On July 21, Interactive Brokers Group (NASDAQ:IBKR) reported results for the quarter ended June 30, with earnings of $0.69 per diluted share, up from $0.51 a year earlier. Net revenues rose to $1.90 billion from $1.48 billion. That is a big leap for a business that was already highly profitable, and the pretax margin still edged up to 77%. Here is what drove it, what could bite, and how the market is pricing the stock.

More Clients, Fatter Balances

The engine starts with people. Customer accounts grew 34% to 5.19 million, and customer equity rose 40% to $930.3 billion. Because equity outran the account count, the average customer is also bringing more money, not just more logins. Bigger balances feed both trading and borrowing.

Those balances then show up in revenue in two ways. Commission revenue climbed 30% to $673 million as customers traded more, with options volume up 17% and stocks up 14%. Futures barely moved at 2%, so the growth is coming from the options and stock crowd. The bigger line is interest. Net interest income rose 23% to $1.06 billion as customers borrowed more against their portfolios and left more cash on deposit. Margin loans jumped 67% to $108.5 billion, far outpacing account growth.

Costs are not eating the gains. The pretax margin of 77% compares with 75% a year ago, so the extra revenue is flowing through rather than being bought with heavy spending. Other fees and services rose 40% to $87 million, led by order-flow payments from exchange-mandated programs and risk exposure fees. The board also declared a quarterly dividend of $0.0875 per share, payable September 14, to holders of record on September 1.

Fine Print Worth a Look

Growth has a price tag. Execution, clearing and distribution fees rose 22% to $142 million, and regulatory fees alone added $19 million after the SEC lifted its Section 31 fee rate on April 4, 2026. Liquidity rebates from exchanges softened the blow as volumes grew. Still, these costs rise with the same activity that lifts revenue, so busier markets do not come free.

Then there is currency. The company holds its equity in the GLOBAL, a 10-currency basket. This quarter, that strategy cut comprehensive earnings by $36 million, because the GLOBAL slipped about 0.21% against the dollar. It added $21 million to other income but subtracted $57 million through other comprehensive income. A fraction of a percent moved a lot of money.

And interest is now the biggest revenue line at $1.06 billion. That means results lean on customers staying active and staying willing to borrow.

Funds Are Leaning In

Hedge funds holding IBKR climbed to 87 from 70 in the prior quarter, a sign institutions are adding rather than trimming. Short interest is 2.64% of float, which is low and points to little organized money betting against the company. Some short interest is hedging rather than conviction, so treat it as a light signal. At 27.93 times forward earnings, as of September 18, the stock is priced for growth to keep coming, even as funds pile in and shorts stay away. That is a full price for a company whose costs and currency swings can shift from quarter to quarter.

Great Quarter, Big Ask

Interactive Brokers is growing in almost every direction at once, yet much of that growth rests on customers staying active and staying leveraged. Bulls need accounts and balances to keep building without the margin slipping. Bears are watching for trading-linked costs and currency swings to take a bigger bite. One quarter will not settle that argument.

While we acknowledge the potential of IBKR as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 10 Best Future Stocks to Buy Under $10 and 12 Best Performing Semiconductor Stocks to Invest In.

Disclosure: None. Follow Insider Monkey on Google News.

This article was written by

Follow

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am currently not invested in this portfolio as it is not meeting my current investment objectives.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

VanEck is a global asset management firm offering ETFs, mutual funds, private funds, model portfolios, institutional strategies, separately managed accounts, as well as UCITS funds. Since our founding in 1955, putting our clients’ interests first, in all market environments, has been at the heart of the firm’s mission. VanEck has a long history of looking beyond financial markets to spot trends that create meaningful investment opportunities. We were one of the first U.S. asset managers to give investors access to international markets, which set the tone for identifying asset classes and themes such as gold investing in 1968, emerging markets in 1993, and exchange traded funds in 2006 that later helped shape the investment industry. The firm oversees $161.7 billion in assets as of September 30, 2025. Disclosures: http://ow.ly/SZ9450N5qTJ.

Max Tegmark, an MIT physics professor and machine learning researcher, says he has warned about the danger of artificial intelligence (AI) potentially overtaking human beings for over a decade.

Tegmark argues that without sufficient guardrails, AI systems will recursively improve themselves until they achieve superintelligence, allowing them to “call the shots” on Earth.

This week, Tegmark traveled from Cambridge, Massachusetts, to Washington, D.C., for a closed-door meeting with a bipartisan group of senators about the threat AI poses. And for the first time, he said he feels his message has broken through.

“I came away feeling quite encouraged,” Tegmark told Fox News Digital. “The senators were just taking this so seriously. A lot of them looked really, really concerned.”

WHO IS DARIO AMODEI, THE ANTHROPIC CEO PUSHING INDEPENDENT AI OVERSIGHT?

