Scale and Substance
In this edition of the Smart Investor newsletter, we examine the stock of the world’s best-managed bank. We are not selling any stocks this week – again – due to an even more packed earnings schedule across Portfolio holdings; however, we have placed five stocks under review for potential sale as we await greater clarity on their developments. But first, let’s dive into the latest Portfolio news and updates.
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Market & Portfolio Update
Last week’s strong rally propelled the S&P 500 out of correction territory and lifted investor spirits. However, the factors that nearly pushed stocks into a bear market – including tariff policy flip-flops and economic uncertainty – have not disappeared.
Markets may take comfort in positive earnings and encouraging news from several large caps, but investor anxiety is palpable as we head into the busiest part of the earnings season. Past achievements aside, the near-term earnings outlook remains clouded by trade disputes, shifting policies, and other unpredictable factors.
In this environment, Smart Investor stays focused on what truly matters: fundamentals, business quality, and portfolio diversification across industries – prioritizing companies with the resilience to withstand tariff impacts and economic downturns, while maintaining profitability and delivering shareholder value.
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Portfolio Updates
❖ Amphenol (APH) reported robust Q1 2025 results, significantly surpassing analyst consensus on both the top and bottom lines. Revenue surged 48% year-over-year to a record high, while adjusted EPS jumped nearly 58%. Growth was fueled by strong demand across IT datacom, mobile devices, defense, and communications networks, further supported by strategic acquisitions. The IT datacom segment was a standout, with sales soaring 133% year-over-year, effectively offsetting weakness in the commercial aerospace and automotive end markets.
For Q2, APH expects revenue between $4.9 billion and $5.0 billion, and adjusted EPS in the range of $0.64 to $0.66 – both well above analyst expectations. This guidance implies year-over-year growth of 36% to 39% in revenue and 45% to 50% in EPS, reinforcing the company’s optimistic outlook. Additionally, Amphenol announced a new $2 billion stock repurchase program, reflecting strong confidence in its sustained growth trajectory.
❖ IBM (IBM) reported Q1 2025 results that surpassed analyst expectations, with revenue reaching $14.54 billion – a 2% constant currency increase – and adjusted EPS of $1.60, exceeding the consensus estimate of $1.42.
The Software segment led growth, generating $6.34 billion in revenue – a 7.4% increase year-over-year (9% at constant currency) – driven by strong performance in Red Hat, automation, and AI offerings. The Consulting and Infrastructure segments faced challenges, with revenues declining year-over-year due to macroeconomic uncertainties and reduced government spending.
IBM’s revenue mix – with Software now responsible for 43.5% of total revenue – reflects its pivot to high-margin, recurring streams. This shift is evident through margin expansion and a 13% increase in adjusted EBITDA to $3.4 billion.
IBM’s AI-related business continues to be a showstopper. The total value of deals and contracts secured for generative AI offerings – including software sales, SaaS contracts, and consulting deals – reached $6 billion in Q1, growing by $1 billion in just one quarter, signaling accelerating demand. This growth reflects booming interest in IBM’s watsonx platform – its flagship generative AI and ML suite.
Meanwhile, IBM’s second-largest segment – Consulting – remained stagnant year-over-year, despite margin improvement. Consulting’s low-margin, labor-intensive model is vulnerable to AI-driven price pressures as GenAI automates core services. Despite its leadership in AI research and implementation, IBM lags some competitors in AI-native consulting strategies.
IBM’s legacy segment – Infrastructure – saw declining revenues and margins in Q1, particularly in the mainframe subdivision, as customers shift to the cloud. However, the segment’s shrinking contribution – now below 20% – highlights IBM’s intentional move away from legacy hardware toward software and AI. Management expressed optimism regarding the upcoming z17 mainframes, expected to drive growth starting mid-2025.
