Goldman Sachs and JPMorgan Chase have emerged as major beneficiaries of the artificial intelligence boom, reporting record quarterly revenues. Goldman's revenue surged 39% to $20.3 billion, while JPMorgan's rose 27% to $58 billion. This surge is primarily attributed to massive gains in equities trading and investment banking, with Combined equity trading revenue soaring $4.4 billion more than analysts expected at these two banks. Goldman's investment banking revenue jumped 55% to $3.4 billion, and JPMorgan's climbed 30% to $3.3 billion, collectively $1 billion above analyst forecasts.
Bank executives, including Goldman CEO David Solomon, described the current environment as an "AI capex super cycle," where significant demands for financing in every instrument, region, and industry are observed. This super cycle involves advising on AI-related deals, financing data centers and power infrastructure, and underwriting debt and equity offerings. Goldman, for instance, was the lead advisor for SpaceX's record $86 billion IPO and Alphabet's $90 billion equity issuance, both seen as driven by the AI cycle. JPMorgan CFO Jeremy Barnum noted that AI is "everywhere in financial markets," contributing to a highly active environment with major IPOs and index rebalancing.
Other large banks also benefited, with Bank of America seeing its equity trading revenue rise 70% to $3.6 billion and investment banking fees jump 50% to $2.1 billion. Wells Fargo banking analyst Mike Mayo identified Goldman Sachs, JPMorgan, and Morgan Stanley as the top beneficiaries of this trend. Investors have also broadened their search for AI beneficiaries beyond the U.S., pouring money into Asian markets like South Korea, Taiwan, and Japan, with Bank of America's Soofian Zuberi noting increased allocations from American foundations, endowments, and family offices.
