Latest news with #bluechip
Globe and Mail
2 days ago
- Business
- Globe and Mail
What's the best way to identify a blue-chip stock?
New investors are often told to avoid risky stocks and to gravitate instead to large blue-chip companies with profitable businesses. The problem is, there are no hard and fast rules when it comes to defining what a blue-chip stock is – and what it is not. But research into quality factors can help to shed a little light on the situation. Profitability has become a successful measure of quality in recent years and it was highlighted by Professor Robert Novy-Marx in a paper called The Other Side of Value: The Gross Profitability Premium. More specifically, he studied the impact of the gross-profits-to-assets ratio (GP/A) in the United States and showed that it performed well. The ratio is calculated by dividing a company's gross profits by assets. For today's purposes, the numerator uses gross profits (revenues minus cost of goods sold) over the past four quarters while the denominator is equal to total assets from the most recent quarter. Norman Rothery: Canadian portfolios to consider It's useful to start looking for blue-chip stocks by focusing on large companies before refining the list using profitability. That's why today's search begins with the largest 100 stocks on the Toronto Stock Exchange (TSX) by market capitalization. A tracking portfolio that follows the largest 100 stocks gained an average of 9.3 per cent annually over the 25 years to the end of April, 2025. In comparison, the S&P/TSX Composite index gained an average of 6.8 per cent annually over the same period. (The returns herein are based on back-tests using monthly data from Bloomberg. They include dividend reinvestment but not fund fees, taxes, commissions or other trading costs. The portfolios are equally weighted and rebalanced monthly.) Unfortunately, gross profits aren't available for financial stocks such as banks and insurance companies, which represent a significant chunk of the Canadian stock market. Currently, 25 of the largest 100 stocks on the TSX are financials, while the other 75 are non-financials. A portfolio composed of the latter gained an average of 9.7 per cent annually over the 25 years to the end of April, 2025. Removing the financials improved returns slightly over the period. The profitability portfolio buys the 20 per cent of stocks with the highest GP/A ratios from the non-financial names in the largest 100 stocks on the TSX. The portfolio produced average annual gains of 11.6 per cent over the 25 years to the end of April, 2025. That is, buying large stocks with high GP/A ratios provided a nice return boost over the period. Mind you, the results come with a technical caveat because the back-tester's GP/A data was a little sparse in the early years. The profitability portfolio currently contains 15 stocks (thanks to the exclusion of financials) and held a similar number, with small variations, back into 2010. But it held just nine when the back-test started in 2000 because some non-financial stocks lacked sufficient data early on. That said, the profitability portfolio performed well in recent years when the data was fulsome. It beat the market index by an average of 5.7 percentage points annually over the 15 years to the end of April, 2025, which is nearly a percentage point better that its average annual outperformance over the full 25 years. The profitability portfolio's stocks tend to trade at higher multiples, and are more growth-oriented, than most of the other portfolios I follow for The Globe. It currently holds 15 stocks and, as a group, they have a median (half are higher and half are lower) earnings growth rate of 16 per cent over the past four quarters and a median total return of 34 per cent over the past 12 months. The portfolio's stocks trade at a median price-to-earnings ratio (P/E) of 33 and a median forward P/E of 23 based on analyst earnings expectations for the next four quarters. Income investors will likely be disappointed by the portfolio's modest median dividend yield of 1.1 per cent. While it might not represent the final destination, the profitability portfolio offers an interesting starting point for investors seeking Canadian blue-chip stocks. I hope to explore the approach more fully this summer during my tour of different quality measures. You can examine the stocks in the profitability portfolio, and other I follow for The Globe and Mail, via this link. Norman Rothery, PhD, CFA, is the founder of Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.
