SCHW changes
Pick any two versions below to diff them.
- Price
- $107.04 → $99.03(−7.5%)
- Discount category
- Below intrinsic value → Well below intrinsic value
- Next earnings
- Oct 21, 2026 → Oct 15, 2026
- Next earnings is estimate
- Yes → No
- Thesis
- removed: The market still prices Schwab added: still trades as if client cash could sort back into money market funds and other higher-yielding removed: alternatives, added: places. That is the removed: way it did in 2023 when added: fear that hit the added: whole brokerage industry removed: worried about deposit outflows. added: in 2023. That fear has removed: faded in practice. added: kept fading. Net interest margin has expanded for several straight quarters, and net new assets removed: are added: keep growing faster than removed: a added: the year removed: ago, showing clients are adding money rather than pulling cash out. added: before. A new worry took its place in September 2026. Schwab removed: also finished digesting added: stock fell about 6% on fear that AI assistants built into rival apps, such as Meta's new Muse, could weaken the removed: TD Ameritrade integration added: loyalty that keeps clients on one brokerage's platform. For the first fear to keep fading, Schwab needs net interest margin and net new asset growth to keep showing up in removed: 2024, removing a multi-year source of cost added: its results. That includes the October 15, 2026 business update. For the AI-loyalty fear to fade, Schwab needs to show its own AI tools keep clients and added: advisors on its platform removed: uncertainty. A market still anchored added: rather than losing them to removed: the old cash-sorting worry may be slow added: outside assistants. These tools include a new partnership bringing Claude to removed: re-rate added: thousands of independent advisor firms. The Federal Reserve raised rates in September 2026 rather than cutting them. This removes, for now, the removed: stock as these added: near-term risk that falling deposit costs lag falling asset yields. If both trends keep removed: showing up added: confirming in removed: earnings. added: the next two to three quarters of earnings, the market's caution looks overdone and the gap can close. If deposit competition or client movement to AI-native tools shows up instead, the discount could persist into 2027.
- Risks
- Schwab holds a large fixed-income investment portfolio, built up when deposits were high. If the Federal Reserve cuts interest rates faster than expected, yields on this portfolio reprice down before deposit costs fall as much, which can compress net interest margin. added: The Fed instead raised rates 0.25 points in September 2026, its first increase since 2023, so this risk did not play out this quarter, but the Fed has signaled it could still cut later if the rate cycle turns. A large share of client cash sits in low-yielding bank sweep accounts. If money market fund yields pull further ahead of sweep rates, clients can move cash out of sweep and into higher-yielding funds. This lowers the low-cost deposit base Schwab lends against. Schwab now competes directly with other platforms on commission-free trading, crypto trading, and cash yields. Its own crypto trading service only launched in 2026, so it is unproven against established crypto-focused competitors. added: AI assistants built into other companies' apps, such as Meta's Muse, could reduce the friction that keeps clients using a single brokerage's app and tools. The market sold Schwab stock on this fear in September 2026, even with no confirmed change to Schwab's own client or asset numbers.
- Recent events
- added: Sep 22, 2026: Schwab stock fell about 6% in one day. The market reacted to Meta's new Muse AI assistant app, which reached the top of the US App Store within two weeks of launch, on fear that AI assistants could weaken the customer loyalty that brokerage and wealth firms depend on. Sep 22, 2026: Schwab Advisor Services is working with Anthropic to bring Claude for Financial Advisors to more than 16,000 independent registered investment advisor firms on Schwab's platform. Sep 16, 2026: The Federal Reserve raised its benchmark interest rate 0.25 percentage points, to a range of 3.75% to 4.00%, its first increase since 2023, and pointed to at least one more increase this year. Jul 21, 2026: Schwab reported Q2 2026 results. Total net revenue was $7.07 billion, a record. Net interest margin was 3.00%, and net new assets reached $62.7 billion in June alone. May 13, 2026: Schwab began rolling out direct spot trading in bitcoin and ether to retail clients.