TheChek News Flow

Key Points

U.S. population growth slowed dramatically last year, and that could create a more than $100 billion drag on the economy, a new analysis contends.

U.S. population growth has slowed significantly with an increase of only 1.8 million, or 0.5%, from July 2024 to June 2025, the U.S. Census Bureau reported in January. That means for the full year, the U.S. grew by only 0.4%, the slowest rate of population growth the country has experienced since the Covid-19 pandemic.

That slowdown in population means fewer consumers, which limits demand and spending, according to an analysis published Wednesday by Implan. The economic impact modeling firm noted that the U.S. experienced a significant increase of approximately 3.2 million people from July 2023 to July 2024. In 2025, that dropped to just 1.8 million, leaving a “growth gap” of 1.4 million fewer people, which reduced household spending by $86.2 billion.

Implan estimates that erasing over one million potential consumers resulted in $103.9 billion in forgone gross domestic product growth and about 741,500 fewer jobs than if growth maintained its 2024 pace. While that is a significant impact, it’s still only a fraction of the U.S. economic activity given that GDP hit $31.098 trillion in the third quarter. The Bureau of Economic Analysis is set to release fourth quarter estimates on Feb. 20.

The latest analysis projected that the biggest hits from slowing population growth will come to the housing and healthcare sectors. “Population growth is the primary engine for residential construction and healthcare demand,” noted Nadège Ngomsi, the report’s author and an economist at Implan. She added that restaurants and dining could see spending and labor impacts as well.

California, New York, and Texas are projected to feel the biggest economic shocks. California will likely be the hardest hit, with Implan projecting $13.4 billion in forgone GDP and 86,520 fewer jobs in the state.

The slowdown in population growth is largely due to a historic decline in the net number of people coming to live in the U.S., Christine Hartley, assistant division chief for Estimates and Projections at the Census Bureau, said in a statement. “With births and deaths remaining relatively stable compared to the prior year, the sharp decline in net international migration is the main reason for the slower growth rate we see today,” Implan reported.

About 1.3 million net new immigrants became U.S. residents from July 2024 to June 2025, less than half of the 2.7 million recorded during the same period a year prior. A Congressional Budget Office estimate found that net immigration amounted to 410,000 in all of 2025.

Census projects that if current trends continue, net international migration will be just 321,000 for the full year of 2026. That would be a decline of nearly one million migrants compared with the prior year.

And net immigration could be even lower. Oxford Economics cut its 2026 forecast to just 160,000 from 350,000 due to the further restrictions, mostly on legal migration. The Trump administration’s decision to suspend processing immigration visas for nationals of 75 countries is especially impactful, considering that nearly half of all immigrant visas issued from abroad in 2024 came from these countries.

To be sure, estimates of the effects of slower population growth and reduced immigration vary. Joint research published by the Brookings Institution and the American Enterprise Institute last month noted that reduced migration likely only resulted in “modest damping” effects on GDP. Researchers expected the lower immigration to weaken consumer spending by $60 billion, to $110 billion combined in total for both 2025 and 2026.

“While this slowdown is driven by a complex mix of lower birthrates and a sharp decline in international migration, the economic implications are immediate and tangible,” Ngomsi said.

A management update crashed shares, creating a compelling buying opportunity.

Key Points

Sometimes, good opportunities in the stock market feel scary. Case in point: Stellantis stock tanked by 24% last Friday after an update from management.

The knee-jerk reaction is to avoid the stock after such a steep selloff. That would be shortsighted. With expectations reset, now is the time to dig in. From this low base, Stellantis stock can rise 50% with little more than basic business execution.

To be sure, management’s latest update doesn’t exactly inspire confidence. The Chrysler parent’s Feb. 6 announcement covered a lot of ground, including one-time charges of 22 billion euros ($25.9 billion) for electric-vehicle asset write-downs and warranty-related items. The company said operating profit for the second half of 2025 would come in below guidance. Oh—and not only will there will be no dividend in 2026, but the company sold €5 billion in convertible debt to shore up its balance sheet.

“I think the most surprising thing was less the provisions and impairments…but the still poor operating performance and inability to generate cash,” says Oxcap Analytics analyst Stuart Pearson. That kind of operating performance creates the fear of a value trap—a stock that is in a perpetual cash-burn cycle characterized by things like, well, dividend cuts and capital raises.

Still, car business fundamentals aren’t a mystery, and the company can be profitable if it gets products and distribution right. As bad as Friday’s update was, it has certainly reset expectations lower. “Clearly, there was a large element of kitchen-sinking going on,” says Pearson. “Hard not to think the new management team weren’t strongly motivated to just put everything they possibly could into [the update], though.”

The new management is CEO Antonio Filosa, tapped to run the company in May, filling a leadership vacuum following the departure of Carlos Tavares in December 2024. It wasn’t long ago that Tavares was the toast of the automotive world. He created a top-five global producer of cars via the combination of Fiat Chrysler and PSA Groupe. Today, Stellantis’ brands include Jeep, Ram, Citroën, Peugeot, Maserati, and others.

