Wall Street's biggest banks are taking a victory lap this week after a global AI boom fueled one of their strongest quarters in recent years.
JPMorgan Chase (JPM), Bank of America (BAC), Citigroup (C), Wells Fargo (WFC), and Goldman Sachs (GS) reported collective profits of $49 billion in the second quarter, up 39% year over year.
Executives for these giants said Tuesday that the AI boom is turbocharging a cycle of Wall Street activities. More trading activity is generating record quarters for their equity trading groups. AI-related IPOs, debt raising, and other deals are throwing off hefty underwriting and advising fees.
Furthermore, the recent successes are enticing more companies to join the action, while newly rich tech workers and investors become wealth management clients.
"The build-out of AI infrastructure remains in its early stages, and we believe in this multiyear investment cycle," Goldman Sachs CEO David Solomon said in a call with analysts.
"Given our progress and what we see in our pipeline, we expect this flywheel of activity to continue," Solomon added.
Much of Wall Street's attention in the second quarter was glued to blockbuster AI-driven capital raises, most notably SpaceX's record IPO and Alphabet's massive follow-on stock offering. But executives said those major deals are just part of a broader resurgence that has more room to run.
Revenue from Goldman's equities trading division rose 72% year over year to $7.4 billion in the second quarter, setting an all-time record haul by any bank in stock trading. Its investment bank reported $3.4 billion in revenue, its highest quarterly figure since 2021.
JPMorgan also logged a massive quarter in stock trading, with revenue from that group soaring 86% to $6 billion. "In some respects, a lot of it is just downstream of the AI theme writ large on a global basis, and it's just a very, very, very active environment," JPMorgan Chase CFO Jeremy Barnum told reporters Tuesday.
Bank of America's stock traders also scored a record quarter, with fees climbing 70% to $3.6 billion.
"The financing opportunities lead to hedging opportunities, and we don't see that cycle of investment slowing," Denis Manelski, Bank of America's co-head of global markets, said in an interview.
Successful raises are spurring other companies to follow suit. Leading Chinese AI startup DeepSeek is preparing for an IPO, according to a Tuesday Bloomberg report. Anthropic (ANTH.PVT) is expected to list later this year, while OpenAI (OPAI.PVT) also has plans to go public.