Category: 3. Business

When Jeff Bezos was drumming up his early visions of Amazon while working as a hedge fund manager, his Wall Street boss questioned if he could achieve success and financial security by selling books on the internet. And when Howard Schultz was looking for money to back his coffee business, called Starbucks, more than 200 investors believed no one would pay $3 for a cup of joe. 

The same goes for two of Chess.com’s founders, Danny Rensch and Erik Allebest, when they were shopping out their platform to potential investors. Rensch tells Fortune they were routinely overlooked and disregarded.

“We were laughed out of VC rooms who said that chess would never be anything. Nobody invested early on, and it became the biggest blessing in disguise,” Rensch recalls. 

No investor, no problem: Chess.com founder had his own back

Instead of relying on the pockets of investors, the Chess.com founders dipped into their own. They bootstrapped the online business in 2009 with money from Allebest’s former chess ventures, also borrowing $70,000 from a mother’s friend, which Rensch says they paid back very quickly. Soon, the entrepreneurs proved that VC investors missed out on a huge win; today, Chess.com is one of the largest online chess platforms in the world with more than 225 million registered members and 40 million active monthly users. Chess.com says it even surpassed a $1 billion valuation back in 2023.

Despite having to keep his day job for years while his bootstrapped company was clawing its way to profitability, Rensch says he wouldn’t have it any other way. It’s a part of Chess.com’s underdog story as the platform concept was not only mocked by venture capitalists, but also by the chess community at large. Now, the website has become essential for anyone who’s interested in, or serious about, chess—from novices to grandmasters. 

“That is a really important part of the story—there was no money raised. We were completely bootstrapped,” Rensch continues. “And given where chess went, I think it’s funny and adds to the magic of ‘Wow, what happened here?”

It was the ‘laughingstock’ of the chess community before amassing 225 million users

When Chess.com was still on its business bambi legs, it not only had to take heat from the VC world, but also from its own community. Players were doubtful; the internet was still in its relative infancy in 2009. Plus, there were other niche chess gaming sites like ChessPark (which became a part of Chess.com), Chess Tempo, and Red Hot Pawn. 

“Chess.com was the laughingstock of the online chess community,” Rensch says. “It sounds so funny to say now, but it really is important to reflect and understand that the internet—at its earliest inception—was not web two or let alone web three. Your website was just a place with a phone number for a lot of people.”

“There were niche communities and there were the main ones, but Chess.com itself, and the idea that it would become such an amazing home for every level of the chess playing community…was kind of ridiculous for most,” Rensch continues. 

Rensch says he sees his website as a skill-sharpener that enriches people’s lives. In looking at Chess.com like a subscription service—like a Duolingo, Strava, or Spotify—the platform is a “lifestyle” ritual that users feel adds value to their well-being. And in the 16 years since the website’s inception, more than 225 million chess lovers have flocked to the platform to sharpen their gameplay and be in community. 

There is clearly a large demand for AI chatbots that are capable of behaving in romantic or sexual ways. An April survey of 6,000 regular AI users by the Harvard Business Review found that “companionship and therapy” was the most common use case. Another study from Ark Invest found that adult-focused AI platforms made significant gains last year, capturing 14.5% of the market previously dominated by OnlyFans, up from just 1.5% the year before.

Popular alternatives that market themselves as companion AI chatbots, such as Character.ai and Replika, also speak to this growing demand from users. Earlier this year, xAI introduced “companion mode” for its chatbot Grok, a feature that lets users engage with various characters, including a highly sexualized anime persona called “Ani.”

“OpenAI is stuck between a bit of a rock and a hard place, because I think they have seen a strong demand signal from users,” Jessica Li, a senior research analyst at Georgetown’s Center for Security and Emerging Technology, told Fortune. “In terms of the relationships that people are having with models…erotic content or adult content would also fall under this bucket of emotional engagement with the models.”

The move could be an attempt by OpenAI to “straddle the line” between keeping the market share they already have by promising opt-in content moderation for NSFW content, Li said, while also seeing if they can capture other users from more specialized or niche services like Replika.

“Despite some of the narratives around building artificial general intelligence that will supercharge the economy, OpenAI is still trying to operate as a technology platform, and somewhat like a social media company,” Li said. “There’s an interesting tension between the narratives that are being sold to investors and politicians… versus the things that are actually happening in the market.”

