CME Group Inc. (CME): A Bull Case Theory

We came across a bullish thesis on CME Group Inc. on The Diversified Fins Analyst’s Substack by Collin Cook. In this article, we will summarize the bulls’ thesis on CME. CME Group Inc.'s share was trading at $301.64 as of February 12th. CME’s trailing and forward P/E were 27.03 and 25.58 respectively according to Yahoo Finance.

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CME Group Inc., together with its subsidiaries, operates contract markets for the trading of futures and options on futures contracts worldwide. CME Group delivered a solid 4Q25 print, with adjusted EPS of $2.77 beating consensus by 1%, primarily driven by stronger non-operating income, while revenue of $1.65 billion came in essentially in line with expectations.

Net revenue rose 8% year over year and 7% sequentially, supported by an 8% increase in clearing and transaction fees and continued strength in market data, up 15% year over year. Adjusted operating expenses were well controlled relative to revenue growth, allowing operating margins to expand 110 basis points year over year to 67%, even as licensing fees stepped higher.

Average daily volume increased 7% year over year to 27.4 million contracts, with notable strength in metals and equities, and a favorable product mix shift toward higher-priced commodities contracts lifted blended RPC to $0.707. Looking ahead, management guided to approximately $1.695 billion in 2026 adjusted operating expenses excluding licensing, with incremental investments in 24/7 crypto trading, securities clearing, and the continued rollout of event-based contracts, while recent transaction fee and market data pricing changes are expected to add 1% to 1.5% to 2026 revenue.

Capital allocation is also turning more active, with $1.3 billion in OSTTRA sale proceeds earmarked for buybacks, $256 million repurchased in 4Q and $276 million so far in 2026, alongside an upcoming variable dividend likely near last year’s level.

Strategically, prediction markets have become a central growth vector, with over 68 million contracts traded in six weeks, expanding CME’s reach into retail and new institutional participants under CFTC oversight, while parallel initiatives in tokenization and proprietary data reinforce its positioning. Overall, CME enters 2026 with strong momentum, disciplined expense management, incremental pricing power, and multiple avenues for user base expansion.

Previously, we covered a 

 on CME Group Inc. (CME) by Magnus Ofstad in January 2025, which highlighted the company’s leadership in derivatives trading, transaction-based revenue model, and strong dividend profile supported by interest rate volatility. CME’s stock price has appreciated by approximately 27% since our coverage. Collin Cook shares a similar view but emphasizes on recent earnings momentum, capital return activity, and expansion into prediction markets.

CME Group Inc. is not on our list of the 

. As per our database, 77 hedge fund portfolios held CME at the end of the third quarter which was 75 in the previous quarter. While we acknowledge the risk and potential of CME as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CME and that has 10,000% upside potential, check out our report about this cheapest AI stock

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