# Hopeboard

> Drawing out the assumptions of future growth implicit in today’s stock prices.

An educational tool: it isn't investment advice. Figures are rounded and computed from company filings, prices and analysts' forecasts; see the [Methodology](https://hopeboard.app/methodology.md). Prices from October 2026.

## Baselines

### Inflation

- Prices rose **3.4%/year** over the last decade. Money kept as cash since 2016 buys 28% less today.

### US Bond

Priced at 20 years of its yearly interest.

- Guaranteed to return **5.1%/year** if held for ten years, so it currently beats inflation by **1.5%/year**.
- Stock prices generally promise a higher return than this, or they aren’t worth the uncertain return on investment.
- Why it matters
  - When its return rises, stock prices have to promise more too
  - Since 1928 stocks have returned 5.5%/year more than this, for taking the risk

### S&P 500

Priced at 26 years of last year’s profit.

- **Earns**: **3.8%** of an index fund’s price a year. 1.5% less than the safe US bond.
- **Priced for**: **13%**/year growth (3.5x today’s profit by 2036). More than the 10%/year of the last decade. Has returned 10%/year since 1928, dividends included.
- **Cushion**: If profit only grows at 10%/year like the last decade, you’d still make **1.5%/year more** than the safe US bond.
- What the price assumes
  - The price assumes companies keep a record share of their sales as profit
  - The ten biggest companies make up a large part of the index, so it depends on them
  - The index now includes highly priced companies like Tesla and Palantir

## Pricey

### Tesla (Electric cars & batteries)

Priced at 328 years of last year’s profit.

- **Earns**: **0.3%** of its stock price a year. 5% less than the safe US bond.
- **Priced for**: **47%**/year growth (47x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you may lose **86% of your investment**.
- Why so pricey?
  - The price assumes Elon Musk keeps building big new businesses
  - It assumes robots and robotaxis are in wide use within ten years
  - Profit per share has fallen since 2022, so the price rests on the new businesses
- Finances
  - Cash: Holds **9 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **9 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - New shares: Issued **6.3%** more shares a year over the last 10 years
- Cheapest in the last decade: **April 2024**, priced for **18%**/year growth

### Palantir (AI software for governments & companies)

Priced at 162 years of last year’s profit.

- **Earns**: **0.6%** of its stock price a year. 4.5% less than the safe US bond.
- **Priced for**: **37%**/year growth (23x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you may lose **72% of your investment**.
- Why so pricey?
  - Profitable only since 2023, so there’s little record to go on
  - Has to become one of the biggest software companies on earth
- Finances
  - Cash: Holds **3 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **24 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
- Cheapest since listing in 2020: **June 2026**, priced for **36%**/year growth

### AMD (Computer & AI chips)

Priced at 135 years of last year’s profit.

- **Earns**: **0.7%** of its stock price a year. 4.5% less than the safe US bond.
- **Priced for**: **35%**/year growth (20x today’s profit by 2036). Analysts expect 107% profit growth next year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you may lose **67% of your investment**.
- Why so pricey?
  - Revenue grew 40% last year, led by AI chips
  - The price assumes AMD keeps gaining ground on Nvidia
- Finances
  - Cash: Holds **2 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **8 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - New shares: Issued **7.7%** more shares a year over the last 10 years
- Cheapest in the last decade: **October 2022**, priced for **14%**/year growth

### Shopify (Software for running an online shop)

Priced at 115 years of last year’s profit.

- **Earns**: **0.9%** of its stock price a year. 4% less than the safe US bond.
- **Priced for**: **32%**/year growth (16x today’s profit by 2036). Analysts expect 28% profit growth next year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you may lose **61% of your investment**.
- Why so pricey?
  - Revenue grew 33% last year
  - The price assumes profit grows into it
- Finances
  - Cash: Holds **3 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **12 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - New shares: Issued **2.4%** more shares a year over the last 6 years
- Cheapest in the last decade: **October 2022**, priced for **5%**/year growth

### Merck (Medicines and vaccines, including Keytruda)

Priced at 137 years of last year’s profit.

- **Earns**: **0.7%** of its stock price a year. 4.5% less than the safe US bond.
- **Priced for**: **32%**/year growth (16x today’s profit by 2036). 10 years ago the price assumed 14%/year, but it actually grew 8%/year.
- **Risk**: If the last decade’s 8%/year growth repeats & the story fades, you may lose **66% of your investment**.
- Why so pricey?
  - Charges for buying other companies’ drug research this year cut its official profit, so its years of profit overstate how pricey it is
  - The price assumes new drugs replace Keytruda, its biggest cancer drug, which starts losing its main patent protection in 2028
- Finances
  - Debt: It would take **18 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **19 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.2%** of its shares a year over the last 10 years
- Cheapest in the last decade: **May 2025**, priced for **1%**/year growth

### ServiceNow (Office software for big companies)

Priced at 104 years of last year’s profit.

- **Earns**: **1%** of its stock price a year. 4% less than the safe US bond.
- **Priced for**: **31%**/year growth (15x today’s profit by 2036). Analysts expect 23% profit growth next year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you may lose **57% of your investment**.
- Why so pricey?
  - Revenue grew 22% last year
  - The price assumes AI helps it rather than hurts it
- Finances
  - Debt: It would take **half a year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **15 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - New shares: Issued **2.6%** more shares a year over the last 8 years
- Cheapest in the last decade: **May 2026**, priced for **23%**/year growth

### AbbVie (Medicines, including Botox)

Priced at 81 years of last year’s profit.

- **Earns**: **1.2%** of its stock price a year. 4% less than the safe US bond.
- **Priced for**: **25%**/year growth (9.5x today’s profit by 2036). 10 years ago the price assumed 5%/year, but it actually grew 1%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you may lose **30% of your investment**.
- Why so pricey?
  - Official profit is held down by charges for buying other drug makers’ research
  - The price assumes its newer drugs Skyrizi and Rinvoq keep replacing Humira, which lost its US patent in 2023
- Finances
  - Debt: It would take **9 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **8 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.4%** of its stock price a year as dividends
  - New shares: Issued **0.8%** more shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **1%**/year growth

### ASML (Machines that make chips)

Priced at 59 years of last year’s profit.

