HSBC

The hot takes on what AI buildout CoreWeave's (CRWV) financial future holds continue to pour in from Wall Street. Some on the Street have defended CoreWeave and its debt-using business model. Others have used the stock's rout to move to the sidelines. And then we have HSBC, which thinks the business is poised to shock the markets with its ugliness over the next few years. In a new note, HSBC analyst Abhishek Shukla slapped CoreWeave's stock with a $39 price target, about 34% below current trading levels. "Our 2028-30 non-GAAP EPS estimates are 50-70% below consensus. We expect CoreWeave to earn a long-term non-GAAP operating margin of 15-16% vs management guidance of c25%," Shukla said. The reason for the earnings bearishness stems from rising angst over how CoreWeave funds its business, not worries of an AI slowdown. "We note that yields on CoreWeave's bonds are now in the 14-15% range, suggesting market concerns over credit worthiness. This may hamper the company's ability to finance speculative capacity or capacity that is backed by only short-term contracts. This removes one key upside for the stock, in our opinion. We also note that consensus is assuming a significant reduction in the interest rate that CoreWeave will need to pay on its debt, which seems increasingly unlikely to us," adds Shukla. Shukla expects CoreWeave's loss per share in 2027 to be 13.3% higher than analyst estimates. For 2028, 2029 and 2030 he sees CoreWeave's EPS to be 53.7%, 70.6% and 64.3% below consensus estimates, respectively. By the end of 2030, Shukla believes CoreWeave will have $92 billion in net debt compared to a year-end 2026 estimate of $46.9 billion. CoreWeave's stock has been torched in October to the tune of 29%. The company's corporate bonds across maturities continued to be dumped amid fears of an AI slowdown and its implications for the company's precarious balance sheet. That has triggered a subsequent sharp sell-off in the stock. The rise in yields on CoreWeave's bonds even spurred Elon Musk to post "Yikes" on X in response to a post by venture capitalist Chamath Palihapitiya last week. Meanwhile, in a new report, Gartner forecast that by 2030, "cost pressure and a lack of a differentiating business model will force over 80% of neocloud providers to cease independent operations." CoreWeave is a neocloud. The report was essentially akin to yelling "fire" in a crowded theater. The company does have its defenders, however. "This [move in CRWV] is more sentiment driven. This is not about fundamentals. This is not about them not being able to pay for the debt, et cetera. This is more sentiment driven and the sentiment needs to change. And what's going to happen is, as always, there's going to be a period of concern. And then the fundamentals will kick in, meaning revenues, revenue growth," BofA analyst Tal Liani told me on Sozzi Unleashed, saying he stands by his aggressive $140 price target on the stock. Brian Sozzi is Yahoo Finance's Executive Editor, host of the Sozzi Unleashed morning show, the 'Power Players With Brian Sozzi' podcast and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email [email protected]. Click here for in-depth analysis of the latest stock market news and events moving stock prices Read the latest financial and business news from Yahoo Finance

HSBC expects third-quarter corporate earnings to provide further support for global equity markets, citing improving profit forecasts, growing demand for artificial intelligence computing capacity and signs of increased AI monetisation. In a research note published on Tuesday, Alastair Pinder, the bank's head of emerging market and global equity strategy, maintained a positive outlook on equities despite rising bond yields and pressure on stock valuations. The bank identified corporate earnings announcements and developments in AI-related revenue generation as potential factors influencing market performance during the reporting season. Global equities have remained relatively stable despite recent selling in bond markets, with the S&P 500 approaching record levels. However, HSBC noted that higher Treasury yields have affected equity valuations. According to the bank, the S&P 500's forward price-to-earnings ratio has declined 16.5% since late 2025. Additionally, 27% of companies in the index have experienced valuation multiple reductions exceeding 20% this year. HSBC estimates that each additional 50-basis-point increase in the yield on the 10-year US Treasury note would reduce the S&P 500's forward earnings multiple by a further 4.3%. The bank also identified differences between headline market volatility measures and the implied volatility of individual stocks. Average three-month implied volatility among S&P 500 constituents stands at the 85th percentile of its historical range, compared with the 35th percentile for the VIX index. HSBC said this difference indicates that volatility at the individual company level remains elevated relative to the broader market measure. HSBC expects third-quarter