attractive.

Second, even in the U.S., Iovance has barely scratched the surface of the patient population it is targeting. Amtagvi is indicated for melanoma patients who have undergone some prior therapies unsuccessfully. In the U.S., 8,000 patients die from the disease every year. Even if not all of them would be eligible for Amtagvi, it is certainly a lot more than the just over 100 Iovance has treated so far.

Third, Amtagvi could earn important label expansions down the line. The medicine is being investigated across a range of other indications, including lung, endometrial, and cervical cancer. If it can score phase 3 clinical wins, that could expand the therapy’s target market and jolt Iovance Biotherapeutics’ stock price.

However, even with all that, the biotech remains a risky bet. The complex and expensive nature of the medicine it develops and manufactures will make it challenging to gain significant traction while allowing it to turn a profit. Expanding into new territories will help Amtagvi’s sales, but it will also significantly increase its expenses.

Further, Iovance isn’t exactly cash-rich. The company ended the second quarter with about $307 million in cash, equivalents, and restricted cash, which it believes will enable it to last until the fourth quarter of next year. That’s not very long. Amtagvi-related sales and various financing options it could pursue should allow it to keep the lights on even longer, but it’s rarely a good sign when a company says that its cash will run out within a year and a half.

Finally, Iovance Biotherapeutics could encounter clinical and regulatory obstacles with Amtagvi, which could negatively impact its stock price. The biotech stock looks too risky for most investors. I don’t expect Iovance Biotherapeutics to hit its average Wall Street price target in the next 12 months.

But investors with a large appetite for risk might still want to consider initiating a small position in the stock. Given its innovative potential and the possibility that it will execute its plan flawlessly, its shares could skyrocket.