- **Earns**: **1.7%** of its stock price a year. 3.5% less than the safe US bond.
- **Priced for**: **23%**/year growth (8x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you may lose **19% of your investment**.
- Why so pricey?
  - ASML is the only maker of the machines that print the most advanced chips
  - Its customers have to keep raising their factory spending
- Finances
  - Cash: Holds **1 year** of profit in cash, beyond its debt
  - Profit on sales: Keeps **28 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.6%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.1%** of its shares a year over the last 10 years
- Cheapest in the last decade: **October 2022**, priced for **12%**/year growth

### Costco (Members-only warehouse stores)

Priced at 48 years of last year’s profit.

- **Earns**: **2.1%** of its stock price a year. 3% less than the safe US bond.
- **Priced for**: **21%**/year growth (6.5x today’s profit by 2036). 10 years ago the price assumed 14%/year, and it grew 14%/year.
- **Risk**: If the last decade’s 14%/year growth repeats & the story fades, you’d make **1.5%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes steady growth with no bad years
  - Revenue grew 10% last year
- Finances
  - Cash: Holds **2 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **3 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.6%** of its stock price a year as dividends
  - Shares: Kept the same number of shares over the last 10 years
- Cheapest in the last decade: **July 2017**, priced for **8%**/year growth

### Lam Research (Machines that make chips)

Priced at 46 years of last year’s profit.

- **Earns**: **2.2%** of its stock price a year. 3% less than the safe US bond.
- **Priced for**: **20%**/year growth (6x today’s profit by 2036). 10 years ago the price assumed 9%/year, but it actually grew 26%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **5%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes chip makers keep spending heavily on new factories
  - Its sales follow that spending, which rises and falls every few years
- Finances
  - Cash: Holds **half a year** of profit in cash, beyond its debt
  - Profit on sales: Keeps **29 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.4%** of its stock price a year as dividends
  - Share buybacks: Bought back **3.2%** of its shares a year over the last 10 years
- Cheapest in the last decade: **December 2018**, priced for **1%**/year growth

### GE Vernova (Gas turbines, wind turbines & power grids)

Priced at 43 years of last year’s profit.

- **Earns**: **2.3%** of its stock price a year. 3% less than the safe US bond.
- **Priced for**: **20%**/year growth (6x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **4.5%/year less** than the safe US bond.
- Why so pricey?
  - Demand for power from data centres has filled its order book
  - The price assumes that demand lasts for years
- Finances
  - Cash: Holds **2 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **6 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.2%** of its stock price a year as dividends
- Cheapest since listing in 2024: **September 2026**, priced for **20%**/year growth

### Airbnb (Holiday home rentals)

Priced at 40 years of last year’s profit.

- **Earns**: **2.5%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **19%**/year growth (5.5x today’s profit by 2036). Analysts expect 18% profit growth next year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **4%/year less** than the safe US bond.
- Why so pricey?
  - Revenue grew 14% last year
  - The price assumes AI assistants don’t start booking trips without Airbnb
- Finances
  - Cash: Holds **4 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **30 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend

### Eli Lilly (Weight-loss and diabetes drugs)

Priced at 42 years of last year’s profit.

- **Earns**: **2.4%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **19%**/year growth (5.5x today’s profit by 2036). 10 years ago the price assumed 14%/year, but it actually grew 17%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **4%/year less** than the safe US bond.
- Why so pricey?
  - Weight-loss drugs drive the growth: revenue grew 50% last year
  - The price assumes rivals and cheaper versions don’t force those drug prices down fast
- Finances
  - Debt: It would take **2 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **25 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.5%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.7%** of its shares a year over the last 10 years
- Cheapest in the last decade: **October 2019**, priced for **5%**/year growth

### Applied Materials (Machines that make chips)

Priced at 41 years of last year’s profit.

- **Earns**: **2.4%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **19%**/year growth (5.5x today’s profit by 2036). 10 years ago the price assumed 11%/year, but it actually grew 27%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **3.5%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes chip makers keep building new factories at today’s pace
  - Sales to China are a large part of its business, and US export rules limit them
- Finances
  - Cash & debt: Cash and debt close to even
  - Profit on sales: Keeps **25 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.5%** of its stock price a year as dividends
  - Share buybacks: Bought back **4.1%** of its shares a year over the last 10 years
- Cheapest in the last decade: **December 2018**, priced for **2%**/year growth

### Broadcom (Chips for phones, networks & AI)

Priced at 42 years of last year’s profit.

- **Earns**: **2.4%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **19%**/year growth (5.5x today’s profit by 2036). Analysts expect 66% profit growth next year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **3.5%/year less** than the safe US bond.
- Why so pricey?
  - AI chip sales more than doubled last year
  - A handful of large customers drive that demand
  - The software business adds steady profit
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **28 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.8%** of its stock price a year as dividends
  - New shares: Issued **2.7%** more shares a year over the last 9 years
- Cheapest in the last decade: **July 2018**, priced for **−2%**/year growth

### Walmart (The biggest US shop, in stores and online)

Priced at 42 years of last year’s profit.

- **Earns**: **2.4%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **19%**/year growth (5.5x today’s profit by 2036). 10 years ago the price assumed 5%/year, but it actually grew 4%/year.
- **Risk**: If the last decade’s 4%/year growth repeats & the story fades, you may lose **31% of your investment**.
- Why so pricey?
  - Priced like a tech company, on online sales, advertising and membership fees
  - Revenue grew 6% last year, a fraction of the growth the price assumes
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **3 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.8%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.8%** of its shares a year over the last 10 years
- Cheapest in the last decade: **January 2017**, priced for **5%**/year growth

### Apple (iPhone, Mac & services)

Priced at 39 years of last year’s profit.

