NIM

fatheadlifter

Given that OP's post is clearly wrong/a mess, I decided to have AI analyze all the ways in which it fails. ChatGPT 5.5-Thinking model to the rescue: "Yeah, this post is a mess. There are a few **plausible directional ideas** buried in it — Google is strong, TPUs matter, ROCm is improving — but the conclusions are mostly sloppy. Here’s what’s wrong. # 1. “OpenAI sets the cadence of AI progress” is too simplistic OpenAI is still one of the main pace-setters, but not *the* pace-setter. Google, Anthropic, xAI, Meta, DeepSeek, Mistral, and others all push the frontier in different directions. Even Google’s own latest Gemini 3.5 Flash model card shows a mixed picture: Gemini beats GPT-5.5 on some tool/workflow benchmarks, but GPT-5.5 beats it on others like Terminal-bench coding. There isn’t one clean winner. So the post starts with a fake binary: “OpenAI now, Google later.” Reality is messier. # 2. “Closed architecture of OpenAI and Nvidia GPUs” is confused OpenAI and Nvidia are not the same kind of “closed.” OpenAI is closed-weight model/software access. Nvidia sells hardware broadly and has a massive developer software platform around CUDA. Google’s Gemini is also mostly closed. Google TPUs are also proprietary Google-designed ASICs made available through Google Cloud, not some open hardware commons. Google describes Cloud TPU as a Google Cloud web service for Google’s custom-developed ASICs. So saying the future is “open-sourced hardware TPUs and software Gemini” is just wrong. # 3. TPUs are not “open-source hardware” This is probably the dumbest sentence in the post. TPUs are **Google proprietary custom ASICs**. They are not open-source hardware in the normal sense. You generally access them through Google Cloud, not by buying open TPU boards and plugging them into your own cluster like commodity GPUs. Google is absolutely doing impressive TPU work, especially Ironwood for inference, but “open-sourced hardware” is fantasy-land wording. Google says Ironwood is its seventh-generation custom TPU and purpose-built for large-scale inference. # 4. Gemini is not “open-source software” Gemini is not open-source. Google has **Gemma** open-weight models. Gemini is the closed/proprietary frontier family. Conflating Gemini with open source is like saying iOS is open source because WebKit exists. Cute, but no. # 5. Hyperscalers are not abandoning Nvidia They are diversifying. Big difference. Google uses TPUs. Amazon has Trainium. Microsoft has Maia. Meta has MTIA. But they are all still heavily using Nvidia because Nvidia remains the default general-purpose AI accelerator ecosystem. CUDA is not just “a programming language.” Nvidia’s own CUDA Toolkit includes libraries, debugging tools, optimization tools, compilers, and runtime components used across embedded systems, workstations, data centers, cloud, and supercomputers. The post treats CUDA like a moat that magically decays. In reality, software moats decay slowly because they are made of tools, libraries, engineers, deployment patterns, bugs already solved, and institutional muscle memory. Very boring. Very powerful. # 6. “Sovereign nations will abandon Nvidia GPUs” is unsupported Sovereign AI projects want supply diversity, control, and national infrastructure. That does not automatically mean “no Nvidia.” In many cases, Nvidia is exactly what they buy because it is available, performant, and supported. Could some sovereign compute shift to custom silicon, AMD, or local chips? Sure. But “abandon Nvidia” is Reddit astrology unless backed by actual procurement data. # 7. “Large corporates will abandon OpenAI” is also too strong Enterprises are multi-vendor. They use OpenAI, Google, Anthropic, Microsoft, AWS, open models, internal models, and whatever is cheapest/safest/good enough for the workload. Google has massive distribution through Workspace, Android, Search, Gmail, YouTube, and Cloud. That’s real. But it doesn’t imply OpenAI disappears. It implies fragmentation. # 8. “Gemini has unique training data: Gmail + YouTube” is partly wrong and potentially backwards YouTube as an ecosystem/data advantage? Plausible. Gmail as training data? That’s a red flag. Google explicitly says Workspace data, including emails and documents, is not used to train or improve Gemini/Search/other underlying models without permission. Google also says Gemini in Gmail does not train foundational models on personal emails and only processes inbox data for specific requested tasks. So if the poster is saying “Google trains Gemini on your Gmail,” that’s not supported by Google’s public policy. # 9. “Gemini is neutral” is laughably overconfident No major LLM is “neutral.” They all have safety layers, RLHF/RLAIF tuning, policy choices, refusals, cultural assumptions, and product incentives. Also, Gemini has had very public bias controversies, especially the 2024 image-generation fiasco where Google paused human image generation after outputs involving historically inaccurate diversity overcorrections. Google’s own CEO acknowledged problems with the model’s responses. So “Grok biased, Gemini neutral” is just team-sports nonsense. # 10. “Closed LLMs like Grok are notoriously biased” is selective Grok may have bias issues. So do Gemini, ChatGPT, Claude, Llama-based systems, etc. Bias is not a closed-vs-open issue. Open models can be biased. Closed models can be biased. The difference is auditability, controllability, deployment flexibility, and provider policy — not magical neutrality. # 11. “CUDA moat will topple Nvidia” is backwards A moat can shrink, but it does not usually cause the castle to collapse. CUDA’s dominance is one reason Nvidia has been so durable. ROCm getting better is real. AMD has improved. But “good enough” has to be good enough across training, inference, libraries, distributed systems, debugging, deployment, model kernels, support, cloud availability, and enterprise procurement. That is a lot more than “PyTorch runs now, bro.” # 12. ROCm helps AMD more than Google The post jumps from “Google TPUs/Gemini win” to “AMD ROCm is getting good enough.” Those are different competitive vectors. ROCm is AMD’s Nvidia alternative. TPUs are Google’s custom accelerator path. If ROCm wins, that does not automatically mean Google wins. If TPUs win, that does not automatically mean AMD wins. It’s like saying Ford will beat Tesla because Toyota’s hybrids are good. Related industry, wrong causal chain. # 13. Nvidia’s advantage is not only CUDA Nvidia’s moat includes: * GPUs/accelerators * CUDA * cuDNN, TensorRT, NCCL, Triton, NIM, etc. * networking/interconnect * full racks/systems like GB200/NVL * supply chain * developer familiarity * cloud availability * enterprise support * fast model/framework optimization CUDA is the headline, not the whole machine. # 14. Google can win parts of AI without “beating OpenAI and Nvidia” This is the biggest conceptual mistake. Google can be a huge AI winner through Search, Ads, Cloud, Workspace, Android, YouTube, Gemini subscriptions, agents, and TPUs. That does **not** require OpenAI losing. It does **not** require Nvidia collapsing. It does **not** require CUDA failing. It does **not** require TPUs becoming open-source. Multiple companies can win because AI demand is enormous. # 15. The “Google AI complex” thesis ignores customer preference Developers and companies often want portability. Nvidia GPUs are everywhere: AWS, Azure, Google Cloud, Oracle, CoreWeave, on-prem clusters, national labs, enterprise data centers. TPUs are powerful, but they tie you more closely to Google’s ecosystem. That may be great for some workloads, especially Google-native users. But it is not automatically better for everyone. # 16. It ignores Nvidia’s role in serving OpenAI itself OpenAI’s GPT-5.5 page explicitly says the model is built and served on Nvidia GB200 NVL72 systems. So the “OpenAI vs Nvidia vs Google” framing is goofy. OpenAI and Nvidia are deeply linked, but Nvidia also sells to Google Cloud, xAI, Meta, sovereign projects, enterprises, and basically everyone else who wants serious AI compute. # 17. “Gemini will beat OpenAI” depends on the metric On cost? Google may win many use cases. On Workspace integration? Google has a huge advantage. On Search distribution? Huge advantage. On frontier reasoning? Mixed. On coding? Mixed. On user preference? Mixed. On enterprise deployment? Mixed. Artificial Analysis recently ranked GPT-5.5 as leading on GDPval-AA, a benchmark for economically useful tasks, ahead of Claude Opus 4.7 and Gemini 3.1 Pro Preview. Google’s Gemini 3.5 Flash model card shows Gemini is very competitive, but not a clean “beats OpenAI” story across the board. # Bottom line The post is wrong because it turns a reasonable thesis — **Google is a serious AI winner and TPUs matter** — into a pile of overclaims: **TPUs are not open source. Gemini is not open source. Gemini is not neutral. Gmail is not simply training data. Hyperscalers are not abandoning Nvidia. ROCm does not equal Google. CUDA is not about to topple itself. And AI is not winner-take-all.** The better version of the thesis would be: > That version is sane. The Reddit version is finance-bro fan fiction with a TPU sticker on it." Sick burns from an LLM! I don't know why people are so worried that AI produces slop and is incorrect, when it's the humans we need to watch out for.