Fast Company
7 days ago
- Business
- Fast Company
4 strategic reputation moves that attract investors to blue-chip brands
In the investment world, perception is reality. For blue-chip brands and market leaders alike, a strong reputation is both a matter of pride and a strategic asset that can attract capital, maintain shareholder trust, and drive long-term growth. A company's reputation affects everything from stock price stability to investor relations, yet many companies overlook the direct link between digital reputation and a company's investment value. At Status Labs, we've seen firsthand how a proactive approach to online reputation management can make a measurable difference in investor confidence. Here are four strategic reputation moves that blue-chip brands use to attract—and retain—investors in today's reputation-driven economy. 1. CULTIVATE TRUST WITH TRANSPARENT AND TIMELY COMMUNICATION For investors, trust is paramount. Market volatility, economic uncertainty, and the 24-hour news cycle have intensified scrutiny on high-profile brands, making transparency and responsiveness essential to maintaining investor confidence. A 2024 PwC Trust Survey reveals that 93% of business executives believe that building and maintaining trust improves a business's bottom line. Simply put, investors are more likely to place their capital in companies that provide timely, clear information, particularly during times of turbulence. That transparency extends to how a brand manages its online presence and responds to news and social issues. When companies proactively address public issues or clarify complex situations with consistent and clear communication, they reinforce investor trust. Whether it's providing updates on social media or issuing public statements to address misinformation, clear communication reassures investors that a company values its integrity and accountability. 2. OPTIMIZE SEARCH PRESENCE AND DIGITAL REPUTATION FOR INVESTOR RESEARCH Investors conduct extensive research before making decisions, and often turn to search engines and social media to gauge a brand's public image. A recent study from the Financial Industry Regulatory Authority found that 67% of investors aged 18 to 34 and 53% of investors aged 35 to 54 use 'six or more different sources of investment information,' including social media such as YouTube, Reddit, Facebook, and Twitter. That same study found that while 47% of investors admitted to relying on research and tools provided by their financial firm, slightly more investors—48%—said they relied on business and finance articles found on the internet. This makes a company's search presence as important as its financial statements. Investors look for credibility, stability, and positive sentiment in the top search results. One way to optimize online presence is through a well-crafted SEO strategy that promotes favorable content and timely and informative thought leadership, while also addressing any potentially damaging information. At Status Labs, we work with companies to build search resilience by boosting positive content and suppressing misleading or outdated information. By actively managing search visibility, blue-chip brands can shape the narrative that investors see by establishing an online presence that reflects stability, thought leadership, and forward thinking. 3. DEMONSTRATE THOUGHT LEADERSHIP TO STRENGTHEN BRAND VALUE A brand's digital reputation may be a reflection of its past, but it's also a predictor of future growth and innovation. For this reason, investors are drawn to brands that are proactive leaders in their industries. Research from Edelman Trust Barometer (Investor Edition) shows that industry leadership—which can be cultivated through thought leadership-style content—accounts for 59% of a brand's reputation and market value. Thought leadership can be expressed through content that highlights company innovation, executive insights, and industry expertise. Regularly publishing articles, participating in reputable media interviews, and contributing to industry conversations all build investor confidence by positioning a company as a trusted authority. Companies that take control of their narrative and actively engage in discussions about their industry's future attract investors looking for steady, visionary leadership. 4. ESTABLISH A CRISIS MANAGEMENT PLAN TO PROTECT INVESTOR INTERESTS A single crisis can severely impact a brand's reputation—and its stock price. Investors are acutely aware of this, which is why companies that show preparedness in crisis management are more attractive as investment opportunities. A Deloitte survey of 300 executives on reputation risk found that nearly 90% ranked reputational risk as a top concern. Establishing a robust crisis management plan signals to investors that a company is prepared to handle unforeseen events without compromising its values or public image. Proactive monitoring, rapid response protocols, and media-trained executives ensure that a brand can respond effectively to challenges, thereby reducing the chance of reputation damage and financial fallout. For blue-chip brands and industry leaders, reputation is an asset that directly influences investor interest and market stability. By building and maintaining trust, optimizing digital presence, showcasing thought leadership, and preparing for crises, companies can create a resilient reputation that strengthens investor confidence and attracts capital. In a market where reputation increasingly drives valuation, these strategic moves can help companies secure investor loyalty and build a foundation for sustainable growth. In today's economy, where trust and transparency define corporate success, a well-managed reputation is one of the smartest investments a company can make.
Forbes
25-05-2025
- Business
- Forbes
Is IBM Stock A Buy Ahead Of Its $150 Billion Investment In America?