- **Earns**: **2.6%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **18%**/year growth (5x today’s profit by 2036). 10 years ago the price assumed 5%/year, but it actually grew 14%/year. Analysts expect 9% profit growth next year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **3.5%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes people keep buying iPhones and stay with Apple’s services
  - It assumes no flat years
- Finances
  - Cash: Holds **half a year** of profit in cash, beyond its debt
  - Profit on sales: Keeps **25 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **4.3%** of its shares a year over the last 10 years
- Cheapest in the last decade: **November 2016**, priced for **4%**/year growth

### TSMC (Makes Apple’s & Nvidia’s chips)

Priced at 40 years of last year’s profit.

- **Earns**: **2.5%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **18%**/year growth (5x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **3%/year less** than the safe US bond.
- Why so pricey?
  - Makes almost all of the most advanced AI chips
  - The price assumes it keeps that lead
  - It assumes conflict over Taiwan doesn’t disrupt it
- Finances
  - Cash: Holds **1 year** of profit in cash, beyond its debt
  - Profit on sales: Keeps **42 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.8%** of its stock price a year as dividends
- Cheapest in the last decade: **May 2023**, priced for **5%**/year growth

### Amazon (Online shopping & cloud computing)

Priced at 36 years of last year’s profit.

- **Earns**: **2.8%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **18%**/year growth (5x today’s profit by 2036). 10 years ago the price assumed 40%/year, but it actually grew 63%/year, from almost nothing.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **3%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes AWS, its cloud business, stays the leader
  - It assumes the $173 billion it spent on buildings and equipment last year pays off
  - It pays no dividend while it keeps building
- Finances
  - Cash & debt: Cash and debt close to even
  - Investments: Owns stakes in other companies, including Anthropic, worth **2 years** of profit
  - Profit on sales: Keeps **8 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - New shares: Issued **1.3%** more shares a year over the last 10 years
- Cheapest in the last decade: **April 2025**, priced for **16%**/year growth

### Thermo Fisher (Lab equipment & supplies)

Priced at 37 years of last year’s profit.

- **Earns**: **2.7%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **18%**/year growth (5x today’s profit by 2036). 10 years ago the price assumed 15%/year, but it actually grew 14%/year.
- **Cushion**: If the last decade’s 14%/year growth repeats & the story fades, you’d still make **1.5%/year more** than the safe US bond.
- Why so pricey?
  - Sells the tools and supplies that drug makers and labs use
  - The price assumes growth picks up again, now the pandemic testing boom is over
- Finances
  - Debt: It would take **6 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **15 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **0.6%** of its shares a year over the last 10 years
- Cheapest in the last decade: **May 2021**, priced for **13%**/year growth

### GE Aerospace (Jet engines)

Priced at 38 years of last year’s profit.

- **Earns**: **2.6%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **18%**/year growth (5x today’s profit by 2036). 10 years ago the price assumed 10%/year, but it actually grew 5%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **3%/year less** than the safe US bond.
- Why so pricey?
  - Most of its profit comes from servicing engines already flying
  - The price assumes airlines keep flying more, so that servicing keeps growing
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **15 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.6%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.6%** of its shares a year over the last 10 years

### Texas Instruments (Basic chips for cars & factories)

Priced at 42 years of last year’s profit.

- **Earns**: **2.4%** of its stock price a year. 2.5% less than the safe US bond.
- **Priced for**: **17%**/year growth (5x today’s profit by 2036). 10 years ago the price assumed 10%/year, but it actually grew 9%/year.
- **Risk**: If the last decade’s 9%/year growth repeats & the story fades, you’d make **2.5%/year less** than the safe US bond.
- Why so pricey?
  - Makes basic chips that go into cars, factories and appliances
  - The price assumes its new chip factories in Texas and Utah pay off
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **32 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.1%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.3%** of its shares a year over the last 10 years
- Cheapest in the last decade: **October 2022**, priced for **5%**/year growth

### Mastercard (Credit cards)

Priced at 34 years of last year’s profit.

- **Earns**: **2.9%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **17%**/year growth (5x today’s profit by 2036). 10 years ago the price assumed 15%/year, but it actually grew 17%/year.
- **Cushion**: If the last decade’s 17%/year growth repeats & the story fades, you’d still make **5%/year more** than the safe US bond.
- Why so pricey?
  - Spending abroad, where its fees are highest, keeps rising
  - The price assumes governments’ own payment systems don’t cut into its fees
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **46 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.6%** of its stock price a year as dividends
  - Share buybacks: Bought back **2.3%** of its shares a year over the last 10 years
- Cheapest in the last decade: **May 2026**, priced for **14%**/year growth

### Salesforce (Software for sales teams)

Priced at 34 years of last year’s profit.

- **Earns**: **2.9%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **16%**/year growth (4.5x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **1.5%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes AI doesn’t let customers build their own software instead
  - Last year’s official profit included gains on its investments, which the board leaves out
- Finances
  - Debt: It would take **5 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **15 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.7%** of its stock price a year as dividends
  - New shares: Issued **3.8%** more shares a year over the last 10 years
- Cheapest in the last decade: **June 2026**, priced for **11%**/year growth

### Visa (Credit cards)

Priced at 34 years of last year’s profit.

- **Earns**: **2.9%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **16%**/year growth (4.5x today’s profit by 2036). 10 years ago the price assumed 17%/year, but it actually grew 16%/year.
- **Cushion**: If the last decade’s 16%/year growth repeats & the story fades, you’d still make **4%/year more** than the safe US bond.
- Why so pricey?
  - Takes a small cut of a large share of the world’s card payments
  - Cash keeps giving way to cards and phones
  - Regulators and new payment systems are the threat to its cut
- Finances
  - Debt: It would take **half a year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **53 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.7%** of its stock price a year as dividends
- Cheapest in the last decade: **October 2022**, priced for **14%**/year growth

### Alphabet (Google search & YouTube)

Priced at 32 years of last year’s profit.