anonymous_zeb

The 'in between' zone is where I've seen the most interesting rotation signals. When expectations are extreme in either direction, the market has already priced it in. But right now everyone's watching credit quality and NIM numbers without strong conviction either way. That's when earnings surprises actually move stocks. What I track is whether the market starts rewarding profitability metrics more than growth after these reports drop. When the narrative shifts defensive like this, there's usually a factor rotation underneath where quality and earnings stability start outperforming pure momentum. Happened after Q3 2022 in a very similar setup. Have you noticed bank earnings acting as a leading signal for broader sector rotation?

Independent_Name_601

This is what we would call an echo. The dilemma is who is exposed to private credit? And what happens next? The players: mega asset, large asset financial institutions and private equity. Private equity is the scary one because they aren’t required to protect their loan unless their PFI required it via covenant. The banks will be fine unless the government/regulators crack a whip and see get to net zero exposure by either buying bonds/holding reserves, or selling the loans off - but to whom would they go? That’s the major crack. A likely scenario is a required write down of the assets, charge off the loan, and allow the borrower to pursue refinancing with a traditional lender at the modified loan amount with a government guarantee (much like the HARP program). Require the FIs to hold a higher capital threshold (say 12-14% instead of 10-12%). And obviously penalize via SEC, and bank regulators for the next 5 years and restrict growth again. Further restrict lending/cap loans from non-FIs. If a company wants to be a non-FI institutional lender, require them to purchase insurance much like brokers buy SIPC or banks buy FDIC insurance. Because they are creating a systemic issue in the credit market they get to be regulated now since they can’t be trusted. Further, any borrower who had this type of loan go bad should be restricted from utilizing another government-backed loan and a permanent mark should be placed on the principal’s personal credit and business credit. Any bailout awarded to individual business or lender should be required to be paid back at a rate of 500% of amount awarded and an interest rate equal to their calculated NIM plus fee income. Any collected proceeds should then be returned to the bailout fund until the 500% threshold is reached.

Shapen361

I would bet that in a super inflationary scenario you get a bear flattener which hurts on both fronts (tighter lending and lower NIM).

Philosofox

NIM or Nicola Mining worth checking out as they have a copper play, but mainly their own mill. This mill is the only mill permitted to process third party ore in the province, and is making money off BLLG. They're in the process of being listed to the Nasdaq as well. I believe they're on track to start mining their own mine in the next couple of quarters. I think it's due for a re-rate to go from explorer to producer and has a lot of upside.

Right-Donut-9941

Listen up degens and long-term holders – NVIDIA just leaked/dropped the bomb on NemoClaw, their open-source AI agent platform that’s basically enterprise-grade OpenClaw on steroids. Wired broke it today, and NVIDIA’s already pitching this to Salesforce, Cisco, Google, Adobe, CrowdStrike – the whole Fortune 500 squad. They’re not just talking; they’re building partnerships ahead of GTC next week where Jensen is 100% dropping the full reveal in his keynote. Why this screams BUY NVDA RIGHT FUCKING NOW: 1. Agentic AI is the new gold rush – Everyone’s hyped on agents that actually DO shit autonomously (multi-step tasks, no hand-holding). OpenClaw went viral, got acquired by OpenAI for big bucks. Now NVIDIA is entering with NemoClaw – tied directly to their NeMo framework, Nemotron models, NIM inference, and GPU dominance. This isn’t some side project; it’s NVIDIA owning the software layer on top of their hardware monopoly. 2. Enterprise security moat – Unlike sketchy consumer claws, NemoClaw has privacy + security from ground zero. Enterprises won’t touch anything without that. This opens massive adoption doors – think automating 20-40% of office grunt work across CRMs, security ops, cloud infra. That’s recurring revenue + insane data center demand for NVIDIA chips. 3. Timing is perfect – GTC 2026 starts next week (March 16 keynote). Historically, NVDA rallies HARD into and post-GTC on big reveals (Blackwell, Rubin, etc.). NemoClaw is teed up as one of the stars. Pair this with the fresh Thinking Machines Lab gigawatt Vera Rubin deal announced TODAY – more proof hyperscalers and frontier labs are doubling down on NVIDIA compute. 4. Valuation still cheap for what’s coming – NVDA’s sitting around $184-186 after today’s pop, but analysts have $250-300+ targets for a reason. Agentic AI + inference boom + new platforms = next leg up. If NemoClaw lands even a few big enterprise wins, we’re talking billions in accelerated capex flowing straight to NVIDIA GPUs. Don’t fade this. The “claw” meta is real, and NVIDIA is about to own it. Shorts are getting torched, institutions are loading calls. If you’re not in yet, this is your last chance before the rocket ignites at GTC. TL;DR: NemoClaw = NVIDIA’s ticket to software dominance in the agent era. Buy NVDA ASAP before the conference pumps it 20-50%. Not financial advice, but I’m balls deep and averaging up.

ExplanationNormal339

The breadth improvement is real, but watch JPM's net interest margin—banks profit from wide spreads, and that's tightening as rate cuts accelerate. If the Fed pivots harder than expected, financials could lag even with earnings beats. I track the NIM compression here: [$JPM](https://aimytrade.io/ticker/JPM?utm_source=reddit&utm_medium=comment&utm_campaign=StockMarket&utm_term=JPM&utm_content=variant_1770682390840_endbf4)

TWSTrader

**This doesn't lower rates for the working class; it deletes their credit limits.** I spent 14 years on institutional desks, and whenever a "Price Ceiling" is introduced into a credit market, the result is always **Credit Rationing**, not "Cheaper Loans." **1. The "Risk-Adjusted" Math** Banks charge 22%+ because the default rate on unsecured consumer debt is high. * If you cap the reward at 10% but the risk remains the same, the math no longer works for the bottom 50% of borrowers. * **The Result:** Banks won't lower the rate to 10% for a risky borrower. They will simply **close the account.** * We saw this with "Usury Caps" in the 1970s. Supply of credit vanishes for everyone except the super-prime borrowers (who already pay low rates). **2. The Ticker Impact** * **Safe:** **Visa (V) / Mastercard (MA).** They are toll roads; they don't hold the debt. They just swipe fees. * **Kill Zone:** **Synchrony (SYF), Capital One (COF), Discover (DFS).** These are the lenders who hold the actual balances. If they are forced to reprice their loan books to 10%, their Net Interest Margin (NIM) collapses, or they have to slash their loan book by 40% overnight. **My Verdict:** This is deflationary. If you suddenly cut off the credit cards of 50 million Americans because they are no longer "profitable" to lend to at 10%, consumption crashes. I would be looking to short the **Subprime Lenders (SYF)**, not the payment networks.

