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Why fossil fuel emissions are set to fall in 2026

The arithmetic is stranger than it first looks, because one fossil fuel is having an excellent year. Expensive gas pushed power systems in Europe, Japan, Korea and China back toward coal, and the resulting jump in coal emissions is “more than offset by declines for oil and gas,” according to Carbon Brief.

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Global coal demand is now set to rise 1.2% this year to “a record 8.94 billion tonnes,” according to the IEA, reversing a forecast for a slight decline. Almost no coal moves through Hormuz. The missing LNG cargoes did the work.

Here is how the year’s forecasts have moved:

• Oil demand went from growth of 930,000 barrels per day in January to a decline of 2.5 million barrels per day in September, according to the IEA.

• Gas demand went from a forecast 2.0% increase in January to a 0.6% drop, according to the IEA’s third-quarter gas report.

• Coal demand went from a slight expected decline to a record 8.94 billion tonnes, according to the IEA’s Sept. 10 mid-year update.

• Fossil carbon dioxide (CO2) emissions hit a record 38.1 billion tonnes in 2025, according to the Global Carbon Project.

What struck me in my analysis of the emissions record is how little precedent this year has. Fossil CO2 emissions have fallen clearly twice in two decades, in 2009 and 2020, according to the Global Carbon Project.

A banking collapse and a pandemic. The record set in 2025 was announced during COP30, the 30th United Nations climate conference, in Belem, Brazil.

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What a shrinking demand curve means for energy stocks

Energy equities have spent 2026 pricing the supply shock and ignoring the demand break. The Energy Select Sector SPDR Fund (XLE) traded near $65.83 on Sept. 14 against a 52-week range of $42.35 to $66.17, after a total return of about 53% over the past year, according to StockAnalysis.

Spot barrels and terminal demand are two separate trades, and only one of them is in the price. The IEA now expects oil use to stay close to flat for two years, which puts a question mark over its own call that demand would not peak until 2030.

Every month the conflict runs raises “the probability of permanent demand destruction,” according to consultancy DNV. Electric vehicles (EVs) took record shares of car markets from Australia and China to Indonesia and Thailand this year.

Related: HSBC raises its oil forecast as the Hormuz backup plan burns

For a portfolio, that is the difference between a cyclical win and a structural one. Oil majors such as Exxon Mobil (XOM) have printed refining and trading profits off this crisis, and those profits are real.

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The customers are the variable nobody can hedge. Diesel crossed $6 a gallon nationally for the first time on Sept. 11, against about $3.70 a year earlier, according to AAA. Households and fleets that responded by buying something electric, or by driving less, do not automatically unbuy that decision when crude eases.

That is also the quiet risk in owning energy at a 52-week high. The sector is being valued on a barrel count that the agency in charge of counting barrels has stopped forecasting upward.

What to watch before the 2026 emissions drop sticks

Next year is a coin flip that trades on shipping lanes. If LNG flows through Hormuz recover and gas prices ease, global coal demand falls 0.4% to 8.91 billion tonnes in 2027, according to the IEA. If the strait stays shut, coal climbs again.

The Global Carbon Project will publish its next full budget at the end of the year, and that number will tell you whether 0.5% was a blip or a turn.

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The world found a way to cut emissions this year. It cost $104 a barrel, a war, a record year for coal, and the first $6 diesel in American history. Nobody is putting that on a banner in Belem.

The number worth watching is not this year’s half a percent. It is how many of the drivers, airlines and utilities that switched decide to stay switched once the tankers sail again.

Related: Scott Bessent’s Hormuz declaration puts Chevron at the center

This story was originally published by TheStreet on Sep 19, 2026, where it first appeared in the Economy section. Add TheStreet as a Preferred Source by clicking here.

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When most investors think about what companies are cashing in on the AI data center boom, they typically picture chipmakers or utilities. Many investors don’t initially consider pipeline companies that supply gas to data centers or utilities. That’s a missed opportunity for generating income. For example, you could generate $600 a month in dividend income by investing around $141,000 into some of the pipeline companies cashing in on AI power demand.

Here’s a look at some of the top pipeline stocks to buy to generate income from the AI data center boom.

Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »

Pipeline AI profits into your portfolio

Pipeline giants Energy Transfer (NYSE: ET) and Kinder Morgan (NYSE: KMI) are leaders in capitalizing on surging gas demand to support AI data centers. Here’s the math for generating $600 a month from these energy stocks:

Data source: Google Finance and the author’s calculation.