International Business Machines Corporation (IBM) recently announced its ambitious plan to invest $150 billion in American operations over the next decade, marking one of the most significant corporate commitments to domestic investment in recent history. This strategic move is pivotal for the technology giant, which has undergone substantial transformation under CEO Arvind Krishna's leadership since 2020. As investors digest this news, many wonder whether this substantial commitment signals a buying opportunity for IBM stock. This article examines IBM's current market position, breaks down the details of the $150 billion investment plan, evaluates its potential impact on growth prospects and considers the company's financial outlook in light of this commitment. We'll also review what market analysts say and ultimately address whether IBM represents a compelling investment opportunity at its current valuation. IBM's stock has experienced a notable resurgence over the past 18 months, with shares climbing approximately 42% since January 2024. This performance starkly contrasts with the previous decade of stagnation that frustrated long-term investors. The company's market capitalization currently hovers around $175 billion, placing it firmly among America's blue-chip technology companies, though still significantly smaller than cloud computing rivals like Microsoft, Amazon and Google. The company's recent quarterly results have shown promising signs of sustainable growth. In its most recent quarter ending March 2025, IBM reported revenue of $14 billion, representing a 1.2% year-over-year increase, with software and consulting segments driving much of this growth. The hybrid cloud business, which IBM has positioned as its strategic cornerstone, grew by 18% compared to last year. Meanwhile, the company's AI-related revenue streams have begun showing accelerating momentum, growing at over 18% annually as enterprises increasingly adopt IBM's AI solutions. What's particularly encouraging for investors is IBM's improving free cash flow, which reached $12.1 billion on a twelve-month trailing basis. This significant cash generation has allowed the company to maintain its dividend (currently yielding around 3.4%) while simultaneously investing in growth initiatives and reducing its debt load, which had swelled following the $34 billion Red Hat acquisition in 2019. The company's transformation is gaining credibility with institutional investors, who have gradually increased their positions throughout 2024 and early 2025. IBM's $150 billion investment in America represents an unprecedented commitment from the company to strengthen its domestic operations. According to company announcements, this capital will be deployed over 10 years, with approximately $30 billion allocated for the first three years. The investment will be distributed across multiple states, with significant concentrations in New York (where IBM is headquartered), Texas, California, North Carolina and Ohio. It will create an estimated 25,000 new jobs directly and potentially support 50,000 additional jobs indirectly. The investment encompasses several categories: $65 billion for research and development initiatives, $45 billion for manufacturing and data center infrastructure, $25 billion for workforce development and training programs and $15 billion for strategic acquisitions of American technology companies. This comprehensive approach suggests IBM is not merely looking to expand existing operations but is fundamentally reimagining its American footprint and technological capabilities. The company has emphasized that this investment is designed to position IBM at the forefront of artificial intelligence, quantum computing and advanced semiconductor development. Beyond the headline numbers, IBM has indicated that this investment aligns with broader national technological sovereignty and supply chain security priorities. By strengthening domestic production capabilities for critical technologies, the company is positioning itself strategically amid growing concerns about technological competition with China and increasing government emphasis on securing domestic supply chains for advanced computing technologies. This alignment with national priorities may yield additional benefits through government partnerships, contracts and incentives. IBM's investment strategy is committed to artificial intelligence research and deployment. Approximately $40 billion will be directed toward advancing what IBM calls "trustworthy AI"—systems designed with built-in governance, security and explainability. This focus differentiates IBM's approach from competitors by emphasizing enterprise-grade AI that meets stringent regulatory and corporate requirements. The company plans to expand its network of AI research centers across America, with significant hubs planned for New York, San Francisco and Austin. Quantum computing represents another key strategic pillar, with IBM allocating $20 billion to accelerate the development of practical quantum systems. Having already deployed its 1,000+ qubit "Condor" quantum processor in late 2024, IBM is now working toward quantum systems capable of tackling commercially relevant problems in materials science, logistics and pharmaceutical development. The investment will fund new quantum fabrication facilities and research centers to maintain America's leading position in this emerging technology. The third central focus area is hybrid cloud infrastructure, which will receive approximately $35 billion of the investment. This includes constructing advanced data centers optimized for AI workloads and expanding IBM's cloud regions across the United States. The company plans to build these facilities with industry-leading energy efficiency standards and aims to operate them with 100% renewable energy by 2030. This expansion will directly compete with offerings from cloud giants like AWS, Microsoft Azure and Google Cloud, but with specific optimizations for enterprise AI deployments and regulatory compliance. IBM's massive investment initiative represents a calculated bet that positioning the company at the intersection of AI, quantum computing, and hybrid cloud will drive substantial growth over the next decade. According to statements from CEO Arvind Krishna, the company expects this investment to accelerate annual revenue growth to 6-8% by 2027, up from the current 4-5% range. This projected growth would represent a significant improvement compared to IBM's historical performance over the past decade, during which the company often struggled to maintain flat or slightly positive revenue. The investment's impact on growth will likely be backloaded, with more significant returns expected in the latter part of the ten-year timeframe. During investor briefings, IBM's management indicated that the initial phase will focus on building capacity and research capabilities. At the same time, years four through 10 are expected to yield accelerating returns as these investments mature into commercial products and services. This trajectory aligns with the long development cycles typical for fundamental technologies like quantum computing, which require significant upfront investment before commercial applications emerge. Particularly promising is how this investment might strengthen IBM's competitive position in enterprise AI, where the company has clear differentiation through its focus on governance, security and integration with existing business systems. While consumer-facing AI companies have captured more headlines, IBM's pragmatic approach to solving business problems with AI presents substantial revenue opportunities, especially as regulations around AI use continue to evolve. The company's growing partnership ecosystem, which includes over 15,000 businesses already using IBM's AI solutions, provides a ready market for deploying these new capabilities. From a financial perspective, IBM's $150 billion investment raises essential questions about the company's capital allocation strategy and return expectations. The company has been explicit that this investment will be funded through a combination of operating cash flow (approximately 70%), debt issuance (20%) and strategic partnerships (10%). Management has maintained that this investment will not compromise IBM's commitment to its dividend, which has increased annually for 29 consecutive years, making it a Dividend Aristocrat. Revenue projections alongside the investment announcement suggest IBM expects to reach $85 billion in annual revenue by 2030, compared to approximately $63 billion. The company anticipates that AI-related revenue will grow at a compound annual growth rate of 25%, eventually comprising nearly 35% of total revenue by the decade's end. Margins are expected to expand as software represents an increasingly large portion of the overall business mix, with non-GAAP operating margins projected to reach 22-24% by 2030, up from current levels of approximately 18%. The investment does create near-term pressures on free cash flow, which IBM expects will temporarily decline by approximately 10-15% over the next three years before rebounding strongly in the latter half of the decade. This temporary reduction appears manageable given IBM's strong balance sheet, with approximately $12 billion in cash and short-term investments as of March 2025. While not optimal, the company's debt-to-EBITDA ratio of 3.1x provides sufficient flexibility to absorb this investment without endangering financial stability. However, investors should monitor this ratio closely, as any significant deterioration could signal potential stress. Wall Street's reaction to IBM's investment announcement has been cautiously optimistic. Of the 24 analysts covering the stock, 14 currently rate it as a "buy" or "strong buy," while 8 maintain "hold" ratings and only 2 recommend "sell." The average price target is $228, representing approximately 15% upside from current levels. However, there's notable dispersion in these targets, reflecting uncertainty about the long-term impact of this massive investment plan. Morgan Stanley analyst Keith Weiss recently