ConferenceLate1922

From the NVDA SYNPOSIS press release: "Advance agentic AI engineering: Building on the existing AI collaboration to enable agentic AI workflows, the companies are integrating Synopsys AgentEngineer™ technology with the NVIDIA agentic AI technology stack — including NVIDIA NIM™ microservices, NVIDIA NeMo™ Agent Toolkit software and NVIDIA Nemotron™ models" Clown-show.

ConferenceLate1922

"**Advance agentic AI engineering:** Building on the existing AI collaboration to enable agentic AI workflows, the companies are integrating Synopsys AgentEngineer™ technology with the NVIDIA agentic AI technology stack — including NVIDIA NIM™ microservices, NVIDIA NeMo™ Agent Toolkit software and NVIDIA Nemotron™ models" ok.

Snoo-30340

PATH - NVDA Announcement 12pmEST The partnership combines UiPath's automation expertise with NVIDIA's Nemotron models and NVIDIA NIM, a software suite for deploying large language models. The collaboration will result in a new connector service that allows UiPath's platform to integrate with NVIDIA NIM and Nemotron, helping customers use structured and unstructured data for business insights. The announcement builds on previous AI partnerships revealed in early October, which included collaborations with OpenAI, Google, and Microsoft.

josho227722

NVDA is in need of foundry biz - to balance dependency on TSMC. Also, NVDA is looking to move into edge devices for AI...partnership with Intel might be a way in: "In early 2025, Nvidia announced “NVIDIA AI Foundation Models for RTX AI PCs” — microservices (NIM) and AI blueprints to run AI agents and workflows locally on RTX AI-PCs."

Rare-ish_Birb

Rate cuts will compress NIM for regional banks, and yet.... my fav pair of filthy bandits, HBAN and CFG, were up 4% today.

barseico

Good points, and that could shift Boomers from the accumulation phase to preservation of their capital forcing the big banks to compete for their money by having to offer higher interest rates on saving deposits squeezing the big banks Net Interest Margin (NIM) more.

helospark

List of stocks that are >80% of their dot com highs, while being lower between 2002 and 2023: Symbol DotComPrice CurrentPrice MaxPrice(2002->2023) ARMZX 9.91 9.19 9.79 ATRS 5.88 5.59 5.59 BELFA 42.75 111.60 38.52 BK 61.54 99.81 61.47 BLX 37.60 39.33 33.52 CLS 77.25 194.74 19.40 CNP 36.63 38.81 32.27 CNXN 66.00 60.96 53.26 CSCO 80.06 67.11 63.53 EHC 68.18 108.53 67.91 FLEX 40.78 49.52 22.55 GE 284.44 269.38 200.08 MSTR 134.32 366.63 92.78 NIM 11.45 9.17 11.26 ONB 25.17 20.40 24.74 SONY 27.41 24.37 25.26 THC 162.37 158.09 88.11 TSDOX 10.24 9.24 10.22

TheCuriousBread

That is very true, if long yields stay flat or rise on sticky inflation or debt supply concerns, the curve could actually flatten further after a cut, compressing margins instead of expanding them. We do see some suggestions of lowering long rates by year end. [https://economictimes.indiatimes.com/news/international/us/us-treasury-yields-outlook-2025-two-year-rates-climb-to-3-948-as-debt-fears-grow-but-fed-pivot-may-spark-sharp-curve-steepening/articleshow/122516394.cms?utm\_source](https://economictimes.indiatimes.com/news/international/us/us-treasury-yields-outlook-2025-two-year-rates-climb-to-3-948-as-debt-fears-grow-but-fed-pivot-may-spark-sharp-curve-steepening/articleshow/122516394.cms?utm_source) However what may actually happen will really depend on not only slowing inflation and Fed NIM rates but also investor confidence in US treasuries again. That is a sticking point I'll admit.

elpresidentedeljunta

[Cramer salutes (and really gets) us:](https://www.youtube.com/watch?v=mCAEor84NIM) > Cramer (on Palantir): "It is the greatest meme stock I´ve ever seen." >"Those are pyjama traders you don´t like..." >Cramer: "Aah, those guys. They di... I lo... I like bask in their success. It´s all they do in their lives. And that´s what their lives are about. And I salute them! They have big lives..." (Unfortunately I don´t own Palantir, but I feel seen and I thought you should know...)

Happy_Discussion_536

Banks like JPM have been saying the bottom will fall out and expect low NIM only to beat every time and growing top line.

roundupinthesky

* Announced that NVIDIA will serve as a key technology partner for the $500 billion Stargate Project . * Revealed that cloud service providers AWS, CoreWeave, Google Cloud Platform (GCP), Microsoft Azure and Oracle Cloud Infrastructure (OCI) are bringing NVIDIA® GB200 systems to cloud regions around the world to meet surging customer demand for AI. * Partnered with AWS to make the NVIDIA DGX™ Cloud AI computing platform and NVIDIA NIM™ microservices available through AWS Marketplace . * Revealed that Cisco will integrate NVIDIA Spectrum-X™ into its networking portfolio to help enterprises build AI infrastructure. * Revealed that more than 75% of the systems on the TOP500 list of the world’s most powerful supercomputers are powered by NVIDIA technologies. * Announced a collaboration with Verizon to integrate NVIDIA AI Enterprise, NIM and accelerated computing with Verizon’s private 5G network to power a range of edge enterprise AI applications and services. * Unveiled partnerships with industry leaders including IQVIA, Illumina, Mayo Clinic and Arc Institute to advance genomics, drug discovery and healthcare. * Launched NVIDIA AI Blueprints and Llama Nemotron model families for building AI agents and released NVIDIA NIM microservices to safeguard applications for agentic AI. * Announced the opening of NVIDIA’s first R&D center in Vietnam . * Revealed that Siemens Healthineers has adopted MONAI Deploy for medical imaging AI.

jameskwonlee

"DeepSeek-R1 model is now available as an NVIDIA NIM microservice" \- NVDA's latest news update.

manwdick

Nvda has released NIM for deepseek. Call for nvda

SingerOk6470

Many banks saw this coming years back since we did have the pandemic in 2020 and shopping malls and regional office buildings before that. Many pared back CRE significantly, though not all did. It's led to higher credit costs at some regionals which meant lowered earnings, but it hasn't really been enough to heavily damage anyone's balance sheet. Some banks sold more equity to strengthen the balance sheet. Many cut dividends as well during 2023. I think CRE will continue to cause higher credit costs for some banks and in general, but this will be a gradual process and case by case., but none probably enough to seriously damage any well known regional bank. The more impactful drivers the last 2 years outside SVB have been managing deposit cost for NIM, generally higher credit costs outside CRE, improving efficiency and having enough capital buffers. Typical boring banking stuff will continue to matter more than CRE risk going forward, in my view. CRE or fear of CRE risk was not what caused SVB or Signature to fail. Neither did CRE really contribute to the NYCB fiasco, which was caused by residential /multifamily loans and bad hype/ panic after SVB when the market was looking for the next bank to fail.