I chose these pipeline stocks for their strong financial profiles and meaningful exposure to the AI power trend.

Energy Transfer has signed several deals to support AI data center power demand, including those to directly supply gas to data centers and to power producers. The master limited partnership (which sends a Schedule K-1 Federal tax form) is also investing in several large-scale gas pipeline projects to support rising gas demand. These investments should give it the fuel to grow its distribution by 3%-5% each year.

Meanwhile, Kinder Morgan currently has $8.2 billion of natural gas pipeline projects under construction to support rising gas demand. Additionally, it’s pursuing over $10 billion in other opportunities beyond its backlog to support growth in gas demand. These projects should give Kinder Morgan the fuel to continue increasing its dividend, which it has done for nine straight years.

You can collect real income today by investing in the pipeline stocks cashing in on the AI data center boom. While $141,250 is a lot to begin with, you can also start small and steadily build your income, as a $12,000 investment would produce over $600 in dividends each year.

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Matt DiLallo has positions in Energy Transfer and Kinder Morgan. The Motley Fool has positions in and recommends Kinder Morgan. The Motley Fool has a disclosure policy.

How to Earn $600 a Month From the Pipeline Stocks Powering AI Data Centers was originally published by The Motley Fool

Kalshi has filed with U.S. regulators to launch perpetual futures contracts linked to individual U.S. stocks, a move that would extend a crypto-style derivatives structure into traditional equity markets. The company’s proposal was submitted to the Securities and Exchange Commission as a rule change and simultaneously sent to the Commodity Futures Trading Commission for review, according to the filing.

The development arrives as Coinbase has also put forward a separate plan to offer single-stock perpetual futures. Both efforts point to growing competition among regulated crypto derivatives venues to adapt perpetual contract mechanics—particularly the use of ongoing funding payments—to equity instruments.

Key takeaways

• Kalshi filed a proposed rule change with the SEC and submitted the related materials to the CFTC to enable perpetual futures tied to specific U.S. equities.
• The contracts would have no fixed expiration date and would use periodic funding payments between long and short positions to keep pricing aligned with the underlying stocks.
• Kalshi said the products would be treated as security futures and cleared through its CFTC-registered clearinghouse, Kalshi Klear.
• Coinbase filed a parallel proposal the same day, and Kraken’s parent company Payward also moved forward with filings through Bitnomial.
• These proposals come amid renewed uncertainty in U.S. crypto-related regulatory pathways following the Senate’s failure to advance the CLARITY Act earlier this month.

Kalshi’s SEC and CFTC filing targets stock-linked perpetuals

According to Kalshi’s rule change submission to the SEC, the company is seeking approval to list perpetual futures tied to individual U.S. stocks. The filing was made on Friday and the CFTC has not yet approved the proposal.

The key feature of Kalshi’s design is that the futures would be structured without a preset expiration date. Instead of settling at a particular maturity, the price relationship to the underlying stock would be maintained through “periodic funding payments” exchanged between long and short positions, a mechanism widely used in crypto perpetual futures.

Kalshi also indicated that the proposed contracts would be treated as security futures products and cleared using Kalshi’s CFTC-registered clearinghouse, Kalshi Klear—an element that matters for market participants because it points to an operating model built around regulated clearing rather than bespoke settlement arrangements.

The filing is available through the SEC’s website as part of Kalshi’s proposed rule change: https://www.sec.gov/files/rules/sro/kalshiex/2026/34-106422.pdf.

Coinbase moves in parallel as the “equity perp” race expands

Kalshi’s submission followed the same day as a separate announcement from Coinbase. Cointelegraph previously reported that Coinbase has also filed a proposal to bring perpetual futures tied to individual U.S. stocks to the market, using the same broad idea: perpetual exposure without a traditional expiration, balanced through periodic funding payments. The earlier Coinbase coverage is linked here: https://cointelegraph.com/news/coinbase-files-to-bring-single-stock-perpetual-futures-to-us-market.

These filings are significant not only because they replicate a familiar crypto derivatives template, but because they attempt to translate it into the equity derivatives framework—where product categorization, clearing arrangements, and regulator oversight can differ materially from crypto-native contracts.

