Wall Street's Big Three dominate AI stock boom with $52 billion in equities revenue

Goldman Sachs, JPMorgan Chase and Morgan Stanley capture nearly 80% of record trading haul

By LineZotpaper

Published21 October 2026

Read Time3 min

Sources2 outlets

Wall Street's biggest investment banks are enjoying a record year for equities trading, driven by the global boom in artificial intelligence stocks, relaxed leverage rules and increased lending to hedge funds. Through the first nine months of 2026, the five largest banks generated $67 billion in equities revenue, with Goldman Sachs, JPMorgan Chase and Morgan Stanley accounting for $52 billion of that total.

The five largest U.S. investment banks have produced $67 billion in equities revenue through Sept. 30, already surpassing the record $60 billion they booked for all of 2025, according to company filings. Wall Street's Big Three, Goldman Sachs, JPMorgan Chase and Morgan Stanley, have captured nearly 80% of that sum, or $52 billion combined.

"When it comes to the AI mega trade, the Big Three consider each other their main competitors, and that's pretty much it," Mike Mayo, a Wells Fargo banking analyst, told CNBC. "They've been best positioned to take advantage of this market."

Prime brokerage, the business of providing hedge funds with margin loans, securities lending and other trading services, has become a key battleground and source of growth. Demand for leverage to place bets on AI hardware, hyperscalers and chip suppliers has surged. Goldman Sachs reported a 96% jump in equities financing activities in the third quarter to a record $3.37 billion. JPMorgan and Morgan Stanley do not break out that figure but said they saw a similar dynamic.

"In this moment where AI is such an overwhelming theme ... there is capital being tapped through all kinds of different mechanisms," JPMorgan CFO Jeremy Barnum said on the bank's third-quarter earnings call.

The fastest-growing frontier for equities trading was Asia, with institutional investors pouring into South Korea and Taiwan to target the "picks and shovels" of the AI supply chain, memory chipmakers and semiconductor manufacturers. The Big Three, with offices across Tokyo, Hong Kong, Seoul and Mumbai, reaped the benefits.

The boom has drawn some warnings. The International Monetary Fund cautioned this month that growing leverage, crowded positions and correlated selling by hedge funds could create stability risks. JPMorgan CEO Jamie Dimon said in August that industrywide leverage was "the highest it's ever been," though he stopped short of calling it a threat to financial markets.

Trading executives note that transaction taxes and stamp duties inflate top-line revenue, and there is no uniform definition of what equities trading revenue should include, complicating comparisons. Still, the overall momentum is clear. "We're still in a stock-based world," Morgan Stanley CEO Ted Pick said on the firm's earnings call. "Equities are still, all things being equal, the attractive asset class."

Analysis

Why This Matters

The AI boom is generating enormous profits for Wall Street's largest banks, concentrating market power among a few firms that can handle multibillion-dollar bets.
Regulatory easing and high leverage raise questions about systemic risk if the AI buildout falters or hedge funds suffer correlated losses.
Smaller and European banks are being crowded out of prime brokerage, reducing diversity in the equities market.

Background

Equities trading revenue at major banks has soared since a stock rally began in October 2022, weeks before OpenAI released ChatGPT. Prime brokerage, lending to hedge funds to amplify their trading, has grown into a high-margin, durable business for the largest banks. In 2025, Trump administration regulators eased balance-sheet caps that previously treated collateralized loans the same as riskier assets, giving dealers more flexibility to expand prime brokerage. Some European banks, including Credit Suisse, have retreated from the business, further concentrating activity on Wall Street.

Key Perspectives

Big Three banks: They argue their global footprint, balance-sheet strength and full-service offerings allow them to serve hedge funds across markets and products, providing stability in volatile periods. Executives say they manage risk through collateral, stress testing and quick margin calls. Regulators and analysts: The IMF and some economists warn that high hedge fund leverage, crowded positions and correlated selling could amplify market shocks. Stanford professor Darrell Duffie called the regulatory easing "not a good idea" though he said the system "hasn't gotten dramatically out of whack." Smaller banks: Firms like Bank of America and Citigroup are falling behind because they cannot underwrite single-trade risks that could reach $100 million, forcing them to cede share to the Big Three.

What to Watch

Whether AI proves as transformative as hoped or a downturn hits the stocks and hedge funds driving revenue.
Potential further hedge fund unwinds after several collapsed this summer, including the fund run by former OpenAI researcher Leopold Aschenbrenner.
Any additional regulatory scrutiny of prime brokerage leverage from the IMF or U.S. regulators.

Sources

Goldman Sachs, JPMorgan and Morgan Stanley are dominating the AI stock boom. Here's their edge · Business News
Goldman Sachs, JPMorgan and Morgan Stanley are dominating the AI stock boom. Here's their edge · US Top News and Analysis

Checked

10 claims in this story checked against 1 source: 6 supported.

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SupportedGoldman Sachs, JPMorgan Chase and Morgan Stanley generated $52 billion in equities revenue.Business News: “Goldman Sachs , JPMorgan Chase and Morgan Stanley have made a combined $52 billion in stock trading revenue so far this year”
SupportedThe Big Three captured nearly 80% of the five banks’ trading revenue.Business News: “have made a combined $52 billion in stock trading revenue so far this year, nearly 80% of the total.”
Partly supportedThe five largest U.S. investment banks generated $67 billion through September 30.Business News: “The five biggest investment banks have generated about $67 billion in equities revenue through Sept. 30”
SupportedThe strong equities-trading year was fueled by the AI stock boom, relaxed leverage rules and increased lending to hedge funds.Business News: “Fueled by the global boom in artificial intelligence stocks, relaxed capital rules and greater lending to hedge funds, big Wall Street banks have already had a banner year for equities trading”
SupportedMike Mayo told CNBC that the Big Three consider each other their main competitors in the AI mega trade and are best positioned to benefit.Business News: ““When it comes to the AI mega trade, the Big Three consider each other their main competitors, and that's pretty much it,” Mike Mayo , Wells Fargo banking analyst, told CNBC. “They've been best positioned to take advantage of this market.””
Partly supportedThe fastest-growing frontier for equities trading was Asia.Business News: “trading executives say the fastest-growing frontier for equities was in Asia.”
Partly supportedThe Big Three have offices across Tokyo, Hong Kong, Seoul and Mumbai.Business News: “For the Big Three, with their footprints across Tokyo; Hong Kong; Seoul, South Korea; and Mumbai, India; the Asia trade was a goldmine.”
SupportedThe IMF warned that hedge-fund leverage, crowded positions and correlated selling could create stability risks.Business News: “The International Monetary Fund warned this month that growing leverage , crowded positions and correlated selling from hedge funds could create potential stability risks.”
Partly supportedJeremy Barnum said that, amid AI’s prominence, capital was being tapped through different mechanisms on JPMorgan’s third-quarter earnings call.Business News: ““In this moment where AI is such an overwhelming theme ... there is capital being tapped through all kinds of different mechanisms,” Barnum said.”
SupportedTed Pick said, “We’re still in a stock-based world” and that equities remain “the attractive asset class.”Business News: ““We're still in a stock-based world,” Morgan Stanley CEO Ted Pick said on the firm's earnings call. “Equities are still, all things being equal, the attractive asset class.””