- **Earns**: **3.1%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **16%**/year growth (4.5x today’s profit by 2036). 10 years ago the price assumed 16%/year, but it actually grew 22%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **1.5%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes Google search keeps its lead as people turn to AI chatbots
  - It assumes its cloud business and YouTube keep growing fast
- Finances
  - Cash: Holds **half a year** of profit in cash, beyond its debt
  - Investments: Owns stakes in other companies, including SpaceX and Anthropic, worth **2 years** of profit
  - Profit on sales: Keeps **27 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.3%** of its stock price a year as dividends
- Cheapest in the last decade: **January 2023**, priced for **10%**/year growth

### Nvidia (Chips that power AI)

Priced at 31 years of last year’s profit.

- **Earns**: **3.2%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **16%**/year growth (4.5x today’s profit by 2036). 10 years ago the price assumed 19%/year, but it actually grew 61%/year, ending on a boom year. Analysts expect 71% profit growth next year.
- **Risk**: If profit doesn’t grow from this year’s level & the story fades, you may lose **41% of your investment**.
- Why so pricey?
  - The price assumes this year’s boom profit is the new normal
  - It assumes data-centre spending doesn’t slow and no rival catches up
- Finances
  - Cash & debt: Cash and debt close to even
  - Investments: Owns stakes in other companies, including Intel and SpaceX, worth **half a year** of profit
  - Profit on sales: Keeps **53 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.2%** of its stock price a year as dividends
  - New shares: Issued **0.8%** more shares a year over the last 10 years
- Cheapest in the last decade: **December 2018**, priced for **11%**/year growth

### Cisco (Routers & internet infrastructure)

Priced at 35 years of last year’s profit.

- **Earns**: **2.9%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **16%**/year growth (4.5x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **1%/year less** than the safe US bond.
- Why so pricey?
  - The price assumes AI networking keeps its sales growing
  - The 2000 boom priced it so high that the stock went nowhere for well over a decade
- Finances
  - Debt: It would take **half a year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **19 cents** of every dollar of sales as profit
  - Dividends: Pays out **1.6%** of its stock price a year as dividends
  - Share buybacks: Bought back **2.4%** of its shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **2%**/year growth

### Caterpillar (Diggers, mining trucks & engines)

Priced at 32 years of last year’s profit.

- **Earns**: **3.1%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **16%**/year growth (4.5x today’s profit by 2036). 10 years ago the price assumed 15%/year, but it actually grew 13%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **1%/year less** than the safe US bond.
- Why so pricey?
  - Its sales follow building, mining and energy spending
  - Data centres buying its engines and generators for power have lifted sales
- Finances
  - Debt: It would take **half a year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **15 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.8%** of its stock price a year as dividends
  - Share buybacks: Bought back **2.4%** of its shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **−2%**/year growth

### RTX (Jet engines & missiles)

Priced at 34 years of last year’s profit.

- **Earns**: **2.9%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **15%**/year growth (4x today’s profit by 2036). 10 years ago the price assumed 2%/year, but profit actually fell 2%/year.
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **0.5%/year less** than the safe US bond.
- Why so pricey?
  - A defect in some of its engines has cost it billions in inspections and repairs
  - The price assumes those costs end and defence spending stays high
- Finances
  - Debt: It would take **4 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **6 cents** of every dollar of sales as profit
  - Dividends: Pays out **1.5%** of its stock price a year as dividends
  - New shares: Issued **4.4%** more shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **3%**/year growth

### Linde (Industrial gases)

Priced at 32 years of last year’s profit.

- **Earns**: **3.1%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **15%**/year growth (4x today’s profit by 2036).
- **Risk**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **0.5%/year less** than the safe US bond.
- Why so pricey?
  - The biggest maker of industrial gases, mostly sold on long contracts that keep its profit steady
  - The price assumes that steadiness keeps growing
- Finances
  - Debt: It would take **3 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **20 cents** of every dollar of sales as profit
  - Dividends: Pays out **1.3%** of its stock price a year as dividends
  - New shares: Issued **5.7%** more shares a year over the last 9 years
- Cheapest in the last decade: **April 2019**, priced for **5%**/year growth

### Microsoft (Windows, Office & Azure servers)

Priced at 30 years of last year’s profit.

- **Earns**: **3.3%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **15%**/year growth (4x today’s profit by 2036). 10 years ago the price assumed 12%/year, but it actually grew 21%/year.
- **Cushion**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d make **the same** as the safe US bond.
- Why so pricey?
  - The price assumes Azure, its cloud business, and Office keep growing fast
  - It assumes the $116 billion it spent on buildings and equipment last year, mostly AI data centres, pays off
  - Profit grew this year while the stock didn’t
- Finances
  - Cash: Holds **half a year** of profit in cash, beyond its debt
  - Profit on sales: Keeps **37 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.7%** of its stock price a year as dividends
  - Share buybacks: Bought back **0.7%** of its shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **12%**/year growth

### Dell (Computers & AI servers)

Priced at 28 years of last year’s profit.

- **Earns**: **3.6%** of its stock price a year. 1.5% less than the safe US bond.
- **Priced for**: **14%**/year growth (3.5x today’s profit by 2036). Analysts expect 4% profit growth next year.
- **Cushion**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d still make **0.5%/year more** than the safe US bond.
- Why so pricey?
  - Companies have ordered a lot of its AI servers; the price assumes those orders turn into profit
  - The stock is 23% below its high in September
  - Memory chips have got more expensive, which cuts what it keeps from each sale
- Finances
  - Debt: It would take **2 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **5 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.5%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.6%** of its shares a year over the last 6 years
- Cheapest in the last decade: **October 2022**, priced for **−5%**/year growth

### Berkshire Hathaway (Buffett’s company: buys & holds whole businesses and stocks)

Priced at 26 years of last year’s profit.

