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    Rising Client Trading Activity and S&P Outperformance Might Change The Case For Investing In Charles Schwab (SCHW)

    Simply Wall St·12/09/2025 02:14:16
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    • In November, Charles Schwab reported that its Schwab Trading Activity Index rose for the sixth consecutive month, signaling ongoing client net buying and strong use of its trading platforms despite recently weak market conditions.
    • An interesting takeaway is that Schwab clients have not only stayed active but also outpaced the S&P 500 for three straight months, with sustained interest in Information Technology and Consumer Discretionary stocks amid growing expectations for a December Federal Reserve rate cut.
    • With Schwab clients maintaining strong trading engagement and sector-specific net buying, we’ll now assess how this activity shapes the company’s investment narrative.

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    Charles Schwab Investment Narrative Recap

    To own Charles Schwab, you need to believe its scale, digital platforms, and multi-product model can keep attracting and engaging investors even as fees compress and competition intensifies. The latest Schwab Trading Activity Index data supports that engagement narrative but does not materially change the near term focus on interest rate sensitivity as a key earnings catalyst and risk, particularly if expectations for rate cuts shift.

    Against this backdrop, Schwab’s recent Q3 2025 results, with net income of US$2,358 million and continued share repurchases, matter more for the near term story than the trading index alone, because they speak directly to profitability and capital returns. The combination of resilient client activity and a still material reliance on net interest income keeps the spotlight on how Schwab balances growth investments with margin discipline.

    Yet beneath this healthy trading picture, one risk investors should be acutely aware of is Schwab’s exposure to...

    Read the full narrative on Charles Schwab (it's free!)

    Charles Schwab's narrative projects $30.2 billion revenue and $11.0 billion earnings by 2028.

    Uncover how Charles Schwab's forecasts yield a $111.61 fair value, a 18% upside to its current price.

    Exploring Other Perspectives

    SCHW 1-Year Stock Price Chart
    SCHW 1-Year Stock Price Chart

    Eight fair value estimates from the Simply Wall St Community span roughly US$79 to US$112 per share, showing how far views on Schwab can stretch. As you compare those opinions, weigh them against Schwab’s rising client trading engagement alongside its sensitivity to changing interest rates and consider how different assumptions could affect the company’s longer term earnings power.

    Explore 8 other fair value estimates on Charles Schwab - why the stock might be worth 16% less than the current price!

    Build Your Own Charles Schwab Narrative

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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.