Payward and Bitnomial also seek approval for stock perpetuals

Kalshi and Coinbase were not the only players advancing this concept. Payward—the parent company of crypto exchange Kraken—also filed to offer single-stock perpetual futures. The proposal was submitted through Payward’s Bitnomial Exchange, and Payward said it expects the products to be available to U.S. traders on Kraken.

Payward stated it plans to start with perpetual futures tied to 10 U.S. equities, including Tesla, Nvidia, Apple, Microsoft, and Amazon, and that it is working toward 24/5 trading.

The underlying SEC filing for Payward is available here: https://www.sec.gov/files/rules/sro/btnl/2026/34-106421.pdf. Payward’s public statement is referenced in a post on X: https://x.com/Payward/status/2101013602790490360.

Crypto-style funding meets a policy moment after the CLARITY Act setback

The push for single-stock perpetual futures comes after the U.S. Senate did not advance the CLARITY Act on Sept. 15, according to reporting referenced in the source. The bill failed to reach the 60-vote threshold needed to proceed.

In the immediate aftermath, SEC Chair Paul Atkins said the agency would act “decisively” within its existing statutory authority “with or without legislation,” signaling that regulators may pursue frameworks through other channels even if broader legislation stalls. The source ties this statement to an Atkins post on X: https://x.com/SECPaulSAtkins/status/2100256253645668860.

For investors and traders, these details matter because regulatory clarity is often what determines whether and how new derivative structures can be launched at scale. Perpetual futures can be attractive to market participants seeking continuous exposure, but they also shift how risk is managed over time—especially given the role of funding payments in maintaining price relationships.

Kalshi has already been operating in the perpetual futures space for crypto assets in the U.S. The source notes that Kalshi received CFTC approval for its Bitcoin perpetual contract in May and offers perpetual contracts tied to assets including Ether, Solana, and XRP.

What to watch next

With multiple exchanges now seeking permission to list stock-linked perpetual futures, the immediate focus should be on regulatory review timelines at the SEC and CFTC and whether the proposed contract structures—no fixed expiration plus funding-based pricing alignment—survive scrutiny in practice. Market participants will also want to monitor how funding mechanics and clearing arrangements are handled as these proposals move from filing to approval.

On August 19, Ferrovial (NASDAQ:FER) announced it had been selected to deliver the I-24 Southeast Choice Lanes, a 26-mile project running between Nashville and Murfreesboro. It is the largest single capital investment in Tennessee’s history and the state’s first public-private partnership. The price tag is $9.2 billion, though Ferrovial isn’t carrying it alone, since its DriveTN consortium also counts Transurban and Tikehau Star Infra as partners.

The Model Travels Well

Choice lanes are familiar ground for Ferrovial, which has replicated the model in Washington, D.C., Charlotte and Dallas-Fort Worth. On Virginia’s 66 Express corridor, similar lanes shaved up to 50% off peak-hour travel times. That is the pitch for I-24, a stretch of highway that already ranks among the region’s most jammed: drivers who opt in get steadier speeds, and those in the free lanes should see less traffic too.

The business behind the bid looks healthy, too. Ferrovial’s July 28 results showed adjusted EBITDA up 21.6% on a like-for-like basis to €746 million over the first six months of the year, with U.S. highways doing most of the lifting. Those roads are sending cash home as well, since Ferrovial received €357 million in dividends from North America. And the construction order book reached an all-time high of €18 billion, so plenty of work is already in hand. The pipeline keeps filling: Ferrovial bid on I-285 East in Georgia in July, and its D35 Highway bid in the Czech Republic was the most cost-effective submitted, with technical evaluation still underway.

Beyond the roads, the balance sheet looks sturdy. Ferrovial ended the first half with €1.3 billion in net cash, excluding infrastructure projects, meaning cash outweighs debt outside those projects. The airport arm is progressing too: Ferrovial has finished funding the $1.1 billion in equity it pledged for New Terminal One at JFK, and construction there is 92% complete.

Fine Print Worth Reading

Start with the line that looks worst on the page. Net profit for the first half of 2026 came in at €258 million, versus €540 million for the same period of 2025. That earlier figure included capital gains from asset rotation, which makes the comparison harsh, but the mismatch is still there: EBITDA climbed while reported profit fell.