Despite headwinds from policy and economic uncertainty, IBM maintained its full-year guidance, projecting at least 5% constant-currency revenue growth and approximately $13.5 billion in free cash flow. For Q2 2025, IBM anticipates revenue between $16.4 billion and $16.75 billion – above analyst forecasts.
In other company news, IBM announced on Monday its plans to invest $150 billion in the U.S. over the next five years. The investment includes over $30 billion for research and development of mainframes and quantum computers. Despite the apparent broad shift to cloud computing, some business and public data is expected to continue to be hosted on prem, meaning continued demand for IBM’s mainframes. The company – one of the largest employers in the U.S. – said that the goal of its capex package is to fuel the economy and to “accelerate its role as the global leader in computing.”
❖ Alphabet (GOOGL) reported blockbuster Q1 2025 results, with revenue of $90.23 billion – a 12% year-over-year increase – and adjusted EPS of $2.81, well above the $2.01 consensus estimate and up nearly 49% YoY.
Growth was driven by Google Cloud – up 28% YoY to $12.3 billion, fueled by demand for AI-powered services – and Search & Other, which rose 10% to $50.7 billion, supported by AI-driven ads and search enhancements. Another AI-supported segment, Google Subscriptions, Platforms, and Devices, saw revenue increase 18.8% YoY to $10.38 billion. While still smaller than Alphabet’s core businesses, this segment remains a bright spot as the company diversifies beyond advertising into recurring revenue streams. Analysts noted that Alphabet’s early AI investments are clearly paying off – AI remains central to its strategy.
During the earnings call, management reassured investors about Alphabet’s aggressive AI investments after capex hit a record $17.2 billion in Q1. They emphasized that these investments are driving strong returns, particularly within Google’s advertising engine. Alphabet also reaffirmed its $75 billion capex guidance for fiscal 2025 – with a major focus on AI-centric data center infrastructure.
Management signaled continued topline growth and margin stability – aligning with, and in some cases modestly exceeding, analyst expectations for FY2025. In a strong shareholder move, Alphabet raised its quarterly dividend by 5% to $0.21 per share and announced a new $70 billion stock buyback program – one of the largest in the U.S. – underscoring confidence in cash flow resilience amid heavy AI spending. Several leading Wall Street analysts raised their price targets on GOOGL following the earnings release.
In other company news, Waymo expanded to 150,000 weekly rides across key U.S. cities, with plans to enter Austin, Miami, and Tokyo. The unit is also leveraging Gemini AI to enhance autonomous operations – a strategic blend of Alphabet’s AI and mobility ambitions.
Additionally, while ChatGPT remains the leading AI chatbot, Alphabet’s Gemini is rapidly gaining ground, reflecting accelerating adoption. As of last month, Gemini reached approximately 35 million daily users and 350 million monthly users – a substantial leap from 9 million daily users a year ago. However, ChatGPT still leads with an estimated 160 million daily users and 600 million monthly users.
❖ Nvidia and Amazon (AMZN) acted as key positive drivers for stocks last week, reassuring investors that the AI data center buildout is not slowing down. While recession fears have led some investors to question whether tech giants might scale back their capex plans, AI leaders emphasized that they continue to see surging demand for AI hardware, infrastructure, and services.
❖ Progressive (PGR) announced plans to hire over 12,000 people in 2025 to support its continued growth. The No. 2 auto insurance provider in the U.S. continues to benefit from strong analyst support, with BMO Capital, Jefferies, and Bank of America Securities raising their price targets over the past two weeks. Additionally, BofA analysts upgraded PGR from “Hold” to “Buy” following the company’s best month in over two decades in terms of customer additions in its auto insurance business. In March, Progressive added a net 572,000 new personal auto customers.