upgraded IBM to "overweight" with a $250 price target, citing the investment as a "transformative commitment that positions IBM to capture disproportionate enterprise AI market share." Weiss highlighted IBM's credibility with Fortune 500 CIOs as a particular advantage in the competitive AI landscape. Similarly, Bank of America maintained its "buy" rating while raising its price target to $235, noting that "IBM's focus on trustworthy AI addresses the primary adoption barriers currently facing enterprise customers." Not all analysts share this optimism, however. JPMorgan's Brian Essex maintained a "neutral" rating with a $190 price target, expressing concern about execution risks associated with such a large capital deployment. "While the strategic direction is sound, IBM's historical track record of translating large investments into sustainable growth has been uneven," Essex noted in his recent report. Similarly, Bernstein Research questioned whether the quantum computing investments would yield commercial returns within the projected timeframe, suggesting that "quantum revenue at meaningful scale remains a post-2030 story." When evaluating IBM as a potential investment in light of this $150 billion commitment, investors should consider both the opportunities and risks this strategy entails. On the positive side, IBM is making a decisive move to position itself in high-growth technology segments with substantial long-term potential. The company's enterprise relationships, global scale and deep technical expertise provide credible pathways to monetize these investments. The 3.4% dividend yield also compensates investors while waiting for growth initiatives to mature. However, significant execution risks remain. IBM's historical struggles with growth despite previous strategic investments should give investors pause. The company faces formidable competition in its target areas: Microsoft, Google and Amazon in cloud and AI; specialized players like D-Wave and Rigetti in quantum computing; and numerous agile startups across these domains. Furthermore, the extended timeframe for this investment means that technological shifts or macroeconomic changes could undermine assumptions underlying IBM's strategy. At its current valuation of approximately 16 times forward earnings, IBM trades at a discount to the broader technology sector but at a premium to its historical average. This valuation suggests the market is pricing in some, but not all, of the growth potential from these investments. For patient investors with a 5+ year horizon who value income and growth potential, IBM represents a reasonable allocation within a diversified portfolio, particularly for those seeking exposure to enterprise AI and quantum computing without the extreme valuations of pure-play companies in these spaces. Bottom Line IBM's $150 billion investment in America represents a bold bet on the company's future in artificial intelligence, quantum computing, and hybrid cloud technologies. While this commitment can accelerate growth and strengthen IBM's competitive position, investors should approach with measured expectations given the company's mixed track record with strategic transformations. The current valuation offers a reasonable entry point for long-term investors, particularly those who value dividend income alongside growth potential. However, the extended timeframe for realizing returns from these investments demands patience and careful monitoring of execution milestones.
Yahoo
24-05-2025
- Business
- Yahoo
Investing in Dividend Stocks: The Stability of Warren Buffett's Picks
Berkshire Hathaway doesn't pay dividends, but Buffett loves investing in companies that do. Buffett gravitates toward consumer-facing brands and core economic industries, like financial services and energy. Berkshire owns several blue chip dividend stocks that can benefit your portfolio if you buy and hold them. 10 stocks we like better than Apple › Legendary investor and multibillionaire Warren Buffett has spent six decades leading Berkshire Hathaway. The company hasn't paid a dividend to shareholders for almost its entire existence, but don't let that trick you into believing that Buffett doesn't like dividend stocks. In reality, Buffett loves receiving dividends -- just not paying them. If you look at Berkshire Hathaway's $280 billion-plus stock portfolio, the top eight holdings represent about 75% of the portfolio -- they all pay dividends. A company that pays a growing dividend is typically healthy and profitably growing, which is music to the ears of long-term investors like Buffett. Dividends also represent firm returns, cash in hand, without needing to sell any shares. Here are his five top dividend picks, ranked by their position size in Berkshire Hathaway's portfolio, and how they can bring stability to your portfolio. The iPhone revolutionized the technology sector and made Apple (NASDAQ: AAPL) one of the world's largest companies. Berkshire Hathaway didn't invest in Apple until roughly a decade after the first iPhone launched, but it's still been one of Buffett's best