- **Earns**: **3.8%** of its stock price a year. 1.5% less than the safe US bond.
- **Priced for**: **14%**/year growth (3.5x today’s profit by 2036). 10 years ago the price assumed 11%/year, but it actually grew 10%/year.
- **Cushion**: If the last decade’s 10%/year growth repeats & the story fades, you’d still make **1%/year more** than the safe US bond.
- Why so pricey?
  - Profit here leaves out paper gains on its stock holdings, the way Berkshire reports it itself
  - Greg Abel took over from Warren Buffett at the start of 2026
  - A large part of its value is cash waiting for something to buy
- Finances
  - Cash: Holds **5 years** of profit in cash, beyond its debt
  - Profit on sales: Keeps **11 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
- Cheapest in the last decade: **January 2019**, priced for **3%**/year growth

### Meta (Facebook & Instagram)

Priced at 26 years of last year’s profit.

- **Earns**: **3.8%** of its stock price a year. 1.5% less than the safe US bond.
- **Priced for**: **14%**/year growth (3.5x today’s profit by 2036). 10 years ago the price assumed 24%/year, but it actually grew 35%/year. Analysts expect 11% profit growth next year.
- **Cushion**: If profit only grows at 10%/year (the average big US company) & the story fades, you’d still make **1%/year more** than the safe US bond.
- Why so pricey?
  - Revenue grew 28% last year, almost all of it from ads
  - The price assumes ad sales keep paying for its AI spending
  - Mark Zuckerberg controls the company, so investors are trusting his bets
- Finances
  - Cash & debt: Cash and debt close to even
  - Profit on sales: Keeps **32 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **1%** of its shares a year over the last 10 years
- Cheapest in the last decade: **October 2022**, priced for **4%**/year growth

## Normal

### Johnson & Johnson (Medicines and medical devices)

Priced at 30 years of last year’s profit.

- **Earns**: **3.3%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **13%**/year growth (3.5x today’s profit by 2036). 10 years ago the price assumed 9%/year, but it actually grew 7%/year.
- **Risk**: If the last decade’s 7%/year growth repeats, you’d make **1.5%/year less** than the safe US bond.
- What the price assumes
  - The price assumes its medicines and devices keep growing, now it has split off its consumer brands
  - Lawsuits over talc have been a cost for years
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **29 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.1%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.5%** of its shares a year over the last 10 years
- Cheapest in the last decade: **June 2024**, priced for **0%**/year growth

### Coca-Cola (Soft drinks)

Priced at 30 years of last year’s profit.

- **Earns**: **3.3%** of its stock price a year. 2% less than the safe US bond.
- **Priced for**: **13%**/year growth (3.5x today’s profit by 2036). 10 years ago the price assumed 10%/year, but it actually grew 4%/year.
- **Risk**: If the last decade’s 4%/year growth repeats, you’d make **4%/year less** than the safe US bond.
- What the price assumes
  - The price assumes slow, steady growth from selling drinks in almost every country
  - Berkshire Hathaway has been its biggest holder since 1988
- Finances
  - Debt: It would take **2 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **24 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.2%** of its stock price a year as dividends
  - Shares: Kept the same number of shares over the last 10 years
- Cheapest in the last decade: **May 2020**, priced for **6%**/year growth

### BlackRock (The biggest money manager)

Priced at 28 years of last year’s profit.

- **Earns**: **3.6%** of its stock price a year. 1.5% less than the safe US bond.
- **Priced for**: **13%**/year growth (3.5x today’s profit by 2036). 10 years ago the price assumed 8%/year, but it actually grew 7%/year.
- **Risk**: If the last decade’s 7%/year growth repeats, you’d make **0.5%/year less** than the safe US bond.
- What the price assumes
  - Earns a small fee on the money it manages, so its profit follows the markets
  - Buying private-investment firms to earn higher fees
- Finances
  - Debt: It would take **half a year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **26 cents** of every dollar of sales as profit
  - Dividends: Pays out **2%** of its stock price a year as dividends
  - Shares: Kept the same number of shares over the last 10 years
- Cheapest in the last decade: **December 2018**, priced for **2%**/year growth

### Amgen (Biotech medicines)

Priced at 28 years of last year’s profit.

- **Earns**: **3.6%** of its stock price a year. 1.5% less than the safe US bond.
- **Priced for**: **12%**/year growth (3x today’s profit by 2036). 10 years ago the price assumed 7%/year, but it actually grew 4%/year.
- **Risk**: If the last decade’s 4%/year growth repeats, you’d make **3%/year less** than the safe US bond.
- What the price assumes
  - Several of its older drugs face cheaper copies
  - The price assumes its obesity drug, still in testing, works out
- Finances
  - Debt: It would take **5 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **19 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **3.4%** of its shares a year over the last 10 years
- Cheapest in the last decade: **May 2019**, priced for **3%**/year growth

### Netflix (Streaming TV & films)

Priced at 22 years of last year’s profit.

- **Earns**: **4.5%** of its stock price a year. 0.5% less than the safe US bond.
- **Priced for**: **12%**/year growth (3x today’s profit by 2036). Analysts expect 6% profit growth next year.
- **Cushion**: If profit only grows at 10%/year (the average big US company), you’d still make **2.5%/year more** than the safe US bond.
- What the price assumes
  - The price assumes its cheaper plan with ads keeps adding subscribers
  - It assumes YouTube doesn’t take more of people’s viewing time
  - The stock is down 25% this year, while revenue grew 16%
- Finances
  - Debt: It would take **half a year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **21 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - Shares: Kept the same number of shares over the last 10 years
- Cheapest in the last decade: **June 2022**, priced for **9%**/year growth

### Philip Morris (Marlboro & nicotine pouches outside the US)

Priced at 29 years of last year’s profit.