❖ According to recent reports, Congressional Republicans are preparing to introduce a $150 billion defense package, which includes an initial $27 billion allocation to bolster President Donald Trump’s “Golden Dome” missile defense initiative. This proposal supplements the already approved $886 billion national security budget for 2025 and aims to enhance spending on naval shipbuilding and missile defense systems. Specifically, the package earmarks $29 billion for the procurement of 14 new warships and $11 billion for combat aircraft acquisitions. Companies poised to benefit from this surge in defense contracts include Smart Portfolio holdings Lockheed Martin (LMT) and RTX (RTH). Additionally, Howmet Aerospace (HWM), known for supplying advanced aerospace components, particularly for military aircraft like the F-35, could also see increased demand as part of the expanded defense spending.
❖ Visa (V) reported strong fiscal Q2 2025 results, beating analyst expectations on both the top and bottom lines. Revenue rose 9% YoY to $9.59 billion, slightly above the consensus estimate, while adjusted EPS increased nearly 10% to $2.76, far exceeding expectations. Growth was driven by continued strength in payments volume – up 8% – and a 13% surge in cross-border activity, reflecting robust international travel and spending trends. Processed transactions grew 9%, highlighting elevated network usage across both domestic and global markets.
For the full fiscal year, Visa raised its revenue growth forecast to the low double digits, up from prior guidance of high single-digit to low double-digit growth – signaling confidence in sustained spending resilience and network momentum. The company also announced a new $30 billion multi-year share repurchase program, reinforcing management’s strong conviction in Visa’s long-term cash generation and market positioning.
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Portfolio Stocks Under Review
❖ We are removing Alphabet (GOOGL) from our “Under Review” bracket following its blockbuster earnings report, detailed in the “Portfolio News and Updates” section above. We also observe other positive factors, which, in our view, outweigh negative sentiment stemming from its ongoing regulatory issues – which are not expected to be resolved for a long time, simmering in the background – while the company continues to benefit from its leadership in search and browsing.
The company’s outstanding profitability and enormous cash pile, coupled with its technological proficiency, support its bid for leadership in AI and other areas. We believe that Alphabet’s push to the front lines of generative AI development is beginning to bear visible fruit – evident in Gemini’s adoption rates. This quarter, Google fully rolled out Gemini 2.5, its newest large AI model, across its products and cloud services – with many analysts confirming it to be the most advanced model currently available.
The AI integration is already helping business performance, with Google Cloud revenue continuing its upward trajectory in Q1 2025. Although still trailing AWS and Azure in market share, it is growing faster than both. GOOGL’s strategic bets on AI infrastructure, data platforms, and open-source ecosystems are helping Google Cloud gradually close the gap. The company’s recent acquisition of cybersecurity firm Wiz – reportedly valued at $32 billion – is expected to complement the Cloud’s offerings, enhancing its security portfolio with AI-driven tools and supporting enterprise growth.
Moreover, some of Alphabet’s ambitious “Other Bets” are beginning to gain traction. For example, its self-driving car project Waymo is transitioning from pilot programs to a commercial business, showing strong momentum. CEO Sundar Pichai stated that Waymo is now delivering more than 250,000 paid autonomous rides per week – a 5x year-over-year increase. According to Morgan Stanley, Waymo could reach one billion autonomous miles annually by 2030 – a sharp rise from 39 million in 2024. The global ride-hailing and autonomous mobility markets represent hundreds of billions of dollars annually – and if Waymo secures even a modest share, the payoff could be transformative for Alphabet’s revenue streams.
In short, while Alphabet’s stock may continue to experience volatility in the near term as trade and macroeconomic conditions remain uncertain, the company continues to be a cornerstone of U.S. technological leadership – and a highly profitable growth platform.
❖ We are keeping RTX (RTX) under review following its recent warning regarding the potential impact of tariffs. The company remains a global leader in aerospace and defense, with strong positions across commercial aviation and a solid footprint in defense systems. RTX’s diversified portfolio, substantial order backlog, and focus on advanced technologies provide a resilient foundation – supported by healthy cash flow and disciplined capital allocation.