earnings announcements to contribute to equity market performance, based partly on recent patterns during corporate reporting periods. Since 2025, the S&P 500 has recorded average gains of 4% during earnings reporting windows, compared with broadly unchanged performance outside those periods, according to the bank. Pinder anticipates another reporting season in which companies exceed analysts' earnings expectations and raise their financial guidance. HSBC noted that corporate guidance is improving at its fastest pace since 2021, providing support for its earnings outlook. The bank also expects approximately $64 billion in customs refunds to contribute to corporate profit margins. These factors underpin HSBC's assessment that earnings growth could continue supporting equity markets despite pressure on valuation multiples. HSBC expects higher interest rates to have a limited direct effect on corporate earnings, citing the structure of outstanding debt among S&P 500 companies. According to the bank, approximately 80% of S&P 500 corporate debt consists of long-term borrowing with fixed interest rates. This financing structure limits the immediate effect of changes in market interest rates on existing debt-servicing costs. HSBC therefore distinguishes between the potential impact of rising Treasury yields on equity valuations and their effect on corporate profitability. While higher bond yields could place additional pressure on price-to-earnings multiples, the bank expects the impact on earnings to remain relatively limited. Artificial intelligence investment remains a component of HSBC's equity market assessment. Pinder highlighted accelerating demand for AI inference, the process through which trained models generate outputs, alongside GPU rental prices that have remained firm. The bank views these developments as indicators of continuing demand for AI computing infrastructure. HSBC identified hyperscale cloud computing providers as its preferred near-term exposure to the expansion of AI computing demand. The bank expects these companies to benefit from demand for processing capacity as AI applications continue to generate computing requirements. Pinder also pointed to signs of AI monetisation as a factor supporting the bank's outlook for technology-related earnings. HSBC's assessment combines expectations of continued corporate earnings growth with recognition that higher bond yields could place further pressure on equity valuations. The bank considers the recent reduction in forward earnings multiples relevant to current market conditions, while noting that individual stock volatility remains elevated. Nevertheless, HSBC expects improving corporate guidance, potential margin support from customs refunds and continued AI computing demand to contribute to third-quarter earnings performance. The bank maintains a constructive view of global equities, with hyperscale technology companies among its preferred investments within the AI sector. Get stock prices from InvestorsHub

- HSBC's Frank Lee upgraded SNPS to Buy with a $700 target, projecting a business model shift could accelerate earnings growth from 7% to 28% through 2028. - Synopsys sealed an agentic AI partnership with TSMC while reporting 42% revenue growth and a $10.9 billion backlog last quarter. - Seventeen analysts raised EPS estimates in the past 30 days, yet HSBC's $700 target still sits 28% above the Street consensus of $546. - Read More: Learn 7 secret wealth tips high net worth investors use that most investors miss (sponsor) HSBC analyst Frank Lee upgraded Synopsys (NASDAQ:SNPS) to buy from hold and raised his price target to $700 from $490. Lee argues that a change in the chip design software leader's business model could lift annual earnings growth from 7% to 28% through 2028. Synopsys stock rose 4.38% in premarket trading to $443.50. The analyst upgrade presents Synopsys as an AI growth story, and near-term volatility remains a real risk. Ticker | Company | Firm | Action | Old Rating | New Rating | Old Target | New Target SNPS | Synopsys | HSBC | Upgrade | Hold | Buy | $490 | $700 In a research note, Lee said the new business model will turn Synopsys from a "slow-growth software play to a high-growth AI beneficiary," with the faster earnings growth "creating significant re-rating potential." He sees the design intellectual property royalty model as the main driver of that earnings growth. Management has described the same shift. On the third-quarter call, the chief executive said Synopsys is in advanced talks to move from a traditional IP license to "a license plus a royalty" with customers that include hyperscalers and ASIC vendors. He added, "We are in active discussions with multiple Factory 2 customers." Design IP revenue reached $474 million, up about 11% year-over-year. The die-to-die business is "on pace to double year over year," and Synopsys won more than 95% of PCIe 7 opportunities. Synopsys is a leading provider of electronic design automation (EDA) software and semiconductor IP. It expanded into