Goldman Sachs and JPMorgan Chase ride AI boom to record quarterly revenue hauls

The AI boom just found two new winners: Goldman Sachs and JPMorgan Chase

American megabanks on Tuesday gave evidence that the global artificial intelligence boom isn't just benefiting tech giants and chip makers. Goldman Sachs and JPMorgan Chase each posted record quarterly revenue hauls, fueled by massive gains in equities trading and investment banking. Behind the surge in activity -- Goldman revenue jumped 39% to $20.3 billion, while JPMorgan saw it rise 27% to $58 billion -- is the fact that AI is "everywhere in financial markets," JPMorgan CFO Jeremy Barnum told reporters. "These are booming environments with a ton of activity, big IPOs, big index rebalancing, a lot of activity in Asia," Barnum said Tuesday. "A lot of it is downstream of the AI theme, writ large on a global basis. It's just a very, very, very active environment." The quarter showed that the AI boom is creating winners far beyond Silicon Valley. While Nvidia and hyperscalers including Alphabet have captured many of the headlines, Goldman, JPMorgan and other banks are profiting from the massive flows of capital into AI. They are advising on AI-related deals, financing data centers and power infrastructure, underwriting debt and equity offerings, and facilitating the surge in trading that has accompanied the global race to deploy the technology. That is creating "a ripple effect" across the American economy and giving banks a flood of new opportunities to provide financing and trading solutions across public and private markets, Goldman CEO David Solomon told analysts Tuesday. "We are in the middle of an AI capex super cycle where there are demands on financing in every single financing instrument, in every region of the world and across every single industry," Solomon said. Capex is short for capital expenditures, or investments made by a business for physical assets like factories. Goldman is preparing for a three-to-five year investment cycle that is still in its early stages, he told analysts. Goldman shares jumped 8% in afternoon trading, while JPMorgan rose 2%.

Wall Street banks see AI 'super cycle' set to boost deals, financing

Investment banks have reaped strong fees from AI-related deals, including SK Hynix's $26.5 billion ADR offering and SpaceX's record $86 billion initial public offering, as well as debt issuance. A rush by technology companies to fund AI infrastructure is boosting dealmaking and financing activity for Wall Street, bankers said on Tuesday, generating lucrative fees from capital raising and loans. Investment banks have reaped strong fees from AI-related deals, including SK Hynix's $26.5 billion ADR offering and SpaceX's record $86 billion initial public offering, as well as debt issuance. But July has been rough for technology stocks, especially microchip makers, as investors wrestle with high valuations and question the longevity of the AI capex boom. 'Multi-year cycle' "The build-out of ⁠AI infrastructure ⁠remains in its early stages, and we believe this multi-year investment cycle will continue to drive elevated levels of strategic activity, financing, and capital formation across markets," Goldman Sachs CEO David Solomon said during an earnings call. Solomon added that the industry "is in the middle of an AI capex super cycle" where there are demands to utilize every single financing instrument. Goldman Sachs was the lead left underwriter on the SpaceX IPO, and is also poised to play a major role alongside Morgan Stanley in the upcoming listing of Anthropic, as investors seek exposure to the AI boom. Rival OpenAI has also filed ⁠for a U.S. IPO. Citigroup, which was a joint global co-ordinator on the SK Hynix sale, earned over $70 million from the deal. AI dominating conversations: Citi Citi CEO Jane Fraser told investors on its conference call that AI was "dominating ⁠a lot of the conversation" with spending on technology, data centers, energy and defense accelerating. Bank of America recently extended a $520 million credit line to OpenAI, its first loan to the AI company, a person familiar with the matter told Reuters. "Overall, the U.S. economy has proved more durable than expected, supported by the strong consumer, ongoing AI-driven investments across the board and easing energy costs, though inflation and tighter monetary policy remain key risks," Bank of America CEO Brian Moynihan said on a conference call. BofA has helped raise nearly $500 billion for AI-related companies since 2025, accounting for 60% of such fundraising across investment-grade debt, leveraged finance and equity capital markets, according to internal data seen by Reuters. "The AI-driven capex super cycle has benefited equity issuance, M&A activity and debt financing," said Stephen Biggar, director of financial services research at Argus Research. Larger rival JPMorgan Chase has also been involved with AI-related ⁠companies on fundraising and is financing data centers. Meta Platforms is working with Morgan Stanley and JPMorgan Chase on a roughly $13 billion financing package for a data center in El Paso, Texas, Reuters reported in May, citing a source familiar with the matter. JPMorgan Chief Financial Officer Jeremy Barnum said the firm is seeing decent capital expenditure and loan demand from companies that may not be AI-related, but have an indirect link. "It's like the comments about data centers wind up creating a lot of demand for plumbers and electricians, so you wind up seeing it in sort of slightly non-obvious places", he said. Barnum added that it was hard to say if such demand was AI-related.