Is Charles Schwab Stock Primed for a Major Breakout?

The financial services firm Charles Schwab is currently demonstrating remarkable operational performance. However, a curious divergence is emerging: while the company's fundamental metrics shine, institutional investors appear hesitant. This dynamic raises the question of whether the market is overlooking a potential opportunity just before a significant upward move.

The true engine of Schwab's success is revealed in its October 2025 monthly data: explosive client growth. Assets under management have ballooned to a colossal $11.83 trillion, representing an increase of more than 20% within a single year.

Key indicators of this expansion include:
* The addition of over 429,000 new brokerage accounts in October alone, a 29.6% surge.
* A total of 38.1 million active brokerage accounts.
* Net new assets of $44.4 billion.

These figures powerfully illustrate Schwab's continuous capture of market share and its consolidation as a premier platform for retail investors.

Quarterly Results Shatter Forecasts

Charles Schwab's third quarter for fiscal 2025 proved exceptionally strong. The financial services provider comfortably exceeded analyst projections, reporting earnings per share of $1.31—a full $0.06 above estimates. The revenue performance was even more striking. At $6.38 billion, it not only surprised to the upside by $450 million but also represented a robust 26.6% year-over-year increase.

The company's profitability metrics further underscore its operational strength. A net margin of 35.93% and a return on equity exceeding 21% demonstrate that Schwab deploys its capital with remarkable efficiency.

Should investors sell immediately? Or is it worth buying Schwab?

Strategic Moves and Capital Allocation

Schwab's management is sending clear signals of confidence to its shareholders. A new $20 billion share repurchase program is set to remove approximately 11.6% of outstanding shares from the market, a substantial vote of confidence in the company's valuation. This is complemented by a stable dividend of $0.27 per share.

Concurrently, the firm is making strategic investments for its future. The acquisition of Forge Global Holdings for $660 million is intended to bolster its private market investment business and is expected to be finalized by the first half of 2026. To fund additional growth initiatives, the company recently placed bonds totaling $2 billion.

Diverging Views: Institutional Caution vs. Analyst Optimism

Despite the stellar fundamental data, a note of skepticism persists among some institutional players. Several asset managers meaningfully reduced their positions in the second quarter. Additionally, insider sales over the past 90 days, valued at $6.67 million, provide a point for consideration.

This caution, however, is countered by significant votes of confidence. Rating agency S&P revised its outlook for Schwab from "stable" to "positive," praising the company's improved interest rate risk management. TD Cowen went further, raising its price target to $134 from $129 and reaffirming its "Buy" rating.

The central question remains: Is Charles Schwab at the dawn of a new phase of growth, or are the optimists overlooking the cautionary signals from institutional investors? The most recent quarterly figures and the persistent client growth present a compelling case for the bulls.