However, RTX now faces a challenging environment. While its Q1 2025 results exceeded expectations, management warned that ongoing tariffs could reduce full-year operating profit by up to $850 million if current trade policies persist. Although the company reaffirmed its full-year guidance, it does not yet reflect the full extent of tariff-related risks.
CEO Christopher Calio stated that about 70% of RTX’s production and over 65% of its supply-chain product spend are within the U.S. Despite this domestic concentration, the company – like many of its industry peers – has a large international customer base and imports raw materials, parts, and modules from around the world. As a result, RTX would be impacted by tariffs and other trade limitations “if the current environment was to stay in place.”
On the other hand, Morgan Stanley recently upgraded the stock from “Hold” to “Buy.” The firm noted that even if RTX loses the entire $850 million due to tariffs – which is not its base case – the impact would remain relatively moderate, and the market reaction was likely overdone. According to MS analysts, the long-term effects of tariffs should be manageable, thanks to RTX’s strong position in the defense sector, its duopolistic Aerospace OEM presence, and its oligopolistic role in the Aerospace & Defense supply chain – all of which support its pricing power and market share. Meanwhile, the company is expected to be one of the key beneficiaries of rising U.S. and international defense spending.
We remain very positive on RTX’s long-term outlook, but choose to keep it under review to monitor the impact of trade policy developments, defense contracting trends, and the pace of recovery in commercial aviation over the coming months.
❖ We are keeping Amazon (AMZN) under review at least until its earnings and guidance update on May 1, with a focus on management’s commentary regarding tariff mitigation and the AWS growth outlook.
Analysts expect the e-commerce and cloud giant to report impressive growth for the quarter – led by strong cloud spending, a rebound in digital advertising, and continued AI momentum – but it is the retail business outlook that will be most closely watched, as this is the segment most at risk from tariffs and a potential consumer pullback in the event of an economic downturn. While the company has recently reaffirmed surging AI demand and its commitment to previously guided data center investments, the jury is still out on Amazon’s marketplace prospects.
Amazon has been experiencing significant growth in its non-retail segments – particularly AWS and advertising services – which are contributing increasingly to its profitability. Still, retail remains Amazon’s primary revenue source, accounting for over 66% of the total through its online stores, third-party seller services, and physical stores. The escalating U.S.-China trade war poses a direct risk to AMZN’s retail operations, with approximately 30% of gross merchandise value linked to China. Higher tariffs could compress margins or dampen consumer demand if costs are passed through.
Although we remain extremely positive on Amazon’s non-retail business lines – despite ongoing volatility and near-term uncertainty – we need greater clarity on its largest revenue contributor before deciding whether to retain the stock in the Portfolio.
❖ We are keeping Charles Schwab Corporation (SCHW) under review at least until its upcoming annual meeting on May 22, 2025.
We have placed the stock under review despite its blockbuster Q1 earnings report and praises from several Wall Street analysts. An activist shareholder, John Chevedden, has recently submitted proposals advocating for the declassification of Schwab’s board structure, aiming to enhance shareholder influence over the company’s management and make the board more accountable to shareholders. The board has expressed opposition to these changes, but they are scheduled to be addressed in full at Charles Schwab’s annual shareholder meeting on May 22.
Schwab’s core business remains fundamentally sound, and we are bullish on its long-term viability. As a leading brokerage and financial services firm, Schwab has shown resilience through various market cycles, benefiting from a robust client base and a comprehensive suite of investment products. However, the internal dispute introduces additional company-specific uncertainty amid broad market volatility, driving our decision to keep SCHW under a magnifying glass for the next few weeks.
❖ We are maintaining Howmet Aerospace (HWM) under review at least until its earnings report on May 1, with a focus on further guidance.
We placed Howmet’s stock in this bracket despite its continued strong performance, after the key supplier to Airbus and Boeing recently invoked a force majeure clause – citing the latest tariffs announced by President Trump.
