CNBC's Inside India Newsletter: Navigating Labor Challenges — Harmonizing Business Goals with Employee Well-Being
Labor Reforms in India: The Indian government has consolidated 29 labor laws into four comprehensive codes to address labor market rigidity, aiming to balance business interests with employee welfare and attract investments.
Impact on Gig Workers: The new labor codes will provide gig workers with access to social security benefits and require startups to contribute to a social security net, while also making it easier for companies to retrench workers.
Economic Goals: India aims to become a $10 trillion economy by 2047, and the labor reforms are seen as crucial for boosting industrial production and attracting both local and foreign investments.
Market Reactions: While some companies have welcomed the reforms, trade unions have protested against them, claiming they were unilaterally approved and could undermine workers' rights.
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- Rating Upgrade: Baird analyst David George upgraded JPMorgan Chase from Underperform to Neutral while maintaining a price target of $280, citing the bank's 'enviable capital position' as a key factor supporting this revision.
- Strong Earnings Report: In its Q4 2025 earnings report, JPMorgan posted an adjusted EPS of $5.23, surpassing the $5.00 consensus, with revenue reaching $46.77 billion, exceeding the $46.20 billion estimate, indicating robust profitability.
- Valuation Concerns: Despite the strong earnings, George noted that JPMorgan's stock trades near 3x tangible book value, suggesting limited margin for disappointment, thus making the risk/reward profile more reasonable but unattractive for new investments.
- Investment Banking Outlook: TD Cowen reiterated its Buy rating on JPMorgan with a price target of $400, despite a 4% drop in shares post-earnings, which analysts deemed 'unwarranted', highlighting a positive outlook for investment banking activity and loan growth in 2026.
- Sustained Earnings Growth: Deutsche Bank strategists highlighted that tech stocks maintained an earnings growth rate near 30% in Q4, which continues to bolster investor confidence despite a three-day market downturn.
- Software Stocks Struggle: The iShares Expanded Tech-Software Sector ETF (IGV) tumbled nearly 9% over eight consecutive days last week, reflecting investor concerns about potential disruptions to business models from artificial intelligence, leading to increased market volatility.
- Future Earnings Expectations: While analysts anticipate a slowdown in tech profit growth to 23%, forward estimates indicate an uptick in earnings expectations for megacap tech firms, suggesting sustained market confidence in future profitability.
- Market Digestion Phase: CFRA's chief investment strategist noted that the recent volatility in the information technology sector is a necessary digestion of prior gains, with projections for record earnings growth in 2026 and 2027, encouraging investors to remain patient.
- AI Technology Transformation: Analysts widely believe that artificial intelligence will be the most transformative technology of the next decade, with its economic impact expected to rival that of the internet, and its adoption rate significantly outpacing that of the internet, indicating strong market potential.
- AppLovin Investment Outlook: AppLovin's Axon ad engine leverages AI to match advertiser demand with publisher supply, with adjusted earnings expected to grow at 48% annually over the next three years; the current P/E ratio of 51 times appears reasonable, and analysts' target price of $771 per share implies an 89% upside.
- Robinhood Market Share Growth: Robinhood is gaining market share across multiple brokerage service categories through payment for order flow and other revenue streams, with adjusted earnings projected to grow at 20% annually over the next three years; the current P/E ratio of 34 times is sensible, and analysts' target price of $152 per share suggests an 81% upside.
- AI Tool Innovation: Robinhood's AI investment tool, Cortex, provides real-time data analysis for Gold subscribers, helping users understand stock price movements, with the CEO stating the goal is to offer users a world-class financial team, further enhancing its appeal among younger investors.
- AppLovin AI Engine: AppLovin's AI recommendation engine, powered by Axon technology, enables advertisers to target campaigns effectively, with adjusted earnings expected to grow at 48% annually over the next three years, making the current 51 times earnings valuation appear reasonable and highlighting its strong growth potential in the advertising market.
- Return on Ad Spend: AppLovin delivers a 45% higher return on ad spend (ROAS) than Meta and a 115% higher ROAS than platforms like YouTube and TikTok, indicating the effectiveness of its advertising technology and solidifying its leadership position in the rapidly evolving digital advertising space.
- Robinhood AI Tool: Robinhood's AI investment tool, Cortex, leverages real-time data and analysis to assist users in making informed investment decisions, with adjusted earnings projected to grow at 20% annually over the next three years, showcasing its strong appeal among younger investors.
- Market Share Growth: Robinhood is gaining market share across multiple brokerage service categories, particularly among millennials and Gen Z, boasting twice the customer base of its closest competitor, which is expected to further drive revenue growth and enhance its market position.
- Increased Pressure on Software Sector: The introduction of new AI tools by Anthropic has triggered a sell-off in software data provider shares, intensifying uncertainty in the private credit market, particularly regarding lending risks to software companies.
- Decline in Asset Management Stocks: Ares Management fell over 12%, Blue Owl Capital dropped more than 8%, and KKR and TPG saw declines of nearly 10% and 7%, respectively, reflecting investor concerns about AI's potential impact on cash flows and default risks.
- Rising Default Risks: UBS Group has warned that in an aggressive disruption scenario, default rates in U.S. private credit could rise to 13%, significantly higher than the projected stress for leveraged loans and high-yield bonds, estimated at 8% and 4%, respectively.
- Liquidity Issues Intensified: Although strains in private credit predate AI concerns, Jeffrey C. Hooke noted that existing liquidity and loan extension issues have been exacerbated by recent developments, adding new challenges to an already pressured sector.
- Issuer Transition: In early 2026, JPMorgan Chase was selected as the new issuer of the Apple Card, taking over from Goldman Sachs, which stated that this move would help it narrow its business focus, highlighting Apple's ongoing expansion in consumer finance.
- Market Position: JPMorgan Chase is the largest credit card issuer in the U.S., managing approximately 150 million credit cards, while the Apple Card has over 12 million users; although this addition is modest, it still presents new cross-selling opportunities for the bank.
- User Demographics: Research indicates that Apple Card users are predominantly aged 20 to 40, accounting for about 70% of the user base, which allows JPMorgan Chase to effectively promote its premium credit card products, such as the Chase Sapphire Reserve, thereby enhancing customer loyalty.
- Future Outlook: While the specific financial terms of JPMorgan Chase's acquisition of the Apple Card business remain unclear, this partnership is expected to bring a significant influx of new customers to the bank, potentially invigorating its stock and strengthening its competitive position in the market.