OpenAI’s foray into adult content has drawn criticism from child safety advocates and notable industry figures concerned about erotica reaching younger users, despite age verifications.

Earlier this week, the entrepreneur and TV personality Mark Cuban said OpenAI’s plan could “backfire hard,” and argued that parents will not trust OpenAI’s age filters to keep children away from explicit material. In the US, the Federal Trade Commission has already opened an inquiry into how AI chatbots interact with minors, and state lawmakers are considering tighter rules around digital companions and sexualized AI content. Jenny Kim, a partner at the law firm Boies Schiller Flexner, told the BBC that OpenAI is “using people like guinea pigs,” and questioned how the company would prevent children from accessing adult material on the platform.

Reached for comment, OpenAI said that the company was building an age prediction system to understand whether someone is over or under 18. They added that if a user’s age could not be confidently confirmed, the chatbot would take the safer route and default to the under-18 experience, while giving adults ways to prove their age to unlock adult capabilities.

Reacting to some of the backlash on X, Altman said that the announcement had blown “up on the erotica point much more than I thought it was going to.” He emphasized that the change was “just one example of us allowing more user freedom for adults,” not a retreat from safety measures or guardrails around mental health.

“We are not the elected moral police of the world,” he said, adding that ChatGPT would continue to “prioritize safety over privacy and freedom for teenagers” while giving adults more autonomy.

The GPT-4o backlash

OpenAI has also been reckoning with an unexpected wave of backlash following its decision to replace the version of ChatGPT powered by GPT-4o with its newer GPT-5 model. Users revolted against the change, citing lost AI friendships and romantic relationships with the earlier iteration of the bot. One petition to keep the earlier version of the bot gathered almost six thousand signatories.

“For many of us, GPT-4o offers a unique and irreplaceable user experience, combining qualities and capabilities that we value, regardless of performance benchmarks,” the petitioners wrote in the change.org campaign to keep GPT-4o. “We continue to benefit from GPT-4o in ways that are distinct and meaningful.”

While OpenAI eventually restored the earlier version, those in the #keep4o movement have since told Fortune they were worried about the company routing users to GPT-5, “without consent or notification.”

According to Li, the announcement from OpenAI could be trying to signal something to these users: “The very public announcement of it does make me think that they’re trying to signal something to users who are demanding this thing—like, ‘We hear you. We’re responding to your desires.’”

The shift is also not entirely new; it builds upon a quieter update to OpenAI’s Model Spec earlier this year. In February, OpenAI updated the document to relax the rules around sexual and violent content in what it called a move away from “AI paternalism.” Updated guidelines at the time permitted the generation of written erotica and other sensitive material in appropriate contexts. OpenAI also told Fortune that the announcement was part of its plan to build on the latest release of the Model Spec, while maintaining boundaries against harmful uses like deepfakes.

• Cognizant Technology Solutions recently announced the launch of its Enterprise Vibe Coding Blueprint, a suite of services and reusable intellectual property that enables large enterprises to securely and efficiently operationalize AI-assisted coding across both technical and non-technical teams.

• This move builds on the company’s record-setting Vibe Coding Week and highlights a shift toward fostering broad-based AI literacy and practical application within client organizations, reaching beyond traditional developer roles.

• We’ll explore how the introduction of the Enterprise Vibe Coding Blueprint could reshape Cognizant’s investment case and growth outlook.

Uncover the next big thing with financially sound penny stocks that balance risk and reward.

To be a Cognizant Technology Solutions shareholder, one must believe in the company’s ability to lead enterprise adoption of AI-driven services, leveraging its proprietary platforms and deep consulting expertise to accelerate clients’ digital transformation. While the launch of Enterprise Vibe Coding Blueprint amplifies Cognizant’s differentiation in enterprise AI, it does not materially shift the immediate catalyst, clients scaling GenAI/automation projects, nor does it reduce the key risk of margin pressure from heightened competition and evolving client demands.