nicidee

It all boils down to profitability: 1/ Net Income Margin positive: is the company profitable (is it making money today from operations, and can it pay all its obligations, and still have cash left over) 2/ historic NIM for last X years all positive: is the company consistently profitable (is the profit the norm for the last several years, is making cash for you BAU for the c-suite) 3/ Return on Incremental Invested Capital: is the company maintaining our increasing its profitability as it grows revenues (I.e. even as it is profitable, the company is creating enough value for clients that they can continue to grow without cutting prices and reducing margins - a great sign that the value proposition for customers is real) 4/ Net Debt/Equity falling: is the profitability self funding growth (you're not going to be diluted as they grow and the company is not at risk of bankruptcy) 5/ Shareholder Yield: is the company sufficiently profitable it has started returning to shareholders in buy backs or dividends 6/ relative (to historic) P/E is the recent growth in profitability *NOT* being fully reflected in the recent stock price (i.e. price momentum should be there but company is relatively undervalued, as markets tend to view good results cynically) The key for long term growth is that high returns on invested capital are capitalised on by reinvesting in the business (starting a dividend is not always a bad thing especially when you consider its relative payout and the fact the cost basis of the founders will be thousands of times less than yours so their relative yield will be much higher) The key to your investment returns is that your company grows and that you hold for that growth to be translated into the share price The booster that supercharges your investment returns are when you buy that profitable and growing stock at a cheap price relative to its growth potential - hence there should be some recent price momentum but not quite enough to make it fully priced - and as you hold, it becomes fully priced then over priced (the history of positive growth translates into over exuberance and when growth stalls or is priced as if that growth will come back with a vengeance)

thotdocter

Imagine being so clueless you think NIM of 0.05 is an "infinite money glitch".

AntoniaFauci

Not trying to rain on the parade (I have a long position much lower) but just keeping it real, we’ve been through “when rates rise, that’s when SOFI will really make money” and “when loan forgiveness starts, that will be good for sofi” and “loan forgiveness being blocked will be good for SOFI” plus iterations of “profitability is coming, profitability is here, probability was here but then it left but it’s coming back”. None of that was ever correct, so I wouldn’t count on lower rates abd crushed NIM to be helpful either. I think the current surge is because their other business model being the ghost kitchen for other banks is showing signs it might be real. If so, it’s kind of like an AWS for white label banks and would be a bit of vindication for Noto. That’s kind of what is keeping me in for now.

Prestigious_Meet820

A lot to explain so I'll be brief, they're fit my investment style though. I mostly find them by tracking 13Fs from funds. Jackson was a spinoff from Prudential PLC, spinoffs are either getting rid of dead weight or generating additional value, in this case I had a strong reason to believe it was to generate value as it had been operating for over 60 years and was insanely profitable for the price. With rates being low and people calling it a scam company (because the majority do not understand their financials statements and operations) it was highly likely to make a boatload under the radar when rates went up and inflows started pouring in. They buyback an insane amount of shares and their dividend payout is next to nothing relative to cashflow. It's an annuity company, an over simplification would be saying they invest old people's cash with a bunch of options to limit up and downside in ETFs and conservative investment vehicles. Although I haven't purchased any above $45 I sold half at $65. Selling half was a big mistake and it's probably a decent buy at $90-100. I'll just warn anyone who wants to invest that if they post MTM hedging losses the stock tends to drop a lot, I think it's mostly an algo thing but I'm not sure as it's happened around 75-80% of the time (less likely going forward due to changes in the company). Bread Financial was being bought by a bunch of funds who were down like 50%+ on it and were holding for 4-8 years, saw they were adding at the lows (when it was $30) and had been watching it a few years myself. It's mainly credit card loans and is dealing with some major headwinds, primarily CFPB late fee rule that's currently in court. Media will tell you delinquency is the issue but that's not the case in my view, they have strong NIM on loans. The other issue not talked about is partner branded cards slowing down, a few years back the lost out on BJ branded cards that was big business, they're mostly flat with little growth but the price is right. Anyhow at the price they should compound at a rate that produces a good return, but if the CFPB wins and caps late fees at $8 it could tank because their profit would go to $0, it would sort itself out but would become a bad investment at that point.

dirtyydavee

The rates really have more to do with the cost of capital. Banks have borrowed to fund loans for the past year as COVID cash ran out. Net interest margins are in the gutter comparatively for the vast majority of financial institutions. They will keep pricing high as long as they can to raise that NIM because shareholders hate it when that number goes down. Some banks will come down quicker than others based on their cost of capital and current funding sources. Efficiency ratios have gone all outta whack as well. Things are weird all over, honestly. Trying to make sense of pricing strategies right now is like reading an alien language.

nicidee

Agreed on their market position. Expensed R&D levels are impressive too. 58bio mkt cap, annual revenue almost 6bio, growing revenues at 15% annually, approaching 20% NIM. No div with buyback being used to sterilise stock comp. If everything goes perfectly in next 5 years, they'll be at 25x current mkt cap. Prefer to buy at 25x (buying at a premium to normal entry to pay for the competitive position) and wait for the market to get excited over the next 5 years and sell when at 55x at double the NI. NI will be about 2.5bio, mkt cap at 55x will be ~135bio, and this would be a 300% total return. If multiples stay at 25x entry, return is 15% CAGR. If I buy tiday at 55x and multiples stay at the level, I get the 15%. But if they shrink to 25x, I flatline over 5 years. Prefer to position for the upside. So what do I need to see to consider? A rout to say 30bio mkt cap, perhaps as part of a broader mkt collapse, rather than anything idiosyncratic. So I'd wait for 145 then revisit.

Desmater

They lowered NIM guidance. There was a Barclay's banking conference.

Desmater

Today was a banking conference, Barclay's. Ally and other banks lowered guidance due to NIM going to fall with rate cuts. Also credit delinquency ticking up. A lot of CEOs and companies saying consumers weakening Picked some BAC up for a swing trade today. Already up now. Hope for a soft CPI print tomorrow and PPI Thursday.

