Category: 3. Business

• 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!

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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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Stocks wavered to a mixed finish on Wall Street on Friday and notched their first weekly loss in the last four.

Major indexes wobbled throughout most of the week, but ultimately pulled back from records set the prior week. Technology stocks once again determined the broader direction of the market.

The Standard & Poor’s 500 index spent most of the day in the red and was down as much as 1.3%. It ultimately eked out a gain, rising 8.48 points, or 0.1%, to close at 6,728.80. The Dow Jones industrial average made a similar reversal and rose 74.80 points, or 0.2%, to close at 46,987.10.

The technology-heavy Nasdaq was down as much as 2.1% at one point during trading, but recovered most of the losses. It fell 49.46 points, or 0.2% to 23,004.54.

The market was weighed down by technology stocks, especially several big names with huge valuations that give them outsize influence over the direction of the market. Google’s parent company, Alphabet, fell 2.1% and Broadcom fell 1.7%.

Wall Street remained focused on the latest quarterly reports and forecasts from U.S. companies.

Payments company Block, which operates the Square and Cash App businesses, sank 7.7% after turning in results that fell short of forecasts. Exercise equipment maker Peloton jumped 14.2% after its results beat estimates.

Expedia Group surged 17.5% after beating analysts’ quarterly earnings forecasts.

More than 90% of companies within the S&P 500 have reported earnings for their latest quarter. Most companies have reported growth beyond Wall Street expectations and the influential tech sector has the strongest growth, according to data from FactSet.

Corporate profits and forecasts were already being scrutinized by Wall Street as investors try to gauge whether the market’s overall high value is justified. The results have taken on more significance amid a lack of other data about the economy because of the U.S. government shutdown, which is now the longest on record.

The shutdown is now responsible for yet another missing economic report typically relied on by Wall Street and economists. The monthly employment data for October were unavailable, as were the monthly data for September previously. The lack of data on employment is especially troubling because the job market was already weakening.

Wall Street still has several private sources of economic data to turn to, outside of earnings. The latest came Friday from the University of Michigan, with its monthly consumer sentiment report. The latest report showed that consumer sentiment fell sharply from a month ago and hit a three-year low. Economists had expected a slight increase.

“Consumers are starting to get concerned about the potential effects of the government’s shutdown on economic activity,” Eugenio Aleman, chief economist for Raymond James, wrote in a note to investors.

The survey also showed that inflation expectations edged slightly higher. Government data on consumer prices and other measures of inflation are among the information Wall Street and others lack because of the government shutdown. Inflation has been stubbornly high and remains a key concern, especially amid a volatile U.S. trade war that could add fuel to rising inflation.

The lack of inflation and employment data is a problem for the Federal Reserve, which has signaled a more cautious approach on interest rate cuts moving forward. Wall Street’s big gains this year have been partly due to anticipation for interest rate cuts, which can help stimulate the economy by making loans less expensive.

The Fed has already cut its benchmark rate twice this year as it tries to counter the effect that a weakening employment market could have on economic growth. Cutting rates could worsen inflation at a time when levels are stubbornly higher than the central bank’s 2% goal, however.

Wall Street is still mostly betting that the Fed will cut interest rates at its December meeting. Investors are forecasting a 67% chance of another interest rate cut, according to CME FedWatch.

Treasury yields held steady in the bond market. The yield on the 10-year Treasury remained at 4.09% from late Thursday. The yield on the two-year Treasury held at 3.56% from late Thursday.

Markets in Europe fell and markets in Asia closed lower. China reported that its exports contracted 1.1% in October, as shipments to the United States dropped by 25% from a year earlier. But economists expect Chinese exports to recover after President Trump and Chinese leader Xi Jinping agreed last week to de-escalate the trade war between the two largest economies.

Troise writes for the Associated Press.