North America is still the company’s largest business, accounting for roughly 40% of total revenue, and Europe is just behind, with South America third at about 10% of sales.

Things started out spectacularly for the combined company. Stellantis produced annual operating profits of about $25 billion in both 2022 and 2023, while operating profit margins approached 13%. General Motors’ profit margins were closer to 8% at the time.

Under the hood, however, there was engine trouble. Dealers were frustrated with product decisions and high inventory, which culminated in a collapse in profits. Stellantis reported an operating profit of less than $10 billion in 2024, and profits all but evaporated in 2025.

Filosa’s job is to turn the company around. His strategy began to take shape late last year, when he announced a $13 billion investment in the U.S. and five new vehicles. Investing in new products takes Stellantis back to Chrysler’s roots under CEO Lee Iacocca. “In the car business, product comes first,” Iacocca said in the early 1980s. “Product is what brought [Chrysler] back to prosperity.”

Things were looking better, with shares stable under Filosa, until the write-downs and dividend cut. It’s hard to accept that the stock could be a buy after a cut, but that is a tested, winning strategy, according to Wolfe Research strategist Chris Senyek. “Dividend cuts lead to stock price outperformance over the subsequent one to two years,” he says.

Essentially, things can’t get much worse. That dynamic led Wolfe Research analyst Emmanuel Rosner to upgrade Stellantis shares after last week’s announcement. “Looking ahead, the bar has now been reset lower, and some sequential improvement in earnings and free cash flow is likely in 2026 and 2027, benefiting from new product that should help U.S. market share and provide operating leverage,” he wrote.

Rosner upgraded shares only to Peer Perform from Underperform, though. Pearson rates shares Overweight. His price target is $10.70 a share, up 40% from Wednesday’s close of $7.62.

It’s easy to see a path to $10.70 or higher. Stellantis stock is as cheap as it has been at any point since the pandemic. Profitability is depressed, but shares trade for about 0.15 times sales. Ford Motor and GM, the other two legs of the original Detroit Big Three auto makers, trade at about 0.3 and 0.4 times, respectively.

Stellantis stock typically trades at 85% of the price-to-sales ratio of Ford and GM. Now it trades at 44%, the lowest ratio in the past five years. Getting back even halfway to the historical 85% ratio would mean a $14 stock price, up almost 100% from recent levels.

No one expects that to happen overnight, but that’s how low the bar is right now. What could help? An encouraging performance when full 2025 earnings are reported on Feb. 26, when first-quarter results are released in April, or at the company’s investor day in May.

There are risks, of course. Consumer spending is always one for auto makers. Americans bought some 16.7 million cars in 2025, the best year since 2019. Europeans bought 13.3 million cars, up about 3% year over year. S&P Global sees U.S. and European volumes stable in 2026. Stable is good enough in the cyclical car business.

The biggest challenge to improving profitability might be China. Its auto makers are coming to Europe. BYD, for instance, is the largest maker of all-battery electric vehicles on the planet, topping Tesla for that title for the first time in 2025. BYD sold some 188,000 cars in Europe in 2025, up 269% year over year. Its share of the entire European market went from 0.4% to 1.4%. It won’t stop there.

Still, Stellantis’ North American operations, which historically have accounted for a majority of the company’s profits, are insulated from Chinese competition for now.

There’s time for Stellantis to get it right. Now, management needs to execute.

‘Companies are not cows to be milked’: French businesses grapple with profits surcharge

Corporate earnings season lays bare impact of levy on profits expected to raise €7.5bn

France’s biggest companies face a €7.5bn blow to their profits this year from the extension of a controversial levy on profits, which bosses warn is unpicking President Emmanuel Macron’s business-friendly legacy.

As companies have reported earnings for 2025, banks, luxury and industrial groups have been the hardest hit by the tax, which raised €8bn in 2025 and has been renewed this year.

The surcharge was introduced in last year’s budget as a one-off measure to raise about €8bn but it has been maintained with small adjustments by Sébastien Lecornu’s government as a concession to the centre-left socialist party, whose support he needed to pass a budget last month.

Proponents say the measure is needed to help restore France’s public finances and reduce its deficit to 5 per cent of GDP this year. But companies hit by the measure have warned it risks limiting their investments in France.

Aerospace and defence group Safran will pay about €470mn linked to the tax this year after paying €377mn last year.

Chief executive Olivier Andriès said on Friday: “With the surcharge, we have returned to or even surpassed a little bit the initial tax level [when Macron took office]. We’ve ended up losing all the competitiveness we had gained.”

The levy will raise the effective corporate tax rate in France for companies with annual revenues of more than €3bn to 35 per cent, and 30 per cent for those above €1.5bn, by adding a surcharge to standard corporate tax paid on profits made in France.

It is a reversal of Macron’s supply-side approach at the beginning of his time in office in 2017, when he gradually reduced the corporate tax from 33 per cent to 25 per cent.

