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• Fairfax Financial Holdings Limited reported third quarter 2025 earnings earlier this week, posting net income of US$1.15 billion and basic earnings per share from continuing operations of US$55.90, both up from the same period last year.

• The company also renewed its universal shelf prospectus, granting it flexible access to capital markets over the next 25 months for debt, equity, or other securities offerings.

• We’ll examine how Fairfax’s strong quarterly profit growth could influence its long-term investment narrative in light of recent analyst expectations.

Find companies with promising cash flow potential yet trading below their fair value.

To be a long-term shareholder in Fairfax Financial Holdings, you need to believe in the company’s disciplined, global insurance and investment approach, its ability to capitalize on emerging market growth, and its consistent capital management. The recent strong Q3 earnings growth highlights robust core profitability, but it does not materially change the near-term catalyst: the sustainability of elevated investment income, especially if global interest rates begin to decline. The main risk remains earnings sensitivity to shifts in interest rates and market volatility.

Among recent announcements, Fairfax’s renewal of its universal shelf prospectus stands out. This move allows the company to flexibly access debt and equity markets over the next 25 months, reinforcing its capital strength. While supportive, this announcement does not directly influence the most important near-term catalyst, though it positions Fairfax to act quickly if external conditions shift.

But investors should be alert to the potential downside if rising investment income proves temporary and…

Read the full narrative on Fairfax Financial Holdings (it’s free!)

Fairfax Financial Holdings’ narrative projects $41.8 billion revenue and $2.9 billion earnings by 2028. This requires 3.4% yearly revenue growth and a $1.7 billion earnings decrease from $4.6 billion today.

Uncover how Fairfax Financial Holdings’ forecasts yield a CA$2708 fair value, a 22% upside to its current price.

Five members of the Simply Wall St Community estimate Fairfax’s fair value ranging from US$2,707 to over US$2 million per share. These widely different opinions underscore the uncertainty around Fairfax’s earnings durability if interest rates reset and market returns cool.

Explore 5 other fair value estimates on Fairfax Financial Holdings – why the stock might be worth just CA$2708!

Disagree with existing narratives? Create your own in under 3 minutes – extraordinary investment returns rarely come from following the herd.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include FFH.TO.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

(Bloomberg) — OpenAI has asked the Trump administration to revamp a Chips Act tax credit to help lower the cost of artificial intelligence infrastructure, as the startup explores additional ways the US government can support an industrywide data center build-out for AI.

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In a letter last week to White House Office of Science and Technology Policy Director Michael Kratsios, OpenAI Chief Global Affairs Officer Chris Lehane suggests the administration work with Congress to expand a 35% chips-focused tax credit to AI data centers, AI server producers and electrical grid components, such as transformers and the specialized steel used to produce them. The letter is dated Oct. 27, according to a copy posted online by the company.

Broadening the tax credit will “lower the effective cost of capital, de-risk early investment and unlock private capital to help alleviate bottlenecks and accelerate the AI build in the US,” Lehane said in the letter.

The letter, which has not been widely covered, offers added clarity into the role OpenAI thinks government should play to help offset the risk from costly investments in AI. OpenAI alone has committed to spending $1.4 trillion on data centers and chips to build more advanced AI systems and support wider adoption of the technology. Those spending plans have drawn scrutiny as the unprofitable startup pursues creative financing arrangements to support it, including deals that have been criticized for being circular.

Earlier this week, OpenAI Chief Financial Officer Sarah Friar alarmed some industry watchers by hinting at a role for the US government to “backstop the guarantee that allows the financing to happen.” Soon after, Friar and OpenAI’s Sam Altman took pains to clarify her remarks, stressing that she had misspoken and that the ChatGPT maker was not seeking a bailout for its infrastructure commitments.

The Trump administration has dismissed the idea of a financial backstop for AI companies, according to US officials, after Friar’s remarks raised questions about the prospect for a bailout. White House AI and crypto czar David Sacks also posted Thursday: “There will be no federal bailout for AI.”

Altman, in a social post Friday, said an effort to revitalize the US chip industry “across the entire stack — fabs, turbines, transformers, steel, and much more — will help everyone in our industry, and other industries (including us).”

“To the degree the government wants to do something to help ensure a domestic supply chain, great.” Altman wrote. “But that’s super different than loan guarantees to OpenAI, and we hope that’s clear.”

A representative for the White House Office of Science and Technology Policy didn’t respond to a request for comment.

In its letter, OpenAI also advocated for the government to issue grants, cost-sharing agreements, loans, or loan guarantees to “manufacturers” in the AI industry broadly, without specifying exactly which kinds of companies.

OpenAI said this type of financial support would help counter China in instances where it is “distorting the market,” such as copper, aluminum and electrical steel. Direct funding would also help shorten lead times for critical grid components such as transformers, the letter said.

In a separate September white paper on infrastructure policy, OpenAI also said it supports loan guarantees to allow AI companies to “confidently purchase US-made chips at scale.” The move would shore up demand for US semiconductor facilities while reducing costs for AI companies purchasing chips, the white paper said.

The US has a prototype for loans and loan guarantees for strategic industries, as it offered these incentives to the semiconductor industry as part of the Chips Act. As of the end of January this year, only $5.5 billion of up to $75 billion were awarded, per a Commerce Department report.

OpenAI’s requested tax credit aligns with the Trump administration’s consistent messaging about winning the AI race and its high-level determination to remake the Chips Act of 2022. Earlier this year, it converted a Chips Act grant in Intel Corp. into an equity stake, marking a significant departure from the original plan.

The so-called Advanced Manufacturing Investment Credit named in the letter was initially part of the 2022 Chips Act. It was increased to 35% from 25% as part of the omnibus tax bill Congress passed this July.

(Updates with comments from OpenAI’s Altman beginning in the seventh paragraph.)

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