picks. It's still Berkshire's largest holding despite Buffett trimming much of his stake last year for a hefty profit. There are over 2.35 billion active iOS devices worldwide. Apple's user base is a massive distribution network for subscription services, consistently generating huge revenue streams as people upgrade old devices. Apple reinitiated its dividend in 2012 and has raised it every year since. Buffett has referred to Apple as Berkshire's best stock and quipped that people would rather give up their second vehicle than their iPhones. U.S. consumers love credit cards, which has made American Express (NYSE: AXP) a lucrative investment for Berkshire. Berkshire has owned it since Buffett bought the stock in 1991. Credit cards represent easily accessible capital, and American Express has built its brand around businesses and high earners. The company is a lender and, therefore, sensitive to the economy. It has opted against dividend increases during tough times to protect its business and has only cut the dividend once in the late 1990s. However, American Express' dividend generally grows over time and is one of Buffett's longest-standing investments. Iconic beverage giant Coca-Cola (NYSE: KO) is a favorite of Buffett, who has drunk Coca-Cola products in front of cameras numerous times. Berkshire has owned Coca-Cola since 1988, and the stock is a Dividend King with a whopping 63 consecutive annual dividend raises. The company grows slowly and steadily, selling dozens of brands to billions of consumers worldwide, many of whom still don't drink packaged beverages regularly. Coca-Cola develops new products, acquires emerging brands, and has unmatched distribution on a global scale. There is an ocean of opportunity for gradual expansion, making Coca-Cola a good bet to continue growing and raising its dividend for the foreseeable future. Buffett traded in and out of Bank of America (NYSE: BAC) around the 2007-2009 financial crisis, but ultimately struck a deal for preferred stock in 2011. He later used warrants to buy common shares, making America's second-largest bank a core holding in Berkshire's portfolio. Bank of America is a financial catch-all for the U.S. and global economies. With over $3.3 trillion in assets, it spans consumer and commercial banking, financial markets, student loans, mortgages, bonds, and more. Bank of America reinstated its dividend after it recovered from the financial crisis, arguably the worst period for banks since the Great Depression, and has raised it for the past 11 years and counting. Buffett has an affinity for the energy sector; Berkshire operates an energy subsidiary, with numerous pipelines, utilities, and other infrastructure. In late 2020, Buffett and Co. pounced on Chevron (NYSE: CVX) when the pandemic sent oil prices below zero for the first time and oil stocks spiraling to generational lows. Buffett picked well; Chevron is an integrated oil major with exploration and refining operations, and navigated the pandemic well enough to maintain its dividend growth streak. Chevron is one of the few oil and gas stocks that could eventually become a Dividend King; the company has raised its dividend for 37 consecutive years and counting. The pitch for Chevron is simple: The modern world depends on energy, and oil and gas remain in high demand, despite growth in renewables over the years. Plus, Chevron yields nearly 5%, making it a cash cow for Berkshire Hathaway. Before you buy stock in Apple, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Apple wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 American Express is an advertising partner of Motley Fool Money. Bank of America is an advertising partner of Motley Fool Money. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Bank of America, Berkshire Hathaway, and Chevron. The Motley Fool has a disclosure policy. Investing in Dividend Stocks: The Stability of Warren Buffett's Picks was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
New York Times
21-05-2025
- Sport
- New York Times
Potential 2026 NFL Draft quarterback class — led by Arch Manning — looks loaded
The only league-wide consensus about the 2025 NFL Draft quarterback class was that next year's group should be better. Should be — not necessarily 'will be.' NIL payments and a much easier transfer process have ended the days of being able to predict a year out who will belong to an upcoming draft class. Even so, the amount of prospective blue-chip QB talent is much higher than it was a year ago at this time. Advertisement Things can of course change between now and the end of the college football season. For now, let's take a look the quarterbacks who will likely receive the bulk of NFL scouting attention once the season starts. They're sorted below by tiers: potential first-rounders (Tier 1), fringe Round 1/Day 2 prospects (Tier 2) and the best of the rest (Tier 3). (Editor's notes: 'EPA' stands for 'Expected Points Added'; passing stats via TruMedia) 6-foot-4, 225 pounds | 20 years old The biggest knock on Manning right now is his lack of experience. Just about everything