Among recent developments, Cognizant’s July rollout of Agent Foundry stands out as it directly relates to the company’s focus on proprietary AI offerings, further supporting the current catalyst of large-scale AI implementation deals. Both the Blueprint and Agent Foundry signal Cognizant’s commitment to capturing new automation-led revenue streams, but risks remain if the company cannot continue scaling these platforms to offset potential headwinds from traditional outsourcing erosion.

However, investors should also be aware that if technological progress outpaces demand for Cognizant’s labor-intensive services…

Read the full narrative on Cognizant Technology Solutions (it’s free!)

Cognizant Technology Solutions’ latest forecasts project $23.5 billion in revenue and $2.9 billion in earnings by 2028. This outlook is based on analysts’ expectations for 4.7% annual revenue growth and a $0.5 billion increase in earnings from the current level of $2.4 billion.

Uncover how Cognizant Technology Solutions’ forecasts yield a $85.80 fair value, a 30% upside to its current price.

Eight community-generated fair value estimates for Cognizant range from US$66.06 to US$117.06 per share, reflecting wide variation in expectations. While many see upside, ongoing competition from established technology vendors could impact future earnings and project wins, consider multiple viewpoints to make a more informed decision.

Explore 8 other fair value estimates on Cognizant Technology Solutions – why the stock might be worth just $66.06!

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

Right now could be the best entry point. These picks are fresh from our daily scans. Don’t delay:

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 CTSH.

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

Story Continues

Taking these key indicators into account, the Excess Returns model calculates an intrinsic value for CME Group that is 37.1% below the current share price. This suggests the stock is substantially overvalued by this measure.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for CME Group.

Our Excess Returns analysis suggests CME Group may be overvalued by 37.1%. Find undervalued stocks or create your own screener to find better value opportunities.

For established, profitable companies like CME Group, the Price-to-Earnings (PE) ratio is widely considered one of the most reliable valuation methods. It captures how much investors are willing to pay for each dollar of current earnings, offering a straightforward gauge of market sentiment around profitability and future growth prospects.

The appropriate or “fair” PE ratio is not a one-size-fits-all number. It shifts based on factors such as expected earnings growth, perceived risks, and broader industry trends. Higher growth and stability often warrant a higher PE, while risk and competitive pressures can bring it lower.

Currently, CME Group trades at a PE ratio of 25.9x. That places it exactly in line with the broader capital markets industry average of 25.9x, but well below the average of its peer group, which sits at 33.8x. On the surface, this might suggest a reasonable or even conservative valuation compared to peers.

However, Simply Wall St’s “Fair Ratio” offers a deeper perspective by factoring in CME’s unique attributes, including its earnings quality, growth forecast, profit margins, its market cap, and the risks specific to this business. Unlike a simple industry or peer comparison, the Fair Ratio captures a more nuanced base case for what multiple a business should trade at in light of all these realities. For CME, the Fair Ratio currently stands at 17.7x, meaning its market price is well above what these fundamentals suggest is justified.

Comparing the Fair Ratio of 17.7x to the current PE of 25.9x, CME Group’s stock is trading at a significant premium, indicating it is overvalued on this basis.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your story behind the numbers—your personal perspective about where CME Group is headed, expressed through your own fair value and estimates for future revenue, earnings, and profit margins.

Rather than just relying on historic figures or generic multiples, Narratives link your outlook on the company and its industry to an actual financial forecast. From there, you arrive at a Fair Value that reflects your unique view. Narratives are easy to create and explore on Simply Wall St’s platform within the Community page, where millions of investors together bring diverse insights and evolving perspectives.

By setting your own Narrative, you can instantly see how your fair value compares to the current price, helping you decide if it is time to buy, sell, or hold. Narratives refresh dynamically as new news or results come in, so you are always working with up-to-date information.

For example, some investors using Narratives see CME Group fairly valued as high as $313, citing strong international expansion and retail growth. Others set targets as low as $212, factoring in competition and technology risks.

Do you think there’s more to the story for CME Group? Create your own Narrative to let the Community know!

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 CME.

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

October 19, 2025

Contrary to widespread fears about the economic outlook, key credit indicators are turning more bullish. Default rates for high yield debt and loans have peaked, along with delinquency rates for auto loans and credit cards, see charts below.

Three factors explain why corporate default and consumer delinquency rates are moving lower:

1) Uncertainty related to the trade war is significantly lower than its peak during Liberation Day.

