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RBC Lifts MFA Financial Target, Sees Potential for ROE Expansion

MFA Financial, Inc. (NYSE:MFA) is included among the 15 Best Stocks to Buy Now for Passive Income.

On March 5, RBC Capital raised its price recommendation on MFA Financial, Inc. (NYSE:MFA) to $11 from $10. It reiterated a Sector Perform rating on the shares after the company reported its fourth-quarter results. The firm said it is gaining clearer visibility into MFA’s potential for ROE expansion. At the same time, the analyst expects some near-term noise in the company’s distributable EPS due to credit loss realizations.

During the Q4 2025 earnings call, CEO Craig Knutson said the environment for fixed income investors improved meaningfully in 2025 after several difficult years. He suggested the shift felt like emerging from a prolonged downturn. Knutson pointed to a positively sloped yield curve and lower market volatility as signs of a more supportive macro backdrop. He added that the company is entering 2026 with favorable momentum and sees these conditions as helpful tailwinds.

Knutson also reviewed the company’s strategic progress. He said MFA deployed more than $100 million of excess cash into targeted investments during the quarter. The company also completed $1.9 billion in purchases of loans and securities. Those acquisitions included about $1.2 billion in agency securities purchased early in the quarter, $443 million in non-QM loans, and $226 million in new business-purpose loans originated through Lima One Capital.

He also noted that the company continued working through troubled assets. According to Knutson, more than $150 million of delinquent loans were resolved during the quarter. The resolutions freed up capital that could be redeployed into investments expected to generate returns in the mid-teens on equity.

MFA Financial, Inc. (NYSE:MFA) is a specialty finance company that invests in residential mortgage loans, residential mortgage-backed securities, and other real estate assets. Its targeted investments primarily include residential whole loans and residential mortgage securities.

While we acknowledge the potential of MFA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than MFA and that has 100x upside potential, check out our report about this cheapest AI stock.

READ NEXT: 15 Best High Dividend Stocks to Invest in Under $100 and 40 Most Popular Stocks Among Hedge Funds Heading into 2026.

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

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.

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  • 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.

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