Steven Alexopoulos, TD Cowen U.S. large cap bank analyst, believes artificial intelligence has created a huge buying opportunity in his favorite bank picks like JPMorgan — one last seen in the aftermath of the Global Financial Crisis — even with some of the shares trading at record highs. The analyst said the focus of AI will widen out from the builders like Nvidia to companies that use the technology to unlock massive economic value. Banks, for example, are going to apply AI to every corner of their businesses from credit decisions to portfolio management to customer experience. “The number two sector out there that’s reliant on people behind the scenes who look at information, pull information, send information, it’s banks,” Alexopoulos said Wednesday on CNBC’s ” Squawk Box ,” implying the biggest users of AI are tech companies, followed by banks. Alexopoulos said head counts at investment banks will come down significantly as more workers are replaced by AI. He predicted that JPMorgan, which he thinks is the leading beneficiary of AI in banking, will see its market capitalization reach $1 trillion by the end of next year. The bank’s current market value is some $807 billion, according to FactSet data. JPM YTD mountain JPMorgan shares in 2025. JPMorgan shares just closed at a record high Tuesday after the bank said it would return more capital to shareholders following the Federal Reserve’s latest stress test. The stock is up more than 21% this year. “We have a technology that’s going to take out massive cost. It’s going to reduce risk dramatically. It’s going to improve the client experience,” Alexopoulos said. “We are going to break to a new paradigm … not to mention deregulation is helping the banks … The only other two times I’ve been this bullish on the banks were coming out of GFC, and then after the regional bank crisis [in 2023]; this is one of those opportunities.” Still, not all banks are created equal. Alexopoulos cautioned investors before buying stocks like Citigroup with big cross border payments businesses, which will be threatened by stablecoins. “Even though I’m very bullish, I’m cautious on a name like Citigroup, because Citigroup’s crown jewel business is this business cross border payments,” he said. The analyst has buy ratings on JPMorgan, Bank of America , PNC and US Bancorp , and hold ratings on Citigroup and Wells Fargo .