Despite small changes to the 2025 measure, to raise the threshold at which it takes effect from €1bn to €1.5bn, the signal sent to investors and businesses was part of the reason for a muted stock market response to Lecornu’s budget last month, said Thomas Zlowodzki, head of equity strategy at ODDO BHF.

“This has prevented Cac 40 shares from taking off after the passing of the budget. The impact would have been less negative if they had lowered the rate a little bit, which would have suggested the additional taxes were going to disappear. Now that seems less likely,” he added.

LVMH chief executive Bernard Arnault said last week that France’s policy to “tax companies to the hilt and create unemployment” added to existing uncertainty for businesses and meant he was “somewhat reserved” on the company’s prospects in 2026.

The measure meant LVMH’s total income tax payments rose to about €5.5bn last year, more than €300mn higher than 2024, finance chief Cécile Cabanis told analysts this week.

That came despite the luxury conglomerate benefiting from lower US tax rates under US President Donald Trump’s “One Big Beautiful Bill”. She said she expected an “identical” tax rate in France in 2026.

French banks face a hit of more than €1bn, according to the French banking federation. Those with large domestic operations will bear the brunt, with co-operative banks Crédit Mutuel, Crédit Agricole and BPCE paying a combined €800mn, the federation said.

This reflects the disproportionate impact of the measure on companies with high sales and profits in France, compared with French-headquartered businesses with significant foreign revenues.

Vinci, the motorway operator, booked a €425mn hit to free cash flow last week, although France’s biggest bank BNP Paribas said the impact had been negligible.

The additional surcharge means that, at 36 per cent for large companies, France has the OECD’s highest statutory corporate income tax rate — a measure the organisation uses to compare headline tax rates faced by businesses across countries.

François Ecalle, a former top finance ministry official now leading non-profit public finances institute Fipeco, wrote in a recent note that the “exceptional, limited tax” has little effect on economic activity but that uncertainty over how long it would be applied was “damaging because it puts brakes on investment”.

The additional tax comes as larger companies continue to perform relatively strongly despite the French political turmoil. The prospect of extending the tax further is set to spark more debate later this year.

“We’re talking about a surcharge on 300 businesses which are the biggest in France,” socialist party leader Olivier Faure told broadcaster France Inter last month. “These are people who have distributed more than €100bn in dividends and share buybacks last year. Do you think we can’t take €8bn?”

However, Philippe Juvin, a rightwing lawmaker and leading parliamentary negotiator on the 2026 budget who opposed the tax, warned: “France already has among the highest tax rates in the world. Companies are not cows to be milked.”

Tekne Capital founder Beeneet Kothari discusses China’s edge in AI—and the nation’s coming IPO boom. Why Samsung is among his favorite stocks.

Mention technology stocks, and investors almost instinctively think of the U.S. But Beeneet Kothari, founder of hedge fund Tekne Capital Management, believes the best opportunities in tech right now are overseas.

Kothari, who began his investing career as a technology analyst for the renowned Stan Druckenmiller, oversees $1.5 billion at Tekne, investing in a concentrated global portfolio of tech stocks that has beaten the MSCI World index by double digits for the past two years.

After foreign markets trounced the S&P 500 last year, some investors found a renewed appetite for diversification abroad. But Kothari was early to the trend. For instance, he saw the potential for China’s artificial-intelligence development well before Chinese start-up DeepSeek reignited broader interest in Chinese stocks.

Kothari likes to go deep, often finding new ideas by interviewing customers of companies and following up on tidbits gleaned from industry executives. He looks for quality companies that others have underestimated. Barron’s spoke with Kothari about which companies might be tomorrow’s Taiwan Semiconductor Manufacturing or ASML Holding, and how China’s AI buildout is different than in the U.S. An edited version of the conversation follows.

Beeneet Kothari: It is a no-brainer; China is a better investment proposition. China is going to do with AI what it has always done—build things faster and cheaper. Sometimes the [state-driven] top-down mentality is the right approach. You need power, chips, data centers, and cooling. China is good at moving mountains to build things. It is a clear advantage.

When you make an investment decision today, the biggest thing you worry about is whether supply in the industry will double or triple next year. That is a legitimate risk in the U.S. because a lot of money has gone into the ground. China is emerging from a deep bear market. Because capital hasn’t been invested in long-duration projects, you can have comfort in knowing you aren’t going to have oversupply.

Also, the big AI companies in the U.S., including OpenAI, Anthropic, and Google DeepMind, are obsessed with artificial general intelligence and artificial superintelligence—when is it happening, what does it mean, how much job displacement will it create? In China, which is in a recession, all a company can focus on is how to make money. It is an incredibly practical approach.

The most attractive valuations are in smaller and midsize businesses. We don’t own Alibaba Group Holding or Tencent Holdings, which are more like Google.

We are one of the top five shareholders in GDS Holdings, a data-center business that is the landlord of AI. China is the largest country in the world, with the largest tech market. Data centers are the hottest thing in tech. Two publicly listed data-center companies in China—GDS and VNET Group —combined have a market value of about $12 billion. That is insane! You can’t get the cheapest data-center stock in the U.S. for $10 billion.