wider engineering software when its $35B Ansys acquisition closed in fiscal Q3 2025. Fiscal Q3 2026 revenue rose 42.4% YoY to $2.48B. Non-GAAP EPS came in at $3.91, beating the $3.67 consensus, and the non-GAAP operating margin was 41.6%. Management raised its full-year guidance to revenue of $9.69B to $9.74B and non-GAAP EPS of $15.04 to $15.10. Backlog stood at $10.9 billion. Shares have gained 16.35% over the past week but remain down 5.58% year to date. The stock trades at about 23x forward earnings, compared with a trailing P/E near 72. Analysts' estimates are moving higher. The consensus fiscal 2027 EPS estimate rose to $17.5259 from $17.2343 90 days ago. Over the past 30 days, there were 17 up updates and just 1 down updates. HSBC's $700 target is well above the consensus target of $545.55. Synopsys also announced an agentic AI partnership with TSMC (NYSE:TSM) this week. Synopsys offers retirement-focused investors exposure to AI chip design complexity through recurring software and IP revenue. The stock pays no dividend, so any return depends on earnings growth. The risks are real: - Export controls and Entity List restrictions - Customer concentration - Ansys integration - Fourth-quarter restructuring charges - Total debt of about $10 billion Key signals to watch include signed Factory 2 royalty deals and the updates to the long-term IP growth outlook that management has promised for Investor Day. The royalty shift is really an AI infrastructure story, since Synopsys gets paid every time a hyperscaler or ASIC vendor produces new silicon (we featured seven companies riding the same expansion, outside the chipmakers themselves, in a free report here: 7 Stocks Powering the AI Boom (That Aren't Chipmakers)). How do you continue to grow a seven-figure portfolio in retirement? The last thing you want is to run out of money, you want your money to generate lasting income while you enjoy your life. Learn seven strategies high net worth investors use with new report: The Seven Secrets of High Net Worth Investors from Fisher Investments. Get your guide here (sponsor) Contact [email protected] for any questions or corrections.

Barclays PLC BCS is benefiting from resilient U.K. borrowing demand, with first-half 2026 loan balances rising 5% year over year. The company's CFO Anna Cross recently said that household and corporate loan formation has continued without signs of demand being pulled forward. Management expects Barclays U.K. net interest income (NII) of £8.2 billion in 2026, within its £8.1-£8.3-billion guidance. Stronger lending should remain supportive of interest income if funding costs and credit quality stay controlled. Barclays U.K. generated £3.99 billion in NII in the first half, up 8% year over year. Mortgage market-share gains, broader distribution through Kensington and increased corporate lending are helping the bank deploy its deposit base more effectively, creating room for further balance-sheet-driven revenue growth. The U.S. Consumer Bank is emerging as another growth engine. Deposits have increased more than 15%, while management said that the net interest margin (NIM) improved by 2.5 percentage points and the cost-to-income ratio fell to the mid-40% range. Expansion through Best Egg and Samsung is also broadening the business beyond credit cards. First-half U.S. Consumer Bank NII rose 18% year over year to £1.56 billion, strengthening Barclays' earnings diversification. Higher investment spending, however, will weigh on near-term costs. Barclays plans an additional £300 million of structural cost-reduction investment this year while maintaining its high-50s cost-income ratio target for 2026. The bank has moved about 80% of its data onto its enterprise platform and is using AI to reduce contact-center workloads and fraud-related calls. Successful execution could translate today's spending into a leaner cost base and improved operating leverage over time. Overall, resilient U.K. lending, stronger U.S. banking economics and technology-led efficiencies could support BCS' revenues and profitability. Barclays expects group NII excluding the Investment Bank and Head Office to exceed £13.7 billion, though higher restructuring expenses and rising credit impairments remain key offsets. The financial payoff will depend on whether loan growth remains healthy while efficiency gains increasingly flow through to earnings. Among Barclays' peers, HSBC Holdings HSBC is also benefiting from stronger core banking income. HSBC's first-half 2026 banking NII increased $1.6 billion to $22.9 billion, supporting a 23% rise in reported profit before tax to $19.5 billion. Growth in Wealth and transaction banking further diversified revenues, though higher credit costs and planned investments remain offsets. NatWest Group NWG is similarly benefiting from resilient U.K. banking activity. NatWest's first-half NII rose 12.6% year over year to £6.89 billion, while customer loans and deposits expanded. Cost reductions and technology investments helped improve its adjusted cost-to-income