- Price
- $107.04 → $99.03(−7.5%)
- Discount
- 13.7% → 20.1%(+6.5 pts)
- Next earnings
- 2026-10-21 → 2026-10-15
- Next earnings is estimate
- Yes → No
- Thesis
- The market still prices Schwab still trades as if client cash could sort back into money market funds and other higher-yielding alternatives,places. That is the way it did in 2023 whenfear that hit the whole brokerage industry worried about deposit outflowsin 2023. That fear has faded in practicekept fading. Net interest margin has expanded for several straight quarters, and net new assets arekeep growing faster than athe year agobefore. A new worry took its place in September 2026. Schwab stock fell about 6% on fear that AI assistants built into rival apps, showingsuch as Meta's new Muse, could weaken the loyalty that keeps clients are adding money rather than pulling cash outon one brokerage's platform. Schwab also finished digestingFor the TD Ameritrade integrationfirst fear to keep fading, Schwab needs net interest margin and net new asset growth to keep showing up in 2024its results. That includes the October 15, removing a multi2026 business update. For the AI-year source of costloyalty fear to fade, Schwab needs to show its own AI tools keep clients and advisors on its platform uncertaintyrather than losing them to outside assistants. A market still anchoredThese tools include a new partnership bringing Claude to thousands of independent advisor firms. The Federal Reserve raised rates in September 2026 rather than cutting them. This removes, for now, the old cashnear-sorting worry may be slow to re-rate the stock as theseterm risk that falling deposit costs lag falling asset yields. If both trends keep showing upconfirming in the next two to three quarters of earnings, the market's caution looks overdone and the gap can close. If deposit competition or client movement to AI-native tools shows up instead, the discount could persist into 2027.
- Risks
- Schwab holds a large fixed-income investment portfolio, built up when deposits were high. If the Federal Reserve cuts interest rates faster than expected, yields on this portfolio reprice down before deposit costs fall as much, which can compress net interest margin. The Fed instead raised rates 0.25 points in September 2026, its first increase since 2023, so this risk did not play out this quarter, but the Fed has signaled it could still cut later if the rate cycle turns.
A large share of client cash sits in low-yielding bank sweep accounts. If money market fund yields pull further ahead of sweep rates, clients can move cash out of sweep and into higher-yielding funds. This lowers the low-cost deposit base Schwab lends against.
Schwab now competes directly with other platforms on commission-free trading, crypto trading, and cash yields. Its own crypto trading service only launched in 2026, so it is unproven against established crypto-focused competitors.
AI assistants built into other companies' apps, such as Meta's Muse, could reduce the friction that keeps clients using a single brokerage's app and tools. The market sold Schwab stock on this fear in September 2026, even with no confirmed change to Schwab's own client or asset numbers.
- Recent events
- 2026-09-22: Schwab stock fell about 6% in one day. The market reacted to Meta's new Muse AI assistant app, which reached the top of the US App Store within two weeks of launch, on fear that AI assistants could weaken the customer loyalty that brokerage and wealth firms depend on.
2026-09-22: Schwab Advisor Services is working with Anthropic to bring Claude for Financial Advisors to more than 16,000 independent registered investment advisor firms on Schwab's platform.
2026-09-16: The Federal Reserve raised its benchmark interest rate 0.25 percentage points, to a range of 3.75% to 4.00%, its first increase since 2023, and pointed to at least one more increase this year.
2026-07-21: Schwab reported Q2 2026 results. Total net revenue was $7.07 billion, a record. Net interest margin was 3.00%, and net new assets reached $62.7 billion in June alone.
2026-05-13: Schwab began rolling out direct spot trading in bitcoin and ether to retail clients.