Dismal-Jellyfish

Source: [https://www.fdic.gov/system/files/2024-09/qbp.pdf#](https://www.fdic.gov/system/files/2024-09/qbp.pdf?ref=dismal-jellyfish.com#) TLDR: Today the FDIC released second quarter financial results in its latest Quarterly Banking Profile published today. U.S. commercial banks and savings institutions insured by the FDIC reported $71.5 billion in net income for Q2 2024, a $7.3 billion (11.4%) increase from the previous quarter, driven by lower noninterest expenses and one-time gains. The profit increase was primarily due to reduced noninterest expenses (down $3.6 billion) and one-time gains on equity security transactions ($10 billion) and the sale of an institution’s insurance division, contributing an after-tax $4.9 billion gain. FDIC-insured community banks reported a modest net income increase to $6.4 billion, up 1.1% from Q1 2024, largely due to higher net interest and noninterest income. The industry’s net interest margin (NIM) decreased slightly by one basis point to 3.16%, driven by larger banks with over $250 billion in assets, while community banks saw a seven basis-point increase in NIM. Total loan balances increased by $125.8 billion (1.0%) from the previous quarter, led by loans to nondepository financial institutions and consumer loans. Annually, loans grew by $244.5 billion (2.0%). **The net charge-off rate increased to 0.68%, the highest since Q2 2013, with credit card net charge-offs rising to 4.82%, the highest since 2011.** Domestic deposits fell by $197.7 billion (1.1%) from Q1 2024, with decreases in savings and transaction deposits, partially offset by small time deposit growth. The Deposit Insurance Fund balance grew by $3.9 billion, bringing the reserve ratio up four basis points to 1.21%. The total number of FDIC-insured institutions dropped by 29 to 4,539 in Q2 2024, primarily due to mergers and one bank failure. Unrealized losses on securities totaled $54.8 billion in second quarter 2024, down $775.7 million (1.4%) from the previous quarter and down $7.7 billion (12.3%) from the previous year. Unrealized losses on held-to-maturity securities ($9.1 billion) and available-for-sale securities ($45.7 billion) both decreased quarter over quarter. The vast majority of community banks (96.7%) reported unrealized losses on securities. [Remember, "As of Q4 2023, 185 banks with $524 billion of assets had unrealized securities losses that exceeded their shareholders’ equity."](https://www.financialresearch.gov/briefs/files/OFRBrief-24-04-bank-health-and-future-commercial-real-estate-losses.pdf) Even if interest rates decrease this year, hundreds of banks with substantial total assets remain at risk unless they significantly reduce their CRE exposure or bolster their resilience. >*"However, the banking industry still faces significant downside risks from uncertainty in the economic outlook, market interest rates, and geopolitical events.  In addition, weakness in certain loan portfolios, particularly office properties, credit cards, and multifamily loans, continues to warrant monitoring.****”*** >*— FDIC Chairman Martin J. Gruenberg*"

Capable_Wait09

Shit really? I just loaded up on $NIM and $BV because of you. You gotta make that shit clear bro

katiajojo

You could tell bears there is a non-cyclical company being traded for 5 dollars per share that is growing revenue 15% per quarter, and a NIM of 80%, with a BV of 260/share and theyd still say: "see you regards at 50 cents! dont @ me when youre bankrupt you stupid greedy pigs" without seeing a shred of irony in their own statement

SweetToothFairy

You think rate cuts help NIM?

dabay7788

Spoiler, this lady is a NIM

No-Number666

Upvote for reach, would be good to know what people really think of these NIM Blueprints. Article linked.

chesapeakeripper_18

Guys, have you even seen the videos that NVIDIA has put on their Website - AI section regarding supply chain? They're not just supplying for AI they're fully using AI in their business / procurement as well using NIM. I am sure if there are any delays / supply concerns NVIDIA has planned it in well advance and always is two steps ahead. Let me just share the link to this one video I saw on Nvidia's website and I was blown away. https://www.youtube.com/watch?v=a9O0JipIrb4

namecard12345

NIM is going to decrease upon rate cuts and rise in bad loans. However, the rate cuts might lead to increase M&A fees and trading revenue.

goldcoastflow

Yeah you’re right, banks would rather pay 5% on CDs. Study NIM before talking out your ass.

theserial

Accumulated Other Comprehensive Income (AOCI) is a worry at most banks at this point with rates climbing as much as they have over the last few years. Any bank that has a large portion of their funds tied up in securities rather than loans (say >15-20%) will be dealing with managing their AOCI and how it affects their liquidity, but if they have sufficient liquidity sources available outside of their available-for-sale (AFS) securities such as cash & due from accounts, federal funds sold (FFS), and interest-bearing bank balances (IBBB) then it shouldn't be a real issue for them bar a catastrophic liquidity event which would cause them to be forced to sell these securities and recognize the losses present. Even then they would most likely draw on some form of contingency funding line to meet liquidity needs (either secured or unsecured) before selling these securities. On their own, if they hold them until maturity there is no direct loss, just loss of potential income as their Net Interest Margin (NIM) will become compressed as funds which could potentially earn higher yields either as higher-rate securities or loans (which are almost all some form of variable rate and adjust to market within a given timeframe) are tied up in lower yielding assets. I actually go in to a bank on this list soon (not in the top 4 however) and we'll definitely be looking over their liquidity and securities portfolios in a Safety and Soundness examination (which is different from Trust, IT, BSA, and Compliance examinations). Every one of the banks on this list is visited very frequently by various examiners from the FRB, FDIC, OCC, State, etc. for all of these types of examination. Reports and memoranda are restricted information, but you can always look up any formal actions (e.g. - Written Agreements which are more of a hard list of demands by regulators) online as they are public information by searching for their primary regulating authority and their public enforcement actions.

texas21217

Anyone betting against NVIDIA’s upcoming Blackwell chips ... Based on the search results provided and the current state of the AI chip market, there is no other chipmaker with a chip directly comparable to Nvidia's GB200 in a one-to-one fashion. Here's why: 1. Unique Architecture: The GB200 is part of Nvidia's new Blackwell platform, which represents a significant leap in AI performance. It combines two B200 Tensor Core GPUs with a Grace CPU, creating a highly integrated and powerful system[4]. 2. Performance: Nvidia claims the GB200 offers up to 30x performance increase compared to the same number of H100 Tensor Core GPUs for LLM inference workloads[4]. 3. Market Position: Nvidia has been leading the AI chip market, especially in the data center segment. The company's GPUs have been the go-to choice for AI and machine learning applications[5]. 4. Advanced Manufacturing: The Blackwell architecture GPUs are manufactured using a custom-built 4NP TSMC process, packing 208 billion transistors[4]. 5. Ecosystem: Nvidia has built a comprehensive ecosystem around its chips, including software like NVIDIA AI Enterprise and NIM inference microservices, which further enhances their capabilities[4]. 6. Adoption: Major cloud providers like AWS, Google Cloud, Microsoft Azure, and Oracle Cloud Infrastructure are planning to offer GB200-powered instances[4]. While other companies like Intel, AMD, and various startups are working on AI chips, none have announced a product that directly compares to the GB200 in terms of its integrated design, performance claims, and ecosystem support. Intel's recent Gaudi 3 chip, for instance, is positioned as a competitor to Nvidia's previous generation H100, not the new GB200[1]. It's worth noting that the AI chip market is rapidly evolving, and competitors may announce new products in the future. However, as of now, Nvidia's GB200 stands out as a unique offering in the high-end AI chip market. Sources [1] A Reality Check on Intel's New Chip | Brownstone Research https://www.brownstoneresearch.com/bleeding-edge/a-reality-check-on-intels-new-chip/ [2] Unwrapping the NVIDIA B200 and GB200 AI GPU Announcements https://www.techpowerup.com/forums/threads/unwrapping-the-nvidia-b200-and-gb200-ai-gpu-announcements.320542/ [3] Nvidia announces GB200 Blackwell AI chip, launching later this year https://www.cnbc.com/2024/03/18/nvidia-announces-gb200-blackwell-ai-chip-launching-later-this-year.html [4] NVIDIA Blackwell Platform Arrives to Power a New Era of Computing https://nvidianews.nvidia.com/news/nvidia-blackwell-platform-arrives-to-power-a-new-era-of-computing [5] Top 20+ AI Chip Makers of 2024: In-depth Guide - Research AIMultiple https://research.aimultiple.com/ai-chip-makers/

Ferkinator442

NVDA NIMs are actual cylindrical shaped devices no unlike the TV Shield product. A consulting AI engineer is contracted to install the NIMs in your environment and integrate to the AI computing cloud. One installed the consultants remain on site to facilitate adoption. Once fully activated the AI NIM rods become permanent fixtures in your infrastructure.

but_why_doh

That's a 2 month stretch. If you just looked at performance relative to the S&P over the last 2 months, you'd say TSLA was grossly undervalued due to its dropping price. You didn't even mention P/E, P/B, NIM, balance sheets, management, or literally anything other than charts.