MIT physics professor Max Tegmark speaks to journalists after addressing an AI briefing led by Sen. Bernie Sanders, I-Vt., Wednesday, at the U.S. Capitol in Washington, D.C.  (Roberto Schmidt/Getty Images / Getty Images)

“They were asking a lot of questions about concrete solutions as well,” he added, describing the Wednesday meeting. “There’s been more of a shift in political will in America in the last three months than in the previous decade. It’s really inspiring to see.”

Tegmark also made the trip to host Tuesday’s Pro-Human Assembly, where two figures who rarely agree on anything — far-right media executive Steve Bannon and Sen. Bernie Sanders, I-Vt. — shared the same stage to warn about AI.

“It just really blew my mind…when I got to introduce both Bernie Sanders and Steve Bannon to speak on that stage in D.C. back to back, and they were both saying the same thing. We want to keep humans in charge here,” Tegmark said.

The event also brought together faith leaders, labor representatives and mothers whose children died by suicide after extensive interactions with AI chatbots.

“The basic conversation that went down there was simply saying we are all pro-human. Doesn’t matter if you’re MAGA or a Democrat, we’re humans first,” Tegmark said. “We want a good future for humans, not for the machines.”

GOP LAWMAKERS SMELL SOMETHING ELSE BEHIND BIG TECH’S AI DOOMSDAY WARNINGS: ‘SOMETHING ELSE GOING ON’

Max Tegmark speaks at the Pro-Human Assembly, Tuesday, in Washington, D.C. (Finn Gomez/Getty Images / Getty Images)

Part of securing that “good future,” Tegmark said, is preventing the nightmare scenario that has kept him up at night for years.

Incidents similar to the Hugging Face hack, where 700 OpenAI agents sent each other human-like messages before coordinating cyberattacks, will begin happening with more frequency in the next six months to year if no meaningful action is taken, Tegmark said.

Tegmark believes that if AI reaches superintelligence and is eventually embodied in millions or even billions of robots, it will become a new species that is superior to the human race.

“These agents that, for example, hacked out of OpenAI and committed crimes online, they are not your grandma’s ChatGPT from two years ago,” he said. “They have goals. They’re actively pursuing them and being incredibly creative about getting things done.”

AI HYSTERIA HAS A Y2K PROBLEM — AND THE STAKES THIS TIME COULD BE FAR HIGHER

An AI robot interacts with people during an industry exhibition in Guangzhou, China. (John Ricky/Anadolu via Getty Images / Getty Images)

He also worries that AI minds put inside robotic bodies may eventually have motives that conflict with our own, leading to outcomes most would find disastrous.

“Why would they do us any harm? I mean, we are nice to cats, and we pet them, and we don’t try to eliminate them,” Tegmark said. “Well, maybe [AI will] find us annoying and a nuisance.”

“If these AIs decide to cover all of America with data centers and get rid of all the houses, a lot of people are going to be pissed, right? And now [the AIs will] view us as some annoying insects. We’re trying to sabotage their little construction project, and they’ll feel, ‘Oh, it’s just self-defense. Got to get rid of these human pests,’” Tegmark said.

But Tegmark insists that this hypothetical future isn’t inevitable. He argues that AI can still be steered toward beneficial uses — such as curing diseases and increasing overall productivity — if governments establish safety standards before increasingly powerful systems are widely deployed.

AI EXTINCTION WARNINGS DOMINATE HEADLINES AFTER EX-ANTHROPIC EMPLOYEE’S VIRAL POST

The Stargate Oracle AI data center campus in Abilene, Texas. (Brandon Bell/Getty Images / Getty Images)

He pitched what he called an “FDA for AI,” modeled on the Food and Drug Administration’s (FDA) oversight of drugs, medical devices and treatments.

Under such a system, companies using AI to develop new medicines or productivity tools could still profit while preventing many of the perceived harms.

As an example, Tegmark pointed to AI chatbots that some children have been using as a stand-in for real, human connection.

“The next time some company wants to release an AI girlfriend for 8-year-olds, they would be asked, ‘Hey dude, where’s your clinical trial?’” Tegmark said. “If they say, ‘We haven’t checked yet, but we feel really good about this,’ then the person from the FDA for AI will be like, ‘OK, buddy, come back when you’ve done your clinical trial.’”

Sen. Bernie Sanders, I-Vt., walks with British computer scientist Geoffrey Hinton, left, and MIT physicist Max Tegmark, center, before an AI briefing, Wednesday, at the U.S. Capitol in Washington, D.C. (Roberto Schmidt/Getty Images / Getty Images)

Politicians have begun responding to the country’s shifting mood, with 79% of Americans saying the government should prioritize AI safety regulations even if doing so slows AI development, according to a recent Gallup poll.

For one, California Gov. Gavin Newsom signed an executive order Friday that calls for new laws that require AI companies to include a “kill switch” to prevent out-of-control models from going rogue.

CLICK HERE TO DOWNLOAD THE FOX NEWS APP

Tegmark said reining in AI is possible, but emphasized that action needs to be taken quickly.

“We’ve done a lot of remarkable things here in the U.S. before that other people thought were impossible. And I think we can do this also,” he said.