Glossary of U.S. Stock and Investing Terms
66 terms used in our columns, explained in plain language.
- AI model
The core of an AI system that answers questions and writes text or code. It is built by training on large amounts of data, and improved versions are released every few months.
- AI security
Products that monitor employees' use of generative AI and manage the permissions granted to AI agents.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- ARRAnnual recurring revenue
The amount of revenue that comes in every year from subscription contracts. It is closely watched as a measure of a business's underlying strength.
- Backlog
Orders a company has received but not yet delivered or recorded as revenue. A larger backlog gives more visibility into future sales.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry Metrics
- Backup and recovery
Systems that keep copies of data in a place attackers cannot alter, so the data can be restored quickly after an attack.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Breakout time
The time it takes an attacker, after breaking into a company's systems, to spread to other computers and servers. The shorter it is, the harder the attack is to contain.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Capital expenditures (CapEx)
Spending on things like factories, machinery, stores, and IT systems.
Used in: Anthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It TouchesHow Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- CNAPPCloud-native application protection platform
A service that detects misconfigurations and suspicious activity in cloud environments.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Compute
The computing infrastructure, built from AI chips, used to develop and run AI models.
- Convertible note
Debt that can later be converted into shares on preset terms. The higher the company’s share value, the more the lender’s right is worth.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsAnthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It Touches
- DBIRData Breach Investigations Report
An annual report published by the major US telecom company Verizon that analyzes real-world data breaches.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- DepreciationDepreciation expense
The cost of assets such as factories and machinery, spread out as an annual expense over the years they are used.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsHow Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- Dilution
When new shares are issued and existing shareholders’ per-share value or ownership shrinks.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsAnthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It Touches
- Durable competitive advantage
A strength that competitors find hard to copy and that can last for decades. Warren Buffett compares it to a moat protecting a castle.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsHow Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- EDREndpoint detection and response
Software that continuously monitors computers and servers and contains an attack on the spot when it detects one.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- EPSEarnings per share
Net income divided by the number of shares outstanding. It shows how much profit was earned for each share.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- Fair valueMark-to-market accounting
Restating a balance-sheet item to its current value each period, with gains or losses booked to the income statement.
- FOMCFederal Open Market Committee
The Federal Reserve meeting that sets US policy interest rates.
- Form 8-K
A current report that US public companies must file with the SEC when a significant event occurs. Material cybersecurity incidents are among the events that must be reported.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Free cash flow
Operating cash flow minus capital expenditures — the cash a company is free to use.
- GAAPGenerally Accepted Accounting Principles
The accounting rules U.S. companies follow when preparing their financial statements. Figures that follow them are called “GAAP” figures.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry Metrics
- Goodwill
The amount by which an acquisition price exceeds the acquired company’s net assets. It pays for invisible value such as brands and customer relationships and is hard to sell for cash.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry Metrics
- Gross margin
Gross profit as a percentage of revenue, where gross profit is revenue minus the cost of buying or making the products sold (cost of goods sold).
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- HBMHigh bandwidth memory
Fast memory made by stacking memory chips and placing them right next to an AI chip so huge amounts of data can move at once. Essential for AI computing; SK hynix, Samsung Electronics and Micron make most of it.
- IAMIdentity and access management
Systems that manage employee identities and determine who can use which systems. Multi-factor authentication falls under this category.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- IDPS and NACIntrusion detection and prevention system / Network access control
Devices that detect and block intrusions, and devices that control which machines can connect to the internal network. These are traditional on-premises defenses, and this market is shrinking.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Interest expense
The interest a company pays on its borrowings.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsHow Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- Interest-bearing debt
Debt that carries interest, such as bank loans and bonds.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry Metrics
- IPOInitial public offering
When a private company lists its shares on a stock exchange so that anyone can buy and sell them.
- Lock-up
A promise by pre-IPO shareholders not to sell their shares for a set period after the listing.
- Long-Term Benefit TrustLTBT
An independent trust that elects a majority of Anthropic’s board. Its trustees have no financial stake in the company.
- Long-term debt
Borrowings that are due more than one year from now.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- M&AMergers and acquisitions
Companies combining with or buying other companies. In this industry, large players keep buying companies in areas where their own lineup is lacking.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- MDRManaged detection and response
A service in which an outside specialist firm handles security monitoring and response around the clock on a company's behalf. It is used by companies that lack in-house security staff.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Multi-factor authentication (MFA)
A way of verifying identity that requires something in addition to a password, such as a code sent to your phone. It makes break-ins harder even if a password is stolen.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Net marginNet profit margin
Net income, the bottom-line profit after all expenses and taxes, as a percentage of revenue.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- Non-GAAP earnings
A company's own adjusted profit figure that excludes items such as stock-based compensation for employees. Some companies that report a loss under GAAP (the official US accounting standards) show a profit on this basis.