Then there is the work itself. Construction turned 3.5% of revenue into adjusted EBIT, right on target, so there isn’t much room for a costly overrun on a big job. North America also accounts for 47.9% of the order book, so plenty rides on one region. The $24.8 billion in concession value cited for the project is a figure for Tennessee, not a profit forecast for Ferrovial. And a winning bid is not a finished road: I-24 still has to be financed, built and operated, and the CEO talks in terms of decades.

Quiet Money, Loud Multiple

Twenty-six hedge funds held Ferrovial in the latest quarter, up from 25 the quarter before. A small vote of continued interest, not a stampede. Just 0.97% of the float is sold short. That signals very little organized skepticism. But at 42.55 times forward earnings, as of September 18, the stock already assumes plenty of growth, so a stumble could hurt.

Lanes, Not Guarantees

The I-24 win hands Ferrovial another big road built on a model it already knows. Bulls need Tennessee’s lanes to deliver time savings like Virginia’s while the US highway engine keeps humming, and bears need the profit line to keep trailing EBITDA. For you, the real question is whether a proven playbook can justify a demanding price.

While we acknowledge the potential of FER 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.

On September 3, 2026, eGain Corporation (NASDAQ:EGAN) reported fiscal 2026 fourth-quarter and full-year results. Full-year revenue rose 3% to $91.1 million, AI customer revenue grew 20%, and adjusted EBITDA climbed to $13.6 million, a 15% margin, up from 10% a year earlier. Operating cash flow reached a record $21.2 million.

Fiscal 2027 guidance calls for total revenue of $84.5 million to $86 million, below fiscal 2026’s total, with adjusted EBITDA margin guided to just 1% to 2%.

Iakov Filimonov/Shutterstock.com

A Gartner Nod and a Widening Pipeline Back the Long-Term AI Bet

Despite the weaker fiscal 2027 outlook, eGain still has several indicators that support management’s longer-term AI thesis. In July, Gartner released its inaugural Magic Quadrant covering customer service knowledge management systems, placing eGain Corporation (NASDAQ:EGAN) in the Leaders category and positioning it highest for ability to execute and furthest for completeness of vision. CEO Ashu Roy described the recognition as evidence that AI-focused knowledge management is emerging as a distinct layer of enterprise infrastructure. New customer wins rose 27% year-over-year, while the number of pipeline opportunities carrying at least $500,000 in annual recurring revenue doubled. Customers are also showing greater willingness to pay for pilot programs before moving to broader deployments, replacing the free-trial approach eGain had previously used. In one early testing and certification engagement, self-service resolution reached 95%. Cash increased to $73.3 million from $62.9 million, despite the company repurchasing 1.6 million shares for $11.5 million. Management is targeting $100 million to $120 million in AI customer ARR by fiscal 2030, compared with $54 million in fiscal 2026.

Analysts on Record Say the Legacy Runoff is Outrunning the AI Ramp

B. Riley’s Erik Suppiger cut his target to $6 from $10.50 on September 8, 2026, keeping a Neutral rating, saying eGain Corporation (NASDAQ:EGAN) beat fiscal Q4 estimates but issued fiscal 2027 guidance well below consensus, driven by accelerating churn in the legacy non-AI business that is significantly reducing next year’s revenue and profitability.

Roth Capital’s Richard Baldry went further the same day, downgrading eGain Corporation (NASDAQ:EGAN) to Neutral from Buy and cutting his target to $7 from $21, citing a meaningful revenue pullback and roughly breakeven adjusted EBITDA for much of the year as legacy attrition more than offsets what he called “modest” AI revenue growth.

The retention data supports the caution.

Trailing 12-month net retention for AI customers fell to 104% from 120% a year earlier, a decline tied to a large expansion deal with JPMorgan Chase that boosted the prior year’s figure, and net retention across all customers dropped more sharply, to 93% from 105%. Total SaaS ARR declined 1% year-over-year, and remaining performance obligations fell 5%.

What The Smart Money Sees

Against that mixed backdrop, hedge funds were hardly moving in one direction either. Renaissance Technologies trimmed its position 10% to 760,999 shares worth $4.79 million as of the second quarter of 2026. Arrowstreet Capital raised its stake 20% to 560,326 shares worth $3.53 million, while AQR Capital Management increased its position 29% to 124,845 shares worth $786,524.

Overall hedge fund ownership ticked up to 12 funds from 11 the prior quarter.