- **Earns**: **3.4%** of its stock price a year. 1.5% less than the safe US bond.
- **Priced for**: **12%**/year growth (3x today’s profit by 2036). 10 years ago the price assumed 8%/year, but it actually grew 1%/year.
- **Risk**: If the last decade’s 1%/year growth repeats, you may lose **7% of your investment**.
- What the price assumes
  - Cigarettes outside the US, plus a growing business in heated tobacco and Zyn pouches
  - Much of what holders get is the dividend
- Finances
  - Debt: It would take **4 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **22 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.9%** of its stock price a year as dividends
  - Shares: Kept the same number of shares over the last 10 years
- Cheapest in the last decade: **May 2020**, priced for **0%**/year growth

### UnitedHealth (The biggest US health insurer)

Priced at 26 years of last year’s profit.

- **Earns**: **3.8%** of its stock price a year. 1.5% less than the safe US bond.
- **Priced for**: **12%**/year growth (3x today’s profit by 2036). 10 years ago the price assumed 10%/year, but it actually grew 12%/year.
- **Cushion**: If the last decade’s 12%/year growth repeats, you’d still make **5%/year more** than the safe US bond.
- What the price assumes
  - The price assumes it can raise what it charges faster than medical costs rise
  - America’s biggest health insurer, and a large health-services business
- Finances
  - Debt: It would take **3 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **4 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **0.6%** of its shares a year over the last 10 years
- Cheapest in the last decade: **July 2025**, priced for **3%**/year growth

### Oracle (Business software & cloud servers)

Priced at 23 years of last year’s profit.

- **Earns**: **4.3%** of its stock price a year. 1% less than the safe US bond.
- **Priced for**: **11%**/year growth (3x today’s profit by 2036). 10 years ago the price assumed 8%/year, but it actually grew 7%/year. Analysts expect 35% profit growth next year.
- **Risk**: If profit doesn’t grow, you may lose **8% of your investment**.
- What the price assumes
  - The price assumes OpenAI, its biggest new customer, pays its bills in full
  - It borrowed heavily to build data centres, and that debt has to be repaid or replaced
  - The stock is down 33% this year while the business kept growing
- Finances
  - Debt: It would take **5 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **22 cents** of every dollar of sales as profit
  - Dividends: Pays out **1.6%** of its stock price a year as dividends
  - Share buybacks: Bought back **3.8%** of its shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **5%**/year growth

### Procter & Gamble (Tide, Pampers & Gillette)

Priced at 24 years of last year’s profit.

- **Earns**: **4.2%** of its stock price a year. 1% less than the safe US bond.
- **Priced for**: **10%**/year growth (2.5x today’s profit by 2036). 10 years ago the price assumed 10%/year, but it actually grew 7%/year.
- **Cushion**: If the last decade’s 7%/year growth repeats, you’d still make **1.5%/year more** than the safe US bond.
- What the price assumes
  - Household brands that grow slowly and steadily
  - The price assumes it can keep raising prices without losing shoppers to cheaper brands
- Finances
  - Debt: It would take **2 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **18 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.7%** of its stock price a year as dividends
  - Share buybacks: Bought back **1.6%** of its shares a year over the last 10 years
- Cheapest in the last decade: **May 2017**, priced for **5%**/year growth

### Exxon (Oil & gas)

Priced at 23 years of last year’s profit.

- **Earns**: **4.3%** of its stock price a year. 1% less than the safe US bond.
- **Priced for**: **10%**/year growth (2.5x today’s profit by 2036). 10 years ago the price assumed 13%/year, but it actually grew 2%/year. Analysts expect an 8% fall in profit next year.
- **Risk**: If profit doesn’t grow, you may lose **2% of your investment**.
- What the price assumes
  - The price assumes oil stays near today’s $127 a barrel
  - Its profit rises and falls with the oil price
  - It pays much of what it earns out as dividends
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **10 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.3%** of its stock price a year as dividends

## Bargain

### Home Depot (DIY & building supplies)

Priced at 22 years of last year’s profit.

- **Earns**: **4.5%** of its stock price a year. 0.5% less than the safe US bond. 3% of it paid to you as dividends.
- **Priced for**: **9%**/year growth (2.5x today’s profit by 2036). 10 years ago the price assumed 9%/year, but it actually grew 12%/year.
- **Risk**: If profit doesn’t grow, you’d make **4%/year less** than the safe US bond.
- Why so cheap?
  - Its sales follow home sales and renovations, which high mortgage rates have slowed
  - The stock is down 8% this year
- Finances
  - Debt: It would take **3 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **9 cents** of every dollar of sales as profit
  - Dividends: Pays out **3%** of its stock price a year as dividends
  - Share buybacks: Bought back **2.5%** of its shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **5%**/year growth

### Chevron (Oil & gas)

Priced at 22 years of last year’s profit.

- **Earns**: **4.5%** of its stock price a year. 0.5% less than the safe US bond. 3.1% of it paid to you as dividends.
- **Priced for**: **9%**/year growth (2.5x today’s profit by 2036). More than the 2%/year of the last decade.
- **Risk**: If profit doesn’t grow, you’d make **4%/year less** than the safe US bond.
- Why so cheap?
  - Its profit rises and falls with the oil price, which is high today
  - Investors expect profit to fall when oil does
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **9 cents** of every dollar of sales as profit
  - Dividends: Pays out **3.1%** of its stock price a year as dividends
  - Shares: Kept the same number of shares over the last 10 years

### Uber (Rides & food delivery)

Priced at 15 years of last year’s profit.

- **Earns**: **6.7%** of its stock price a year. 1.5% more than the safe US bond.
- **Priced for**: **8%**/year growth (2x today’s profit by 2036). Analysts expect 43% profit growth next year.
- **Risk**: If profit doesn’t grow, you’d make **3.5%/year less** than the safe US bond.
- Why so cheap?
  - Investors fear robotaxis will cut out the drivers it connects riders to
  - Its profit has only recently turned steady
- Finances
  - Debt: It would take **1 year** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **14 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - New shares: Issued **3.9%** more shares a year over the last 5 years
- Cheapest since listing in 2019: **December 2025**, priced for **4%**/year growth

### Adobe (Photoshop & PDF software)

Priced at 14 years of last year’s profit.