else screams 'blue-chip QB prospect.' The Texas junior made just two starts and 10 appearances behind Quinn Ewers last season, but the glimpses of his game were terrific for a first-time contributor. Manning's start against Mississippi State (26-of-31 passing, 325 yards, two TDs, no interceptions) was elite and showed off why many scouts believe he'll be in the mix for the No. 1 pick, whenever he declares for the draft. His size, arm talent and movement skills are all ideal. More importantly, so is his process — Manning's footwork is consistent, incredibly calm and almost always in rhythm with the pass concept he's working. An excellent processor for his age, Manning shows poise against pressure and already has put several examples on film of being able to move beyond a second (or even third) read from the pocket. He's athletic enough to be a factor as a scrambler and passer on the run, but his natural calm in the pocket will be what separates him long term. The hype here feels very real. We just have to see more. 6-5, 235 | 21 years old Had Allar declared for the 2025 NFL Draft, he might have been the No. 1 pick. I don't want to discount Cam Ward as a prospect, but Allar's physical traits — at 6-5, 235 — are impossible to ignore. Nearly everything about his game improved last year, too, as Penn State allowed him more opportunities to push the ball deep. Allar is very comfortable driving the ball down the middle of the field, often into tight windows. And when his feet are on time, he can look elite. He's also flashed great off-platform velocity and can deliver from different arm slots. Consistency with his feet in the pocket remains an issue, though, as Allar plays with sloppy mechanics too often. He'll fade in the face of pressure and throw off his back foot or trust his arm to get him out of a jam — all of which lead to missed layups. Allar can also be indecisive in the pocket. He's shown an ability to process at a high level, but he can get stuck on reads, leading to late throws over the middle that get him in trouble. Advertisement Allar feels like a first-round prospect in next year's class. With more improvement on details, he could easily find himself in the top 10. 6-3, 242 | 19 years old Sellers made his debut as a full-time starter last season and at no point looked overwhelmed against high-level competition in the SEC. Generally an accurate thrower with a quick release and enough arm talent to drive the ball downfield, Sellers showed above-average footwork for a QB his age. His consistency in the dropback game was hit or miss, but the flashes were outstanding. He's also a tank on wheels and really hard to tackle. He runs in the open field like a bigger, albeit not-quite-as-fast version of Jayden Daniels. Sellers needs to be more decisive from the pocket while finding better consistency with his footwork and throwing process. He fumbled too much last year (13 times) and found trouble when he got stuck on his first or second read. Plenty of that stuff can be ironed out with more experience, though, and Sellers' physical traits are first-round — and potentially top-10 — worthy. 6-5, 225 | 21 years old A big, sturdy prospect with outstanding arm talent and enough athleticism to navigate against pressure in the pocket, Mendoza will team up with Indiana's Curt Cignetti this season after a year-plus as Justin Wilcox's starter at Cal. It's fair to expect an uptick in downfield shots, both inside and outside the numbers — plenty of the damage Mendoza created within Cal's offense came on short, quick stuff. Still, when he's been asked to operate from the pocket on a deeper drop, he's flashed explosive arm talent and an ability to make every throw. Mendoza can be guilty of holding the ball too long in the pocket. His drop rhythm also has to be more consistent, and he needs to avoid throwing while flat-footed. But if Cignetti can do for Mendoza what he did for Kurtis Rourke, the former could be an easy first-round prospect and might even push into the top half of Round 1. Advertisement 6-2, 200 | 23 years old The official gunslinger of this group. Nussmeier can't match the size of some of the other prospective 2026 QB prospects, but his arm talent — from the pocket, off-platform, from any arm slot — is the real deal. A perfect fit for LSU's aggressive pass offense, Nussmeier has been fearless throwing over the middle and has never seen a vertical route he doesn't like. He's also a comfortable thrower who can improvise on the run and a twitchy athlete who doesn't lose velocity, no matter his base. There are times his aggressiveness can get him into trouble — some of his off-platform attempts aren't necessary, as he plays with inconsistent feet in his drop and throwing process. He needs to be a more decisive passer from the pocket and work to avoid making unnecessary risks, because he's not big enough to play on the move as much as he prefers. Same time, Nussmeier never gives up on a play. The son of longtime college and NFL assistant Doug Nussmeier, Garrett has some J.J. McCarthy in him. There's enough in his game for teams to consider him in Round 1. 