Howmet, a major player in the $150 billion jetliner supply chain, sources materials like aluminum and steel globally – many of which were already impacted by earlier tariffs. The new duties target additional countries critical to its operations – amplifying the pressure. This legal move allows the company to suspend certain contractual obligations under unforeseen circumstances – indicating potential shipment disruptions if compliance becomes economically or logistically unviable.
While no shipments have been halted – and there are no indications that any are expected to be – Howmet has opened discussions with customers about sharing the burden of tariffs, an unprecedented step. However, there are counterbalancing factors that allow for optimism. Howmet’s CEO has emphasized the strength of existing contracts – which may allow tariff costs to be passed through to customers.
Additionally, HWM’s role as a Tier 2 supplier provides structural leverage – Boeing and Airbus cannot easily replace it without deepening their own supply chain bottlenecks. The company’s underlying fundamentals and profitability remain solid, and its financial flexibility should help it weather near-term turbulence. Analysts recognize the company’s resilience, with Benchmark citing Howmet as a “primary flight-to-safety name.”
We believe that long-term, HWM remains one of the best long ideas in the Industrials space, but we will closely monitor developments. The company’s ability to navigate tariff-related challenges and maintain strong customer relationships will be critical in our ongoing assessment.
❖ We are keeping Uber (UBER) under review at least until its earnings report on May 7 – with a focus on further guidance.
Uber remains a leader in ride-hailing and food delivery – backed by a scalable platform, strong brand presence, and growing international operations. Its asset-light model continues to offer flexibility in navigating economic headwinds, while its mobility services play a critical role in urban transportation markets. However, rising macroeconomic risks could impact its continued strong performance. Tariffs and inflation may weigh on consumer spending, particularly in food delivery, while regulatory uncertainty continues to cloud visibility. Recently, the Federal Trade Commission (FTC) filed a lawsuit against the company – accusing it of deceptive billing and cancellation practices tied to its Uber One subscription service.
Despite these negatives, analysts remain optimistic regarding Uber – rating its stock a “Strong Buy” and citing resilient subscription growth, strong gross bookings from engaged members, and a favorable outlook for the gig economy within the internet sector. Uber’s ride-hailing services, responsible for nearly 60% of total revenue, remain largely “tariff-proof” – a rare advantage in today’s market. Uber’s global reach – operating in over 70 countries and 15,000 cities – also provides a safety net in case of an economic downturn at home. Moreover, its ads business, while still small in terms of revenues, is growing fast and has wide margins – while its digital-native nature shields it from tariffs.
We remain positive on Uber’s long-term platform strength, but recognize that regulatory scrutiny, cost pressures, and consumer demand shifts could impact near-term performance. We will reassess the stock after the company’s earnings report – focusing on guidance, regulatory responses, and macro trends affecting both mobility and delivery segments. Until then, we continue to monitor Uber closely as these dynamics evolve.
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Portfolio Earnings and Dividend Calendar
❖ The Q1 2025 earnings season is in full swing, with several Smart Portfolio companies reporting today and in the next several days. These are: EMCOR Group (EME), Public Service Enterprise Group (PEG), MetLife (MET), Microsoft (MSFT), Parker Hannifin (PH), Howmet Aerospace (HWM), Amazon (AMZN), Berkshire Hathaway (BRK.B), Arista Networks (ANET), Texas Pacific Land (TPL), and Uber Technologies (UBER).
❖ The ex-dividend date for MetLife (MET) is May 6.
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New Buy: JPMorgan Chase (JPM)
JPMorgan Chase & Co. is the largest bank in the United States by assets and among the most influential financial institutions globally. With operations spanning investment banking, consumer and community banking, commercial banking, asset and wealth management, and corporate services, JPMorgan maintains a deeply integrated presence across the financial landscape. The company serves a wide range of clients – from individuals and small businesses to multinational corporations and governments – through both digital channels and an expansive branch network. Widely regarded as the best-run bank in the world, JPMorgan’s diversified revenue streams and disciplined risk management provide a stable foundation, even amid economic uncertainty. The firm continues to invest heavily in fintech, cybersecurity, and artificial intelligence to enhance client services, maintain its operational edge, and adapt to a rapidly evolving global financial environment.
