HSBC analyst Saul Martinez upgraded MasterCard (NYSE: MA) stock to buy with a $633 price target this morning.
“As a leading global payment network benefiting from economies of scale and scope,” said Martinez, “Mastercard is well positioned to benefit from the displacement of cash even as its sizable services businesses continues to grow at an outsized pace. In addition, the company’s smaller size relative to Visa, higher proportions of revenue coming from non-US (which, on average, are growing faster than the US) and value added services and solutions businesses, and client-focused mindset suggest that Mastercard will grow revenue and EPS faster than Visa.”
The analyst anticipates low double digit revenue growth and mid-teen EPS growth from Mastercard for the next few years. It’s not clear how “mid-teens” growth justifies MasterCard’s hefty 35x earnings valuation, however, and investors don’t seem 100% convinced by the buy thesis.
In afternoon trading, Mastercard stock is down more than 1%. The Vanguard S&P 500 ETF is down 0.3%.
UBS analyst Timothy Arcuri reiterated his buy rating and $275 price target on Micron Technology (Nasdaq: MU) stock this morning, saying he sees “a favorable setup for MU into the [upcoming earnings release] and leave our estimates unchanged from prior in-quarter updates.”
That all sounds like some pretty no-news news, but Arcuri notes that his forecast for Micron’s earnings are “well ahead” Micron’s own guidance — essentially telling investors to expect an earnings beat for fiscal Q1 2026.
DRAM supplies continue to tighten, pushing up prices and broadening profit margins for Micron, says the analyst, and this all bodes very well for earnings.
Micron stock is up 2.3% in response to the note, but the Voo is now down 0.3%.
S&P 500 component company IBM (NYSE: IBM) will acquire data streaming platform Confluent (Nasdaq: CFLT) in an $11 billion transaction that’s being couched in terms of its significance for the artificial intelligence market: “Confluent excels at preparing data for AI, keeping it clean and connected across systems and applications, eliminating silos inherent in agentic A.I.”
As IBM explains, the market for Confluent’s services has doubled in size over the past four years, to $100 billion.
The two tech companies signed a definitive agreement for the merger this morning. IBM will pay $31, in cash, for each outstanding share of Confluent, valuing the shares at approximately 6.7 times trailing revenue.
IBM’s own shares sell for a P/S ratio of less than 4.5x, but investors don’t seem to mind it paying a premium. Confluent stock is up more than 28% this morning, but IBM stock is also up, albeit only 1.5%.
The parties plan to close the transaction in mid-2026.
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U.S. Treasury Secretary Scott Bessent made the rounds of Sunday talk shows to spread the news that is doing “better than we thought,” and the Vanguard S&P 500 ETF (NYSEMKT: VOO) likes the news. The Voo opened 0.1% on Monday morning.
“We’ve had 4% GDP growth in a couple of quarters,” Bessent told CBS News’ Face the Nation on Sunday, and “we’re going to finish the year … with 3% real GDP growth.” Gross domestic product grew only 0.6% in Q1, but 3.8% in Q2, and the Atlanta Fed estimates Q3 growth may have been 3.5%.
Not quite “4%” growth for “a couple of quarters,” but close (if you round up).
Meanwhile, the news from consumers is more mixed. The University of Michigan’s consumer sentiment survey last week showed a 53.3 reading, up 4.5 percentage points sequentially from November but down 28 points year over year.
That’s not necessarily good news, but it may help to give the Federal Open Markets Committee political cover to lower interest rates at its next meeting, as it’s forecast to do on Wednesday. This would please the stock market — a second reason for the Voo to be up this morning.
There’s no big earnings news yet this morning, but later in the day we’re scheduled to get an update from Toll Brothers (NYSE: TOL | TOL Price Prediction) on its Q4 earnings numbers. Analysts will be looking for earnings of $4.88 per share on $3.3 billion in quarterly sales.
Tuesday should see earnings from S&P 500 component companies AutoZone (NYSE: AZO) and Campbell’s (NYSE: CPB).
Then on Wednesday: a slew of tech earnings news from Oracle (NYSE: ORCL), Adobe (Nasdaq: ADBE), and Synopsys (Nasdaq: SNPS).
Contact [email protected] for any questions or corrections.
Joel South covers large-cap stocks, dividend investing, and major market trends, with a focus on earnings analysis, valuation, and turning complex data into actionable insights for investors.
He brings more than 15 years of experience as an investor and financial journalist, including 12 years at The Motley Fool, where he served as an investment analyst, Bureau Chief, and later led the Fool.com investing news desk. He has also co-hosted an investing podcast and appeared across TV and radio discussing market trends.
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The earnings reports were solid for both Visa and MasterCard and shares up both were up in Thursday morning trading.
Semiconductor maker Micron reports earnings after markets close Wednesday and used-car retailer CarMax reports results before markets open Thursday.
