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Analyst Says Capital One (COF) ‘Very Cheap’ Amid ‘Game Changer’ Acquisition

We recently published 10 Stocks Wall Street is Watching Heading into October. Capital One Financial Corporation (NYSE:COF) is one of the stocks Wall Street is watching.

Stephanie Link, Hightower Advisors’ chief investment strategist and portfolio manager, said in a recent program on CNBC that she bought Capital One because of the company’s “game changer” acquisition of Discover. She also believes the stock is “very cheap.” Capital One has a dividend yield of about 1%.

“I recently bought this about a month ago and I do like it as the stock is very cheap at 14 times forward estimates. But the reason I bought it is because they just closed the Discover Financial acquisition in July and I think it’s a gamecher in terms of them now having a scalable payments network, one of only two in the US. American Express is the other one and American Express trades at 20 times forward estimates. But I think the synergies will be substantial. I think the earnings power of something like $26 a share is very doable. And they have excess capital so they can return it to shareholders as well.”

photo by Business-laptop-campaign-creators on Unsplash

Aristotle Capital Global Equity Strategy stated the following regarding Capital One Financial Corporation (NYSE:COF) in its second quarter 2025 investor letter:

“Founded in 1988 and headquartered in McLean, Virginia, Capital One Financial Corporation (NYSE:COF) is one of the largest credit card issuers in the U.S. The company was spun out of Signet Financial in 1995 under the leadership of founder and current Chairman and CEO Richard Fairbank. Over the past three decades, Capital One has evolved from a monoline credit card lender into a diversified financial services firm offering a broad range of consumer and commercial banking products.

In 2025, Capital One completed its acquisition of Discover, becoming one of the only major U.S. banks to own and operate a credit card network. This should position the company to enhance its profitability by reducing its reliance on third-party networks (i.e., Visa and Mastercard) and reduce earnings volatility as fee-based revenue increases. The deal also advances Capital One’s efforts to attract high-spend, premium-tier customers. Products like Venture X—the firm’s premium travel rewards card—stand to benefit from the integration of Discover’s transaction data with Capital One’s advanced analytics capabilities. This combination enables more personalized offers, deeper customer engagement and targeted cross-selling across lending and deposit products, reinforcing a cycle of data-driven growth…” (Click here to read the full text)

While we acknowledge the risk and potential of COF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than COF and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

The answer lies in a breakthrough so powerful it’s redefining how humanity works, learns, and creates.

And this breakthrough has already set off a frenzy among hedge funds and Wall Street’s top investors.

What most investors don’t realize is that one under-owned company holds the key to this $250 trillion revolution.

In fact, Verge argues this company’s supercheap AI technology should concern rivals.

Before I reveal the details, let’s talk about how some of the richest people on the planet are positioning themselves.

  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

Even as we admire what Tesla, Nvidia, Alphabet, and Microsoft have built, we believe an even greater opportunity lies elsewhere…

But the real story isn’t Nvidia — it’s a much smaller company quietly improving the critical technology that makes this entire revolution possible.

And judging by what I’m hearing from both Silicon Valley insiders and Wall Street veterans…

This prediction might not be bold at all:

A few years from now, you’ll wish you’d owned this stock.

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Wall Street calls this $3 stock a “Melting Ice Cube.” They said the same thing about BTI before it returned 90%.

Dr. Inan Dogan

Dr. Ian Dogan

Co-Founder and Research Director at Insider Monkey

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