Equities trading generated about $67 billion for the five biggest investment banks in the first nine months of 2026, already exceeding their full-year 2025 record by $7 billion. Goldman Sachs, JPMorgan Chase and Morgan Stanley captured a combined $52 billion as demand for artificial intelligence stocks and hedge-fund financing helped expand their businesses.
Key Takeaways
- Goldman Sachs, JPMorgan and Morgan Stanley earned nearly 80% of the five banks’ equities revenue through September.
- Prime brokerage connects the trading boom to lending, as hedge funds borrow to increase their investment exposure.
- Higher leverage brings risks, while differences in revenue reporting complicate comparisons between banks.
Table of Contents
- Equities trading rewards scale and financing capacity
- JPMorgan’s results show the strength of prime and derivatives
- Asia adds opportunity, but revenue totals need care
- Leverage creates both growth and exposure
- Conclusion
Equities trading rewards scale and financing capacity
The three banks’ advantage extends beyond executing stock orders. Their prime brokerages provide hedge funds with margin loans, securities lending and other trading services, allowing them to earn financing revenue alongside transaction-related income.
Bank executives said demand for leverage tied to AI hardware, large cloud-computing companies and chip suppliers reached new heights during the third quarter. Goldman Sachs’ equities financing activities rose 96% to a record $3.37 billion. JPMorgan and Morgan Stanley do not separately disclose an equivalent figure.
The practical distinction is important: banks can benefit from investors financing positions as well as buying and selling securities. Large balance sheets and broad product coverage help the biggest dealers serve funds trading across multiple markets.
| Item | Details |
|---|---|
| Five-bank equities revenue | About $67 billion in the nine months ended September 30, 2026. |
| Comparison with 2025 | Nine-month revenue exceeded the previous full-year record by $7 billion. |
| Three leading banks | Goldman Sachs, JPMorgan and Morgan Stanley generated a combined $52 billion. |
| Goldman equities financing | Record third-quarter revenue of $3.37 billion, an increase of 96%. |
| JPMorgan Equity Markets | Third-quarter revenue of $5.0 billion, up 49% year over year. |
JPMorgan’s results show the strength of prime and derivatives
JPMorgan’s third-quarter 2026 earnings release showed Equity Markets revenue of $5.0 billion, up 49% from a year earlier, driven by strong performance across products, particularly prime brokerage and derivatives. That outpaced the bank’s broader Markets business, where revenue increased 15%.
On the bank’s earnings call, Chief Financial Officer Jeremy Barnum described AI as an “overwhelming theme” and said capital was being tapped through different mechanisms. His comments explain the financing demand, but do not establish how much of the bank’s revenue came specifically from AI-related trades.
Asia adds opportunity, but revenue totals need care
The AI investment theme also extends to South Korea and Taiwan, where memory-chip producers and semiconductor manufacturers supply the expanding data-center industry. The biggest banks’ international networks allow them to support investors moving between those markets and U.S. technology stocks.
Cross-bank comparisons nevertheless have limits. Transaction taxes and stamp duties can be included in top-line revenue, inflating Asia prime-brokerage totals. Banks also differ on whether activities such as clearing services belong within equities revenue.
The combined totals therefore show the scale and momentum of the business, rather than a perfectly standardized measure of competitive performance.
Leverage creates both growth and exposure
Changes to U.S. leverage rules finalized in 2025, with early adoption permitted from January 2026, gave large banks more flexibility to expand balance-sheet-intensive businesses such as prime brokerage.
That financing capacity also raises questions about risk. In October 2026, the International Monetary Fund warned that growing hedge-fund leverage, crowded positions and correlated selling could threaten financial stability. It estimated global hedge-fund assets at $13 trillion.
Banks point to collateral requirements and frequent stress testing as safeguards. Those controls do not eliminate the possibility that falling prices could trigger margin calls and forced selling. A reversal in enthusiasm for AI would also test the financing demand that has supported the current revenue boom.
Conclusion
Fourth-quarter results will complete the 2026 revenue picture. The key distinction will remain how much growth comes from client trading and financing activity, and how effectively banks manage the leverage supporting it.
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Disclaimer
This FinanceVelix article provides general information, not personalized financial, investment, legal, or tax advice. Market prices, interest rates and economic conditions can change; investments carry a risk of loss. Facts reflect the material available when published and may change. Check important information independently and consult a qualified professional when needed. Mentioning an asset, company, or service is not an endorsement.