6-2, 210 | 21 years old A dynamic athlete with a quick trigger and a great deep ball, Klubnik enjoyed a breakout 2024 season in Clemson's Air Raid attack, throwing for 36 touchdowns to six interceptions while becoming a serious run threat for the first time in his college career. An explosive scrambler who can cut on a dime and force missed tackles in space, Klubnik is a legit dual-threat passer, even at his modest size. Klubnik had a whopping 16 completions of 30 or more air yards last season and has shown an ability to layer the ball between levels downfield. Klubnik's flashes are pretty outstanding. On the other hand, he is not the sharpest processor from the pocket, often working only one side of the field before looking to run. He needs to show more consistent feet and a better feel for staying in the pocket, with or without pressure. Like Nussmeier, his size isn't ideal, but his full profile — assuming he improves this season — could be more than enough to make him a possible first-rounder. Advertisement 6-2, 200 | 20 years old A first-year starter at Arizona State last year after transferring from Michigan State, Leavitt has an above-average feel for a passer his age. He plays tall, with generally solid footwork, and isn't afraid to step up and drive the ball against pressure. A good athlete with enough speed and agility to be a solid scrambler, Leavitt is hard to sack and can launch a beautiful deep ball when his base is stable. Other quarterbacks in this class have better arm talent, and Leavitt's accuracy and velocity can be impacted if he abandons his technique. There are too many examples of missed layups on his tape, so he also needs to develop more strength if he's going to run as much as he does. Fundamentally, though, he plays older than his experience level, including with his ball handling in the run and play-action games. Leavitt still has plenty of time in college, but a great 2025 could launch him toward a first-round grade. 6-1, 220 | Age: 21 Mateer was one of this offseason's biggest transfers after throwing for more than 3,000 yards and putting up a combined 44 touchdowns (29 passing, 15 rushing) last season as a first-year starter at Washington State. A thick, powerful runner with good speed and vision, Mateer is capable of running over or away from some defensive backs — he's a legit dual-threat option. He's also an aggressive passer who will throw from some pretty crazy arm slots. Mateer has flashed good footwork and rhythm from the pocket while maintaining velocity from any arm angle. He has to be careful to maintain sound technique with all his improvisational skills and, more than anything, has to show stronger processing from the pocket — he fades away, throws from flat feet, and aims and stares down early reads too often. Physically, though, Mateer is a very interesting player. Not unlike Ward, the guy he replaced at Washington State, he has the tools to make a big jump. Advertisement 6-4, 220 | Age: 22 Beck has had a long journey. Despite the step back he took last season, though, he's still a solid prospect. His best work came in 2023 at Georgia, with Brock Bowers and much more refined offensive talent around him. He's an accurate passer who isn't afraid to test the middle of the field, so long as he's working from a clean pocket. Beck's quick processing and release are what helped him throw for nearly 8,000 yards in two years as Georgia's starter. When he's pressured or forced to improvise, though, issues pop up. He is limited athletically, just as his ceiling will be if he can't develop better consistency against pressure. 6-6, 215 | 20 years old The drama surrounding Iamaleava's exit from Tennessee will be stuck in scouts' minds until he gives them enough reasons to forget it. That said, Iamaleava showed plenty of arm talent and downfield playmaking ability as a tall passer with quick feet and an over-the-top release. He needs to get stronger, but many see Justin Herbert in parts of Iamaleava's game at this stage. He has to prove he can operate in an offense that's more translatable to what he'll see in the NFL, but there's plenty to be intrigued about here. 6-6, 230 | 22 years old A gigantic passer and a capable runner — both through or around defenders — Green was a two-year starter at Boise State before joining Sam Pittman and Bobby Petrino at Arkansas last season and producing his best year to date. Green showed good pace and relatively consistent feet with his pocket drops last season and did plenty of damage throwing on the run outside the pocket. He's athletic and strong enough to escape and improvise, but he has to improve against pressure. His accuracy fades beyond 30 yards, too, although Green was 23-of-43 on throws of between 20 and 29 air yards last season. Others to watch: Aidan Chiles, Michigan State; Miller Moss, Louisville; Dante Moore, Oregon; Mark Gronowski, Iowa; Conner Weigman, Houston; Kevin Jennings, SMU; Jackson Arnold, Auburn (Top photos of LaNorris Sellers and Arch Manning: Kevin C. Cox / Getty Images; Scott Wachter / Imagn Images)
