Is the AI Rally Ignoring a Real Geopolitical Threat to Tech Stocks?

**SPEAKER_1** (0:01)
This is Invest Talk from KPP Financial, helping investors make sense of the markets one day at a time. Here's your host, Luke Guerrero.

**Luke Guerrero** (0:16)
Good afternoon, fellow investors, and welcome to the Thursday, July, what's the date today? July 16th, 2026 edition of Invest Talk. I'm your host Luke Guerrero, and I'll be with you over the next hour as we dissect the stories that matter.
And prepare for the second half of the month, diving into earnings season, and most importantly, answer your finance and investment questions. To that end, before we talk about today's market performance and run down those show topics, let's tackle this caller question now.

**SPEAKER_3** (0:51)
What do you think of Cincinnati Financial Corporation? C for China, I for India, N for Norway, F for France. Do you think it's a good long-term hold? Thank you. Bye.

**Luke Guerrero** (1:04)
CINF is Cincinnati Financial Corporation. It is a property and casualty life insurer. So they got those commercial line insurance, personal line insurance, life insurance, and then they also have an investment division that makes up about 21% of their revenue. So it's pretty diversified. It's probably going to be mostly baked into their annuity business. But still, they have a pretty diversified revenue stream. Now, we hold this name in one of our strategies that is focused on income. And the reason why is because this name has had 65 years of dividend increases. Pretty significant. So if you're looking for income, this is a pretty solid name for that strategy. It yields about 2.1% over the past five years. It's been between two and three. But from a total return basis, it's pretty solid as well, especially if you compare it to the industry. I mean, for the past three years, really two and change, going back to 2024, it's outperformed its industry by 7 to 10% on an annualized basis. I mean, in 2024, it outperformed the S&P by about 16%.
Overall, it's a very solid name. Now, most recently, they reported earnings and operating EPS was a beat at 194, that beat by 8.25%. Total operating revenues are up 12% year over year. Their property and casually net written premiums grew by 7% and then you compare that to an industry that grows at about four? That's pretty solid beyond industry, really prime growth here compared to its peers. It also has a $31 billion investment portfolio. Its debt to capital ratio is only about 5%. That's a pretty conservatively financed insurance company.
You're seeing annual premium growth outpacing the 4% industry average by about double.
I think that it's not all perfect. You have across the industry rising costs. You have, despite the company's strong history of bringing earnings estimates, guidance that is, I would say cautious towards modest growth. But overall, for income-focused investors who are searching for insurance exposure in a diversified way for a company that has a track record of dividend growth and really overall growth of the business, I think this is probably one of the most reliable names within the insurance industry. Keep in mind that it looks like we got earnings coming up in 11 days. So, you know the general rule I like to follow, no buying within two days on either side of earnings, because then you just get that earnings volatility. You're not really learning much about the business. So, the CINF, Cincinnati Financial Corporation, thanks for the call.
Let's see, yesterday we looked into a great story, I would say, about retail investors and how honestly, they tend to chase shiny objects whilst ignoring more broadly diversified investments. And so, Justin explored the psychology behind why the trend, or this trend and why chasing shiny objects almost always ends poorly. We also answered a listener question on Airbnb. If you happen to miss that episode, I encourage you to check it out. And remember, the best way to never miss an episode of Invest Talk is to subscribe wherever you get your podcasts. That was yesterday, but today we got another great focus point for you on the AI rally and how, in a way, it might be ignoring real geopolitical threats to tech stocks, because even as the Strait of Hormuz closed and oil started to surge again, chip stocks in the NASDAQ bounced. They bounced back sharply as investors bet that AI-driven earnings growth outweighed any geopolitical headways. Now, we started to see that unwind a bit in the previous couple of days, but we'll dive all in to that topic.
We also have a great many questions to answer, including one on the financial sector and another on Berkshire Hathaway, a couple of great stories, I've said great a lot, but a couple of important stories to bring you as well, including one on oil traders' warning that the market is close to, essentially running on empty given the Hormuz closure, a hot button topic recently being the housing market, and essentially across the political spectrum, people are angry that Wall Street has been involved, but what will pushing Wall Street out of the housing market really do? Should we have time for the other show? We'll touch on how millions of workers are still locked out of an improving job market. Along with those questions that I mentioned, we also have voice bank calls ready to play and questions that came in from the comment section of the Invest Talk YouTube channel, and hopefully, we hear from you live throughout the show. We're headed into a break. Please remember, you can call any time and leave your question on the Invest Talk voice bank. If you're listening to our live stream, we're possibly on AM 1220 in the Bay Area. Give me a call now at 888-99-CHARP. When we come back, we'll talk about today's market activity.