Short interest sits at 9.29% of float, a level that reflects the same skepticism now showing up in B. Riley’s and Roth Capital’s cuts, and shares trade at 76.92 times forward earnings as of September 18, 2026, a multiple that leaves little room for the AI transition to slip further behind the legacy decline.

Both analysts who cut their price targets on eGain Corporation (NASDAQ:EGAN) agree on the same problem: the legacy business is shrinking faster than the AI business can replace it, at least for fiscal 2027. Where they might eventually differ is whether Gartner’s endorsement and a pipeline that doubled in size are enough to make that transition worth waiting through.

For now, the target cuts from B. Riley and Roth Capital reflect a guide that trades a year of visible growth for a bet that pays off only once the legacy runoff is substantially complete by fiscal 2030.

While we acknowledge the potential of EGAN 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: 33 Stocks That Should Double in 3 Years and 15 Stocks That Will Make You Rich in 10 YearsDisclosure: None. Follow Insider Monkey on Google News.

Kalshi has filed with U.S. regulators to launch perpetual futures linked to individual US stocks, extending the “crypto-style” derivatives model into traditional equity trading. The prediction market operator submitted its proposed rule change to the Securities and Exchange Commission (SEC) and separately to the Commodity Futures Trading Commission (CFTC) for approval on Friday, with the CFTC still pending a decision.

The proposal would create contracts without a preset expiration date and would rely on periodic funding payments between long and short positions to keep the futures price aligned with the underlying equities. Kalshi said the products would be treated as security futures and cleared through its CFTC-registered clearinghouse, Kalshi Klear.

Key takeaways

• Kalshi filed for single-stock perpetual futures with the SEC and CFTC; CFTC approval is still outstanding.
• No expiration date: contracts would remain open-ended, with periodic funding used to maintain price alignment.
• Security futures framework: Kalshi says the contracts would be cleared through its CFTC-registered clearinghouse, Kalshi Klear.
• Racing competitors: Coinbase submitted a related proposal the same day, and Payward (Kraken) also filed to expand the concept.

What Kalshi’s proposal would change in US equities

Perpetual futures are a derivatives format that has been widely used in crypto markets, where contracts do not settle on a predetermined maturity date. Instead, traders typically rely on a funding mechanism—payments exchanged between long and short positions—to encourage the perpetual contract to track the spot price of the underlying asset.

In Kalshi’s filing, the exchange described contracts tied to individual US stocks that would similarly avoid a fixed expiration date and use periodic funding payments to keep contract prices in step with the referenced equities. Kalshi also framed the offering as “security futures products,” which would place the proposal in a specific regulatory lane and allow for clearance via Kalshi Klear.

Coinbase and Payward join the single-stock perpetual push

Kalshi’s filing lands in the middle of a broader push by crypto firms and crypto-linked trading venues to bring perpetual-style derivatives to the US stock market.

According to a separate report, Coinbase submitted its own proposal to offer perpetual futures tied to individual US stocks on the same day. The timing suggests a coordinated wave rather than isolated experimentation.

Payward—the parent company of crypto exchange Kraken—also moved forward. Earlier coverage of the filings noted that Payward, through its Bitnomial Exchange, submitted a proposal to offer single-stock perpetual futures and said it intends to make them available to US traders on Kraken. Payward stated it plans to start with perpetual futures linked to 10 equities, naming Tesla, Nvidia, Apple, Microsoft, and Amazon among them, and said it is working toward 24/5 trading.

Kalshi already has a precedent: crypto perps

This is not Kalshi’s first attempt at perpetual derivatives. The company already offers perpetual futures tied to cryptocurrencies in the US, including Bitcoin, Ether, Solana, and XRP. Kalshi received CFTC approval for its Bitcoin perpetual contract in May, demonstrating it has experience operating within the CFTC’s regulatory framework for these products.

That prior track record may be part of why Kalshi is now attempting to replicate the structure—perpetual contracts paired with funding payments—within a different underlying asset class. Still, investors should note that the regulatory posture for equities and security futures differs from crypto spot and crypto derivatives, even if the trading mechanics are familiar to perp users.

Regulatory momentum after the CLARITY Act setback

The filings come shortly after the CLARITY Act failed to advance in the US Senate on Sept. 15, falling short of the 60 votes required to proceed. The outcome has raised questions about whether comprehensive crypto legislation would move forward quickly.