ratio to 46%, highlighting the potential for stronger revenues and efficiency gains to lift profitability. For Barclays, these peer trends reinforce the broader opportunity from healthy loan demand, deposit growth and technology-led cost savings. Its ability to sustain U.K. lending momentum while improving efficiency will be important in keeping pace with HSBC and NatWest. In the past six months, BCS shares have gained 14.9% compared with the industry's 22.6% growth. Image Source: Zacks Investment Research Currently, Barclays carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Barclays PLC (BCS) : Free Stock Analysis Report HSBC Holdings plc (HSBC) : Free Stock Analysis Report NatWest Group plc (NWG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Barclays expects AI-driven earnings strength to support stocks while a more hawkish interest-rate outlook limits valuation expansion. HSBC raised its year-end S&P 500 target to 8,100 from 7,650, pointing to strong earnings growth and continued AI investment. Fundstrat’s Tom Lee maintains an 8,000 year-end target and has outlined a potential path toward 8,400 to 8,800 under a stronger scenario. U.S. equities edged lower in early morning trading Wednesday, but Wall Street strategists continue to raise their year-end targets for the S&P 500, pointing to resilient corporate earnings and continued AI investment. In a note to investors cited by TheFly, Barclays raised its year-end S&P 500 target to 7,950 from 7,800. Head of equity strategy Venu Krishna cited a "standout earnings season" led by technology. Krishna said recent earnings results support "AI-driven earnings durability," while a more hawkish outlook for interest rates should keep valuations in check. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox Futures pointed to a softer open, with Dow Jones Industrial Average futures down 0.37%, S&P 500 futures 0.22% lower and Nasdaq futures off 0.37%. The SPDR S&P 500 ETF (SPY) slipped 0.28%, while the SPDR Dow Jones Industrial Average ETF (DIA) fell 0.44%. The Invesco QQQ Trust (QQQ), which tracks the Nasdaq-100, declined 0.48%. Retail sentiment around SPY remained in ‘bullish’ territory on Stocktwits over the past day. HSBC made a larger upward move a day earlier, lifting its year-end 2026 S&P 500 target to 8,100 from 7,650. Head of equity strategy Nicole Inui pointed to strong earnings momentum, with S&P 500 earnings growth in the first half of 2026 approaching 40%. HSBC expects earnings to continue expanding at a 25% pace in the second half. The firm sees AI spending as a key catalyst for semiconductors and other AI-linked companies, while a resilient consumer backdrop should support the rest of the index. Fundstrat’s Tom Lee has also steadily raised his S&P 500 outlook this year. His current 8,000 year-end target sits between the latest Barclays and HSBC forecasts. Lee began 2026 with a 7,700 target set in December 2025 before raising it to 8,000 in June. He cited higher 2027 earnings expectations and a more conservative valuation multiple, putting the emphasis on earnings growth rather than further multiple expansion. By July, Lee outlined a potential path toward 8,000 by year-end, with upside toward 8,400 to 8,800 under a stronger scenario. He also warned investors to expect a possible 10% to 20% drawdown between August and October. Lee has continued to highlight AI-driven productivity, energy infrastructure investment and corporate earnings as key drivers. He has also argued that the S&P 500’s valuation multiple has compressed during the year because earnings have grown faster than stock prices. The S&P 500 has already climbed above 7,800 this year, reaching a record intraday high of around 7,800 in August, putting Barclays’ 7,950 target within relatively close range and HSBC’s 8,100 call within reach of another 300 points. Read also: Samsung, TSMC Commit To ASML's Next-Gen Chip Machines, But Intel Got There First For updates and corrections, email newsroom[at]stocktwits[dot]com. Prabhjote Gill has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: ORCL Stock Sees Price Target Cut Ahead Of Earnings: Analyst Says Bad News Is Priced In ORCL Stock Sees Price Target Cut Ahead Of Earnings: Analyst Says Bad News Is Priced In PHAT Stock Falls 7% As Leerink Sees Little Near-Term Upside — CEO Plays Down Upcoming Rival