SpiderPiggies

The thing I'd add to this is that the bigger banks are all holding long term bonds and mortgages from when interest rates were near 0. So their actual 'arbitrage' (NIM) is actually much lower than SOFI's at the moment. It's also part of the reason why big banks won't offer higher interest on deposits. SOFI's NIM is around 6%, while most of the big banks are around 3%. Part of the reason is, as you've said, SOFI's loans are inherently riskier. But they're also more profitable from a margin perspective as long as we don't see a major spike in defaults.

but_why_doh

Why would they? Banks benefit from their NIM, and lower interest rates or higher interest rates don't affect SOFIs NIM.

Rare-ish_Bird

I guess, watch those banks recover to ath when folks recognize that higher for longer increases NIM. HBAN, CFG both up 4% after hours on low volume.

Nice-Paint-3587

I bought 716 at 53.15 and sold at 68. My thesis was higher for longer won’t help the stock much but the monthly activity offset the NIM and the stock went up even more. In terms of the future I would buy it again at 70 but perhaps not at the current price.

Lost-Practice-5916

There's a disconnect with soft survey data and hard data for a long time now. From consumers to CEOs to even credit officers at big banks that claim things are terrible... yet they keep doing tons of business and writing loans, printing record NIM.

Desmater

You could buy rate sensitive sectors. Utilities and Real Estate for sure would go up when rates start getting cut. Financials are sort of like that as well. With more mortgages and loans. But NIM gets hit. But they were making a lot of monet even when rates were low. Obviously tech will start going up. Since cost of borrowing will go down.

SpiderPiggies

They've guided for ~0.75 in earnings for 2026 and ~20% y/y growth beyond that. Obviously we're a couple of years away from that being reality, but the potential is certainly there. Their NIM is basically double most other banks and they will have enough deposits in a year or so to not have to rely on their (ridiculously high) line of credit for originations going forward.

cocoa_croissant

They have a 5.88% NIM and still have consistently lost money generally. What does that tell you? This is a disaster waiting to happen.

ChooChoo_Mofo

Analogy isn’t the same. If Wendy’s wanted more raw materials they’d raise the price they paid to suppliers. Sure, this would compress their margins when they sold a hamburger, but they’d have high stock. For banks - cash is the raw material, loans are the assets. If banks wanted more cash, which was OP’s point, they’d pay MORE for the cash i.e. increase their deposit rates. This of course reduces their NIM (equiv to Wendy’s margin), but the banks would be more flush with cash.

sh1tler

Dumb fucks just want a rate cut so their NIM shoots through the roof

fkn_clownshoes

tbh? prolly not good for me, but I say that with every trade. NIM is the name of the game for banks. Bad CPI means less likelihood of interest rate cuts which equals good for banks. Plus just based on the fed #’s, reserves set aside for bad consumer loans has dropped from Jan to Feb. Hoping the trend continues, but who fkn knows what the guidance will be and if they beat expectations. I have calls and they didn’t beat last quarter

JoeyChampagne

$10K spot trade on JPM. Hoping they will report higher than projected NIM based on 2024 rates remaining higher for longer, and a rebound in M&A activity (deal volume in 2023 was low).

fkn_clownshoes

It’s all about guidance. My thoughts are banks may change their forecast to being more bullish on interest rates staying higher for longer, which would increase their future NIM

fkn_clownshoes

calls or puts on JPM? high interest rates increase their NIM, but lowers demand for loans. About to have a coin flip decide

optionsCone

No where does it mention software, NIM in particular. Clowns. Long NVDA

trajo123

All big companies are diversifying their compute, even Microsoft, in addition to also using AMD and Intel are developing their own chip, same for Amazon. See Satya Nadela's speech at the Ignite conference. They didn't strangle anything with NIM.

Bossmon25

This is good to see, but I wonder how adoption will look especially if they’re offering NIM as a way to convert exisiting customers into more heavy users. TSMC continuing to be the manufacturer is good for that stock too.

GWooK

how is it even priced in? we all knew they were releasing better product but no one expected them to release a new chip that basically makes the last one which put nvidia at the third most valuable company in the world archaic. and they will have infinite growth with NIM. if this is priced in, i will fucking eat my own dick

Wild_Paint_7223

On top of that, they are able to sell GPU to Microsoft Azure and resell the NIM and Omniverse software APIs from Azure to global customers powered by their chip. This is like Apple’s iPhone and iOS App Store but way bigger.

tabrizzi

With NIM, a bit of the software ecosystem got added to their portfolio.

tabrizzi

Yup! That's what NIM makes possible. Going to make even older GPU useful for devs.

tabrizzi

There is NONE. And with the introduction of NIM, it's going to get even harder, not impossible, to steal customers from Nvidia.

andrewskdr

Lot of them in charge though... you can guardrail the NIM to avoid THEIR knowledge though lol

andrewskdr

NIM gonna take so many middling company jobs. Having generative AI that you can train for all the proprietary bullshit in a corp. is going to wreck house.

sirarteaga

That NIM stuff is pretty cool. Was that about a mouse or something? Can't remember.

sirarteaga

That NIM stuff is pretty cool. Was that about a mouse or something? Can't remember.

ProfessionalAd6683

NIM write me a program that always trades options at a profit Bam I'm rich, checkmate

playswithsquirrel

I need a NIM to manage my portfolio

ProfessionalAd6683

Shit, this NIM stuff is going to take my jerb. Good thing I own NVDA stock.

ercanbas

Who that NIM shit is actually pretty cool

DrunkHappyGilmore

The bank sector is getting largely crushed by higher interest rates. A large corpus of fixed assets originated in a low interest rate environment coupled with rising costs on deposits have put immense pressure on NIM.

Death_and_Taxes_

I'm long over 10k shares OZK. None of this post's DD is founded in any fact. OZK is exposed to construction and CRE because that's what they specialize in, they're experts in the space. CEO George Gleason is the most competent banker in the industry, he literally built this $5 billion business from a single branch in backcountry Arkansas. These guys are cautious, they only put up the second half of the money for risky loans and make developers put up the first half to get things started. As for the riskiness of CRE, these guys love it. Their revenues grew by double digits last year and EPS INCREASED from the 1.20s/quarter to 1.50/quarter as other banks shied away from CRE. NIM compression has stopped here too and their NIM is huge in the upper 4%s (outstanding). This is not a bank, it's a growth stock, and it's priced like deep value right now. Loan loss provisions didn't even increase for all of 2023 despite the "bank panic" and NYCB has nothing to do with this (they're exposed to a totally different region and type of real estate. Look at the REITs in the Sunbelt, everything is a-ok). Short it and buy your puts if you want, I'm patient. "Bad times" only mean good times for OZK as they hoover up more market share and scale to the next level. See you on the other side gay bears keep the stick out of your ass.

tachyonvelocity

When the markets go left, you go right, when everybody is worried of CRE, don't be sheep and if you knew anything about real estate, you would instantly realize CRE are almost always floating rate. CRE lenders are literally the banks most shielded from interest rate rises because they have better NIM flexibility. As interest rates stop rising, smaller CRE lenders like INBK, which has gained another 7% today, are now experiencing increasing NIM due to those floating rate loans increasing in lockstep. I was bullish when it was $10, I am still bullish INBK now that tangible book value has increased to over $40 when the stock is $32. What efficient market? It was just insane that this bank was trading at 0.25x book value. Looking possibly at a 4x return in only 1 year.