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Commanding Capital
JPMorgan Chase’s rise to financial dominance is rooted in more than two centuries of evolution, shaped by landmark mergers and a steady expansion of services. The company’s modern form came together in 2000 through the merger of J.P. Morgan & Co. and Chase Manhattan Bank – both storied institutions with legacies tied to the industrial and financial backbone of the United States.
Under the leadership of Jamie Dimon, who became CEO in 2005, JPMorgan navigated the global financial crisis with unmatched resilience, positioning itself as a pillar of stability during systemic stress. While peers faltered, JPMorgan acquired Bear Stearns and Washington Mutual under government-brokered deals, helping contain contagion and preserve confidence in the banking system. Much like J.P. Morgan himself had done during the Panic of 1907, Dimon played a central role in restoring order to financial markets when it was most urgently needed.
Over the past five years, JPM has doubled down on that legacy by aggressively investing in digital transformation and reinforcing its leadership in both consumer and institutional banking. Between 2020 and 2025, the bank allocated over $15 billion annually toward technology – more than any other U.S. bank – funding initiatives in AI, machine learning, cloud migration, cybersecurity, and blockchain infrastructure. This investment supports everything from fraud prevention and personalized digital banking to capital markets execution and real-time payments.
Strategic acquisitions have further expanded JPMorgan’s capabilities and customer base. Notable deals include the 2021 acquisition of OpenInvest, a fintech firm focused on ESG investment tools; the purchase of Renovite in 2022 to strengthen the bank’s payments infrastructure; and the acquisition of Aumni, a data analytics firm for venture capital markets, in 2023. These acquisitions enhance the firm’s position across digital banking, payments, and private markets – areas that are central to future growth.
In 2023, JPMorgan also stepped in to acquire First Republic Bank after its collapse, securing more than $100 billion in deposits and further consolidating its strength in wealth management and high-net-worth clientele. This move not only reinforced JPMorgan’s role as a stabilizer in the U.S. banking system, but also expanded its retail and advisory footprint.
Jamie Dimon’s leadership has been instrumental in shaping JPMorgan’s culture of disciplined risk management and long-term thinking. While his eventual retirement remains a topic of speculation, the firm has taken deliberate steps toward succession planning, elevating key executives and reinforcing bench strength across its business lines. The bank’s future leadership will inherit a playbook grounded in scale, technology, and relentless strategic execution.
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Capital Fortress
JPMorgan Chase is uniquely positioned to weather – and often benefit from – shifting economic and geopolitical tides, including tariff disruptions, inflationary pressure, and rate volatility. As the largest U.S. bank and a central node in the global financial system, JPMorgan’s scale, diversification, and risk controls make it one of the most resilient institutions in the sector. Its business spans consumer banking, credit cards, corporate lending, capital markets, and asset management – a model that generates revenue across virtually every stage of the economic cycle.
JPMorgan’s earnings profile tends to benefit from rising interest rates, which widen lending margins and support net interest income – still a core profit driver. In the current high-rate environment, that’s been a tailwind. But the bank is equally adept at managing through low-rate periods. Its fee-based businesses – including investment banking, payments, trading, and wealth management – provide a counterweight when lending margins compress. The result is a model less dependent on rate direction and more focused on cross-cycle stability.
Tariff-related volatility, meanwhile, is more of a market concern than a direct operational threat. JPMorgan doesn’t deal in physical goods, but when tariffs trigger financial market turbulence, it plays an outsized role in managing the fallout. Whether through liquidity provisioning, trade financing, hedging services, or navigating dislocated markets, the bank’s global trading desks and advisory arms often benefit from the very volatility that rattles others. A fresh wave of tariffs – which remains a live risk given shifting trade policy – could stoke equity and credit market stress, but history suggests JPMorgan is one of the best positioned to handle, and monetize, such scenarios.