HSBC raised its year-end benchmark projection for the S&P 500 from 7,650 to 8,100, implying a 5% gain from Friday’s close and around 18% growth for the full year. HSBC sees earnings per share growth, up nearly 40% in the first half of 2026. However, HSBC warned investors of potential near-term seasonal pullback, regulatory shifts, and geopolitical volatility. HSBC upgraded its year-end target for the broad S&P 500 index to 8,100, driven by stronger-than-expected corporate profitability and sustained technology investment. The revised target, lifted from a previous forecast of 7,650, implies an additional 5% gain from Friday’s market close, and would place the index up around 18% for the full year, according to HSBC’s research note released on Tuesday. See what 10M+ investors are talking about. Get the Stocktwits Daily Rip for what retail is watching right now, free to your inbox The primary driver behind the upgrade is an accelerating corporate earnings environment. According to HSBC strategist Nicole Inui, earnings per share growth across S&P 500 companies surged nearly 40% in the first half of 2026. HSBC expects corporate momentum to remain strong in the second half, projecting year-over-year earnings growth of at least 25%. Heavy enterprise capital expenditure on artificial intelligence infrastructure continues to drive bottom-line expansion. However, Inui highlighted that gains are not exclusive to the technology sector. A resilient macroeconomic foundation and steady consumer spending have provided a supportive backdrop for broader market sectors not directly tied to AI technologies. The target hike follows a strong second-quarter corporate reporting cycle that exceeded consensus expectations across multiple sectors. Broad-based upward revisions to full-year earnings guidance have reassured market participants that profit margins are absorbing elevated interest rates and supply adjustments better than initially feared. Beyond mega-cap tech firms benefiting from AI-driven demand, health care, industrials, and consumer goods companies have also demonstrated resilient pricing power and operational discipline, bolstering overall S&P 500 profit expansion. Despite the optimistic end-of-year outlook, HSBC urged investors to remain prepared for potential short-term volatility. Inui noted that markets could face typical autumn seasonal weakness, along with potential reactions to upcoming economic reports. Furthermore, shifting regulatory environments, particularly around data centers and social media operations, and broader geopolitical tensions continue to present localized risks. Nevertheless, HSBC emphasized that solid underlying corporate performance should allow equities to absorb temporary fluctuations as the benchmark index moves toward its fourth consecutive winning year. Retail sentiment on Stocktwits on SPDR S&P 500 ETF (SPY), tech-heavy Invesco QQQ (QQQ) and SPDR Dow Jones ETF (DIA) was ‘bullish’ at the time of writing. For updates and corrections, email newsroom[at]stocktwits[dot]com Shashank Nayar has no position in any of the stocks mentioned in this article. StockTwits' news team content is for informational purposes only and is not intended as investment advice. For more, see our editorial policy. This article was originally published on StockTwits. Related: QCOM Stock Extends Gains Overnight: Analyst Says Amazon AI Deal 'Changes Calculus For Qualcomm' QCOM Stock Extends Gains Overnight: Analyst Says Amazon AI Deal 'Changes Calculus For Qualcomm' HOOD Stock Ticks Up Overnight — Why This Analyst Sees Upside Of Over 19% From Here

Interested in Grupo Financiero Galicia S.A.? Here are five stocks we like better. Grupo Financiero Galicia reported strong second-quarter profitability, with net income rising 12% year over year to ARS 258 billion. Lower funding costs, stronger trading and securities results, reduced loan-loss provisions and HSBC integration efficiencies supported the improvement. Banco Galicia’s balance sheet expanded sequentially, with private-sector financing up 4% and deposits up 7%; growth was concentrated in dollar lending, while peso loans declined amid selective underwriting. Credit quality remains a concern, as the nonperforming-loan ratio increased to 8.3%, although provisions fell and coverage improved to 92.8%. Management expects 2026 loan growth of approximately 10%–15%, driven mainly by dollar-denominated commercial lending in sectors such as oil and gas, while targeting roughly 10% ROE for the year and about 12% by year-end. The company also projects improving credit metrics and an efficiency ratio near 39% following HSBC-related restructuring. Grupo Financiero Galicia (NASDAQ:GGAL) reported second-quarter net income of ARS 258 billion, up 12% from a year earlier, as lower funding costs, stronger trading and securities results, and reduced loan-loss provisions supported profitability. The company said its second-quarter return on average assets was 2.1%, while return on average shareholders’ equity was 11.3%. Banco Galicia contributed ARS 158 billion in profit, followed by Fondos Fima with ARS 38 billion, Naranja X with ARS 36 billion, Galicia Seguros with ARS 23 billion and Galicia Securities with ARS 8 billion. → What Rising Delivery Forecasts Say About Rivian's Stock Prospects Head of Investor Relations Pablo Firvida said the quarter took place against a more stable Argentine macroeconomic backdrop. The company cited 2.7% year-over-year economic growth in June, a deceleration in monthly inflation to 1.9% from 3.4% in March, and continued expansion in financial-system deposits and lending. Banco Galicia’s net income rose 211% from the first quarter and 21% from the second quarter of 2025. Firvida attributed the improvement to lower