Big banks' record Wall Street profits are increasingly tied to AI

Wall Street's biggest banks conscionable posted a grounds archetypal half, turbocharged by banal trading, dealmaking, and financing tied to the AI boom.

The country's 5 largest Wall Street banks — JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Goldman Sachs (GS), and Morgan Stanley (MS) — collectively reported $114 cardinal of superior markets gross successful the archetypal six months of 2026, up 31.5% from a twelvemonth earlier. Stock trading accounted for much than fractional of the increase.

The windfall showed conscionable however profoundly the AI frenzy is feeding Wall Street's nett machine. It besides raises the large question: How overmuch does the sector's momentum beryllium connected the AI revolution?

AI is the "No. 1 net driver" for large banks this year, Wells Fargo expert Mike Mayo said successful an interview. He compares the superior demands from tech firms, utilities, and related industries to a "100-foot wave" lifting Wall Street.

"Big waves tin origin large falls," Mayo said, but added helium doesn't expect a wipeout implicit the adjacent year.

Executives implicit the past week said AI is fueling a rhythm of lucrative Wall Street activities. "The marketplace is intelligibly highly risk-on, and we're benignant of takers of that," JPMorgan CFO Jeremy Barnum noted connected Tuesday. He added it was "a small spot hard to imagine" the bank's trading concern repeating its grounds haul.

"It's getting adjacent to arsenic bully arsenic it gets," CEO Jamie Dimon said astir the existent banking environment.

Sharp terms moves, dense banal rotation, and higher capitalist balances pushed equities trading revenues to caller heights. Newfound AI wealthiness is besides pouring into wealthiness management. Morgan Stanley CFO Sharon Yeshaya said "over half" of its wealthiness business's nett caller assets came from employees of companies that did IPOs successful the quarter.

That enables banks, which hauled successful hefty fees for underwriting AI deals, to marque wealth agelong aft the headline-grabbing IPOs.

The biggest contributor to the grounds archetypal fractional came from Goldman Sachs, which saw a $7.1 cardinal emergence successful superior markets gross aft advising connected SpaceX's IPO and Alphabet's equity raise.

"We're aboriginal successful the rhythm to physique out, but it won't beryllium without bumps and recalibrations," CEO David Solomon said of the AI roar connected Tuesday. 

Morgan Stanley estimates the broader AI build-out volition magnitude to $10 trillion successful spending implicit aggregate years. As the rhythm rolls on, much of that spending is expected to determination beyond Big Tech's currency travel and into nationalist debt, equity, backstage credit, and different financing channels.

"We're astir 10% to 15% of the mode done the concern cycle," CEO Ted Pick said Wednesday.