People have discovered Taiwan Semiconductor and ASML. They are like the gateway drugs to international technology investing. When we bought Taiwan Semi, the stock was TW$500 a share [$15.90]. Now it trades for TW$2,000 and is among the top five holdings in many portfolios. There are several other layers in the tech supply chain, with scores of companies across Asia that are just as integral, albeit not as well-known.

As chips become more complex, we think the money will be made in advanced packaging. We own Tongfu Microelectronics, a $10 billion market-cap company, which has had a joint venture with Advanced Micro Devices since 2016.

China has passed a law that says 50% of all semiconductors produced in the country must use local supply chains. Tongfu is a winner, as is ACM Research. Both are part of the semiconductor capital-equipment supply chain in China.

China consumes 35% of the world’s semis today and produces 6%. The government has said it wants to bring those numbers into alignment.

Tongfu trades for 13 times Ebitda [earnings before interest, taxes, depreciation, and amortization], with revenue growing more than 20% annually and structural growth behind it. A lot of these companies are underearning because they’re young. Western peers are 40 years old and trade for 11 to 12 times Ebitda, with a fraction of the revenue quality and growth.

It’s always a concern, but the question is if that’s priced in. Plus, the trend is also in the right direction. There’s a thawing in tensions between the U.S. and China. Trump and Chinese leader Xi Jinping are going to meet four times this year, and officials have said the relationship with China is in a good place right now. We just allowed China to purchase Nvidia H200 chips.

Also, the export restrictions and moves over the past eight years, with the first Trump administration and then Biden, scared the Chinese and pushed them to localize and become more independent. That has made them a bit more resilient and highlighted how sensitive we are to [their dominance in] rare earth. It also created an opportunity in these semiconductor and supply-chain bets.

Last summer, Baidu’s stock was trading at cash. It is up more than 50%, spurred by plans for a spinoff of its AI chip unit, Kunlunxin. But nothing has happened yet. Once Kunlunxin’s Hong Kong listing is executed, then will come proof of value for Baidu’s Apollo robo-taxi business, which just hit 250,000 rides weekly—on par with Waymo. Its agentic AI business, GenFlow, and CoreWeave-like HPC cloud will follow.

This is going to be the year of Chinese semiconductor initial public offerings. Some say Kunlunxin could be a $30 billion IPO. Alibaba is going to spin out its T-Head chip unit. CXMT, the largest memory company in China, is going to do an IPO this year. That could bring more investors. Plus, when semi companies earn or raise money, they spend it because they’re always building new factories, new construction. There’s going to be a lot of new capital raised, and we expect a massive new wave of capacity expansion to ensue.

More broadly, this could be the year for some of the big IPOs in China we’ve been waiting for—fintech Ant Group, ByteDance, Shein, and Didi, the Uber of China, which we own. ByteDance is the biggest, most successful, and most global Chinese company, and most investors have no idea of it, but it’s probably worth over a trillion dollars.

Their homegrown chips aren’t quite ready. Access to Nvidia’s even older-generation chips bridges that gap. If they lose that bridge, they are swimming naked a bit until 2028-30. Having this bridge probably accelerates the rate at which they can become self-sufficient.

Samsung Electronics’ share price is off very low levels because it is the leading memory player in the world. But that isn’t what interests us. Inside Samsung is the second-largest foundry after Taiwan Semi, and it has been sitting dormant.

Taiwan Semi took off because it landed Apple as a customer. Elon Musk and his conglomerate of companies—SpaceX, Tesla, and xAI—are now in need of a lot of chips and couldn’t get much capacity out of Taiwan Semi, so he went to Samsung. Given the number of chips he needs over the next three to five years, Samsung could build out its foundry to rival Taiwan Semi.

Currently, Samsung is an $800 billion company, with most of its profits from memory. There is a business bigger than memory that no one is talking about, and it’s about to get a shot in the arm with what could be the biggest IPO in history this summer with SpaceX, a company we know well through various relationships.

The way foundries work is that your customer has to commit, and then you go out and spend. There were filings in the Korean stock market late last year that indicated that Tesla has committed to about $17 billion of chip purchases from Samsung. And Samsung is building out factories in Texas. What Apple did for Taiwan Semi is potentially what Elon could do for Samsung.

Brazil is the cheapest market in the world, with the index trading at about six times earnings. The central bank governor is going to change, and they are starting an easing cycle. Plus, there’s a commodity boom.

We are also seeing a structural change in emerging markets. Companies in bear markets are finally behaving the way American companies have learned to behave: When you can’t control the macroeconomics, you control capital allocation. We saw Chinese companies do this a couple years ago, when the economy was struggling and they became aggressive with buybacks.

Brazil is now doing that. In the next two years, fintech StoneCo, which we own, may return to shareholders over a third of its market cap through dividends or buybacks. The company is growing at about a 10% pace, above gross domestic product. But largely the story is that it’s a concentrated industry and finally can be more efficient and grow profits.