funding costs as interest rates declined, better results from government securities and derivatives, lower provisions for loan losses, and efficiency gains from the integration of Galicia Más, formerly HSBC. → NVIDIA Reveals $21 Billion SpaceX Stake: Signal of Confidence or Circular Financing? Average interest-earning assets increased 6% sequentially to ARS 30 trillion. The increase reflected a 27% rise in peso-denominated government securities, a 37% increase in dollar-denominated government securities, and 9% growth in dollar loans. Peso loans declined 7% amid more selective underwriting and lower demand. The yield on interest-earning assets declined 190 basis points to 21.1%, while the cost of interest-bearing liabilities fell 159 basis points to 10.1%. Net interest income decreased 3% from the prior quarter, as an 8% decline in interest income was partly offset by a 16% reduction in interest expenses, primarily related to deposits. → Berkshire Boosts Its Bet: This AI Hyperscaler Is Now a Top-3 Holding Net income from financial instruments increased 275% sequentially. The company said the result was driven by an 85% reduction in losses from derivative financial instruments, higher gains from the sale and valuation of government securities, and a recovery in private-sector securities results. Banco Galicia’s financing to the private sector reached nearly ARS 25 trillion at quarter-end, up 4% sequentially. Dollar-denominated financing rose 19%, while peso financing fell 4%. Deposits totaled ARS 27 trillion, up 7%, with peso deposits rising 7% and dollar deposits increasing 6%. The bank estimated its market share of private-sector loans at 15.1%, up 69 basis points from the first quarter, while its private-sector deposit market share rose 42 basis points to 14.3%. Provision for loan losses at Banco Galicia declined 8% from the previous quarter, which the company said reflected fewer loans entering Stage 3 and early signs of improving delinquency indicators. However, the nonperforming-loan ratio rose to 8.3% from 7.7% in the first quarter. Allowance coverage increased to 92.8% from 91.4%. Banco Galicia ended June with a total regulatory capital ratio of 26% and a Tier 1 capital ratio of 25.9%, each 48 basis points higher than at the end of the prior quarter. Its liquid assets represented 93.1% of transactional deposits and 55.2% of total deposits. At Naranja X, CFO Hernán García said the company expects its nonperforming-loan ratio to decline to roughly 16% to 17% by year-end from nearly 20% during the second quarter. He said short-term delinquency rates continued to decline and that coverage is expected to recover toward 100%. Firvida said Banco Galicia’s coverage ratio could reach approximately 95% in the next quarter and approach 100% by year-end. CFO Gonzalo Fernández Covaro said Grupo Financiero Galicia expects total loan growth of about 10% to 15% for 2026, with most of the expansion expected to come from dollar-denominated loans. Peso loan growth is expected to be limited in real terms. The company sees opportunities in commercial dollar lending, particularly in oil and gas, as well as financing related to privatizations of state-owned companies. Fernández Covaro said the company expects personal-loan growth to improve in the second half, though it will continue to emphasize higher-quality customer segments and careful underwriting. Grupo Financiero Galicia expects deposits to grow about 10% this year. Fernández Covaro said the company has managed deposit growth in line with lending demand and believes it can raise additional deposits as loan growth accelerates. The company also expects to use dollar-denominated commercial paper issuances to help fund dollar lending. Banco Galicia expects full-year 2026 cost of risk of approximately 8.3%, compared with 9.3% at the time of the call. The bank expects its nonperforming-loan ratio to decline modestly in the third quarter and reach about 6.3% by year-end. Management expects Banco Galicia’s full-year net interest margin to average about 16%, with pressure expected in the second half as inflation and interest rates decline. The company is targeting return on equity of about 10% for the full year and said it aims to exit the year near 12%. For 2027, Fernández Covaro said the company is aiming for return on equity of about 15%, though formal guidance will be addressed later in the year. Over the longer term, management continues to target return on equity between 15% and 20%. The company expects Banco Galicia’s efficiency ratio to remain below 40% in 2026, at around 39%, following restructuring actions tied to the HSBC acquisition. Management said it would aim for a longer-term efficiency ratio of roughly 37% to 38%, while continuing initiatives involving automation, artificial intelligence, staffing and branch optimization. On the macroeconomic outlook, Fernández Covaro said the company expects Argentina’s inflation rate to be around 29% in 2026 and GDP growth to be about 2.6%. He also said management expects the exchange rate to be around ARS 1,600 per dollar at the end of 2026 and around ARS 2,000 per dollar at the end of 2027. Grupo Financiero Galicia is a diversified financial services holding company headquartered in Buenos Aires, Argentina. As one of the country's largest private-sector financial institutions, the company provides a comprehensive suite of banking, insurance and investment products to individual, small-to-medium enterprise (SME) and corporate clients. Its operations span retail and commercial banking, asset management, leasing, factoring and pension fund administration. The core banking segment offers deposit and lending services, credit and debit cards, payment solutions and digital banking platforms. