Charles Schwab (SCHW): Expecting Continued Earnings Momentum in 2026
Giverny Capital Asset Management, LLC, an investment management company, recently published its fourth-quarter 2025 investor letter. A copy of the same can be downloaded here. The Portfolio returned 0.01% compared to 2.66% for the S&P 500. YTD, the fund returned 12.58% compared to 17.88% for the Index. The firm faced a challenging fourth quarter and calendar year, despite solid appreciation. The outperformance of a few large technology companies has negatively impacted performance, given the portfolio's underweight in large tech and overweight in smaller niche leaders. While portfolio companies are excelling in earnings growth and capital returns, the market is fixated on AI investments, leaving the actual benefits unclear. Additionally, you can review the Portfolio’s top 5 holdings to see its best picks for 2025.
In its fourth-quarter 2025 investor letter, Giverny Capital Asset Management highlighted The Charles Schwab Corporation (NYSE:SCHW) as one of its leading contributors. The Charles Schwab Corporation (NYSE:SCHW) is a leading brokerage and financial services company. The Charles Schwab Corporation (NYSE:SCHW) stock closed at $103.92 per share on January 30, 2026, with a market capitalization of $188.638 billion. One-month return of The Charles Schwab Corporation (NYSE:SCHW) delivered a 0.17% return in the past month, and its shares are up 25.58% over the past twelve months.
Giverny Capital Asset Management stated the following regarding The Charles Schwab Corporation (NYSE:SCHW) in its fourth quarter 2025 investor letter:
"The Charles Schwab Corporation (NYSE:SCHW) has an exceptional position with a fluent American households. It grew earnings by more than 50% in 2025 and could grow them by another 20%+ in 2026. Schwab lately has been adding 1 million new brokerage accounts per quarter and now has more than 38 million active brokerage accounts. In 2025, it brought in $519 billion of net new client assets. That, coupled with strong markets, lifted total client assets held at Schwab to $11.9 trillion at year-end. Schwab is attracting new clients at a remarkable rate, while maintaining the lowest expense structure in its industry."
The Charles Schwab Corporation (NYSE:SCHW) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 99 hedge fund portfolios held The Charles Schwab Corporation (NYSE:SCHW) at the end of the third quarter, compared to 100 in the previous quarter. While we acknowledge the potential of The Charles Schwab Corporation (NYSE:SCHW) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.
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