2) The ongoing AI boom is boosting the buildout of data centers and related energy infrastructure. Simultaneously, higher stock prices are supporting consumer spending.

3) Investors are increasingly recognizing that we are in the early stages of an industrial renaissance across sectors like aerospace, defense, manufacturing, biotech and technology/automation.

In summary, while the trade war remains a mild drag on growth, its impact is being more than offset by the tailwinds from the AI boom and the industrial renaissance. Consequently, there is a growing upside risk that economic growth will reaccelerate over the coming quarters.

Download high-res charts

Embracing technology platforms for applications such as electronic proxy voting, private debt underwriting and trading of repurchase (repo) agreements can help Hong Kong elevate its standing as Asia’s top financial hub, according to a leading US fintech firm.

Technologies that simplified investor engagement had been a catalyst for growth in other markets, said Tim Gokey, CEO of New York-listed Broadridge Financial Solutions, adding that fintech could enhance corporate governance and product innovation to help the city strengthen its connections with mainland China and the wider world.

“We’re investing in the region and are excited to be part of the rapidly growing Hong Kong market, which is emerging as a leading financial hub in Asia and the primary point of connectivity between the mainland and global markets,” Gokey said in an interview during a trip to the city last month.

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His comments came before financial regulators in Hong Kong and mainland China unveiled a series of measures last month to allow cross-boundary bond repo business and to strengthen the city’s fixed income and currency markets – all initiatives that had been discussed and anticipated among market participants for a number of years.

“We see a strong opportunity to support that growth by enhancing trust and transparency in corporate governance,” added Gokey, whose firm doubled its Asian team to nearly 500 over the past five years, with Hong Kong accounting for more than 80 people.

As companies increasingly turned to capital markets, beyond banks, for fundraising, the transparency and trust of corporate governance became essential, he said, pointing to the US as an example.

Tim Gokey, CEO of New York-listed Broadridge Financial Solutions. Photo: Handout alt=Tim Gokey, CEO of New York-listed Broadridge Financial Solutions. Photo: Handout>

“Strong corporate governance is one of the key drivers behind the success and confidence in US capital markets,” he said. “It’s not the sole answer, but a crucial contributing factor.”

Broadridge’s corporate-governance offerings, including proxy-voting platforms, have a global reach, processing shares held in street names at more than 1,000 broker-dealers and custodian banks. Its proxy services covered about 80 per cent of outstanding shares of US publicly listed companies in 2023.

“Leveraging technology to simplify investor engagement has fuelled growth in markets like Japan, and building similar trust and transparency in Hong Kong is vital for its ambition to enhance connectivity between the mainland and the rest of the globe and become Asia’s leading financial hub,” Gokey said.

A pain point that Broadridge aims to address is improving the distribution of information on corporate-governance processes, which was often well documented but not effectively shared.

Digitising materials and enabling convenient access and voting through an app or broker platform would make it easier for retail investors to engage with the companies they invested in, he said.

“Our platform brings transparency and enables retail investors – particularly those using digital brokers in Hong Kong who may hold shares across China, the US and Europe – to conveniently vote their shares globally under different regulatory regimes,” he said.

For institutional investors, the firm was developing a data-driven voting platform that used artificial intelligence to apply preset rules to votes, moving beyond traditional recommendation-based systems to make proxy voting more efficient and customised, Gokey said.

Another focus area for Broadridge in Asia is private debt – a growing asset class in the region. The firm’s cloud-based platform aimed to help asset managers with tasks from underwriting and working through deals to keeping deals on their books and record-keeping, reducing risks associated with managing collateralised loan obligations.

Gokey said the fintech company also saw opportunities in tokenised assets and their clearing and settlement in Hong Kong, as market conditions and regulatory initiatives increasingly aligned with participants’ needs.

Hong Kong authorities have launched several plans to future-proof the city’s financial infrastructure in recent years, including initiatives like stablecoins, electronic trading platforms and tokenised products.

“We believe [our solution] is well-suited for this market due to clients’ need for liquidity, financing and risk management, as well as regulators’ push for digital assets,” Gokey said. “By leveraging existing infrastructure, we can help jump-start repos on the distributed ledger in Hong Kong and build confidence around these instruments.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP’s Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.