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Grupo Financiero Galicia Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

HSBC Holdings plc (NYSE:HSBC) posted a stronger-than-expected first-half profit this week and resumed its share buyback program. UBS Group AG (NYSE:UBS) posted its own profit beat, but it's facing a $125 million fine from U.S. regulators. Hedge funds had already been quietly trimming their UBS positions before that fine even became public. Europe's biggest banks are having a strong earnings season, but HSBC is telling the cleaner story of the two. Its profit beat came from wealth management growth, a resumed buyback, and a raised outlook for net interest income. On the other hand, UBS Group AG (NYSE:UBS) beat estimates too, but its win comes with a catch, i.e., a $125 million fine from U.S. regulators for repeated anti-money-laundering failures, alongside a hedge fund base that had already been quietly pulling back heading into the quarter. This makes you wonder: does a clean earnings beat matter more to investors than a resolved regulatory problem? Or does UBS's history as a "repeat offender" cast a longer shadow over its recovery than HSBC Holdings plc (NYSE:HSBC)’s cleaner quarter? First-half profit rose 23% to $19.5 billion, beating the $18.9 billion analysts expected. HSBC Holdings plc (NYSE:HSBC) resumed its buyback with a plan of up to $1 billion after pausing for three quarters to fund its Hang Seng Bank takeover. It also raised its guidance for net interest income to exceed $46 billion. Wealth revenue grew 18%. The bank added 640,000 new clients in the first half. Corporate and institutional banking is now HSBC's biggest income source, generating a third of first-half profit. The bank has more than 70 IPOs lined up across Asia. However, Citi flagged that the new $1 billion buyback came in well below the $2.2 billion investors expected, raising the question of whether HSBC is permanently scaling back its repurchases. The stock dropped from its own record high right after the earnings release. HSBC is also still exiting several businesses, including its Singapore insurance unit, Egypt retail banking, and Australian mortgages, which is a sign of ongoing restructuring rather than pure growth. Second-quarter net profit rose 17% to $2.8 billion, beating the $2.39 billion analysts expected, while pretax profit jumped 64% to $3.6 billion. UBS Group AG (NYSE:UBS) announced a new $3 billion buyback program. Its cost-to-income ratio improved to 72.9% from 80.5% a year earlier. Its Credit Suisse integration remains on track for completion by the end of 2026, with cumulative cost savings reaching $12.6 billion. CEO Sergio Ermotti said UBS is nearly back to the profitability it had before the Credit Suisse acquisition. However, UBS was fined $125 million by U.S. regulators just two days before this comparison, the largest-ever civil fine against a broker-dealer under the main U.S. anti-money-laundering law, and a repeat offense after a smaller 2018 penalty for similar failures. Zuercher Kantonalbank called the current share price simply "fair." UBS's buybacks also remain contingent on an unresolved Swiss capital rules debate that could force it to hold billions more in reserve capital. Insider Monkey's hedge fund database shows HSBC Holdings plc (NYSE:HSBC) had 18 hedge fund holders as of Q1 2026, down from 25 the quarter before. UBS Group AG (NYSE:UBS) had 37 holders, down from 39. So, hedge funds are bullish on UBS. Among other large European bank peers, Barclays had 36 holders, up from 29, and Deutsche Bank had 27, up from 24. Both banks are benefiting from higher interest rates, jumping markets, and growing wealth management. However, UBS recently got hit with a $125 million fine. This shows that taking over Credit Suisse is not just about money because UBS still has to clean up old legal problems. HSBC does not have this extra trouble weighing down its own recovery. Nonetheless, hedge funds prefer UBS Group AG (NYSE:UBS) over HSBC. While we acknowledge the potential of HSBC as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: Hedge Funds Are Bullish on DXC Technology (DXC) and Blackstone Inc. (BX)'s Profit Jumped 26% on AI Bets but the Stock Barely Moved. Here's Why. Disclosure: None. This article is originally published at Insider Monkey.