We own Vend Marketplace, a Norwegian classifieds company, whose stock is down 25% over the past year. There are two sectors that have gotten destroyed globally: Software and classifieds. People think AI will act as an agent that will scour all sites to find them a job, such that if one site has all the jobs, it won’t be so relevant in an agentic AI world. But what really matters is who owns the supply. Think about e-commerce. The idea is that you don’t need to go to Amazon.com anymore. You can just have an agent find the phone you want, but ultimately most of the inventory sits at Amazon, so it will still earn its share.

We think the classified businesses own the supply. And whether it’s a robot or human searching the site, Vend will still earn its share and its ability to make money won’t be impacted in a meaningful way.

Thanks, Beeneet.

Latin America is having a moment. It may last a little longer before confronting some big “ifs.”

Stocks in Brazil, which account for 60% of regional market capitalization, have soared by nearly a quarter this year and half over the past 12 months. No. 2 market Mexico is nearly as hot.

Shifts in global sentiment are driving the rally more than anything happening at home. Investors poured twice as much into emerging markets in January as in all of 2025, betting on a weaker dollar and hedging U.S. risk, says Paulina Amieva, portfolio manager for the T. Rowe Price Latin America Fund.

Within the asset class, investors are balancing tech-forward Asian markets with a tech-laggard Western Hemisphere, adds Malcolm Dorson, head of emerging markets strategy at Global X exchange-traded funds. “People are looking for some of that barbell optionality in LatAm financials and commodities,” he says.

Brazil’s domestic picture offers an additional reason to be bullish. The central bank has tightened interest rates while the rest of the world loosened, to a punishing 15%. With inflation holding below 5% annually, it’s expected to cut three percentage points over the next year. That should unshackle an “asphyxiated” economy, says Alejo Czerwonko, chief investment officer for emerging markets Americas at UBS Global Wealth Management. “We are favoring Brazilian stocks, which are direct beneficiaries of both global and domestic trends,” he says.

T. Rowe’s Amieva thinks Brazil’s bulging real interest rate creates space for up to five percentage points in cuts. That could juice standout consumer-facing companies like car rental franchise Localiza and pharmacy chain Raia Drogasil, along with top bank Itau Unibanco.

Risks loom, too. For Brazil, leftist incumbent President Luiz Inácio Lula da Silva looks the favorite to win re-election this October. His archrival Jair Bolsonaro is in jail for plotting to overturn the last election and has tapped his charisma-challenged son Flavio as his stand-in. “The market is kind of resigning itself to Lula,” Amieva says. “No matter who wins, they will have to implement some sort of fiscal adjustment.”

Mexico could be in much more serious trouble if President Donald Trump refuses to extend the U.S.-Mexico-Canada Agreement on trade, which is due for “review” this summer. Exports headed North account for nearly 30% of Mexican gross domestic product.

Investors are betting that objective symbiosis and Mexican President Claudia Sheinbaum’s skilled Trump whispering will renew the pact with minimal changes. “People are playing Mexico ahead of a potential trade deal,” Dorson says.

An emerging bright spot for Latin America could be Argentina, whose stocks are excluded from most indexes after years of economic depredation.

The Global X MSCI Argentina ETF has jumped by a quarter since reformist President Javier Milei triumphed in midterm elections last October. Dorson and Amieva both like Vista Energy, which is domiciled in Mexico but focused on Argentina’s massive Vaca Muerta shale oil formation.

“Latin America is back on the map after 10 years falling off the map,” UBS’ Czerwonko says. The topography might still prove treacherous.

Buy This Stock to Own a Piece of Ferrari. It’s a Low-Risk Bet for Value Seekers.

Exor owns stakes in a group of public and private companies, notably a nearly 20% stake in Ferrari, the top luxury car maker in the world. Its shares look cheap.

Sometimes the parts are worth more than the whole. That’s the case with Exor, whose massive discount has created a low-risk bet for value-seeking investors.

Exor is a European investment company controlled by Italy’s Agnelli family. It owns equity stakes in a group of public and private companies, notably a nearly 20% stake in Ferrari, the top luxury car maker in the world. Other assets include interests in auto maker Stellantis, farm equipment producer CNH Industrial, and Philips, the European maker of medical diagnostic equipment. Its smaller portfolio of private holdings includes stakes in the Economist magazine and Christian Louboutin, the high-end European maker of women’s shoes.

The past two years have been subpar for Exor—shares have dropped more than 20% over the past year alone—as Ferrari stock has fallen 25% from its record high last year, and Stellantis, which recently took a $27 billion write-down keyed off its electric-vehicle business, has struggled. The decline has left Exor shares trading at 72 euros ($85.75) on Europe’s Euronext exchange, or $86 for its lightly traded American depositary receipt, EXXRF. Exor now trades at a more than 50% discount to its estimated net asset value of $190 based on the recent value of its public company stakes and the company’s estimates of its private holdings, most recently updated as of June 2025.