- **Earns**: **7.1%** of its stock price a year. 2% more than the safe US bond.
- **Priced for**: **7%**/year growth (2x today’s profit by 2036). Less than the 33%/year of the last decade. Analysts expect 13% profit growth next year.
- **Risk**: If profit doesn’t grow, you’d make **2.5%/year less** than the safe US bond.
- Why so cheap?
  - The stock is down 30% this year on fears that AI makes creative tools cheap
  - The price assumes AI tools don’t take its customers
- Finances
  - Cash & debt: Cash and debt close to even
  - Profit on sales: Keeps **28 cents** of every dollar of sales as profit
  - Dividends: Pays no dividend
  - Share buybacks: Bought back **1.7%** of its shares a year over the last 10 years
- Cheapest in the last decade: **June 2026**, priced for **6%**/year growth

### T-Mobile (Mobile phone plans)

Priced at 17 years of last year’s profit.

- **Earns**: **5.9%** of its stock price a year. 1% more than the safe US bond.
- **Priced for**: **7%**/year growth (2x today’s profit by 2036). 10 years ago the price assumed 18%/year, but it actually grew 37%/year.
- **Risk**: If profit doesn’t grow, you’d make **2%/year less** than the safe US bond.
- Why so cheap?
  - Its fast growth came from buying Sprint in 2020, which won’t repeat
  - The price assumes it keeps winning customers from Verizon and AT&T
- Finances
  - Debt: It would take **8 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **12 cents** of every dollar of sales as profit
  - Dividends: Pays out **2.6%** of its stock price a year as dividends
  - New shares: Issued **3.2%** more shares a year over the last 10 years
- Cheapest in the last decade: **December 2018**, priced for **5%**/year growth

### JPMorgan Chase (America’s biggest bank)

Priced at 15 years of last year’s profit.

- **Earns**: **6.7%** of its stock price a year. 1.5% more than the safe US bond.
- **Priced for**: **6%**/year growth (2x today’s profit by 2036). 10 years ago the price assumed 2%/year, but it actually grew 14%/year.
- **Risk**: If profit doesn’t grow, you’d make **1.5%/year less** than the safe US bond.
- Why so cheap?
  - Investors expect profit to fall when interest rates come down
  - The biggest US bank, and the one that came through 2008 in the best shape
- Finances
  - Dividends: Pays out **1.8%** of its stock price a year as dividends
  - Share buybacks: Bought back **3%** of its shares a year over the last 10 years
- Cheapest in the last decade: **April 2020**, priced for **−2%**/year growth

### Morgan Stanley (Looks after wealthy people’s money)

Priced at 15 years of last year’s profit.

- **Earns**: **6.7%** of its stock price a year. 1.5% more than the safe US bond.
- **Priced for**: **6%**/year growth (2x today’s profit by 2036). 10 years ago the price assumed 6%/year, but it actually grew 15%/year.
- **Risk**: If profit doesn’t grow, you’d make **1%/year less** than the safe US bond.
- Why so cheap?
  - Most of its profit now comes from managing people’s money, which is steadier than trading
  - Its profit falls when markets go quiet
- Finances
  - Dividends: Pays out **2.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **2%** of its shares a year over the last 10 years

### Micron (Memory chips for computers & phones)

Priced at 12 years of last year’s profit.

- **Earns**: **8.3%** of its stock price a year. 3% more than the safe US bond.
- **Priced for**: **6%**/year growth (2x today’s profit by 2036).
- **Risk**: If profit falls back to last year’s level, you may lose **85% of your investment**.
- Why so cheap?
  - This year’s profit is a memory-chip boom profit
  - Micron lost money as recently as 2023
- Finances
  - Cash: Holds **1 year** of profit in cash, beyond its debt
  - Profit on sales: Keeps **48 cents** of every dollar of sales as profit
  - Dividends: Pays out **0.1%** of its stock price a year as dividends
  - New shares: Issued **1%** more shares a year over the last 10 years

### Goldman Sachs (Advises on big deals & trades shares)

Priced at 14 years of last year’s profit.

- **Earns**: **7.1%** of its stock price a year. 2% more than the safe US bond.
- **Priced for**: **5%**/year growth (1.5x today’s profit by 2036). 10 years ago the price assumed 7%/year, but it actually grew 10%/year.
- **Risk**: If profit doesn’t grow, you’d make **0.5%/year less** than the safe US bond.
- Why so cheap?
  - Profit rises and falls with deal-making and trading
  - Its profit falls when markets go quiet
- Finances
  - Dividends: Pays out **2%** of its stock price a year as dividends
  - Share buybacks: Bought back **3.6%** of its shares a year over the last 10 years

### Citigroup (Bank for big companies worldwide)

Priced at 13 years of last year’s profit.

- **Earns**: **7.7%** of its stock price a year. 2.5% more than the safe US bond.
- **Priced for**: **4%**/year growth (1.5x today’s profit by 2036). 10 years ago the price assumed 3%/year, but it actually grew 4%/year.
- **Cushion**: If profit doesn’t grow, you’d still make **0.5%/year more** than the safe US bond.
- Why so cheap?
  - In the middle of a long overhaul, selling businesses abroad
  - The price assumes the overhaul finally lifts profit
- Finances
  - Dividends: Pays out **2%** of its stock price a year as dividends
  - Share buybacks: Bought back **4.6%** of its shares a year over the last 10 years
- Cheapest in the last decade: **April 2020**, priced for **−8%**/year growth

### Wells Fargo (Everyday banking & home loans)

Priced at 12 years of last year’s profit.