ComprehensiveKiwi489

What’s the appeal with SoFi? It seems like they just bribe ppl with high ass APY’s to deposit their money with them (which leads to liquidity for loans and NIM). Eventually, that “shtick” won’t work anymore.

tachyonvelocity

INBK gained 3% on top of 9% yesterday after earnings. It is STILL trading at 0.8x book. Regional banks got so fundamentally undervalued in the "crisis" yet no one is looking further out than a few months. 0% office exposure, meanwhile NIM is actually increasing. Did everyone just forget that increasing interest rates is actually great for banks because they can now loan out at much higher interest rates while there is room for monetary policy and deposit payments to fall? It's honestly hilarious everyone is scared of CRE when CRE exposure is mostly floating rate rather than fixed rate and would actually do better than fixed mortgages when interest rates rise. Remember all that rent inflation, where do you think that money goes? It goes to multifamily, the majority of CRE, then floating interest rates towards CRE bank lenders. CRE lenders are actually more shielded from interest rate changes because there is more flexibility. Meanwhile interest rates are set to fall towards 3% in 2 years, making CRE lender NIMs boom. I reiterate what I said a couple of days before INBK's earnings, I'll sell after it goes up 50%.

creemeeseason

JPM is at 1.6x book and LOB is around 2.2 (barring today's report which might change that a bit). So yes, it's more expensive. I can't see JPM being a multibagger from here though. It's just too big, too regulated. LOB is in small business loans. Most of these loans have backing from the government. They also have incredibly low default rates on these loans. They started with veterinarians, for example. Stable business, almost none go out of business....great businesses to make loans for. They only touch a fraction of these types of loans so far, and there's no one else really competing for them. As far as duration mismatch, the FED basically eliminated that risk last year with their backstop. I think the bigger risk for banks right now is NIMs, and LOB is included in this. Their NIM declined on their earnings today. I think there's a very low risk of them going belly up at this point.

CornfieldJoe

I really like financials because, unlike a mining company, you actually don't need to look at it's *financials* until much, much later. They're qualitative investments usually (well when they're good). All banks do banking "stuff" but every bank large enough to be publicly traded (as opposed to say a community bank with say 500 million AUM only) has some kind of goat. That is to say they specialize in a specific kind of loan/credit (though they'll still do the others to a lesser degree). Examples: Capital One specializes in credit cards/consumer credit (auto loans too), Ally Financial is very heavily cars, Wells Fargo used to be all mortgage and is now no mortgages at all. Citi is almost all wealth management and international commerce + credit cards, SoFi specializes in Student Loans, OZK specializes in commercial real estate relating to advertising. You need to learn how that particular kind of consumer credit or loan book works in order to understand the bank. Banks can have spectacular earnings for a short period of time if their risk management skews harder into risk, and then they can rapidly come back down to the earth if something happens with their loan book. Citi pre-2008 is a great example of this - they were super wrapped into the MBS fiasco, but prior to the whole house of cards falling apart they were showing incredible earnings + growth. For the numbers (again this is mostly not research I do and more a filter for looking more once I figure out what their loan book is primarily and I feel comfortable with it). Book and Tangible Book value relative to price. In the USA, most banks trade near to their book value + or minus a certain discount or bonus - it depends on what wall street generally thinks of the bank. You can track this over long periods of time (I'd say the last 7 or so is a good indication). Usually the bank stock wont deviate (excepting March of last year) a certain discount or bonus to their own book value/tangible book value. If the bank is trading outside of its "historical" range, then I'm interested. If they're able to grow book value reliably over a long period of time and their debt isn't toxic, then I'm interested too. ROE is then the next best metric - because that's telling you how effectively the bank's leadership team is allocating capital. I like for it to be over or at 10% per year on a pretty consistent basis (it can dip lower in special scenarios). Your bank above is trading near to book value and its leadership is not efficiently allocating capital. Their NIM is also very low - that's not important unless they're \*primarily\* a holder of deposits and are especially conservative with their capital (that's possible given the very low ROE). So, unless it's a fintech in a developing nation that is really popular with consumers - with goals to engage in some kind of more profitable lending in the future once it grows sufficiently large - it's not interesting.

TheSuggi

If you want it really simple. ROIC is basically the long-term CAGR you could expect given continuing business operations, while NIM just tells you how much of your revenue your actual profit is. They tell you very different things if it comes to the dynamics of a business.

Rare-ish_Bird

HI, this is Jason, sitting in for Ben who is on another call. Thanks for taking my one question. Umm...what's NIM, how many interest rate cuts are you forecasting for 2024, and how's your hedge program holding up?

OG_Time_To_Kill

Frankly, all the bailouts have been reducing the market efficiencies ........ ​ US banks' NIM to remain under pressure despite expected Fed rate cuts \[27 December 2023\] [https://www.reuters.com/markets/rates-bonds/us-banks-nim-remain-under-pressure-despite-expected-fed-rate-cuts-sp-2023-12-27](https://www.reuters.com/markets/rates-bonds/us-banks-nim-remain-under-pressure-despite-expected-fed-rate-cuts-sp-2023-12-27) U.S. banks whose net interest margins (NIM) have been compressed due to higher funding costs are unlikely to see relief before the end of 2024 even if the Federal Reserve cuts rates, research and data analytics firm S&P Global Market Intelligence said on Wednesday. The U.S. Federal Reserve's interest rate hikes have spurred customers into chasing high-yielding alternatives to bank deposits, such as money market funds. To stem the migration, banks have offered higher rates of interest on deposits, which has increased costs for an industry already grappling with a slowdown in loan demand as borrowing has become costlier. Analysts expect NIM compression for 16 of the 20 largest U.S. banks in 2024, with a median decline of 14 basis points for the group, according to S&P Global Market Intelligence data. NIM is a key measure of banking profitability which shows how much a bank is earning in interest on loans against the amount it pays depositors.

bLACK_liGHTER99

Given the new dot plot released by the Federal reserve yesterday that includes 75 bps of rate hikes in 2024. I believe it would be a good time to invest in the banking sector due to lower borrowing costs providing NIM expansion. Additionally, rate cutes in 2024 should lead to improved loan growth if there’s a successful soft landing.

vtsandtrooper

Citi is the money center I dislike the most. It lacks the moat of BAC and WF, and its deposit and NIM strength was weaker than BAC. The hatred against BAC was crazy, considering its valuation and overall capital strength from years of being conservative (maybe to a fault given the duration losses) I have good news tho, citi will probably get acquired at a far better price than here, probably more like 75.