Critically, JPMorgan’s risk management is widely considered best-in-class. Its fortress balance sheet, deep liquidity reserves, and conservative capital posture provide insulation in adverse environments. The firm runs constant stress tests – often more stringent than regulatory mandates – to evaluate its performance in extreme macro scenarios.
In short, while JPMorgan is not immune to inflation or geopolitical shocks, it remains structurally advantaged. Its adaptability, global reach, and countercyclical strengths turn economic disruption into opportunity.
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Bankable Might
JPMorgan Chase’s financial profile reflects its role as a capital markets powerhouse and retail banking giant – a diversified institution with robust earnings capacity, consistent outperformance, and a fortress balance sheet to match. While not a high-growth stock in the tech sense, JPM has reliably compounded value through economic cycles by delivering operational consistency, prudent capital allocation, and strong returns on equity.
JPM continues to set the benchmark for financial performance in global banking. Over the past three years, the bank has grown revenue at a CAGR of ~11%, with net income expanding even faster thanks to disciplined cost control and interest rate tailwinds.
In 2024, JPMorgan delivered record-breaking results, reporting net income of $58.5 billion ($19.75 per share), the highest in its history. Excluding one-time items, adjusted EPS was $18.22, still far ahead of peers – and up 14.2% year-over-year. In Q1 2025, the company posted another strong performance with adjusted EPS of $5.07, up 9% year-over-year.
The bank’s top line continues to grow across multiple revenue engines. Full-year 2024 managed revenue reached $180.6 billion, up 10% from the prior year. First-quarter 2025 revenue came in at $46 billion, marking an 8% year-over-year increase.
Net interest income (NII) remains a foundational driver, hitting $92.6 billion in 2024 and $23.4 billion in Q1 2025. While the pace of NII growth has moderated, JPM continues to benefit from higher revolving balances in its card business and robust wholesale deposit growth, even as deposit margin compression begins to take effect in some segments. Notably, NII excluding Markets was $22.6 billion in Q1 2025, a slight decline from the prior year, reflecting rate sensitivity and changing funding mix – yet still among the highest in the industry.
Noninterest income was equally strong, totaling $85 billion in 2024 and $22.6 billion in Q1 2025 – up 17% year-over-year. Key contributors included record Markets revenue ($9.7 billion in Q1), Investment Banking rebound (+12% YoY), and surging Asset Management fees amid strong AUM growth.
The balance sheet remains a defining strength. As of March 31, 2025, JPMorgan’s CET1 capital ratio stood at 15.4% – even higher than at the end of 2024 and well above regulatory minimums. Liquidity coverage and leverage ratios remain conservatively managed, with a firm supplementary leverage ratio of 6.0%. The bank ended the quarter with $1.5 trillion in cash and marketable securities, reinforcing its deep financial flexibility and unmatched capacity to navigate volatile or stressed environments.
JPMorgan’s financial engine is reinforced by best-in-class technology investments. The bank’s ongoing spend on AI, cloud infrastructure, and digital banking tools has driven operating efficiency and client growth, particularly in Payments and Wealth Management. These capabilities support revenue resilience and scalability across business cycles.
Looking ahead, analysts expect JPM to deliver continued earnings growth, with 2025 consensus EPS projected around $19.42, up from $18.10 in 2024. Meanwhile, the bank’s 2025 outlook pencils in total NII of $94.5 billion, reflecting expectations for increased Markets NII. The full-year guidance projects stability amid elevated uncertainty and a wait-and-see sentiment among corporate clients.
With its diversified income base, disciplined cost management, and fortress-level capital ratios, JPMorgan remains one of the most financially robust institutions in the global banking landscape – and likely the only bank able to profit not just from stability or volatility, but also from saving the financial system itself.