- NRRNet revenue retention
A metric showing what percentage existing customers are paying now compared with one year earlier. An NRR of 110% means revenue grew 10% even without any new customers.
Used in: Anthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It TouchesToday's Cyberattacks and the US Companies Defending Against Them
- Operating cash flow
The difference between cash actually coming in and going out from the core business.
- Operating income
The profit earned from a company's core business. It is calculated by subtracting cost of goods sold, SG&A, and other operating expenses from revenue.
Used in: Anthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It TouchesHow Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- PAMPrivileged access management
Systems that tightly control administrator privileges, which allow unrestricted control over systems.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Patch
A fix released by a software vendor to repair vulnerabilities or bugs in its software.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- ProspectusForm S-1 in the US
The document a listing company files to disclose its business, results and risks to investors. A version with the share count and price still blank is a preliminary prospectus.
- Public benefit corporationPBC
A for-profit company legally required to weigh a public benefit stated in its charter alongside shareholders’ interests, as provided in Delaware law.
- Ransomware
An attack that encrypts a victim's data so it cannot be used and demands a ransom to restore it. Today the dominant form is double extortion, where attackers also steal the data and threaten to publish it.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- ROEReturn on equity
Net income divided by shareholders' equity. It shows how efficiently a company uses shareholders' money to generate profit.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- RSURestricted stock unit
A right for an employee to receive company shares once set conditions, such as a period of service, are met.
- S&P 500S&P 500 Index
A stock index made up of about 500 leading large US companies. It is commonly used as a gauge of the overall US stock market.
Used in: Anthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It TouchesHow Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- SASESecure access service edge
An approach that verifies and inspects employees' network traffic in the cloud, all in one place, wherever they connect from.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- SECU.S. Securities and Exchange Commission
The US government agency that sets and enforces the disclosure rules for publicly listed companies.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsAnthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It TouchesToday's Cyberattacks and the US Companies Defending Against Them
- SG&A expensesSelling, general and administrative expenses
The costs of selling products and running the company, such as advertising, sales staff salaries, and head-office expenses.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- Share buyback
A company buying back its own shares from the market. Alongside dividends, it is one of the main ways companies return cash to shareholders.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsHow Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- Share retirement
Canceling shares a company has bought back. This reduces the number of shares outstanding, and no treasury stock remains on the books.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- SOC automationSecurity operations center automation
Using AI to automate the threat detection and response work performed by a security operations center (SOC).
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Social engineering
A tactic in which attackers pose as employees or business partners and use phone calls or emails to trick people into revealing passwords and other information. It exploits human carelessness rather than technical flaws.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Stock-based compensation
Paying part of employees’ pay in company shares instead of cash. No cash leaves, but the share count rises, so it is a real cost to shareholders.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry MetricsAnthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It Touches
- Subscription
A fixed-fee pricing model in which customers, once they adopt a product, keep using it by renewing their contract each year. It gives the provider recurring revenue year after year.
Used in: Anthropic's IPO (ANT) Through Its Prospectus | What's Behind the Loss, the Risks, and the US Stocks It TouchesToday's Cyberattacks and the US Companies Defending Against Them
- Supply chain attack
An attack that, instead of targeting a well-defended company directly, gets in through a less-protected business partner or an outside service the company uses.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Treasury stock
A company's own shares that it has bought back from the market and holds rather than retiring them.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- Treasury-adjusted debt-to-equity ratio
Total liabilities divided by shareholders' equity with treasury stock added back. The adjustment removes the effect of share buybacks making equity look smaller than it otherwise would.
Used in: How Buffett Picks Stocks | Spotting Durable Companies in the Financial Statements
- TTMTrailing twelve months
The most recent 12 months. The latest four quarters are added together and used as the most up-to-date full year of results.
Used in: The Complete Guide to U.S. Stock Metrics: From P/E and P/B to ROE, FCF and Industry Metrics
- Usage-based pricing
A pricing model where customers pay according to how much they use.
- VPN applianceVirtual private network appliance
A device that lets people connect securely to a company's internal network from outside. Because it serves as a gateway into the company, it is a frequent target for attackers.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Vulnerability
A design weakness or flaw in software or hardware. Attackers exploit these weaknesses to break in.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Vulnerability and exposure management
Services that catalog the weaknesses in a company's software and devices and flag them for fixing, starting with the most dangerous.
Used in: Today's Cyberattacks and the US Companies Defending Against Them
- Zero trust
A security approach that trusts no access by default, even from inside the company network, and checks identity and permissions every time. It helps limit the damage to a small area even if an attacker gets in.
Used in: Today's Cyberattacks and the US Companies Defending Against Them