- **Earns**: **8.3%** of its stock price a year. 3% more than the safe US bond.
- **Priced for**: **3%**/year growth. 10 years ago the price assumed 1%/year, but it actually grew 3%/year.
- **Cushion**: If profit doesn’t grow, you’d still make **1.5%/year more** than the safe US bond.
- Why so cheap?
  - Regulators lifted the cap on its size in 2025, years after the fake-accounts scandal
  - The price assumes it can grow again now the cap is gone
- Finances
  - Dividends: Pays out **2.2%** of its stock price a year as dividends
  - Share buybacks: Bought back **4.6%** of its shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **−8%**/year growth

### Bank of America (Banking for US households)

Priced at 12 years of last year’s profit.

- **Earns**: **8.3%** of its stock price a year. 3% more than the safe US bond.
- **Priced for**: **3%**/year growth. 10 years ago the price assumed 5%/year, but it actually grew 15%/year.
- **Cushion**: If profit doesn’t grow, you’d still make **1.5%/year more** than the safe US bond.
- Why so cheap?
  - Investors worry some of its loans go bad
  - It still holds bonds bought when rates were low, which pay little
- Finances
  - Dividends: Pays out **2.3%** of its stock price a year as dividends
  - Share buybacks: Bought back **3.7%** of its shares a year over the last 10 years
- Cheapest in the last decade: **March 2020**, priced for **−3%**/year growth

### Verizon (Mobile phone & home internet)

Priced at 12 years of last year’s profit.

- **Earns**: **8.3%** of its stock price a year. 3% more than the safe US bond. 6.3% of it paid to you as dividends.
- **Priced for**: **−1%**/year growth. 10 years ago the price assumed 3%/year, but profit actually stayed roughly the same.
- **Cushion**: If profit doesn’t grow, you’d still make **5.5%/year more** than the safe US bond.
- Why so cheap?
  - Its profit has barely changed in ten years, so buyers pay little for growth
  - Investors worry that cable companies and T-Mobile will keep taking its phone customers
  - It carries a large debt, which has to keep being paid before anything else
- Finances
  - Debt: It would take **10 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **12 cents** of every dollar of sales as profit
  - Dividends: Pays out **6.3%** of its stock price a year as dividends
  - Shares: Kept the same number of shares over the last 10 years
- Cheapest in the last decade: **October 2023**, priced for **−9%**/year growth

### AT&T (Phone plans & fibre internet)

Priced at 10 years of last year’s profit.

- **Earns**: **10%** of its stock price a year. 5% more than the safe US bond. 4.7% of it paid to you as dividends.
- **Priced for**: **−1%**/year growth. 10 years ago the price assumed 3%/year, but it actually grew 1%/year.
- **Cushion**: If profit doesn’t grow, you’d still make **6%/year more** than the safe US bond.
- Why so cheap?
  - Profit jumped in the last year; if that was a one-off, the price is less cheap than it looks
  - Most of what you get is the dividend
  - Fibre to homes is its bet for growth
- Finances
  - Debt: It would take **8 years** of profit to pay off its debt, after using its cash
  - Profit on sales: Keeps **12 cents** of every dollar of sales as profit
  - Dividends: Pays out **4.7%** of its stock price a year as dividends
  - New shares: Issued **2.4%** more shares a year over the last 10 years
- Cheapest in the last decade: **December 2018**, priced for **−10%**/year growth

## Little or no profit

### Intel (Chips for PCs & chip factories)

- **Earns**: Lost **$11 billion** last year.
- **Priced for**: **$65 billion** profit/year by 2036. Its best years were $21 billion.
- **Risk**: If profit only reaches Intel’s best year ($21 billion), you may still lose **17% of your investment**.
- Why this price?
  - The stock is up 144% this year
  - The price assumes the chip-factory business wins outside customers
- Finances
  - Debt: Owes more than it holds in cash
  - Dividends: Pays no dividend
  - Share buybacks: Bought back **0.8%** of its shares a year over the last 10 years

### SpaceX (Rockets & Starlink satellite internet)

- **Earns**: Lost **$4.8 billion** on $12.5 billion of revenue in the first half of 2026.
- **Priced for**: **$280 billion** profit/year by 2036. Apple earns $128 billion a year.
- **Risk**: If profit reaches Apple’s level ($128 billion), you’d make **3.5%/year less** than the safe US bond.
- Why this price?
  - Since listing in June the stock has ranged from 20% below its first price to 57% above
  - It now includes Musk’s AI company xAI, bought in February
  - The price ignores new shares it will have to issue
- Finances
  - Cash: Holds more in cash than it owes
  - Dividends: Pays no dividend

### CrowdStrike (Cybersecurity software)

- **Earns**: Almost nothing: **$50 million** last year, after paying staff $1.2 billion in shares.
- **Priced for**: **$35 billion** profit/year by 2036 (700x last year’s profit).
- **Risk**: If profit only reaches the $2 billion a year it makes before paying staff in shares, you may lose **85% of your investment**.
- Why this price?
  - Most of what it earns goes to staff as shares, which shrinks every holder’s slice
  - A faulty update crashed millions of Windows computers in July 2024
- Finances
  - Cash: Holds more in cash than it owes
  - Dividends: Pays no dividend
  - New shares: Issued **2.9%** more shares a year over the last 5 years

### Palo Alto Networks (Cybersecurity software)

- **Earns**: Almost nothing: **$310 million** last year, after paying staff $1.8 billion in shares.
- **Priced for**: **$40 billion** profit/year by 2036 (130x last year’s profit).
- **Risk**: If profit only reaches the $4.6 billion a year it makes before paying staff in shares, you may lose **70% of your investment**.
- Why this price?
  - Most of what it earns goes to staff as shares, which shrinks every holder’s slice
  - Revenue grew 24% last year; the price assumes profit catches up
- Finances
  - Cash: Holds more in cash than it owes
  - Dividends: Pays no dividend
  - New shares: Issued **4.4%** more shares a year over the last 7 years