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Rewarding Resilience
In the past year, JPMorgan’s stock has moved in line with its peers from the “Big Four” cohort – Wells Fargo, Bank of America, and Citigroup – but with a far stronger result, clocking nearly a 30% gain for the period. The stock reached a record high in February before giving up much of that gain as tariff storms triggered market turbulence. However, the trend turned upward in early April as investor fears gave way to a more sober view of tariffs’ probable effects on the economy.
Despite the outperformance, JPM remains reasonably valued, given that its position as the leading bank in the U.S. and globally, as well as its badge as “the best-run bank in the world,” justifies a premium over the Financial sector average. Still, that premium is modest – below 10% in terms of non-GAAP P/E – making the stock look attractive at current valuations. Moreover, when compared to its peers, JPM trades in the middle of the valuation scale: above Citi, below WFC, and in line with BAC. Furthermore, based on future cash flows, JPMorgan appears to be undervalued by about 30%, reinforcing the strength of its investment case.
JPM’s stock performance is supported by buybacks. The board renewed JPMorgan’s repurchase authorization in June 2024 without setting an expiration date or a specific dollar limit, leaving buybacks subject to management discretion and regulatory capital requirements. Jamie Dimon and CFO Jeremy Barnum emphasized that they prefer flexibility to respond to market conditions without being locked into a large headline amount.
JPMorgan repurchased $16.5 billion worth of common stock in 2024, with buybacks averaging $4 billion per quarter. Following strong annual results and continued strength in profitability and liquidity, the bank significantly ramped up its buybacks, repurchasing $7.1 billion worth of shares in Q1 2025. Despite the increase, management emphasized that they are still maintaining excess capital and ample liquidity due to macro uncertainty and that buybacks will remain opportunistic and “sensitive to the external environment.”
Beyond share appreciation, the bank rewards its shareholders through dividends. JPMorgan Chase, through its historical lineage, has been paying dividends for well over a century, maintaining this tradition in its current form since the 2000 merger and consistently raising payouts over the past 15 years. The latest hike came in March 2025, when JPMorgan raised its quarterly common dividend by 12%.
Although its current dividend yield of about 2% isn’t among the market’s highest, it sits above the Financial sector’s average – and is expected to continue growing at a solid clip for years to come. While JPMorgan has no formal dividend policy, the firm aims to grow its payout opportunistically over time, balancing shareholder returns with its commitment to maintaining a fortress balance sheet and ample liquidity.
With resilient fundamentals, disciplined capital returns, and a clear runway for future growth, JPMorgan continues to offer long-term investors a rare blend of stability, profitability, and strategic upside.
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Investing Takeaway
JPMorgan Chase is the largest U.S. bank and one of the most influential financial institutions in the world. Over the years, the firm has built a diversified business model that generates earnings across all economic cycles. Its consistent profitability, record-breaking results, and fortress-level balance sheet position it as the gold standard in global banking. Despite recent outperformance, JPM’s stock remains attractively valued relative to both peers and long-term cash flows. With a growing dividend, active buybacks, and industry-leading technology investments, JPMorgan offers investors a rare combination of income, scale, resilience, and upside potential – all backed by a history of delivering during both periods of calm and crisis.
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Smart Investor’s Winners Club
The 30% Winners Club includes stocks from the Smart Investor Portfolio that have risen at least 30% since their purchase dates.
Our list of Winners has expanded by one, as one of our newest additions – CrowdStrike Holdings, purchased on April 9 – has already surged through the threshold. The Club now includes 12 stocks: GE, AVGO, TPL, ANET, HWM, EME, TSM, APH, ORCL, PH, IBKR, and CRWD.
The first contender is still BRK.B with a 26.63% gain since purchase. Will it join the Club, or will another stock outrun it to the finish line, again?
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Disclaimer
The information contained in this article represents the views and opinions of the writer only, and not the views or opinions of TipRanks or its affiliates and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy, or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices, or performance.