That discount is too extreme. Exor’s management is led by CEO John Elkann, 49, a member of the Agnelli family. He has run the company since 2009 and is also chairman of Ferrari and Stellantis. Elkann’s overall record has been strong, with NAV growing at a nearly 18% rate through the middle of 2025, against 11% for the company’s benchmark, the MSCI World Index. With the stock trading at such a monster discount, and the possibility of a turnaround at its portfolio companies, it won’t take much for Exor to become a winning bet.

“John Elkann has a great track record growing Exor’s value per share at a strong rate, while steadily improving the qualitative mix of Exor’s assets, yet the stock trades at an unusually large discount to NAV,” says Ross Glotzbach, CEO and head of research at Southeastern Asset Management. “I don’t think Exor will let a 50%-plus discount like this persist.”

The common denominator among three of the main Exor holdings—Ferrari, Stellantis, and CNH—is a link to Fiat, the dominant Italian industrial company founded by Giovanni Agnelli in the late 19th century and whose descendants now own over half the stock in Exor. Auto maker Stellantis was formed by the merger of Fiat’s auto business with Chrysler in 2014 and the subsequent combination with France’s Peugeot. CNH, the No. 2 farm equipment maker behind Deere, was created by the merger of Fiat’s industrial business and CNH Global in 2013. Ferrari was jettisoned by Fiat Chrysler in 2015.

The company has a strong balance sheet with net debt of about $2 billion relative to total assets of almost $40 billion. The dividend is modest at under 1% as the company prefers to invest or repurchase stock. European analysts are almost uniformly favorable on Exor. UBS’ Patrick Hummel, who has a Buy rating and price target of €117 on the stock, up 60% from recent levels, wrote in late 2025 that the company was “well positioned to seize on significant investment opportunities.”

Like many conglomerates and investment companies, including Loews and Graham Holdings, Exor trades at a discount to NAV in part because investors doubt its holdings will be sold off, while family control at all three companies makes it difficult for activists to push for breakups. Berkshire Hathaway, the world’s largest conglomerate, is an exception, trading around intrinsic value, according to UBS analyst Brian Meredith. Exor benefits from its domicile in the Netherlands since it doesn’t pay taxes when it sells any of its equity holdings at a profit. U.S. companies generally get no such tax break.

The current Exor discount of more than 50% hasn’t always been like that. It stood at 35% in 2023 and 15% a decade ago, and the average has been 30% since 2009. Management doesn’t seem too worried. Elkann said last March that Exor simply needs to deliver. “As one performs, the discount will take care of itself,” he said. Ferrari stock has bounced some 20% off its recent lows, and Stellantis stock looks cheap at a discount to its auto peers.

Investors can view Exor as a cheap, backdoor way to invest in Ferrari, since Exor’s 19.5% stake is valued now at $14.8 billion and accounts for nearly 40% of Exor’s NAV and about 80% of its market value of $18 billion. Ferrari has been a big winner for Exor, rising nearly sevenfold in price since its 2015 initial public offering, while Stellantis and CNH stocks are lower in the past five years.

While not cheap, Ferrari trades for about 35 times projected 2026 earnings, down from a price/earnings ratio of 50 last year. Its stock got hit in late 2025 when Ferrari disappointed investors with lower-than-expected financial guidance through 2030. With a fanatic following, limited auto production, and high margins on cars averaging about $500,000 each, Ferrari is more like a luxury company than an auto maker. Larry Pitkowsky, manager of the Goodhaven mutual fund, says Ferrari is now more reasonably priced than it was a year ago. That makes Exor a better value since Ferrari is its biggest asset.

Elkann hasn’t maintained a static portfolio. Exor sold PartnerRe, a reinsurer, for $9.3 billion in 2022 and made a well-timed sale of over $3 billion of Ferrari stock near the highs in February 2025. Exor bought around $4 billion of Philips stock starting in 2023.

The company has said it wants to focus new investments on healthcare and luxury goods, but it’s hard to argue that those are better values now than Exor’s own stock. Exor bought back about $1.2 billion of its shares in the first half of 2025, or about 6%, but the company has the wherewithal for more repurchases with a strong balance sheet that includes $4 billion of debt and $2 billion of cash.

Exor should net over $1 billion this year from the sale of Iveco, a maker of commercial vehicles, giving it more cash to buy back stock, though the company was noncommittal on buybacks in September. Expect management to face analyst questions on the discount and buyback when Exor reports its second-half 2025 results in late March.

Pitkowsky, echoing words from legendary value investor Ben Graham, says Exor offers an “ample margin of safety” now. And plenty of upside, too.

TSMC’s US investment plans at heart of $250bn puzzle for chip sector

Agreements reached between Taiwan and Trump administration imply big expansion for world’s biggest chipmaker

The trade deal signed between the US and Taiwan this week brings Washington’s tariffs on Taiwanese exports in line with those of other big trading partners. But it excludes the core of the two countries’ trade relationship: chips.