0PercentLTV

Basel III endgame doesn't start until 2025 and it will transition over a three year period thru 2028. It will take a long ass time. Cuts ===> lower funding costs and immediate improvement to NIM. Also all their loans skyrocket in value. Banks are a no brainer play for cuts. They only get screwed if you think Fed will cut **too late** and they will allow a credit crisis. I never believed this thesis and after SVB bailouts I believe it even less. However, cuts are good for everything including what you mentioned plus energy, homes, everyone gonna party. Tech will keep printing too. That's why I said SPX 5000 2024.

0PercentLTV

Basel III endgame doesn't start until 2025 and it will transition over a three year period thru 2028. It will take a long ass time. Cuts ===> lower funding costs and immediate improvement to NIM. Also all their loans skyrocket in value. Banks are a no brainer for cuts.

MissDiem

Financials are beaten down, and as long as you don't think they're going out of business, they will rebound someday. BAC has been cut in half and during that whole decline they've been participating in hugely improved NIM, floods of deposits incoming from small regionals, and record earnings. On that basis, is being down 50% maybe an overshoot? Still, that bounce might not be imminent. Or look at some automakers. GM and Ford are setting all time records for conventional (ICE) vehicle sales. They've trained the whole market to happily wait in line for the chance to pay full price. Exclusive of EV, they're doing better than they ever have. But you can't give their stock away right now. GM is at 3x multiple. Ford is 5x. And Ford is basically like a bond that's currently paying 6% dividend. Again, don't know when they will inflect. But they will. Chevron was the strongest before and is still and just announced an acquisition that should greatly strengthen them even more. They're at a 10x multiple. And they'll pay you 5% yield to wait for the next breakout.

0PercentLTV

Look back at earnings calls for like the last 4 quarters. Then look at their statements on NIM run rates. Each time they say "this is unsustainable and won't last" but they keep printing and it goes up.

absoluteunitVolcker

A few problems with your analysis IMHO. 1. You basically assume NIM will go up in every single scenario when most of the industry is seeing compression. While BAC may enjoy end up funding advantages, that's not guaranteed at all. 2. BAC you don't just buy the earning power, you're also buying a giant bond fund. So secular rising rates from massive deficits flooding supply actually matter. Do bond funds end up rolling over into new rates eventually, yes but that doesn't mean you want to buy it now. 3. Think telecoms are a stupidly capital intensive business that require investors to keep pouring money back into the business? Try banking. Banks are perpetually at low PE's for a reason. Investors do not necessarily ever see that $30B. Literally all that cash might just go back into bonds and loans. 4. Finally balance sheets of big banks like this are opaque. It's really, really damn hard to know what's there. There are some ex-analysts that never buy banks. And for good reason.

vtsandtrooper

Some of yall are real dumb. You think bank of america is rolling around on margin like your broke behind? Lol. Once again, live in reality. Their deposits went UP. They went up so much that the capital they have to set aside for that bond alotment is washed with the new deposits they have gained, and they are gaining them with higher NIM than they have had in 20 years. So they literally will never have to sell those if they dont want to unless you think 6 trillion dollrs is all at once gonna stand up and walk away from the 2nd largest capital institution in america

vtsandtrooper

The fuck are you rambling about, inflation lol. Dude stay on topic and stop the fud Bac took out over 100b in bonds when bond yields were lower. If they sold those bonds now they would have to pay the capital difference to what the future value difference is in the two yields. But they have no plans to do this. Inflation can do whatever it wants, in this prticular case of bonds it wont matter so long as BAC maintains its capital requirements per the fed. And even if it drops below that line, it doesnt have to liquidate those bonds, they may just face consequences from the fed in terms of dividend and buyback restriction If inflation is bad for BAC then why is their profit up 10%? All the fud up about deposit flight was bullshit, their deposits are up, their NIM is up, in a high rate environment banks make a shit ton of money being the levers of free capital.

vtsandtrooper

Jesus christ learn to read. BAC posted 10% growth in earnings. Go look for yourself. Their capital that is locked into long duration did nothing to stop them from obtaining those 10% profit gains from last year even tho rates went from 2.5% to almost 5 on 10yr. People keep saying that they have losses of 100b etc, those losses arent real. They are losses that are in theory only, in other words thats how much money they would have made (over the course of maturity of 10yrs) on those bonds if they bought them now versus then. However its the difference between making 20b in profit and 120b in profit in 10yrs. Thats 100b in lost opportunity but its not a loss unless they sell the bond before maturity. Does it blow? Sure. Is it affecting them? No. Objectively no. Look at the damn report, 10% profits year over year. Deposits went UP. NIM went UP. Loans gains went way up. So this lost opportunity is bullshit. Its like complaining that you didnt put all your chips on a specific roulette number when you are still hitting black for a win. And by the time those bonds go to maturity there will probably be a time when they will be happy they have capital stored away for a rainy day.

vtsandtrooper

Update, all the banks keep beating estimates. They are all, except for JPM, trading at discounts. All the FUD was wrong, for a year CNBC has been screaming about how NIM would collapse, and yet they are going up --> thats because anyone with a 3rd grade arithmetic knowledge could tell you that as rates go up, lenders make money. It doesnt matter that volume is down, understand the difference in the amount of profit made in a 10, 15, or 30 year loan when the lending rate is 3% versus 7-8%. The difference is enormous, exponential, you can reduce volume substantially while still growing total revenue. In 36 months all of the people who are completely out of position in banks are going to be chasing the sector up, Im fine sitting right here with the maximum pessimism already in place

Ready2gambleboomer

*Good Mornin Euro poors & fellow dumpster night shift workers. Currently enjoying my usual Monday morning breakfast of bourbon and cocaine.* *Picked up a few SCHW calls for a sweat this am thinking the big banks made bank on NIM SCHW should too. Please don't fuck me in the anoos Chuck I need the tendies for this weeks 0DTE trading.*

AP9384629344432

[Bloomberg reports consensus Q3 YoY profit growth estimates for the S&P 500 sectors](https://i.imgur.com/UL7oSJu.png). What I find remarkable: - Wow, big tech seeing a 34% earnings rise - Materials/energy getting walloped, but 2022 was insanely good for those companies anyway. - Financials up 31% is surprising, too. I guess NIM are still really high for big banks, while the regional banks (not in the S&P 500) are getting hit much harder.

Rare-ish_Bird

JPM, Citi and Wells all beat EPS, but see turbulence ahead...forecasting mild recession and tighter NIM. S&P drops through 4300.

Outside_Ad_1447

I mean banks are pretty well protected from inflation on their cost side considering G&A efficiencies. Along with this, they are much more resistant to rates increasing than a REIT as their traditional banking segment is counter cyclical to the multi family financing and warehousing segment, this is seen in their NIM staying constant over the last few quarters and earnings staying strong as even though earning popped in 2020 on the financing side, earnings are now popping on the banking side.

sgg129

This precludes the possibility of a major rip lower in response to elevated interest rates. We really only saw massive deposit flight reporting on a select few regionals. I think loan destruction from higher interest rates is a larger line item than any offset from increased NIM. The printed money PLUS interest bunks the interest on reserves any day. I think you’re probably right on the leaps - but I see the big reversal more late next year. Probably after a death drop or two leads to fed cuts. GL to you too!

RIP_Soulja_Slim

> Just another way to nickel and dime their customers. Do keep in mind that NIM is more or less the profit center that created an environment allowing brokers to eliminate commissions. Brokerage services do still have cost, it's just weather or not that cost is from an explicit commission or if it's derived from things like NIM, some order flow revenue, ancillary services like advisory as well as offering funds within that ecosystem, etc.