We came across a bullish thesis on MarketAxess Holdings Inc. on The Diversified Fins Analyst’s Substack by Collin Cook. In this article, we will summarize the bulls’ thesis on MKTX. MarketAxess Holdings Inc.’s share was trading at $181.83 as of February 24th. MKTX’s trailing and forward P/E were 28.55 and 20.58 respectively according to Yahoo Finance.
Adjusted operating margins declined to 36.8% due to elevated expenses, reflecting investments in technology, staffing, and AI capabilities. Transaction volumes were uneven: credit ADV fell 8% Y/Y while rates ADV dropped 17% Y/Y, partially offset by fee-per-million gains in rates and incremental growth in credit, driven by shifts toward portfolio and block trading.
MKTX continues to lead in electronic trading, with automated block trading up 125% among top clients and U.S. high-yield portfolio trading volumes rising 126% in January 2026, signaling traction for newer protocols like the closing auction and AI-driven trading solutions.
Management’s medium-term plan targets 8–9% revenue growth over three years with ~100bps margin expansion, relying on increased electronic penetration, AI-driven efficiency, and adoption of new protocols in U.S. credit and emerging markets. The market opportunity is further supported by opaque EM markets, where MKTX’s AI applications could create a significant competitive advantage.
While near-term revenue growth remains modest and the company faces execution risks, the combination of protocol innovation, AI integration, and expanding electronic trading penetration positions MKTX for meaningful medium-term upside. Investors willing to look beyond short-term fluctuations could view the current valuation as an attractive entry point for a stock with strong structural growth levers, resilient client demand, and multiple catalysts for margin and revenue expansion over the next three years.
Previously, we covered a bearish thesis on MarketAxess Holdings Inc. (MKTX) by Dan in November 2024, which highlighted operational inefficiencies, U.S. market pressures, and limited upside from weak fee capture and portfolio trading. MKTX’s stock price has depreciated by approximately 31.98% since our coverage due to lower credit trading fees per million, shifting trading protocols, and shrinking gross/operating margins over five years. Collin Cook shares a contrarian view, emphasizing AI integration, new trading protocols, and electronic penetration as drivers for medium-term growth.
MarketAxess Holdings Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 47 hedge fund portfolios held MKTX at the end of the third quarter which was 47 in the previous quarter. While we acknowledge the risk and potential of MKTX 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 MKTX 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 NOW
Disclosure: None.