The deal builds on Taiwan’s pledge last month that its tech companies would invest $250bn to make chips in the US in exchange for chip tariff exemptions. But the lack of available information on the investment pledge leaves big questions about the way forward for Taiwan Semiconductor Manufacturing Company, the world’s biggest maker of chips.

Analysts and investors in TSMC, which has become one of the world’s most valuable companies by making chips for the likes of Nvidia and Apple, are trying to work out the implications for its spending commitments and manufacturing footprint.

The uncertainty highlights the complexities of doing business under US President Donald Trump for TSMC and its clients, as well as for US companies such as Google and Microsoft that are spending huge sums on AI servers powered by Nvidia-branded, TSMC-made chips.

“There’s negotiated text beyond this memorandum of understanding,” said an industry insider. They added that Washington was unlikely to release a fuller text of the January agreement until after Trump meets Chinese President Xi Jinping in Beijing in April, because Trump does not want issues over Taiwan to interfere with building stable relations with China.

One key Trump administration plan reported by the FT this month envisions TSMC allocating quotas for bringing chips into the US tariff-free — which it and other Taiwanese companies will get in exchange for building capacity onshore — to its American customers, the actual importers that would be hit by tariffs.

January’s $250bn agreement accommodated the Trump administration’s desire to ensure a stable, onshore supply of cutting-edge chips.

The agreed figure was the sum of Taiwanese companies’ existing investment plans, according to Taiwan’s vice premier Cheng Li-chiun. TSMC, with its massive capital spending — forecast over the next three years to significantly exceed the $101bn spent over the past three years — is expected to account for the lion’s share.

According to US commerce secretary Howard Lutnick, $100bn of TSMC’s previous commitments to build US factories is included. TSMC’s supply chain accounts for another $30bn, according to people briefed on the matter.

Several other Taiwanese companies including Foxconn are expanding US capacity to assemble the servers that power the AI boom. But their factories are much less capital-intensive than advanced chip plants, known as fabs. They are expected to cost no more than $20bn, leaving a $100bn gap only TSMC could fill.

“In the Taiwan trade deal, the whole shooting match is TSMC,” said a semiconductor industry insider.

TSMC had previously announced plans to pour $165bn into the construction in Arizona of six fabrication plants, two advanced packaging plants — where chips are assembled into a bigger device such as an Nvidia processor — and a research and development facility. It started volume production for Nvidia and Apple at the first of these plants in late 2025.

But TSMC would “come in huge, bigger”, Lutnick said last month, referring to reports the company’s US presence might double. “The objective is to bring 40 per cent of Taiwan’s entire [chip] supply chain and production to America during President Trump’s term.”

Two people familiar with TSMC’s plans said it would invest another $100bn in the construction of four more fabs.

That figure aligns with analysts’ calculations of what else TSMC needs to build in the US for all its chip sales to American customers to remain tariff-free. Under the US-Taiwan agreement, companies building plants in the US can import 2.5 times the facilities’ planned capacity, free of national security tariffs, during construction. After the plants start production, Taiwanese investors will still get a chip tariff exemption quota of 1.5 times those plants’ capacity.

“TSMC’s $165bn commitment covers tariff-free imports through 2032 under the narrow interpretation that covers only direct chip imports,” said Sravan Kundojjala, an analyst at consultancy SemiAnalysis. “Post-2032, the loss of the 2.5x construction multiplier as fabs complete creates a gap requiring four additional fabs by 2035 to maintain full coverage.”

Kundojjala believes TSMC’s land deals in Arizona suggest expansion of such scale. The company recently acquired 900 acres of land, adjacent to the 1,100-acre plot where it has one operational fab, one completed fab shell and a third fab under construction.

TSMC chief executive CC Wei told investors last month it would “expand the many fabs” in Arizona. TSMC said the original plot was not large enough for facilities planned under the $165bn investment. But it would not clarify how much of the new plot will be filled with already-announced investment.

In Taiwan, TSMC’s cutting-edge fabs are in much smaller, tightly-packed campuses. In the southern city of Tainan, it operates more than 15 fabs on a site less than a quarter the size of its total Arizona plot. While the buildings with the clean rooms are of similar size, space in Arizona is taken up by other facilities such as car parks, which are built underground in Taiwan.

Another comparison is with Intel, TSMC’s American rival and customer, which plans eight fabs on a 1,000-acre site in Ohio. Kundojjala estimated that TSMC’s area per fab would run up to 50 per cent larger, probably reflecting bigger clean rooms, on-site water recycling and dedicated chemical and gas plants.

“After accounting for one fab spillover from the original plan, we estimate TSMC can build four more fabs on the remaining 720 acres at 180 acres per fab,” Kundojjala said.

The total Arizona campus could support up to 10 fabs, at least two advanced packaging centres and one R&D centre on a 2,000-acre footprint, he suggested.

Even if TSMC eventually expands to that scale, observers believe that its US footprint will remain small compared with Taiwan for many years. The company previously said it expected to have 30 per cent of its most advanced chipmaking capacity — producing chips of 2 nanometres and below — in the US when its Arizona complex is fully built up in the early 2030s.