In a statement reported following the vote, SEC Chair Paul Atkins said the agency would “act decisively” within its existing statutory authority “with or without legislation.” That message aligns with what traders and market operators are now seeing: rather than waiting for new legislation, firms are moving ahead with product proposals that fit within existing regulatory pathways.

Kalshi’s SEC and CFTC submissions, along with parallel filings from Coinbase and Payward, effectively test how the current rulemaking and approval processes handle perpetual derivatives when the underlying assets are equities instead of crypto tokens.

What to watch next

For traders and market participants, the key next step is regulatory: the CFTC must decide on Kalshi’s proposal, and other filings—such as Coinbase’s and Payward’s—will also need to clear their respective review processes. The most important question is how quickly regulators will reconcile perpetual contract mechanics with security futures requirements, and whether the early product schedules described by applicants translate into approved, widely accessible trading.

On September 8, Fifth Third Bancorp (NASDAQ:FITB) said it had finished moving close to 600,000 former Comerica customers and 293 branches across Arizona, California, Florida, Michigan and Texas onto its own systems, a conversion carried out over Labor Day weekend. The move caps the integration that began when the two banks joined forces on February 1, and turns Fifth Third into the ninth-biggest bank in the country by size, with north of $300 billion on the balance sheet. The systems work is finished. Whether that translates into durable earnings growth is the part investors still have to watch.

A Bank Built For Growth Markets

Comerica customers now get the full Fifth Third menu, including the Momentum Banking suite, Early Pay and Extra Time, backed by roughly 1,500 branches and 21,300 ATMs. In Michigan, where Fifth Third already leads in retail deposits statewide and in Detroit, former Comerica customers get 60% more branch access and existing Fifth Third customers get 42% more. Texas is the bigger story. Fifth Third now runs 107 financial centers there and plans to spend nearly $1 billion over five years, adding 150 new centers by 2029 in one of the country’s fastest-growing state economies. By 2030, the bank expects roughly 1,750 branches total, with more than half sitting in Texas, the Southeast, Arizona and California.

The early numbers back up the strategy. Fifth Third pulled in $2.5 billion of consumer deposits from its Comerica Southwest marketing push, and Newline deposits climbed $2.1 billion while fee revenue there jumped 35% year over year. Net interest margin widened 6 basis points sequentially to 3.36%, and the adjusted efficiency ratio improved 480 basis points from the prior quarter to 57.1%. Credit quality held up too. Net charge-offs fell to 30 basis points in the second quarter, the lowest reading since the second quarter of 2023.

The Integration Bill Isn’t Paid Off

None of this came free. Merger-related charges cut $155 million from after-tax income in the second quarter, part of a $0.19 per share drag from certain items, and management says year-to-date merger costs already represent about 65% of what it expects to spend for the full year. Noninterest expense fell 12% from the first quarter but was still up 67% from a year earlier.

Average wholesale funding rose 20% sequentially as the bank leaned on $3.3 billion more in short-term Federal Home Loan Bank advances to bridge a seasonal dip in commercial deposits, a reminder that funding costs can swing while the deal digests. The CET1 capital ratio sat at 9.93%, still below the 10.58% posted a year earlier, reflecting $933 million of pre-tax merger-related capital hits, and Fifth Third did not repurchase any shares in the first half of 2026. Nonperforming loans also crept higher, with the NPL ratio rising to 0.58% from 0.54% the prior quarter.

Where Wall Street Stands

Hedge fund ownership of Fifth Third fell to 35 funds from 46 in the prior quarter, a meaningful pullback in institutional conviction right as the integration reached its finish line. That comes alongside a forward price-to-earnings ratio of 10.82, as of September 18, a multiple that does not suggest the market is pricing in much of the growth story management is selling. The gap between a cheap valuation and fewer funds willing to hold the stock is the tension shaping how investors are reading this merger right now.

The Verdict Isn’t In Yet

The systems conversion is behind Fifth Third, but the financial case is still being written. The bull argument rests on Texas expansion, deposit campaign wins, and margin gains that are already showing up in the numbers. The bear argument rests on a capital base still recovering from acquisition costs and an expense base that has not fully normalized. For the growth story to win out, Texas and Southeast expansion will need to keep generating deposits at the pace seen so far. For the skeptics to be right, merger costs and funding pressure would need to linger well past the point management has promised they will fade.

While we acknowledge the potential of FITB 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.