Improving NNA Growth and Revenue Diversification Strengthen Re-Rating Case

Research evidence excerpt

Improving NNA Growth and Revenue Diversification Strengthen Re-Rating Case

IdeaMbenefit may already be reflected in activity, but also believes the rule change could

support future participation. The broader implication is that a larger segment of the retail

population can engage with more advanced strategies than in prior cycles.

Mgmt also identified AI as a factor supporting trading levels. Investors are using AI to

research companies, evaluate positioning and understand investment strategies, while

some clients are beginning to use AI in a more algorithmic fashion. Mgmt expects that

influence to continue. 2Q's activity was also supported by strong equity markets, including

AI-related equities, large technology companies and high-profile IPOs. Mgmt noted such

client behavior is often driven as much by volatility and interesting market events as by

absolute market returns.

We think AI can make trading more accessible by reducing the expertise and time

required to move from a question to an actionable strategy. SCHW launched Portfolio

Insights in May and began an employee pilot of the first version of Schwab Assistant in

July.

While SCHW has yet to announce a dedicated agentic trading product comparable with

HOOD’s offering, we expect that's in the works at SCHW. We see a logical path toward an

experience in which a client uses natural language to identify an idea, access research and

education, evaluate risk, construct an order and eventually execute with appropriate

controls and permissions. The company already has the research, education, execution and

risk-management components; AI can make the movement between them more seamless.

6) Mgmt reiterated the 5%+ NNA framework, while June

strength, relationship deepening and crypto transfers

support the outlook.