But its simultaneous expansion in Taiwan means that this might be a ceiling. Cheng this week said it was “impossible” to achieve Lutnick’s 40 per cent goal.

The Trump administration’s idea to exempt big US tech companies from future chip tariffs through quotas earned with new TSMC capacity onshore ensures that companies like Nvidia keep pushing their Taiwanese chip supplier to build more.

However, huge uncertainties remain. Only $8.2bn of Taiwan’s $198bn in exports to the US last year were standalone semiconductors. The vast majority of the chips that TSMC and other Taiwanese chipmakers sell to US customers are assembled into other devices such as server modules or smartphones in factories in Taiwan, India, south-east Asia or Mexico before crossing the US border.

According to experts, importers are unlikely to be able to report the value of the chips built into the final products they bring in. One industry executive said: “I will only believe that US customs can collect those tariffs when I see it.”

‘Companies are not cows to be milked’: French businesses grapple with profits surcharge

Corporate earnings season lays bare impact of levy on profits expected to raise €7.5bn

France’s biggest companies face a €7.5bn blow to their profits this year from the extension of a controversial levy on profits, which bosses warn is unpicking President Emmanuel Macron’s business-friendly legacy.

As companies have reported earnings for 2025, banks, luxury and industrial groups have been the hardest hit by the tax, which raised €8bn in 2025 and has been renewed this year.

The surcharge was introduced in last year’s budget as a one-off measure to raise about €8bn but it has been maintained with small adjustments by Sébastien Lecornu’s government as a concession to the centre-left socialist party, whose support he needed to pass a budget last month.

Proponents say the measure is needed to help restore France’s public finances and reduce its deficit to 5 per cent of GDP this year. But companies hit by the measure have warned it risks limiting their investments in France.

Aerospace and defence group Safran will pay about €470mn linked to the tax this year after paying €377mn last year.

Chief executive Olivier Andriès said on Friday: “With the surcharge, we have returned to or even surpassed a little bit the initial tax level [when Macron took office]. We’ve ended up losing all the competitiveness we had gained.”

The levy will raise the effective corporate tax rate in France for companies with annual revenues of more than €3bn to 35 per cent, and 30 per cent for those above €1.5bn, by adding a surcharge to standard corporate tax paid on profits made in France.

It is a reversal of Macron’s supply-side approach at the beginning of his time in office in 2017, when he gradually reduced the corporate tax from 33 per cent to 25 per cent.

Despite small changes to the 2025 measure, to raise the threshold at which it takes effect from €1bn to €1.5bn, the signal sent to investors and businesses was part of the reason for a muted stock market response to Lecornu’s budget last month, said Thomas Zlowodzki, head of equity strategy at ODDO BHF.

“This has prevented Cac 40 shares from taking off after the passing of the budget. The impact would have been less negative if they had lowered the rate a little bit, which would have suggested the additional taxes were going to disappear. Now that seems less likely,” he added.

LVMH chief executive Bernard Arnault said last week that France’s policy to “tax companies to the hilt and create unemployment” added to existing uncertainty for businesses and meant he was “somewhat reserved” on the company’s prospects in 2026.

The measure meant LVMH’s total income tax payments rose to about €5.5bn last year, more than €300mn higher than 2024, finance chief Cécile Cabanis told analysts this week.

That came despite the luxury conglomerate benefiting from lower US tax rates under US President Donald Trump’s “One Big Beautiful Bill”. She said she expected an “identical” tax rate in France in 2026.

French banks face a hit of more than €1bn, according to the French banking federation. Those with large domestic operations will bear the brunt, with co-operative banks Crédit Mutuel, Crédit Agricole and BPCE paying a combined €800mn, the federation said.

This reflects the disproportionate impact of the measure on companies with high sales and profits in France, compared with French-headquartered businesses with significant foreign revenues.

Vinci, the motorway operator, booked a €425mn hit to free cash flow last week, although France’s biggest bank BNP Paribas said the impact had been negligible.

The additional surcharge means that, at 36 per cent for large companies, France has the OECD’s highest statutory corporate income tax rate — a measure the organisation uses to compare headline tax rates faced by businesses across countries.

François Ecalle, a former top finance ministry official now leading non-profit public finances institute Fipeco, wrote in a recent note that the “exceptional, limited tax” has little effect on economic activity but that uncertainty over how long it would be applied was “damaging because it puts brakes on investment”.

The additional tax comes as larger companies continue to perform relatively strongly despite the French political turmoil. The prospect of extending the tax further is set to spark more debate later this year.

“We’re talking about a surcharge on 300 businesses which are the biggest in France,” socialist party leader Olivier Faure told broadcaster France Inter last month. “These are people who have distributed more than €100bn in dividends and share buybacks last year. Do you think we can’t take €8bn?”

However, Philippe Juvin, a rightwing lawmaker and leading parliamentary negotiator on the 2026 budget who opposed the tax, warned: “France already has among the highest tax rates in the world. Companies are not cows to be milked.”